Generous by default: A field experiment on designing defaults that align with past behaviour on charitable giving

Defaults can influence behaviour in many contexts, from savings to organ donations registrations, but can also reduce an individual’s perception of control if they don’t take into account individual preferences. This paper examines defaults in a charitable giving setting where a preference for control might limit the role of the default option. We run a field experiment with an NGO hosting an online peer-to-peer micro-lending platform. Lenders, who had their microloans fully repaid but had taken no action for over one year, were invited to use their money in one of four ways: withdraw, lend to a new borrower, donate to the NGO, or leave idle. In the control condition, there was no default. In the ‘default loan’ and ‘default donation’ treatments, lenders were told that if they did not take any action their money would automatically be re-lent to a new borrower or donated to the NGO respectively. We find that both defaults increase the proportion of individuals giving and the amount given, compared to the control, and that the increase was largest in the ‘default loan’ treatment. This suggests that aligning defaults with past behavior can increase their effectiveness.