On KQED's pledge gift schedule

| Comments (5) | Overthinking
While listening to KQED's latest pledge drive, I noticed something funny about their thank you gift schedule. This time, they offered the option to have you not take any gift but instead donate it to the SF Food Bank.. The schedule looks like this:

Donation ($) Meals
40 2
60 5
144 33
360 180

This seems strangely non-linear, which suggests something interesting, namely, that the fraction of your pledge that KQED uses to pay for thank you gifts as opposed to using to fund their operations. There's way too few points here to do a proper fit but I can't help myself. Playing around with curves a bit, a quadratic seems to fit pretty well, with parameters: Meals = .0014 * Donation^2 + 1.2. It's not just the $360 data point that throws it out of whack, either. There's apparent nonlinearity, even in the first three points. (Again, don't get on me about overfitting: with only four points there's only so much you can do.)

I'm not sure what this suggests about their business model. Naively, I would have expected the fraction of your donation that goes to gifts to go down as your gift went up. Indeed, you might have thought that they would take a small loss on the smallest pledges just to get people involved and then move to the upsell at some later date. Thinking about it some more, I guess the natural model is that KQED as trying to extract money from you up to the point where the marginal dollar they extract from you costs them a marginal dollar in gifts (or in this case food bank donations) at which point they stop. So, as people's marginal utility of having given something, anything, to KQED declines, they need to keep jacking up gift quality faster than the size of the donation to keep extracting your cash. Other theories are of course welcome.


Or those who donate more on the pledge drive are easier to get more money out of later and/or can be sold on the mailing list for more money, so someone who gives $350 when you just beg for it on the radio is far FAR more likely to give more than someone who give $40.

Me, I always decline the gifts[1], and just give the money to the station (WNYC, in my case). Why would I want to give, say, $120 to the station and have part of it go toward an overpriced DVD, and only have $80 be considered a contribution? I give it all to the station.

[1] Well, almost always. I did accept one once that I couldn't get elsewhere: a pair of "Dr Who dematerializing tardis" mugs.

It could simply be that the Food Bank has economies of scale such that larger donations go further in how they compute the # of equivalent meals.

The food bank can feed people for 33ยข per meal according to their site.

Listeners could give money directly to the food bank. The food bank's economies of scale don't really depend on the size of separate donations, especially if they're all funneled through the radio station.

I think you're right that the fraction of the pledge returned as a gift should decrease. So clearly the gift is not the number of meals, but the number of hungry people who don't get a meal because you gave your money to the radio station instead.

Give $40 to KQED instead of the food bank: 118 people starve (98% of your pledge value).
Give $60 to KQED instead of the food bank: 175 people starve (97% of your pledge value).
Give $144 to KQED instead of the food bank: 400 people starve (92% of your pledge value).
Give $360 to KQED instead of the food bank: 900 people starve (83% of your pledge value).

I think Nicholas has it right. I have nothing other than the deluge of crap that I've received after giving them money as evidence, but I think that most of KQED's revenues come from selling your name and address to other people, and the more you donate the more you're likely to be a sucker for all the other stuff people would want to sell you.

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