Dr. James explains why sustainable giving starts by answering, “Do we have a shared future?”

Dr. Russell James

May 01, 2023

It starts with a question

In nature, sustainable giving to unrelated others does occur. But it happens only with reciprocal alliances. These alliances start by answering a question:

Who is able and willing to return a favor?

Predicting who is able involves many factors:

• Who is likely to have a shared future with me? (Who is near me? Who is stable?)
• Who has strength (or other valuable resources) to share?
• Who can observe my giving?

Answering these gets complex. But biologists often model these using a simple game.[1]

The primal-giving game

The game is this. Two unrelated players both face these same payoffs.

Each must choose to give, or not, before knowing what the other will do. The game has an unbreakable law. It is this:

Giving must be seen by partners who are able and willing to reciprocate.

Without this, reciprocal altruism fails. Giving costs. Thus, if a gift’s audience can’t reciprocate, giving always loses. As capacity to reciprocate grows, so can giving.

One-round game

Suppose there is only one round of this game. In that case, giving would break the first law. My giving is never seen by a partner with capacity to reciprocate. They must decide to give before they see my choice. After they see my choice, the game is over.

Giving is possible. But reciprocity is not. In this scenario, we have no future together. The right play is simple. Don’t give. Ever. Without reciprocity, giving always loses.

Invisible giving

The game must have more than one round. Otherwise, giving never makes sense. What if the game had multiple rounds, but no one could tell if I gave or not? Again, giving would break the first law. If other players never see my gifts, they can’t respond to them. They can’t reciprocate. Without reciprocity, giving always loses.

One-night stand

Now suppose my giving is visible, but only to the other player. Reciprocity is possible, but only if I encounter this player again. What if we will never meet again? Giving would break the first law. We have no shared future. This player has no capacity for reciprocity. Without reciprocity, giving always loses.[2]

Capacity for reciprocity in the game

In this game, the audience’s capacity to reciprocate is simple. It’s just the number of future game meetings. If I’ll meet them in 0 future games, they can’t reciprocate. If I’ll meet them in 1 future game, they can. If I’ll meet them in 10 future games, they can reciprocate 10 times more.

Chance fits in the game, too. If there’s a 1% chance I’ll meet them in 1 more game, I probably don’t care. But if there’s a 10% chance I’ll meet them in 100 more games, I probably should care.

Capacity for reciprocity in nature: Strangers vs. neighbors

In nature, reciprocal altruism starts with the same question: Do we have a shared future? (In other words, will we play future reciprocal games?) The formal idea is this:
“The shadow of the future makes it ecologically rational for organisms to cooperate, rather than cheat or exploit each other. In part, this is because an act of defection now lowers the probability of receiving a stream of benefits in the future if one’s partner responds to defection in kind.”[3]

In the game, this “shadow of the future” is simple. It’s the expected number of future interactions. In nature, this number is high for neighbors and low for strangers. Researchers explain,
“There are two quite different kinds of interaction: those in neighboring territories where the probability of interaction is high, and strangers whose probability of future interaction is low.”[4]

Neighbors have a shared future. Strangers usually don’t. Among neighbors, the capacity to reciprocate is high. Among strangers, it is low. Animals will form reciprocal alliances with neighbors. They’ll do so even with competing neighbors. But they won’t do this with strangers.[5]

One example of mutual sharing happens in the ocean. Small cleaner fish will eat parasites off larger fish. The larger fish don’t eat the cleaners, although they could. Both sides benefit. But this doesn’t happen everywhere. It happens only when there are stable neighborhoods. Researchers explain,
“Aquatic cleaner mutualisms occur in coastal and reef situations where animals live in fixed home ranges or territories. They seem to be unknown in the free-mixing circumstances of the open sea.”[6]

Some places – such as the open ocean – have no neighborhoods. Without stable neighbors, repeated interactions are rare. Without this shared future, reciprocal helping disappears.

In nature, sustainable giving starts with a shared future. This requires stable neighbors. For example, ants have many reciprocal relationships with other species. Ant colonies stay in one place. In contrast, honeybees don’t have such relationships.[7] Honeybee colonies often relocate.

Reciprocal altruism starts with this question: Do we have a shared future? With unstable neighbors, expected future meetings decline. With unstable neighbors, reciprocal altruism fails.[8]

Charity strangers

So, what do games, fish, ants, and bees have to do with fundraising? In each case, sustainable giving starts by answering, “Do we have a shared future?” Stable neighbors have a future together. Passing strangers don’t.

Some charities see the big “open ocean” of generic prospects. They think success lies there. They like their own story. So, their thought is this:
“Just throw our message as far and wide as possible! The potential is unlimited!”[9]

This sounds good. And, yes, the charity can “reach” many prospects. But it reaches them as a stranger.

