3 Behavioral Economics Tips All Fundraisers Should Know

Every one of your donors is unique. Their own stories, priorities, and motivations weave through every decision they make, including their decision to support your cause.

But there are also decision-making drivers—rooted in psychology and behavioral economics—that most of us share. And if you understand and apply them every time you talk to your donors, you’ll have a much better chance of cutting through the noise, getting their attention, and motivating them to take action alongside you!

So, how do you do that?

Let’s talk about 3 of these key behavioral drivers, and how they can make your donor communications and fundraising sing.

1. Part Of The Crowd

We have a whole lot of things that set us apart (from what we order at dinner to what’s on our Netflix watch list). But at the heart of things, we’re also incredibly social creatures. We want to be part of the group. That means we like to watch and follow what others are doing, and fit in with social norms.

This has a huge impact on our day-to-day decisions. It also plays a big role in our giving decisions, including what nonprofit to support, how frequently, and how much.

What does this mean for your fundraising?

Think about how you can highlight the voices of the group(s) that your donors are looking to for guidance. Whether that’s groups they already belong to, or groups they want to belong to. Here are a few ways you can do that.

• Share your donors’ stories: Find ways to share your most passionate and dedicated donors’ stories, highlighting why they choose to give, how it makes them feel, and how it reinforces their chosen identity. For example, you could feature one of your monthly donors in your newsletter or on the back of your reply coupon, emphasizing how their regular gift makes them feel like a steady and reliable supporter of those most in need in their community. Social media spotlights, emails, and buckslips are other great ways to weave your supporters’ stories through your donor communications.
• Appeal to supporters’ group identity: Whether it’s a group we’re already a part of, or one we want to join, we all have circles that we gravitate towards. And once we’re inside, we often want to shout it from the rooftops because it’s such a key part of our identity. There are lots of ways you can help your supporters feel like part of a thriving community. One of the simplest and most effective is to give groups of your supporters names that set them apart, like the Greater Vancouver Food Bank’s monthly program, the Full Heart Club, or the Smithsonian National Zoo’s legacy program, The Circle of Life Society. Once you’ve nailed down your program names, give members plenty of opportunities to show off their membership. You can do that in a lot of ways, from social media badges to stickers to membership cards.
• Peer-to-peer persuasion: Peer-to-peer campaigns are a great way to leverage the power of group identity and influence. If you don’t already, consider adding peer-to-peer to your fundraising mix, especially during your major annual campaigns. Make it as simple and straightforward as possible for your supporters to jump on the P2P train, providing clear, easy tips and resources on your website and social media. Make P2P fun, and consider adding an element of competition to get your community fired up about participating! Finally, celebrate P2P progress and success, getting it in front of your community often!

2. The Power Of One

In the nonprofit sector, many of us are working hard to address some very big, very complex, and very challenging issues. There’s a temptation to “shock and awe” supporters with the scale and scope of the issues we’re working to overcome to show them how much their help is needed.

How many times have you read something like: “There are 5.7 million people in desperate need of humanitarian aid right now”?

Here’s the thing: those big numbers are important, especially for program planning and reporting.

But they can also overwhelm your supporters in two important ways. First, they can make the problem unsolvable. If there are 5.7 million people out there in urgent need, what’s my $20 possibly going to do? Second, it brings the problem up to 30,000 feet, making it hard for your supporters to identify and empathize with those who are affected.

The solution? The power of one. Focusing on one story, one person or family, helps your supporters connect with your cause and understand how they can make an impact.
What does this mean for your fundraising?

As Jeff Brooks says, “We’re all tempted to marshal facts and send them out like an army to battle people into being generous. That doesn’t work. If you want people to give, you have to touch them deeply. And to do that, you must tell stories.”

• Stories over stats: Find the stories that will stick with your supporters and motivate them to act. Not just any stories. Vivid, emotional, and tangible stories about one person. One family. One animal. Give your donors someone to identify with and help, not just an abstract issue. This isn’t to say that numbers are a total no-go in your fundraising appeals, but a good rule of thumb is to lead with a story, and support with stats.
• The power of one in design: The power of one is equally important in design. Whenever possible, zoom in on a single subject. If you’re hesitating between photos of a crowd or a single person in need, chances are that one face will stay with your supporters much more strongly.

3. Paying It Forward

We’re hard-wired to respond to good with good, whether it’s a kind word, a helping hand, or a gift. In behavioral psychology, this is called reciprocity, and it’s an especially powerful way of building strong, lasting relationships, creating a positive feedback loop.

What does this mean for your fundraising?

You might feel uncomfortable with some of the ways that reciprocity is leveraged in fundraising. It can feel more like a bribe or a guilt trip, reducing your relationship with donors to a transaction. But when done right, reciprocity is a great way to strengthen your donor relationships and make them last.

• Thank early and often: When you warmly thank your supporters immediately and frequently, you’re not only showing them how important their gift is, you’re giving them something in return: the “warm glow” of knowing they’re making a difference. Don’t discount how important this emotional reward is to your supporters.
• Show them the impact of their gift: Report back often on how donors’ gifts are making a real, tangible impact. This can be through stewardship emails, social media posts, your impact report, and any number of other touchpoints throughout the year. By doing so, you’re giving your supporters the fulfillment of knowing they’re making a real difference.
• Recognize their identity as a change-maker: Some donors are motivated by being recognized publicly for their gift. There are many ways to do so, whether it’s a profile in your newsletter or a shout-out in your impact report. By acknowledging your supporters in this way, you are reinforcing their desired identity as a philanthropist, change-maker, advocate, or community leader.
• Premiums — a note of caution: Premiums are one of the most common ways nonprofits encourage reciprocity. Who hasn’t received those address labels in the mail? But exercise caution when you consider whether or not to use premiums like this. They risk making the donor relationship feel transactional, and many donors see them as wasteful, affecting their trust in your stewardship of their gifts. Especially in these fiscally challenging times. If you do choose to use premiums, make sure you frame them as a genuine gesture of thanks and offer real value to your supporters. And don’t connect your gift to donors with an ask.

Wrap-up

The most important thing to remember is that each and every one of your supporters is unique and should be treated that way. But it’s also really important to recognize what they have in common, including these key decision-making drivers. By understanding them and weaving them through every touchpoint with your supporters, you’ll help build strong, long-term relationships and motivate them to act in support of your shared mission.

We hope you’ve found these quick behavioral economics tips helpful as you think about your donor communications and fundraising strategy moving forward. If you have any questions or would like a hand weaving behavioural economics into your fundraising, don’t hesitate to reach out!