How Nonprofits Can Use Behavioural Economics to Increase Fundraising Revenue

How Nonprofits Can Use
Behavioural Economics
to Increase  
Fundraising Revenue
2/4/16
1pm Eastern
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Our guest presenter »
Leah Eustace, M.Phil, CFRE, ACFRE
Principal, Good Works
Chair of the AFP Foundation for
Philanthropy-Canada.
Co-Chair of AFP’s Inclusive Giving
Project.
In 2014, Leah became the 101st person
in the world to receive the ACFRE
accreditation. She was also honoured
with the AFP Ottawa Chapter
Outstanding Fundraising Executive
Award for 2014.

@LeahEustaceBloomerang: Behavioural Economics
February 2016
HOW NONPROFITS CAN INCREASE
FUNDRAISING REVENUE THROUGH
BEHAVIOURAL ECONOMICS

February 2016
Say what?

February 2016
Behavioural economics
be·hav·ior·al ec·o·nom·ics
noun
a method of economic analysis that applies
psychological insights into human behavior to
explain economic decision-making. (wikipedia)

February 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?

February 2016
How we think we
make decisions
@LeahEustace
#NPStoryConf

February 2016
How we actually
make decisions
@LeahEustace
#NPStoryConf

February 2016
Emotion versus logic
Artwork courtesy of Mark Phillips www.bluefroglondon.com

February 2016
Emotion versus logic

February 2016
Emotional Contagion

February 2016
Relevance to Fundraising?

February 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

February 2016
I’d better act fast!

February 2016
Limited sponsorships, naming
opportunities, timelines

February 2016
Mere exposure theory

February 2016
Reciprocity theory
Give Receive

February 2016

February 2016
Social Proof
Social proof is a psychological phenomenon where
people assume the actions of others in an attempt to
reflect correct behavior for a given situation.
(wikipedia)

February 2016
Social proof

February 2016
“Every day,
people just like
you … “

February 2016
Authority
We feel a sense of
duty or obligation to
people in positions
of authority.

February 2016
Authority
The Milgram
experiments

February 2016
Anchoring theory
The 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/)

February 2016
Has this happened to you?
Photo by Ann Larie Valentine / CC BY-SA 2.0

February 2016
Campbell's soup sale

February 2016
How much jail time?
Photo by Ken Teegardin/ CC BY-SA 2.0

February 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

February 2016
Be thoughtful
about what your
first ask is

February 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?"

February 2016
What’s the anchor
… in Toronto

February 2016
What’s the anchor?

February 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.”

February 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

February 2016
Extremism aversion

February 2016
Leah Eustace, ACFRE
Chief Idea Goddess, Good Works
leah@goodworksco.ca
www.goodworksco.ca
@LeahEustace
#NPStoryConf

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How Nonprofits Can Use Behavioural Economics to Increase Fundraising Revenue

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