3 Ways to Remove Psychological Barriers to Philanthropic Giving

I’ve long been fascinated by how helpful an understanding of some basic psychological principles can be to the effective practice of fundraising. One of my favorite blogs, focused on consumer marketing, is Sean D’Souza’s Psychotactics. It applies in spades to fundraising, because it involves getting inside your target constituent’s brain — the essence of donor-centered fundraising.

Recently Sean ran a three-part series of podcasts on the one thing all marketing (and fundraising) ultimately boils down to:

“Risk.”

When a prospective donor contemplates making a gift to you, they ask themselves (consciously or unconsciously) what the risk is in so doing. 

Allow me to explain by taking a look at how your donor’s brain works.

Researchers such as Paul Slovic and Daniel Kahneman have shown fear of loss weighs heavier than hope of gain. So, from the get-go, would-be philanthropists consider what might be lost if they give/don’t give to your cause.

In the past I’ve discussed how to turn the fear of loss equation from a personal win/lose to a communal win/lose. This is important as it causes the donor to think from a perspective of generosity (If I don’t give, hundreds of children will have no water) rather than greed (If I give, I won’t be able to go out to dinner tonight). This will cause some folks to tip into the “yes, I’ll give” column. But… not everyone.

So it’s also important for you to understand how your donor calculates giving pros and cons as a personal win/lose proposition. Because people can’t help it. Human beings are wired this way. And the reasons they’ll consider range from the seemingly ridiculous or trivial to the more substantial. For example, “Will giving away this money:”

• Cause my inbox to be flooded with unwanted email?
• Make me a target for others wanting hand-outs?
• Mean I give up my daily latte?
• Negatively impact my lifestyle?
• Negatively impact my heirs’ lifestyle?
• Cause loss of opportunity to give to another more worthy cause?
• Result in a ‘black hole’ such that I don’t get the results for which my gift was made?
• Be a foolish squandering of my hard-earned income?

Because of ingrained fear of loss, well-intentioned donors on the verge of giving will hesitate.

Naturally risk averse, they’ll go through a series of steps before coming to a decision. How can you circumvent the natural donor thought process? The one that causes folks to screech to a halt before hitting the “donate” button?

D’Souza walks us through key elements of risk-aversion theory so that we can remove the barriers that cause consumers to hesitate — enabling folks to take a leap of faith and purchase a product or service. Let’s take a look — through the lens of inspiring a philanthropic gift.

3 Key Elements of Risk-Aversion Theory Applied to Philanthropic Decision-Making

When a donor is asked to make a philanthropic gift, they do a little dance in their heads. Think of it as the ‘Should I or shouldn’t I?’ Tango.

They’ll asked themselves: “Based upon what I know now, should I make this gift? Or shouldn’t I?” The consideration is not just about money. It’s a broader cost/benefit consideration. Part of the cost may simply be looking like a chump. Not doing due diligence and feeling stupid. Folks will hesitate and hesitate; then hesitate some more. Until they…  Know enough. Trust you. Trust themselves. Completely.

Here are the three steps of the ‘Should I or shouldn’t I?’ Tango.

1. Understand and Address Elements of Risk – Why Donors Don’t Give

Once a donor has learned about and been attracted to your fundraising offer, there are several elements of risk that impact your donor’s decision to give/not give.

• Objections – the harbinger of risk.

Every possible “purchase” has numerous objections. Imagine a friend asks you to come over for a visit. Your brain has to process this request.  So it goes through the objections phase. You wonder if you should eat lunch first, or if lunch is on the agenda. Or will the visit last too long? Should you make an excuse, or should you go? The difficulty is that you don’t have all the information you need to make your decision.

TO-DO:

To overcome this phase with your donors, you need to offer all the information a prospective donor needs to decide. What does this project cost? How much are they being asked to give? How will their money, specifically, be used? What will happen if they don’t give? Will their contact information be shared with others? Can they remain anonymous? In essence, how do they know they can trust you?

Which brings us to…

• Testimonials – a critical element of the purchase decision.

These are the flip side of objections. They destroy risk — from a third-party perspective. 