Approaching another as a stranger doesn’t encourage sharing. (Nature says, “Strangers make bad partners.”) Thus, this “open ocean” approach isn’t initially rewarding. Professor Adrian Sargeant explains,
“It typically costs nonprofits two to three times as much to recruit a donor than they will give by way of a first donation.”[10]

Nevertheless, this strategy can eventually work. But it works only if the charity then becomes a stable, reciprocal neighbor. The charity must create a shared future with the donor. In the game, this means ongoing reciprocal interactions.

Charity neighbors

Call it engagement. Call it relationship. Call it community. These are all good social-emotional words. But in the game, they simplify to one thing. These are the expected number of future reciprocal interactions. Increase this and giving makes sense. Eliminate this and it doesn’t.

How can a charity increase future reciprocal interactions? There are many ways. Maybe it’s building a mutually supportive community of board members. Maybe it’s creating compelling volunteer activities. Maybe it’s hosting attractive gatherings.

But let’s start simple. Want to succeed in fundraising? Go see donors.[11] Bring a gift. Neighbors do that. Good ones do it regularly.

It sounds simple. But it’s rare because it’s hard work. Staying in the office is easier. Pontificating about branding style guides is more fun. But answer this: “What works in the primal-giving game?”

The game isn’t about marketing corporate-speak. Instead, it depends on a number. It depends on the expected number of future reciprocal interactions. This starts with a simple question: “Do we have a shared future together?”

Charity neighbors and strangers in legacy giving

“Go see donors?” Really? Is that it? No. But it starts there. Many charities fail to take this first step, even with potentially large donors.

Consider legacy giving. The estate gift is normally, by far, the largest gift a donor will ever make.[12] And yet, charities often react to learning of such a planned gift – by disappearing.

Modern campaign metrics use a “count it and forget it” approach. A charity learns it is in the donor’s will. So, it declares victory, and then disappears. Fundraisers receive no credit for maintaining the relationship. The neighborly visits stop. This changes the answer to, “Do we have a shared future?” It changes the expected number of future reciprocal interactions. What happens then? The gift goes away.[13]

One study looked at decedents from several large charities’ legacy societies.[14] What happened during their last two years of life? About one in four received no communications from the charities. Among these people, half removed their gifts. But for those who got at least one communication, fewer than a quarter removed their gifts.

This seems obvious, right? Stay connected to your donors. But even among these large charities, it often didn’t happen. And when it didn’t, the gifts went away.

Neighbor strength and stability in nature

Reciprocal altruism works best with a strong, stable neighbor. In the game, sharing with a player who is about to leave makes no sense. This changes the answer to the question, “Do we have a shared future?” In nature, weakness or sickness usually ends reciprocal cooperation.

Researchers explain,
“The ability to monitor cues for the likelihood of continued interaction is helpful as an indication of when reciprocal cooperation is or is not stable…. Illness in one partner leading to reduced viability would be one detectable sign of declining [future interactions]. Both animals in a partnership would then be expected to become less cooperative.”[15]

This occurs even at the microscopic level. In a “microbiome mutiny,” formerly helpful bacteria become harmful when a host becomes seriously ill.[16] The strategy makes sense. A partner who is likely to expire can’t offer long-term reciprocity. Reciprocal altruism no longer works.

In the game and in nature, sharing works best with a strong, stable partner. This is true for people, too. In experiments, people are more likely to share with a high-status player.[17] Even in primitive tribes, high-status members receive more gifts of food.[18]

Charity strength and stability in fundraising

For real world fundraising, the results are similar. Donors give more to strong, stable charities.[19] Studies using financial data from thousands of charities confirm this. One reports that fundraising success is predicted by a charity’s
“Ability to continue to operate and provide charitable services in the event of changed economic circumstances.”[20]

Another concludes,
“Donors want to know whether the organization can continue to operate in the future.”[21]

But wait. Shouldn’t large donations go to the neediest organizations? Nature says no. Nature says share with the strongest, most stable partners.

Do large donations go to the neediest organizations? Of course not. More than two-thirds of all donations over $1 million go to universities that hold large endowments or foundations that are large endowments.[22] In 2019, nine of the ten largest charitable gifts went to such groups.[23]

Stability is particularly important for estate gifts. Death reminders increase giving to a charity when it is described as making a “lasting” – rather than an “immediate” – impact.[24] Among those with estates over $5 million, 78% of charitable dollars go to permanent foundations.[25] Over a quarter of all charitable bequests to education go to just 35 of the wealthiest, oldest, and most stable private schools.[26] As in nature, strength and stability attract giving.

