Charity Triples Donations by Eliminating Overhead Costs

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Nonprofit organization charity: water faced a recurring challenge of losing the majority of its donors each year, forcing the team to constantly rebuild its funding base. Founder Scott Harrison brought an unusual perspective from his background in persuasion psychology in the Manhattan club scene and suspected that traditional nonprofit fundraising strategies were missing something fundamental about human nature. By securing separate major donors to cover the organization's overhead costs, charity: water was able to guarantee that 100% of public donations went directly to program delivery, allowing donors to feel their personal contribution created direct change. An experiment involving 40,000 potential donors showed this "zero-overhead" approach nearly tripled donations compared to standard solicitation, early commitment messaging, and matching opportunities.

Why it matters

charity: water's discoveries reveal that donors don't object to organizational overhead - they simply prefer not to fund it directly. Contributors want confidence that their specific investment creates tangible progress on issues they value, rather than focusing on organizational efficiency metrics. This insight challenges long-held fundraising orthodoxy and points to a more effective way for nonprofits to engage supporters and maximize donations.

The details

Before founding charity: water, Scott Harrison had mastered persuasion psychology in Manhattan's club scene. He suspected that traditional nonprofit thinking was missing something fundamental about human nature. The standard nonprofit fundraising playbook relied on strategies like showcasing early commitments from major backers and promising to multiply every gift through matching programs. But the problem was that when donors gave $100, only about $75 went to programs while $25 went to overhead costs. Donors often viewed that $25 as 'waste' even though it was necessary to run the organization effectively. charity: water's solution was to get separate major donors to cover the $25 overhead entirely, so public donors could give $100 knowing it all went directly to the cause they cared about.

• In 2026, charity: water conducted an experiment involving 40,000 potential donors.

What’s next

The findings from charity: water's experiments have the potential to transform nonprofit fundraising strategies across the sector, as organizations seek to maximize donor engagement and contributions.