How Nonprofits can Increase Fundraising Revenue through Behavioural Economics
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@LeahEustace Bloomerang: Behavioural Economics February 2016 HOW NONPROFITS CAN INCREASE FUNDRAISING REVENUE THROUGH BEHAVIOURAL ECONOMICS
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Transcript of How Nonprofits can Increase Fundraising Revenue through Behavioural Economics
@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
@LeahEustace#NPStoryConf
@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 [email protected]
@LeahEustace#NPStoryConf
