It’s Not Just WHAT Donors Think, It’s HOW They Think that Matters

When certain fundraising experts have something to say, we all would be wise to pay close attention. Bernard Ross, Director of =mc consulting (The Management Centre based in the UK), is one of those insightful voices.

I’ve been among the legion of fans Bernard has attracted through his consulting work, conference lectures, articles, and books. Bernard’s latest volume, Change for Good written with Omar Mahmoud, demonstrates that fundraising is more than an art; it is also a science.

The publisher’s book description reads:

This breakthrough book is about how we as human beings make decisions — and how anyone involved in the field of social change can help individuals or groups to make positive choices using decision science. It draws on the latest thinking in behavioural economics, neuroscience and evolutional psychology to provide a powerful practical toolkit for fundraisers, campaigners, advocacy specialists, policy makers, health professionals, educationalists and social activists.”

Change for Good introduces readers to 10 key persuasion principles that will help fundraising professionals introduce decision science into their work as they strive to raise more money. For a decade or more, the for-profit sector has used decision science to influence people to make particular choices, whether to purchase something, accept certain behaviors, or take specific action. Now, this book, by Ross and Mahmoud, makes this profound knowledge accessible to fundraisers.

Not only will your nonprofit organization benefit when you read Change for Good, so will Médecins Sans Frontières/Doctors Without Borders. That’s because the authors are donating the profits from book sales to the international charity.

Bernard’s generosity does not end there. He has kindly provided us with a special article that demonstrates the importance of understanding both WHAT and HOW people think. In his guest post below, Bernard demonstrates the impact that decision science can have with real-life examples. In addition, you’ll be able to download a free summary sheet that provides valuable highlights from Change for Good.

I thank Bernard for his willingness to provide the following material:

 

Fundraisers are often concerned about changing hearts and minds. And they’re often, especially when prompted by colleagues in advocacy or communications, interested in increasing supporters’ conscious engagement with the cause. But, is this the best or only way to improve pro-social behavior — whether it’s increasing donations, using less plastic, or avoiding bias?

Let’s begin with the science. Fundamental to decision-making is the premise that much of our data processing and decision-making is subconscious and fast. Deciding is so fast, even changing our minds can be difficult. According to some recent research at Johns Hopkins University if we change our minds within roughly 100 milliseconds of making a decision, we can successfully revise our plans. If we wait more than 200 milliseconds, however, we may be unable to make the desired change. That’s not very long to persuade a donor to not look away from our TV ad or crumple our direct-mail pack.

But, it’s not just our visual process that’s important. For example, other senses are also important, especially smell. In a test between two Nike stores, one with a very faint “consciously undetectable” scent and one without, customers were 80 percent more likely to purchase in the scented store.

In another experiment at a petrol (gas) station with a mini-mart attached to it, pumping the smell of coffee into the store saw purchases of the drink grow 300 percent.

If you take the time to wander into the M&M World candy store in Leicester Square London, you might now notice the smell of chocolate. When it first opened in 2011, it did not have the smell and sales were disappointing. They hired a company called ScentAir who specialize in adding signature scents to stores. The managing director of the company, Christopher Pratt, said in an article describing the effect, “It looked like the place should smell of chocolate, it didn’t. It does now.” And sales have moved in response.

There was a similar positive response when the National Trust, a UK heritage charity, included a “scratch and sniff” element in an appeal to save a flower meadow.

When you visit a charity website, the conscious brain analyses the message content. (What is the cause I am being asked to support? What do they want me to do — donate, sign a petition, or join up?) At the same time, the subconscious brain continuously responds to how you react to the subtle background and peripheral cues. (How do I feel about the colours, images, celebrities involved, etc.?)

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“I always thought the brain was the most wonderful organ in my body. And then one day it occurred to me, ‘Wait a minute, who’s telling me that?'”

— Emo Philips

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It’s not all about you either. Your subconscious brain has a mind of its own. Some signals also come from inside us, and we look unconsciously for opportunities to confirm our inner state. When we are in a good mood, we are more likely to tolerate our colleagues and partners and are more likely to donate to charities. These activities become a way to validate or confirm our inner feelings. Let’s look at an example of how this affects our behaviour.