TO-DO:

The best way to use testimonials is to begin by making a list of all the common objections you receive. Then ask your current supporters to address these objections head-on with their testimonials. Publish these testimonials on your website. Promote them on social media. Use them in your e-newsletter and annual report. Check out this great article on collecting testimonials from Nancy Schwartz at Getting Attention, and this one from Caryn Stein at Network for Good.

Once you’ve established trust…

• Uniqueness – why you are the best choice.

Perhaps you do what you do more quickly than your competitors. More cost-effectively. More comprehensively. More collaboratively. Perhaps your claims of effectiveness are backed by research. Or client testimonials. Or perhaps you simply have lots more experience and expertise than others in your field. Whatever is unique about you, make sure you let folks know!

TO-DO:

Make a list of what is special about you. Ask yourself: “What’s our unfair advantage?” Perhaps it’s your staff. Or maybe your volunteers. Of it could be your geographic proximity to the need. Whatever it is, finding your own uniqueness creates clarity. It overcomes the objection that giving to you may cause loss of an opportunity to give to a better cause. Because you are the best!

2. Understand How New Giving Opportunities Create More Risk – Why Donors Don’t Continue Giving

Even when donors already trust you, if you ask them to give a monthly gift, an upgraded gift, a major gift, a deferred gift, or to support a capital campaign or endowment campaign, they’ll once again hesitate. Because all the objections rise up again for them with this “new offer” Why? They don’t have enough information about the new way of giving you’re offering..

TO-DO:

Again, you must overcome the new perceived risks with information. Why is this gift needed? Why should I make the gift in the manner suggested? Who says so? How do you know this is really what it will cost? How do you know it will meet the need/address the problem? 

Don’t just say “would you give an increased gift this year?” or “will you contribute to our anniversary campaign?” It’s not enough.

Again, describe what’s unique about making the gift in this manner. What the benefits will be to the donor (e.g., tax benefits; lifetime income; naming opportunity). What the benefits will be to your charity (e.g., reliable source of annual income [monthly giving]; investment income [endowment campaign]; ability to forgo future rent payments and assure more manageable annual campaigns moving forward [capital campaign], etc.).

Again, show you can be trusted. Have campaign leadership talk about why this campaign was initiated, and how the goal was established. Better still, announce the leadership gifts that have already been made – showing that other donors already believe this is a good investment.

3. Understand How Stewardship (aka “Pre-Sell”) Ramps Down Risk – Why Donors Give Again

Too often nonprofits ask once; then assume folks who’ve made the decision to give will continue to do so. This is similar to retailers thinking that once someone has bought from them they’ll automatically do so again. Not true in either case. 

You’ve got to sell again and again. Time marches on. Memories are short, and circumstances change. It’s a matter of “What have you done for me lately?”

If you thank folks once, and then wait a whole year to communicate with them again, folks are not going to be ‘ready’ to repeat their giving without going through the whole cycle of hesitations.

TO-DO:

This is where stewardship comes in. Create a plan that will help your donor get continuous enjoyment out of their ‘purchase.’ If they buy a car, they get to use it for a long time, which validates their good decision. The same is true if they purchase a laptop. Or even a six pack. It’s not as much of a ‘one-and-done’ proposition as philanthropy.

Since giving is not always its own reward, it’s imperative you develop a donor-centered content marketing plan that offers your donors little gifts throughout the year. One of the best gifts, and integral to effective stewardship, is ongoing communication with your donor about why their gift is such a good investment. Because of the impact it creates. Because it makes your donor a hero.

Offer information to folks about your ‘product’ in a no pressure environment. Year-round. You’re not asking right now. You’re serving up donor-centered content, in bits and pieces, so that by the time you come to the “ask” again your donor is already pre-sold.

Set yourself up to raise even more next year by beginning now to instill a desire in your constituents to choose you. It’s your job to make folks want to hear from you and want to become more deeply connected to you. Woo folks with appealing communications and you’ll find they become less risk averse over time.

How will you apply these three lessons learned from psychology to overcome donor hesitations?

As part of Bloomerang’s Content Donation Program, $100 was donated to OneJustice.