Sunday, November 11, 2012

Understanding Donor Behavior to Increase Contributions

JEN SHANG understands the power of prayer ? to open wallets.

Jonathan Player for The New York Times

Jen Shang specializes in the psychology of giving.

Ms. Shang, who bills herself as the only philanthropic psychologist in the world, recently advised a religious organization to tinker with a direct-mail fund-raising solicitation, to encourage potential donors to pray before deciding to give.

Some religious people, Ms. Shang found, ?pray and read Bibles when making a major life decision before they talk to others, think about it, meditate about it, let their emotions cool down.?

The experiment paid off. In early research, the solicitation with the suggestion of prayer ?significantly? increased the campaign?s response rate compared with previous appeals.

In the following edited and condensed conversation, Ms. Shang, who is on leave from her position as assistant professor at the Center of Philanthropy at Indiana University to teach at the University of Bristol in Britain, delves into donor behavior and shares some simple ways for nonprofit organizations to increase donations.

Q. Describe the different psychological hurdles donors must jump over before they open their wallets.

A. Grabbing a donor?s attention is the very first psychological step that a supporter takes during a potentially lifelong journey that they take with a charity. This is the step where donors become aware of the existence of a giving opportunity. To give money, people need to then be satisfied with the ways that organizations treat them as supporters. They need to trust the organization to best achieve what they would like to achieve with their limited funds. They need to commit to supporting the organizations in such a way that the commitment itself is meaningful to them as individuals. The psychological transformation from paying attention to giving money is the process of integrating that cause from the external world into one?s most inner sense of who they are.

Q. Some nonprofits rely on stark imagery of starving children or earthquake victims in appeals. Do those images motivate or dissuade donors?

A. Speaking from the charities? perspective, they do not ?rely? on those images per se. They strategically use those images to portray the case for support for individual donations during a particular time period during a supporter?s relationship with a charity. At the beginning stage of this relationship, donors might be attracted to the organization through those images. Then they might get to know a bit more about all the great things that these charities are doing, and then their giving is not directly related to the images anymore, so that they would continue to give even without the images.

Q. You write that nonprofits can increase contributions ?by changing a handful of words in a solicitation.? What are those magic words?

A. There are nine adjectives Americans use to describe a moral person: kind, caring, compassionate, helpful, friendly, fair, hard-working, generous and honest. Charities can randomly select a couple of adjectives from those nine words and use them in their fund-raising solicitations when appropriate. We?ve found that women then increase their giving on average by 10 percent.

Q. What words in solicitations prompt men to give more?

A. The adjectives that male donors used during our focus groups include strong, responsible and loyal.

Q. How important is it for nonprofits to thank donors?

A. It?s extremely, extremely, extremely important for nonprofits to thank people properly.

Q. Define ?properly.?

A. It?s done immediately, the first opportunity they get to thank people. When they thank people, they need to make sure that with first-time donors they are really taking a donor on a journey that this person will travel with the nonprofit to achieve some social goal. Thanking needs to serve the purpose of holding the donor?s hand on this exciting journey.

Q. How common is it for donors to cite atonement as a motivation for a gift?

A. Of all the people I have studied, a few thousand, I cannot recall anybody mentioning atonement as their primary motivation for a gift. This includes people supporting faith-based organizations.

Q. Several celebrity billionaires, including Bill Gates and Warren Buffett, announced plans in recent years to spend much of their fortunes on philanthropy. How does what?s been called ?conspicuous charity? influence donors with more modest budgets? Could a potential donor feel as if their gift is inconsequential?

A. No. That usually doesn?t even come into the discussion. If a charity is doing its job right, every single donor feels that they are valued, and every single donor knows exactly how their donation is being spent and the difference their donation makes.

Q. You?ve interviewed many millionaires as well as donors of modest means. Does wealth influence donor behavior?


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