I Told You So: Charitable Giving is Up!

Most charity pundits, mainstream media, and press serving the nonprofit sector got it wrong. Sadly, none of them is admitting their mistake, and many are continuing to advance a false narrative. However, I always told you the truth, and I’ll continue to do so.

I’ve often encouraged you not to overuse statistics in your appeals. But, we can all certainly benefit from reading lots of illuminating statistics.

In 2017 and 2018, most pundits and the media were convinced that the Tax Cut and Jobs Act would result in up to a $21 billion decrease in philanthropic giving. In January 2018, I joined a tiny group of professionals who predicted the decrease in giving would be far less than that and giving might actually increase. This was not a guess on our part, but a well-educated expectation based on research, experience, and observation.

Now, with the release of Giving USA 2019, we know who was correct.

Overall, philanthropic giving in constant dollars INCREASED by $2.97 billion (0.7 percent) between 2017 and 2018, and now stands at $427.71 billion, the highest level of all time. Relative to Gross Domestic Product, giving remained at 2.1 percent, which is greater than the 40-year average of 2.0 percent.

Despite the generally good news, the philanthropy scene is not entirely positive. When adjusting for inflation, giving in 2018 did decline by 1.7 percent, though that was much less than the doom and gloom estimates. Furthermore, giving by individuals as a share of overall philanthropy accounted for 68 percent; this is the first time since at least 1954 that it has fallen below 70 percent. In 2018, individual giving fell by 1.1 percent in constant dollars.

While the new tax code likely had an effect on charitable giving, we need to be careful not to overstate its impact. A number of factors have influenced giving:

New Tax Code. All or part of the decline in individual giving in 2018 could be due to donors taking action in advance of the tax law change. We saw this in 1986 when there was a spike in charitable giving in advance of the Reagan tax cuts in 1987.

In 2017, many donors likely front-loaded their philanthropic giving since they would no longer be able to deduct gifts beginning in 2018. In addition, many donors chose to bundle their philanthropy by contributing to Donor-Advised Funds at record levels in 2017. Together, these two factors might explain the 1.1 percent decrease in individual giving in 2018 compared to a 5.7 percent increase in 2017. If not for the new tax rules going into effect in 2018, some of those 2017 donations might have been made in 2018 instead.

The tax code might also affect giving in other ways that we just don’t see clearly at this point. Just as we had to wait until 1988 to see giving normalize following the Reagan tax cuts, we may need to wait another year or two to understand the full effect of the current tax code.

Decline in the Number of Donors. Since 2001, the percentage of US households contributing to charity has fallen steadily from a high of 67.63 percent to 55.51 percent in 2014, according to data from the Indiana University Lilly Family School of Philanthropy’s Philanthropy Panel Study. In other words, the new tax code is not responsible for a sudden decline in the number of donors. This trend has been going on for years.

What is the Biggest Obstacle to Fundraising Success?

Have you ever wondered what is the biggest obstacle to fundraising success?

Is it the new tax code?

Is it the economy?

Is it the decline of religious affiliation?

Is it fewer donors?

Is it an underfunded fundraising budget?

Any or all of those might be obstacles. However, none of them is the biggest obstacle. So, what is?

You are the biggest obstacle to fundraising success.

Before you fire off a blistering comment to me, let me explain.

I know you’ve dedicated yourself to a noble profession. If you’re like many fundraisers I know, you continue to enhance your skills by studying books, reading blogs (wink, wink), participating in webinars, and attending conferences. I applaud you.

Unfortunately, none of that matters if you don’t take proper care of yourself, both physically and mentally. You can’t do your best if you’re not at your best. If you want to be the most successful fundraiser you can be, you must first take care of you. That begins with recognizing that workplace burnout is a real thing.

Recently, the World Health Organization announced, “Burn-out is included in the 11th Revision of the International Classification of Diseases (ICD-11) as an occupational phenomenon.” WHO explains:

Burn-out is a syndrome conceptualized as resulting from chronic workplace stress that has not been successfully managed. It is characterized by three dimensions:

• • • feelings of energy depletion or exhaustion;
    • increased mental distance from one’s job, or feelings of negativism or cynicism related to one’s job;
    • and reduced professional efficacy.”

