Donation Ceilings Boost Charitable Giving by Over 36% in New Experimental Study

New research indicates that imposing a maximum limit on donations can significantly increase both the likelihood and the amount of charitable contributions. Economist Robin Hanson highlighted these findings in a recent tweet, stating, > "imposing a donation ceiling significantly increases both the likelihood and the amount of giving compared to the baseline. Moreover, ceilings perform at least as well as suggestions in our experimental setting." The study challenges conventional wisdom that capping donations might deter generosity.

The findings stem from an experimental study titled "Do Donation Ceilings Increase Contributions? Evidence from an Experimental Study," authored by F. Cochard, E. Peterle, and J.-C. Tisserand. Conducted at the Laboratory of Experimental Economics of Besançon, University Marie and Louis Pasteur, France, between March and September 2024, the research involved 210 participants. The experiment compared a neutral baseline condition with a suggested donation amount and a capped maximum donation.

Results showed a notable increase in giving under the ceiling condition. The average donation in the ceiling group was 1.46 units, a 36.4% increase compared to the baseline's 1.07 units. Furthermore, the proportion of participants who donated nothing decreased significantly from 76.7% in the baseline to 61.8% under the donation ceiling. The study also concluded that donation ceilings performed comparably to suggested donation amounts, with average contributions of 1.45 units in the suggestion group.

The researchers propose several behavioral mechanisms that could explain these counterintuitive results. A donation ceiling may act as an anchor, setting a reference point that encourages donors to aim closer to the maximum. It can also facilitate social comparison, motivate individuals by providing a clear target, and simplify the decision-making process by reducing choice overload.

For charitable organizations, these findings present a promising, low-cost behavioral tool. Donation ceilings offer a psychologically subtle alternative to traditional prompts, potentially encouraging greater participation and higher average contributions without the perceived pressure that can sometimes accompany direct suggestions. The study suggests that strategically implemented donation caps could become a valuable component of future fundraising campaigns.