Tag: donations

Nonprofit organizations supply resources to people in need, and they’re critical for advancing the United Nation’s Sustainable Development Goals. Food banks, blood banks and humanitarian relief organizations all rely on donations.

But not all nonprofits want or need certain donations, especially if they don’t have space for them or the donations are in bad shape. Still, many nonprofits go ahead and take unwanted donations, and that can pose operational costs for the nonprofits or their partners downstream. The costs can be staggering: In 2018, Australian charities spent $13 million to dispose of unwanted clothing donations.

All is not lost, though. New research suggests strategies for how nonprofits can handle the issue of unwanted donations.


Olin’s Kaitlin Daniels, assistant professor of supply chain, operations and technology, wanted to understand the repercussions of rejecting donations. Since donors’ behavior after a rejection is not well understood, nonprofits’ strategies vary widely. For example, a survey of food banks found that 15% of them banned certain low-nutrition items, while nearly half had no nutritional guidelines or policies. Even among the food banks with nutritional guidelines, 40% reported uncertainty about how to handle unwanted donations.

A nonprofit, of course, can reject unwanted donations to control its inventory and to relieve itself and its partners of sorting, storage and disposal costs. But many nonprofits hesitate to reject unwanted donations for fear of alienating donors who might otherwise contribute helpful donations in the future. The consequences are real: Blood donors whose donations were rejected were found to be 29% less likely to donate again within 4.25 years than donors whose blood was accepted.

Daniels studied how donors respond to rejection—and how nonprofits could minimize repercussions afterward. What should organizations do with unwanted donations? “To even begin to answer that question, you need to know how the donors will respond to being turned away,” Daniels said.

Donors’ responses to rejection

In their research, Daniels and coauthor León Valdés at the University of Pittsburgh were, to the best of their knowledge, the first to conduct a controlled laboratory experiment to study donors’ responses to rejection and also the first to find evidence of donors’ self-serving bias, which refers to the tendency to conflate what is fair with what benefits oneself.

Subjects participated in a repeated game in which they decided whether to perform a real-time typing task that could generate a donation to a nonprofit of their choice.

Daniels and Valdés called this version of the experiment the “donation condition.” The subjects had to repeatedly choose whether to complete the typing task that generated a donation, which was then rejected with a probability that was unknown to the subjects.

Daniels and Valdés measured the subjects’ decisions, and they measured the subjects’ beliefs about the probability that their future donations would be accepted.

They then compared those measures against a for-profit experiment: In that, the subjects themselves received a payment generated by a task. The coauthors called this part of the experiment the “reward condition.”

Their work offers two main results.

First, they pinpointed something important about donors’ decision-making: After rejection, they were less optimistic about their chances of successfully donating again, causing their number of instances of completing the typing task (hence, donations) to fall.

Second, they identify that donors are actually biased in a self-serving way: When a lot of effort was required of them to make a donation, their beliefs about if they would be successful were more negative after their efforts were rejected in the donation condition than they were in the reward condition, the authors write in “Trying and Failing: Biases in Donor Aversion to Rejection,” published in Production and Operations Management.

This result uncovers an obstacle to managing inventory that is particularly acute, and it affirms the tension nonprofits feel, Daniels said: “Rejecting donors can negatively impact future donations, especially since a rejected donation can be used in a biased manner to excuse failure to donate in the future.”

Steps nonprofits can take

This finding is of practical use to nonprofit organizations, “serving as both a caution and a guide,” Daniels said.

“On the one hand, NPOs [nonprofit organizations] are particularly vulnerable to backlash over rejections. On the other hand, our results highlight a source of this backlash, which offers NPOs an opportunity to design their processes to try to mitigate it.”

The authors propose two concrete steps nonprofits can take:

  1. Reduce the effort required to make a donation. This can increase overall donations and reduce donors’ self-serving bias, Daniels said.
  2. Use interventions the researchers designed to dispel negative feelings. “We show that offering rejected donors the opportunity to make a small monetary contribution mitigates biased response to rejection,” Daniels said. Nonprofits may achieve similar results by offering other alternatives such as joining the nonprofit’s mailing list or supporting the nonprofit on social media.

Daniels became interested in the topic of rejected donations during an earlier conversation with Valdés about blood donations after the September 11, 2001, terrorist attacks. The surge in blood donations after the attacks helped replenish the nation’s blood supply. But blood bank officials also had a problem on their hands.

