I’m interested in charity from several perspectives – personally, I think it’s a moral duty; professionally, it’s baked into the business model where I work; and academically, I like to geek out on the behavioral economics. So, when this item came to my attention, I had to blog it. I blogged it at work, but I want to expand on the idea a bit here.

The short story is that somebody somewhere set up an online fundraising page that won’t take donations of less than $25. I think that’s foolish on a practical level and offensive on a philosophical level.

Why would you set a minimum donation? I suppose either it’s too expensive to process small donations, or you’re trying to encourage larger donations and are willing to take the risk that some people will just walk away.

First up, cost. I’m in this business. I know that fees for online transactions (or donations) are percentage fees and probably less than 10%. Credit card processing costs 2-3%. If there’s a service that charges a flat fee per donation, I don’t know about it. And if there is a service that charges such a fee that a $25 donation isn’t worth taking, I would call that service “theft.”

Second, encouraging larger donations. I think the $25 minimum is a bit too draconian. Look at how public radio does this – you can give any amount but you only get the mug or t-shirt at particular minimum levels. When you get a solicitation in the mail, it probably has boxes to check off at various levels, but I bet they wouldn’t send your check back if it were too small. And it might well cost them a couple of dollars to process a paper check. There are lots of positive ways charities can encourage larger donations, usually by giving recognition incentives or by demonstrating what good larger amounts can do, such as $x can feed a hungry child, $y can feed a family, etc.

Ok, I’m done with that rant. Well, actually, I’m not. Let’s suppose for a moment that it actually does cost $25 to process an online donation. Would you or should you accept a $26 donation? It’s a dollar, right?

I say yes, emphatically yes. In fact, I think if cost you $25 to process a donation, you should be willing to take a $20 donation, maybe even less, if it gets you one more donor, one more evangelist for your cause, one more address on your mailing list.

As a marketer, I regularly pay a few dollars for a sales lead.  Not a sure thing at all.  If I could pay a couple of dollars to get somebody on my list who has a proven track record of spending money on me, I think I would do it.  Wouldn’t you?

As a quant-oriented marketer, I’m open to the possibility that this restriction actually turns out to raise more money.  It’s possible that the people who up their donation outweigh those who walk away.  I suppose on some level it’s worth testing, but I also have to wonder about the message that this kind of thing sends to the donors.

High price and exclusivity are positive brand attributes for luxury goods but hardly for charities.  If you don’t want $10 more to help fight AIDS, I don’t think you’re really serious about fighting AIDS.  And if you say that $10 isn’t enough, maybe it’s all some people can spare today, but maybe in the future they’ll have more, and I don’t suppose they’re likely to give it to somebody who turned them down last time.