Overhead Aversion

We avoid donating to charities which dedicate a high percentage of expenses to administrative and fundraising costs (overhead). As overhead increases, the amount donated decreases. This aversion is due to a decreased sense of personal impact, which reduces the positive emotions associated with giving.

Example

People react strongly to salaries of non-profit executives even though they’re dwarfed by the salaries of for-profit executives.

Fundraising opportunity

Charities could mitigate the negative effect of overhead on giving, if they emphasize the supporters’ impact and thus increase their happiness.

Keenan, E., & Gneezy, A. (2016). Understanding and Overcoming Overhead Aversion in Charity.

Previous Principle Go to List of Principles Next Principle

Ask A Behavioral Scientist

Behavioral Science Q & A

Q:We are struggling with acquistion. During our biggest community campaign, a colleague is suggesting that we have a QR code directing donors to a donate page that does not capture donor information – just a donation and an email address. We won’t be able to post any of these new doors our lvoely newsletters, or thank you letters. We’ll likely never hear from them again. What’s the best method to get this team to see the importance about a donor vs a donation?

Thanks so much for raising this. Yes, capturing donor information can be helpful for stewardship like newsletters, thank-you letters, impact updates. But how you ask matters. Forcing full data capture introduces friction that can significantly depress conversion, many donors may simply abandon the process. Beyond the friction itself, required fields also shift the emotional experience […]

Read Full Answer

Q: Should we include “Giving Tuesday” in the subject lines for the emails that are going out before Giving Tuesday?

Unlike holidays that everyone already knows, Giving Tuesday is a created event. Many donors recognize the name but not the exact timing, so referencing it becomes a helpful cue. It serves as a reminder and taps into social norm activation (“everyone’s giving today”), which boosts response. However, we still want it paired with the mission, […]

Read Full Answer

Q: can we pull the match language into the subject lines? Or this should be an A/B test?

When a subject line leads with the match (“Your gift matched!”), it risks triggering market-norm thinking: the sense that giving is a financial transaction rather than an act rooted in values, identity, and care. This shift reduces intrinsic motivation and, over time, can weaken donor satisfaction and long-term engagement. It also makes the email indistinguishable […]

Read Full Answer

Q: Our mid-level donor team removed the QR code from the DM donation form that links to the donation page, but have left the URL for them to type it in manually. Not sure why they are adding a barrier to the donation process for a higher value donor – but I have to ask – is there any proof – either way – if a QR donation code reduces MV online giving, has any effect on their donation amount, has any effect on off line donations? Thank you….

There’s no evidence that QR codes suppress mid-value giving; all available research suggests they either help or have no negative effect. In fact, behavioral and usability research consistently shows the opposite: reducing friction at any point in the donation process increases completion rates and total response. And that has nothing to do with capacity and […]

Read Full Answer

Q: How can we effectively use behavioral science to help shift our Board’s mindset. The majority are extremely resistant to asking their networks or sharing their contact lists with us, even after a candid discussion with an external lay leader who has been training boards with her fantastic Fundraising isn’t the F Word! workshop. We have also offered to use our automated email tool to send their appeals from their own email. It is so frustrating. We even have 2 Board members and the chair trying put some accountability on them for our big event but people are not really moving!

What you’re experiencing is very common. Resistance often isn’t about capability, but about motivation quality. If board members feel pushed into fundraising, that triggers controlled motivation (low quality motivation) i.e. obligation, guilt, or fear of judgment, which often results in avoidance. Instead, we need to create conditions for volitional motivation (high quality motivation) by satisfying […]

Read Full Answer

Q: Copywriters often argue the ask should appear on the first page, but that usually breaks the story in two. With a one-sided letter the ask is always on page one, but with a two-sided letter it may fall on the second page—do results differ? Has your appeal structure been tested on both one-sided and two-sided letters? I just read the article Your Appeal Outline: Thoughtful Strategy or Random Spasm?

That’s a really thoughtful question, and you’re not the first to raise it. Many of our clients have been cautious about placing the ask at the very end. To address their concern, we’ve tested both approaches, and the results are clear: when the ask comes last, even if that means it appears on the second […]

Read Full Answer