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What is the ROI of a tribute gift?

March 20th, 2012
giving

Many charities let you make a gift in honor of someone: Oxfam, Partners in Health, Against Malaria. Joe donates in honor of Mary, who gets a card in the mail to let her know. Perhaps Mary later feels generous and decides to give to that charity, maybe even doing so annually, in which case Joe's gift had a greater charitable impact than just the initial donation.

This is the return on investment (ROI) of a tribute gift. And I think a place like Oxfam could measure it: they know when someone makes a tribute gift, and they know if and how much the recipient later starts giving. The ROI may be small, but if it's greater than the additional cost mailing a thank-you imposes on the charity, perhaps you should start making all your donations in honor of friends.

This does depend on whether your friends like getting these cards. If your friends don't like to get "Joe has bought a goat in your honor," you're converting social capital in the form of friendships into charitable donations, and probably not even at a very good exchange rate.

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