Describing complex charitable giving instruments: Experimental tests of technical finance terms and tax benefits

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6 Scopus citations


Planned giving, including charitable remainder trusts, charitable gift annuities, remainder interest deeds, donor advised funds, and gifts of appreciated stocks and bonds, can offer substantial benefits to donors and provide needed support to charities. However, presenting complex charitable planning options creates unique challenges. Past experimental work demonstrates that social or emotional concerns motivate charitable giving decisions, but that financial or monetary reminders promote a market-exchange mentality reducing both social concern and charitable donations. Consequently, some recommend eliminating references to tax benefits when introducing charitable planning options. Yet, tax benefits may be a motivational and socially acceptable form of donor benefit because they cost the charity nothing. A series of experiments measuring interest in pursuing various planned giving arrangements demonstrates that although using technical financial terms—including even the technically correct name of the instrument—does reduce interest, referencing tax benefits increases interest. Gratuitous technical finance references may engender a market-exchange mindset and thereby reduce charitable interest. However, a simple description of donor tax benefits—a socially acceptable benefit also relevant for a market-exchange mindset—can still motivate charitable giving. The experimental results suggest that when initially describing complex charitable options, practitioners should avoid technical financial terminology, but should mention, and even lead with, tax benefits.

Original languageEnglish
Pages (from-to)437-452
Number of pages16
JournalNonprofit Management and Leadership
Issue number4
StatePublished - Jun 1 2018


  • charitable giving
  • financial planning
  • fundraising
  • philanthropy
  • planned giving


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