The Psychology of Giving: Charity vs. Retail Transactions

In recent years, the rise of contactless giving has revolutionised how people donate, making the act of donating more spontaneous and effortless.

Retail transactions are primarily motivated by self-interest. When people buy something, they expect a product or service in return, and this decision to buy is usually influenced by both necessity and desire. 

A customer knows the cost of something upfront, and has decided that the item justifies them parting with their money - it's a fair exchange. 

In retail, the psychological reward is immediate and personal - the satisfaction of acquiring something new which fulfils a need, or indulges a desire for parting with their cash.

The term 'shopaholics' derives from people constantly looking for this purchasing high. The release of dopamine, (a hormone and type of neurotransmitter associated with pleasure and reward) creates a sense of happiness or excitement. This cycle of anticipation, purchase, and reward is something retailers count on, and drives much of consumer behaviour.

Giving to charity is psychologically very different. Unlike retail, the donor is receiving nothing physical in return, it’s essentially a selfless gesture involving empathy, compassion, and a sense of social responsibility. 

The rewards from giving are often delayed, but they can be just as powerful as those associated with retail purchases and can also contain an element of self interest.  As well as helping a good cause, the donor has confirmed themselves as being a good, caring person with values.  Some donors may experience a ‘warm glow’ from knowing they’ve helped someone in need, and although different to the ‘high’ derived from a retail purchase, still taps into the brain’s reward system.

Social recognition can also play a part; people are often motivated to give because it aligns with societal norms and expectations. Public recognition of charitable acts, whether through social media, community accolades, or acknowledgment by the charity, can boost the donor’s sense of self-worth and social standing.

Contactless giving has reduced decision fatigue. In traditional forms of giving, such as filling out a donation form, remembering to visit a website, or needing to find cash, the process itself can be a barrier. People may hesitate, reconsider, or abandon the idea altogether due to the effort involved. 

The speed and simplicity of contactless giving means donations are more spontaneous and easier than ever before.  Just as people make impulse purchases, they can also make impulse donations, without overthinking or delaying the decision which is great news for charities! Charities can now make the most of an opportunity to collect funds when people are inspired and encouraged to donate ‘in the moment’.

Contactless giving can create a positive experience. The instant gratification and self affirmation of contributing to a good cause, combined with the ease of the transaction, can encourage repeat behaviour which is so important to  charities.

By using charity specific software, you are also taking away the potentially awkward conversations of “how much should I give?” and giving the donor complete control.

Looking at the difference between retail transactions and charitable giving, it’s clear that charities need to work harder and smarter for the ‘give’.  They don’t have the shiny new item to give to the donor in return, there is a bigger and trickier ‘ask’, and this is where donation specific software like Give A Little comes into play.  

Using the software to create a story, using words and images, using the right language and tone is the equivalent of a catalogue of items to choose from. It’s a way to show donors the value of their gift , encourage them to donate and then thank them brilliantly - to bring the ‘warm glow’, give them a great experience and make them want to donate again!

• Not having to handle cash - revenues go straight to the charity

• Higher average donation values

• Allowing donors to pay in the way they want to with confidence

• Preventing donors walking off because they don’t have cash

• Donors don’t have to be anonymous - they can provide their details for Gift Aid and marketing consent

• Multiple income streams

• Offline/ Gift Aid/ marketing consent

• Tap to Pay (Android phones without the need for a card reader)

Sign up to Give A Little today