Showing charity strength and stability

Strong, stable charities attract major gifts. If you have it, emphasize it. Be careful though. This isn’t just about, “Aren’t we so great?” It’s still about the donor. It’s about answering, “Do we have a shared future together?” Strength and stability messages can help. They help when they show that, “Donors can make a lasting impact here.” They help when they show that, “We can have a long future together.”

But what if the charity is new? In experiments, just using permanence language to describe impact can help.[27] Also, when a charity doesn’t have permanence, it can sometimes borrow it.

It can borrow it from other supporters. A community of wealthy and committed donors has strength and stability, even if the charity is new. Strong, stable supporters encourage giving by others. Research experiments show this. People are more likely to donate after seeing a high-status player give than after seeing a low-status player give.[28]

A charity can even borrow permanence from other organizations. In experiments, the chance to endow a permanent fund can dramatically increase donations.[29] Even a new or unstable charity can offer this. It can create a fund held by a strong community foundation.

Conclusion

In the game, giving depends on a question: “Will we play future reciprocal games?” In other words, “Do we have a shared future?” In nature, and in fundraising, the same question applies.

There are many ways to show, “Yes, we have a shared future.” There are many ways to build community. There are many ways to be a strong, stable neighbor. Pick your favorite. But the underlying game still matters. When a charity wins the primal-giving game, it wins the fundraising game.

Footnotes:

[1] Boyd, R. (1988). Is the repeated prisoner’s dilemma a good model of reciprocal altruism? Ethology and Sociobiology, 9(2-4), 211-222.

[2] “With two individuals destined never to meet again, the only strategy that can be called a solution to the game is to defect always despite the seemingly paradoxical outcome that both do worse than they could have had they cooperated.” Axelrod, R., & Hamilton, W. D. (1981). The evolution of cooperation. Science, 211(4489), 1390-1396. p. 1391.

[3] Sznycer, D., Delton, A. W., Robertson, T. E., Cosmides, L., & Tooby, J. (2019). The ecological rationality of helping others: Potential helpers integrate cues of recipients’ need and willingness to sacrifice. Evolution and Human Behavior, 40(1), 34-45. p. 35.

[4] Axelrod, R., & Hamilton, W. D. (1981). The evolution of cooperation. Science, 211(4489), 1390-1396. p. 1395.

[5] See, e.g., Getty, T. (1987). Dear enemies and the prisoner’s dilemma: Why should territorial neighbors form defensive coalitions? American Zoologist, 27(2), 327-336.

[6] Axelrod, R., & Hamilton, W. D. (1981). The evolution of cooperation. Science, 211(4489), 1390-1396. p. 1394

[7] Id. p. 1394; Wilson, E. O. (1971). The insect societies. Bellknap.

[8] Examples of inter-species cooperation must be based exclusively on reciprocity, as similarity is impossible. However, the importance of neighborhoods increases even more for intra-species cooperation because neighbors tend to also have a higher probability of genetic relatedness. See Eshel, I., Samuelson, L., & Shaked, A. (1998). Altruists, egoists, and hooligans in a local interaction model. American Economic Review, 88(1), 157-179.

[9] Or, as Greg Warner calls it, the “spray and pray” method. See Warner, G. (2018). Engagement fundraising: How to raise more money for less in the 21st century. MarketSmart.

[10] Steinberg, R., & Morris, D. (2010). Ratio discrimination in charity fundraising: The inappropriate use of cost ratios has harmful side-effects. Voluntary Sector Review, 1(1), 77-95. p. 86.

Citing to,

Sargeant, A. (2008). Donor retention: What do we know and what can we do about it? Association of Fundraising Professionals, www.afpnet.com/content_documents/Donor_Retention_What_Do_We_Know.pdf

[11] For an excellent description of this concept see, Tumolo, J. (2017). Go see people: Grow your fundraising program. Independently published.

[12] Decedents in 2007 with estates of under $2 million, $2<$5 million, $5<$10 million, $10<$50 million, $50<$100 million, and $100 million+, produced estate gifts averaging 3.5 times, 20 times, 25 times, 28 times, 50 times, and 103 times, respectively, their average annual giving in the last five years prior to death.
Steuerle, C. E., Bourne, J., Ovalle, J., Raub, B., Newcomb, J., & Steele, E. (2018). Patterns of giving by the wealthy. Urban Institute. Table 4.
https://www.urban.org/sites/default/files/publication/99018/patterns_of_giving_by_the_wealthy_2.pdf.

[13] For data on the end-of-life instability of charitable estate components, see James, R. N., III., & Baker, C. (2015). The timing of final charitable bequest decisions. International Journal of Nonprofit and Voluntary Sector Marketing, 20(3), 277-283.