Sound familiar? You’re not alone. Furthermore, a number of scientific studies demonstrate that overwork can lead to real health problems.

Business Insider reports:

• People who work more than 55 hours a week are 33 percent more likely to suffer a stroke and have a 13 percent greater risk of heart attack than those who work 35-40 hours weekly.
• It gets progressively harder to relax if you don’t periodically get away from external stresses like a heavy workload. Even a 24-hour timeout can have health benefits.
• Taking fewer vacations can shorten your life expectancy.

Fortunately, there are things you can do to prevent or overcome job burnout. Using your allotted vacation time each year and taking a spontaneous day off can be enormously therapeutic.

My wife and I did just that when we recently played hooky for a day. It was a gorgeous Monday. So, at the last minute, we decided to push all of our responsibilities aside. We jumped in our car, and visited the Philadelphia Zoo. Founded in 1859, the Zoo is in a beautiful, park-like setting. We had a relaxing stroll, and even saw something we’ve never seen before. Whenever we’ve visited in the past, the hippos were always cooling off in their pond. However, on this trip, the weather was so perfect that we got to see the hippos walking around their enclosure. It made a special day just a bit more memorable.

Just our one day away from work, communing with nature a bit, was enough to recharge our batteries. We were much more relaxed and productive the rest of the week. Now, I know you might be thinking, “That’s nice, but that’s just one person’s anecdote.” Rest assured, though, that there’s plenty of scientific evidence backing me up.

Inc. magazine cites studies that show time away from the office:

• Reduces stress,
• Prevents heart disease,
• Enhances sleep,
• Improves productivity.

Business Insider reports:

• Even planning a vacation makes people happier before they actually go.
• Vacations and hooky days can provide greater life perspective and enhanced motivation.
• Relaxing time off can keep your nerve cells healthy and your mind sharp.
• Time off can make you more productive when you’re in the office.

Mental Floss reveals 11 hidden benefits of taking time off from work:

4 Major Problems with Nonprofit Compensation

Salaries are a big problem for nonprofit organizations. However, the problem, or rather problems, might not be what you think they are.

Let’s look at just four major issues:

1. Nonprofit staff earns too much money. The mainstream media regularly trumpet the high salaries that some nonprofit executives receive. Through their selective reporting, many in the media advance a narrative that suggests nonprofit professionals earn too much money. As a result, donors focus frequently on charity overhead, including salaries, rather than program and service outcomes when evaluating charitable organizations.

2. Nonprofit staff earns too little money. Simply put, many people working for nonprofit organizations are grotesquely underpaid. For example, I recently came across an advertisement for a nonprofit Administrative Manager and Marketing Associate in Washington, DC. The charity requires candidates to have a college degree and an automobile. The organization offers an annual salary of just $35,000. Take a moment and think about that. The job pays $35,000 a year in Washington, DC! In case you don’t know, Washington, DC is the fifth most expensive city in the US, according to Kiplinger.

Yes, some charity executives are overpaid. However, many high-paid nonprofit employees are worth every dollar because of their skills and proven results. Geographical cost of living is another reason some nonprofit professionals earn higher salaries. On the other hand, the story that the media seldom cover is that of underpaid nonprofit staff. The failure to provide a competitive salary, or even a salary someone can live on reasonably, makes it difficult for charities to attract and retain talented staff.

Maclean’s examined nearly 600 charities in Canada with gross revenue of over $2 million (Canadian $). The publication found charities that significantly overpaid or underpaid chief executives, relative to peer organizations, were less likely to be transparent or efficient. “Analysis of charity data suggests extremely high compensation is linked to poor results for charities. But intriguingly, so is extremely low compensation,” according to the report. “High salaries receive the most attention, but Maclean’s found a stronger correlation with poor performance at charities that underpay their staff or have no staff at all.”

Ideally, nonprofit organization would provide employees with competitive compensation packages taking into account the type and size of organization, the job position, and geographic area. Compensation does not have to be precisely average; it can be high or low though it should be within the average range. Compensation that is excessively high or low can be directly problematic and could be a symptom of other problems at the organization.

This brings me to a third compensation problem: