Helping Nonprofits Raise More Money & Do More Good

Fundraising: Half Art and Half Science

Posted: December 4, 2015 |

One of the best, and simultaneously worst, decisions I ever made was taking a philosophy class in college. I had an empty class that needed to be filled and there was a 200-level Medieval Philosophy course being taught by a great professor that didn’t require any prerequisites. So I signed up.

Turns out I knew nothing about philosophy. From the first day, other students, who had taken pre-reqs, were quoting Plato and Socrates like it was second nature. And I was left playing catch up. Eventually it was a great experience, although it sure brought the ol GPA down, and I came across some great quotes like this one from Plato:

“Human behavior flows from three main sources: desire, emotion, and knowledge.”

My career in the nonprofit world has largely been driven by desire and emotion. Compelled to try and make a difference, help others and live out what I believe. But it’s been the ‘knowledge’ where I’ve had to force myself to grow. And one area where I’ve found a lot of value is in looking at scientific research on donor behavior – why do people give?

Here are 3 of my favorite scientific studies on giving and what they mean for your cause.

1. Avoiding Overhead Aversion In Charity

In this experiment, published in Science, donors were asked to support the same organization but different randomly selected groups received four different appeals: one like normal (control), one that said they had seed funding donations already in place towards their goal (seed), one that offered to match donations (match) and one where “overhead” was being covered by another donor (overhead). Here were the results:

My theory on why the ‘overhead’ appeal worked so well is twofold:

  1. It removes a barrier to giving. Donors believe “overhead” is a measurement of effectiveness for charities and, rightly or wrongly… okay wrongly…, having that removed makes it easier for them to give. 
  2. It makes the impact feel closer, bigger. It feels like their donation goes even further. There is no ‘middle man’ taking a cut, and will do even more good. 

Key Takeaways:

  • Any incentive is better than no incentive. The seed funding and matching appeals also outperformed the control so using any incentive can help inspire giving.
  • Remove barriers to giving. Taking away overhead is one way, but having easy to complete donation forms online, putting “trust marks” on your website and making your financials available online all help reduce some barriers people have when giving.
  • Make donors feel like they are making an impact. Be specific when you talk about your work and in particular use personal stories and stories of one person.

2.  Model of the Value of Giving to Others Compared to the value of Having More for Oneself

I came across this study in the book The Science of Giving: Experimental Approaches To The Study of Charity and the chapter name only covers a bit of what they discuss. In looking at the value of giving and receiving, the researchers determine that the value of giving slope is concave – or value, I call it happiness in the chart below, diminishes as giving goes up after rising sharply.

 

 

One of the studies they did to arrive at this conclusion was asking people if they would rather give $200 to charity on Day 1 and nothing on Day 2, $100 on each day, or $200 on Day 2 and nothing on Day 1. 73.1% of respondents preferred $100 on each day.

A second similar question was asked where they could give $120 away all at once, over the course of 12 months or at the end of month 12. 61.5% chose to spread out their payments even though it’s easier for them to give away at the start in one sum, and better for the charity, or better for them to hold on to the money for 12 months.

There’s something about spreading out our payments, in this case giving, that feels simple, effective and powerful.

Key Takeaway’s:

  • Have a monthly giving program. This seems like a no-brainer but monthly giving programs are good for donors because they can spread out their payments – they’re very good for you too by the way
  • Don’t be afraid of asking for more, smaller donations, more frequently. You still need to report back to donors, thank them and be respectful of their support, but you shouldn’t wait all year and take your one chance at year end to get donations. People actually like giving in small amounts more often (it makes them happier).

3. Social Influences In Giving

We are heavily influenced by our social networks and surroundings even if we don’t always realize it. And charitable giving is the same. This study is also in the Science of Giving book and it was done in the field with a public radio station telephone fundraising program. Here’s how they set up the experiment:

“After being greeted by a volunteer, callers were randomly assigned to either a control group (where they received no social information) or to an experimental group in which they were told, “We had another donor who gave X dollars. How much would you like to give today?” These amounts varied in increments of $75, $180, and $300, and we examined each increments impact on giving.”

Here were the results:

When we know that others are giving we are more likely to give ourselves. And if we know amounts or averages, we are likely to “anchor” our own donations and giving around that.

Key Takeaway’s

  • Share average donations. In an email or direct mail appeal, mention what the average person gives to your organization and have it as one of the suggested donation amounts.
  • Allow donors to share their donation, and amount, easily. On your thank-you donation page, or through the donation tool you use, allow people to easily share their donation and amount on social media.
  • Share donor stories, with donation amounts. Tell the story of a donor, what they gave, why they gave and the impact the donation has had – on them and for your organization.

So…

If you’re like me and got into the nonprofit space based on your desire and emotion, I hope you’ll continue to pursue insights into why people give and support a cause. By using intangible incentives, like matching, allowing for separation of payments, through monthly giving, and leveraging social factors, sharing donor stories and donation amounts, these scientific insights can be translated into a better bottom line for you, your organization and your cause.

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