@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

HOW NONPROFITS CAN INCREASE FUNDRAISING

REVENUE THROUGH BEHAVIOURAL ECONOMICS

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Say what?

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Behavioural economics

be·hav·ior·al ec·o·nom·icsnoun

a method of economic analysis that applies psychological insights into human behavior to explain economic decision-making. (wikipedia)

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

In other words …

What impact does your subconscious have on the decisions you make? And, how can we use that knowledge to increase our fundraising revenue?

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

How we think we make decisions

@LeahEustace#NPStoryConf

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

How we actually make decisions

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@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Emotion versus logic

Artwork courtesy of Mark Phillips www.bluefroglondon.com

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Emotion versus logic

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Emotional Contagion

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Relevance to Fundraising?

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Scarcity theory

Simply put, humans place a higher value on an object that is scarce, and a lower value on those that are abundant.

Photo by Matt Wetzler / CC BY-SA 2.0

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

I’d better act fast!

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Limited sponsorships, naming opportunities, timelines

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Mere exposure theory

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Reciprocity theory

Give Receive

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Social ProofSocial proof is a psychological phenomenon where people assume the actions of others in an attempt to reflect correct behavior for a given situation. (wikipedia)

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Social proof

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

“Every day, people just like you … “

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Authority

We feel a sense of duty or obligation to people in positions of authority.

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Authority

The Milgram experiments

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Anchoring theoryThe anchoring rule of thumb describes the common human tendency to rely too heavily on the first piece of information offered (the “anchor”) when making decisions. Once the anchor is set, decisions are then made by adjusting around the initial anchor, regardless of the legitimacy of the actual anchor.(source: http://disenthrall.co/)

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Has this happened to you?

Photo by Ann Larie Valentine / CC BY-SA 2.0

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Campbell's soup sale

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

How much jail time?

Photo by Ken Teegardin/ CC BY-SA 2.0

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Save 50,000 sea birds

“Would you be willing to pay $5….”? $20

“Would you be willing to pay?” $64

“Would you be willing to pay $400…?” $143

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Be thoughtful about what your first ask is

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

People look to an anchor to help them make a decision, but they make multiple decisions before making a gift, so there's an opportunity for multiple anchors: “Should I open the package?" "Should I read the letter?" "Should I agree to the meeting?"

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

What’s the anchor… in Toronto

What’s the anchor?

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

What’s the anchor?

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

What’s the anchor?

“I don’t want to ask for $1,000,000 and get thrown out of your office, but I don’t want to ask for $100,000 either if $500,000 is more your speed.”

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

What’s the anchor?

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

What’s the anchor?

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

What’s the anchor?

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

• Impact• Break the cycle• You make the

difference• The time to act is now• Our programs work• There’s no better place

to ask for help than YSB

• Saving lives

… and look at the eyes

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Extremism aversion

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

@LeahEustaceBloomerang: Behavioural EconomicsFebruary 2016

Leah Eustace, ACFREChief Idea Goddess, Good Worksleah@goodworksco.cawww.goodworksco.ca

@LeahEustace#NPStoryConf