A new book being released next month, The Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life, explores a wide range of marketplace situations and field experiments conducted by behavioral economists John List and Uri Gneezy. Their research goes far beyond just philanthropic decision-making, but the work definitely relates to how nonprofits raise money. Their premise? That we must do a better job of addressing donors’ self-interest, not focusing solely on our organizational needs.
According to this new research, what you are accomplishing as a nonprofit organization may actually be less important to some donors than how writing a check makes them feel. People give to charities to make themselves feel good; thus your fundraising messaging should strive to reinforce a person’s sense of well-being instead of simply assuming that “people want to help others.”
This facet of human behavior is what List and Gneezy call the “warm glow of philanthropic sacrifice.” They encourage nonprofits to focus on understanding a person’s ego—not so much selfishness per se, but an individual’s motivations and desires in a donation transaction. The failure to recognize these motivations, List and Gneezy assert, is undermining today’s fundraising.
Simply put, when you’re talking to donors, remember that it’s about them, not about you.
This idea seems cynical and essentially contrary to the way most of us have been raising money, particularly if you’ve been in fundraising for more than 20 years using the usual tried-and-true appeals, client stories, campaigns, and so on. It’s fair to say that the best strategies going forward should better reflect donor self-interest while still meeting your outbound communications goals.
Here are some considerations.
1. This idea may challenge your long-held donor development tactics. Described in this week’s Chronicle of Philanthropy, List has proposed (and proven) the crazy wisdom of telling donors that they can give once and never be asked again. An appeal from a health-care organization that included this “give now, and we promise to leave you alone” approach raised nearly twice the usual dollars of its earlier campaigns, still without compromising the quality of its donor list. Since only a third of the donors who gave checked the “never again” box, that still keeps two-thirds of them willing to be approached again and eliminates the waste of sending future appeals to people who don’t want them.
2. We’re definitely seeing this “meet their needs, not just yours” phenomena in research about nurturing the next generation of givers. Millennials are drawn to local events where they can meet and mingle with like-minded peers. In their fundraising toolbox, some nonprofits are de-emphasizing all the time and effort that it takes to produce events and thinking that a strong social media presence is everything, but that’s probably a bad idea. Keep it balanced.
3. The fact that altruism is linked with self-interest is demonstrated perfectly in the model of Tom’s Shoes and their “One for One” project. With every pricey purchase, the customer gets one cool pair of shoes (and let’s be clear, they know that the little logo on the back of the shoe is showing) and a second pair is provided as part the company’s international aid work, which also includes not just shoe-giving but also health checkups, distribution of medicine and vaccines, microfinance programs, youth leadership programs, school support, and vocational training for older teens. This model builds on the fact that ego or vanity is part of the equation. Good still happens.
4. Meeting donors’ needs also means accepting that their fatigue is real and just the sheer messaging “noise” of our lives affects how we respond to appeals. Are your longtime donors sighing and saying, “No matter what I do, they will always need more,” and are you assuming that this is a sustainable relationship? You may want to consider locking in a donor to a given amount, as AfricAid does with its Kisa Sponsors. The donor gets to make a finite, specific gift with high, tangible “braggability.” Meanwhile, you sacrifice the time-honored (but potentially destructive) ability to always try to upgrade every giver to write a bigger check.
5. Think about whether you should adjust the timing, frequency, or sequence of your appeals, even though you firmly believe you’re following an essential practice. How many people in your database would actually tell you, if asked, “Gosh, I wish I had more fundraising emails from you!” People may be supporting you in spite of, not because of, your manner of communicating. If you were willing to truly design your fundraising year around their preferences, it could be the innovative boost your stale program needs.
6. Another good example of donor self-interest blending with philanthropy is in the rise of “voluntourism,” where a substantial gift to a nonprofit also buys the donor a chance to go visit the operations and/or work there. They get a vacation, you get their dollars, and everybody’s needs are met even if their motivation is only partly fueled by your mission.
7. Habitat for Humanity’s model appreciates that donor self-interest may include getting their hands on the tools and the work—literally. And star power never hurts: Denver’s Globeville neighborhood is one of just a handful across the country selected this year for the Jimmy and Rosalynn Carter Work Project, and the former president and first lady will visit a local construction site here in early October and be honored at an exclusive event. Will some of this money come in based solely on celebrity access? Of course.
8. Some of the newest research in the growing field of behavioral economics, lead by List and Gneezy, examines differences in motivations for philanthropic behavior among men and women. Male donors may be simpler in their thinking, even subconsciously, while women are more likely to be what the researchers call “marginal” donors, i.e., less likely to support something when given an easy chance to opt out. Obviously many factors influence who gives, how much, and why—age, experience, geography, and so on—but if your future fundraising work is truly going to be designed around donor preference and tighter targeting, gender is bound to be a factor.
9. Our official sector stance is that donor-self-interest isn’t something we’re comfortable talking about, and it flies in the face of what many of us want to believe about our life’s work. It’s ironic that amid all the calls for nonprofits to be stronger on measuring impact and outcomes, the reality could be that the personal motivations of an individual donor, both conscious and unconscious, will dictate their giving more than powerful data ever will.
10. Ultimately, this debate comes down to your nonprofit better understanding what its supporters value. People regard acknowledgement, public praise, gratitude, relationships, etc. in different ways, and as noted earlier, ego is a factor for nearly everyone as well. Perhaps considering donor self-interest means re-thinking some older fundraising practices through a new lens. Could you replace your usual donor thank-you’s with a handwritten note from a child you serve? Could it be time to dust off the practice of buying an ad in the newspaper (or a billboard) to thank those donors and sponsors by name? What about returning to the public-radio strategy of coffee mugs or tote bags with your slogan/logo? Embracing donors’ wishes for recognition and belonging doesn’t have to be new or expensive; it’s simply appreciating that their motivations are more complicated, and probably more personal, than we have imagined.