Said Daniels: “The upshot of this outpouring of generosity was that the national network of blood supply was replenished, but really there was way more blood than was needed and almost a fifth of donations were discarded.”

Daniels hopes that their behavioral study of donors’ response to rejection can contribute to further research in this area. Understanding, and mitigating, how donors react to information about unwanted donations can help nonprofits continue their critical contribution to the UN’s Sustainable Development Goals.

“They can provide goods that are actually needed by recipients, and at the same time ensure that waste is truly reduced—not transferred to downstream partners in the donations’ supply chain.”

The Aramark staff invites you to participate in its 2nd annual Push for Pencils Campaign in conjunction with KidSmart, a 501c3 non-profit. 90,000 children in the St. Louis region go to school each year without the basic school supplies. KidSmart collects the supplies and distributes them to the children in need. The Aramark staff will be collecting items from July 27th to August 17th. Collection boxes will be located at Starbucks and in the Knight Center, see below for details.

On Giving Tuesday, holiday donation campaigns launch into high gear, with various year-end appeals supporting a whole array of causes. But how do people decide where to donate their money?  They know that they should give to the neediest cases, but new research from Washington University in St. Louis’ Olin Business School shows the donation decision often comes down to something called a “charity beauty premium.”

“We observed that donors often favor beautiful, but less needy charity recipients,” said Cynthia Cryder, associate professor of marketing at Olin.

Cryder and her co-authors — Simona Botti, associate professor of marketing at the London Business School, and Yvetta Simonyan, lecturer at the University of Birmingham — conducted eight different studies involving thousands of in-person and online participants. They showed them multiple photos of actual charity recipients and observed how participants responded. The bottom line: Beauty prevailed when it came to making intuitive choices on where, how much, and to whom to donate.

giving-tuesday-logo“There seems to be a very basic automatic preference for beauty,” Cryder said. In one study, a significantly greater percentage of participants chose to sponsor a giraffe or zebra (both rated as highly beautiful) rather than a penguin or orangutan (rated as less beautiful), despite correctly perceiving the latter two animals as more severely endangered.  “If you’re asking people to make quick decisions based on intuition, then a preference for beautiful recipients emerges. However, visual judgments of neediness and beauty are negatively correlated, which means when donors are choosing the beautiful recipients, they are overlooking the needy ones, who are the ones they say they should give to.”

Although participants chose beautiful recipients when deciding quickly and intuitively, when participants were asked to carefully consider charitable recipients, there was a shift. When encouraged to deliberate, participants opted to donate to those recipients they knew they should (the needier recipient) instead of those they wanted to give to (the more beautiful recipient).

“We found when we asked participants to make very thoughtful and well-reasoned decisions, then a preference for needier recipients emerged,” Cryder said.

So where does this leave organizations looking to boost their bottom lines via charitable donations? Cryder found that because many decisions are intuitive, they should focus on the donor’s experience during the act of giving to be more successful.

“The most effective charities, who do the most good in terms of serving the neediest recipients and serving them well, should be the savviest about potentially highlighting the most aesthetically pleasing causes that they have,” Cryder said.

“More broadly, they should be very attuned to allowing their donors to feel good about their donation. If a charitable organization is able to affirm to people that they are doing a good thing, and also ensure that donors are feeling good about giving, they might be more successful long-term.”

Guest blogger: Erika Ebsworth-Goold

Olin Alumni Board president Jim Gidcumb, EMBA’93, asks KaLeena Weaver Thomas, PMBA’12, why she donates time and treasure to their alma mater. Bottom line? “It’s an investment that’s going to pay back valuable dividends,” she says. (more…)

The Coin Battle has returned pitting staff, students, and faculty in a three-way competition to see who will raise the most money for United Way. The competition began this week and will end on Friday, October 30.

Coin jars are located  in front of the Graduate Programs Office in Knight Hall and in front of the Undergraduate Programs office in Simon Hall.  The team bottle that contains the most money at the end of the competition will be declared the victor and the team will earn bragging rights until next year.  All proceeds of this competition will be donated to the United Way.

Enter the 25/75 Raffle

Raffle tickets will be available to purchase at $5.00 each (cash only) starting Monday, September 14 and will end on Friday, October 30.  Tickets will be sold two times during the day from 10:00 – 11:00 a.m. and from 3:00 – 4:00 p.m. in the dean’s office (Bauer Hall, room 440).  25% of the prize pool will go to the winner at a random draw to take place following the campaign.  75% of the amount collected will go to the United Way.

Guest bloggers: Terry Wirtel and Joyce Montgomery