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Rewarding Altruism: Can It Be Effective?

1/12/2009 --

Ross professor shows which incentives best impact blood donations, and receives $330,000 National Science Foundation grant to expand research.

ANN ARBOR, Mich.—Research by Stephen M. Ross School of Business Professor Mario Macis is shedding light on which types of incentives for voluntary, pro-social behavior are most effective, and the work could have important public policy implications.

Macis and his co-authors have found that offering non-cash but material rewards for blood donations can increase turnout and the blood supply. Macis focused on this area because blood shortages are frequent in most Western countries despite regular information campaigns. Paying money for blood is either illegal or against policy in many Western countries.

Several studies have backed up the claim that paying cash for blood lowers the quality of donors and the quantity of blood. Other research has shown that incentives tend to lower the quantity and quality of altruistic activity.

But after observing a program in Italy where employees are given a day off in return for a blood donation, Macis concluded that certain types of rewards can increase donations without the negative effects.

Macis and the study's co-authors -- Nicola Lacetera of Case Western Reserve University and Robert Slonim of the University of Sydney -- were awarded a $330,000 National Science Foundation grant recently for a field study in partnership with the American Red Cross to expand the research. The Ross School is the leading institution in the grant-funded study.

The research could help solve a persistent medical and social issue and serve as a guide for businesses and nonprofits looking to drive other pro-social behaviors such as recycling or carpooling.

"Our interest is not purely academic," Macis says. "The question is what happens when we give people a reward for activities many perform without incentives. Blood donation is the most obvious case, but it extends to other environments."

In the case of the day off incentive in Italy, the program led the donor-employees to make one extra blood donation a year, on average. Many of the employee-donors maximized the benefit, scheduling the blood donation and the day off for a Friday to extend the weekend.

"The popular wisdom is that you shouldn't pay or offer rewards for blood because you would necessarily destroy the sense of civic dedication and discourage donation," Macis says. "That was true for only a fraction of the donors. It did not hold for most of them."

That could be due to two factors in the Italian study. First, the reward of a day off is considered major compensation, and other studies have shown large rewards do not create the backlash. Small prizes, however, can lead to the erosion of civic behavior. Second, the Italian system gave donors who eschewed an award an out. They could simply donate blood on their own time and not take the day off.

"It appears helpful to leave room for people to refuse the incentive," Macis says.

The NSF grant will fund a study with the American Red Cross to examine the effect of non-cash gifts or symbolic awards on blood donations. American Red Cross policy prohibits paying for blood donations, though small gifts such as t-shirts, gas cards, or coupons are allowed.

A preliminary study by the Macis and his co-authors found that the amount of blood collected at drives increases significantly when donors are offered a non-cash incentive, both material and symbolic. But some of the extra donors came from neighboring areas where there were blood drives with no incentives.

Macis and the other authors will use the grant to perform a larger study on the issue with the American Red Cross that will chose locations randomly and add experimental controls. This will provide better data on how the incentives work, what kinds of incentives might work, and measure potential negative effects. A small-scale pilot study is scheduled for March, with the full study starting in June. The results should be ready by Spring 2010.

The work could help further explain the dynamic of incentivizing altruistic behavior while giving nonprofits and businesses an idea of strategies might work and which ones might backfire.

"We are starting our work with a situation where altruism isn't enough," Macis says. "From a public policy issue, we're looking at the constant shortages of blood and why we think incentives might help. We'll know more after the field experiments."

—Terry Kosdrosky



For more information, contact:
Bernie DeGroat, (734) 936-1015 or 647-1847, bernied@umich.edu