When Less is More: Consumers Prefer Brands that Donate More in Relative versus Absolute Terms

When trying to make a good impression on consumers through charitable giving, is it better for brands to maximize the overall dollars they donate or how much they give in relative terms; for example, the proportion of profits? Across five studies we show that consumers prefer a brand that donates less in absolute dollars, if it reflects a higher proportion of profits, compared to a brand that donates more money overall, when it reflects a smaller proportion of profits. This preference emerges because consumers use the relative size of the donation as a stronger indicator of the brand’s generosity than the absolute dollar amount. The effect persists even when firms make a smaller amount of money seem more generous (i.e., seem larger in relative terms) than a larger amount by condensing the timeframe of a donation.