[14] Wishart, R., & James, R. N., III. (2021). The final outcome of charitable bequest gift intentions: Findings and implications for legacy fundraising. International Journal of Nonprofit and Voluntary Sector Marketing, 26(4), e1703.

[15] Axelrod, R., & Hamilton, W. D. (1981). The evolution of cooperation. Science, 211(4489), 1390-1396. p. 1395.

[16] Rózsa, L., Apari, P., & Müller, V. (2015). The microbiome mutiny hypothesis: can our microbiome turn against us when we are old or seriously ill? Biology Direct, 10(1), 1-9.

[17] Ball, S., & Eckel, C. C. (1998). The economic value of status. The Journal of Socio-Economics, 27(4), 495-497. They’re also more likely to join a high-status person in supporting a cause. See, Ebeling, F., Feldhaus, C., & Fendrich, J. (2017). A field experiment on the impact of a prior donor’s social status on subsequent charitable giving. Journal of Economic Psychology, 61, 124-133.

[18] Hames, R. (2017). Reciprocal altruism in Yanomamö food exchange. In L. Cronk, N. Chagnon, & W. Irons (Eds.), Adaptation and human behavior: An anthropological perspective (pp. 397-416). Routledge. (“Research in hierarchical societies (Betzig 1988; Bird and Bird 1997) clearly shows that high-status households receive disproportionately more and give disproportionately less in food exchanges.”)

Citing to,

Betzig, L. (1988). Redistribution: Equity or exploitation. In L. Betzig, M. B. Mulder & P. Turke (Eds.), Human reproductive behavior: A Darwinian perspective (pp. 49-63). Cambridge University Press;

Bird, R. L. B., & Bird, D. W. (1997). Delayed reciprocity and tolerated theft: The behavioral ecology of food-sharing strategies. Current Anthropology, 38(1), 49-78.

[19] Trussel, J. M., & Parsons, L. M. (2007). Financial reporting factors affecting donations to charitable organizations. Advances in Accounting, 23, 263-285; Parsons, L. M., & Trussel, J. M. (2008). Fundamental analysis of not-for-profit financial statements: An examination of financial vulnerability measures. Research in Government and Nonprofit Accounting, 12, 35-56.

[20] Parsons, L. M., & Trussel, J. M. (2008). Fundamental analysis of not-for-profit financial statements: An examination of financial vulnerability measures. Research in Government and Nonprofit Accounting, 12, 35-56. p. 35. (Also see p. 52, “Our results suggest that contributions are positively associated with a charitable organization’s ability to continue to operate …”)

[21] Trussel, J. M., & Parsons, L. M. (2007). Financial reporting factors affecting donations to charitable organizations. Advances in Accounting, 23, 263-285. p. 268.

[22] See, e.g., Coutts and Co. (2015). Coutts million pound donors report. http://philanthropy.coutts.com/en/reports/2015/united-states/findings.html and http://philanthropy.coutts.com/en/reports/2015/united-kingdom/findings.html

[23] Yakowicz, W. (2019, Dec. 29). The biggest philanthropic gifts of 2019. Forbes. https://www.forbes.com/sites/willyakowicz/2020/12/29/the-top-10-philanthropic-gifts-of-2019

[24] Wade-Benzoni, K. A., Tost, L. P., Hernandez, M., & Larrick, R. P. (2012). It’s only a matter of time: Death, legacies, and intergenerational decisions. Psychological Science, 23(7), 704-709.

[25] Raub, B. G., & Newcomb, J. (2011, Summer). Federal estate tax returns filed for 2007 decedents. Statistics of Income Bulletin, 31, 188-191. https://www.irs.gov/pub/irs-soi/11essumbulestatereturns.pdf (among decedents in 2007 with estates of $5 million and above, 78% of charitable dollars went to private foundations).

[26] Fleischer, M. P. (2007). Charitable contributions in an ideal estate tax. Tax Law Review, 60, 263-321. p. 303.

[27] Wade-Benzoni, K. A., Tost, L. P., Hernandez, M., & Larrick, R. P. (2012). It’s only a matter of time: Death, legacies, and intergenerational decisions. Psychological Science, 23(7), 704-709.

[28] Kumru, C. S., & Vesterlund, L. (2010). The effect of status on charitable giving. Journal of Public Economic Theory, 12(4), 709-735.

[29] James, R. N., III. (2019). Encouraging repeated memorial donations to a scholarship fund: An experimental test of permanence goals and anniversary acknowledgements. Philanthropy & Education, 2(2), 1-28.

Related Resources:

• Donor Story: Epic Fundraising eCourse
• The Fundraising Myth & Science Series, by Dr. Russell James
• The Importance of Asking Permission to Ask More Questions
• Finally, the questions you should ask that have been proven to lead to gifts from wealth

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