Posts tagged ‘Behavioral Economics’

March 18, 2015

Bernard Ross Reveals the Next Big Thing in Fundraising!

Have you ever wondered what your donors are thinking? Life would be so much simpler if you could read their minds.

Now, we’re actually a step closer to knowing.

To understand what your donors are thinking, you first need to understand how they think. That’s where veteran consultant and author Bernard Ross, Director of The Management Centre, and fundraising consultant Alan R. Hutson, Jr., Principal and Managing Partner of The Monument Group, can help.

Thinking-Please Wait by  Karola Riegler Photography via FlickrIn a preview of their session “Behavioural Economics: Everything You Know about Donor Decision Making is Wrong” at the AFP International Fundraising Conference (Baltimore, March 29-31, 2015), Ross told me the duo will show attendees how they can apply the work of Dr. Daniel Kahneman, author of the bestseller Thinking, Fast and Slow, to better understand their prospects and donors and, thereby, enhance their fundraising efforts.

Kahneman, a psychologist who won the Nobel Prize in Economic Sciences, says we have two complementary processes by which we make decisions in life, including fundraising decisions. He refers to these as System 1 and System 2. System 1 operates automatically and quickly, like an autopilot. System 2 allocates attention to effortful, conscious mental activities. We think System 2 is at work most of the time; however, Kahneman has found it is, in fact, System 1.

Ross asserts:

Hutson and I believe that Kahneman’s insights are the next big thing in fundraising.”

Ross observes that most fundraising professionals think donors are making rational judgments when they are not. Think of the old sales axiom: “People buy based on emotion then justify, after the fact, with logic.” A similar process is often involved with philanthropic decision-making.

Donors make philanthropic decisions based on six to eight key mental heuristics — or System 1 short cuts — that we all use. Ross says that fundraisers can learn these heuristics and use them to transform response rates, gift sizes, and more. In their session, Hutson and Ross will introduce participants to these key heuristics and show them how that knowledge is being used to remarkable effect by charities around the world.

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