Dana Segal, presented ‘Understanding Human Decision Making‘ designed as a tool to help us improve our close rate with corporate funders and other donors. Author, renowned psychologist and Nobel Prize winner, Daniel Kahneman wrote about this in his book Thinking, Fast and Slow.
Ms. Segal is a senior partner and consultant at MC Consulting, a firm with offices in the UK and the U.S. Their clients have included British Red Cross, UNICEF United Kingdom, YMCA, and others. Ms. Segal holds an MBA from the London School of Economics and Political Science, as well as a certificate in Arts Fundraising and Philanthropy from the University of Leeds, and Bachelor of Arts in Modern Drama Studies from Brunel University London.
Ms. Segal began her presentation with a definition of Decision Science involving:
Evolutionary Psychology: Programmed Behavior for our species over time
Neuroscience: Processing of information and experiences in real-time used to reach conclusions
Behavioral Economics: Phrase used to describe real world practical rules and people use often unconsciously to make decisions
Humans make 25K to 35K decisions per day. Unconsciously, we often use mental short cuts (Heuristics) instead of logic. These Right Brain (System 1) decisions are fast, intuitive, emotional and subconscious as opposed to Left Brain (System 2) decisions that are slow, calculating, analytical, conscious, and rule-based.
Non-profits seeking donors can determine ways of leveraging this System 1, Right Brain thinking to increase funding, help donors avoid over thinking. Recent product sales affected by right braining thinking include:
- Mars Candy enjoyed an exceptional sales increase when NASA’s Pathfinder landed on planet Mars in 1997
- Lemonade beverage sales increased following the release of Beyoncé’s Lemonade album in 2016
- Alternatively, Corona Beer experienced extreme losses after the outbreak of the Corona Virus (COVID) in 2020
Also, a study of seven hurricane-related donor appeals revealed that the proportion of donations from people whose names shared the hurricane’s initial increased immediately after the hurricane (For example: M-named people made up 30% of donations after 1998’s Hurricane Mitch).
Ms. Segal described The MINDSPACE model of decision-making, developed by the Behavioural Insights Team at the UK Government, and written about for the charity sector by her, Bernard Ross & Marina Jones.
MESSENGER – we are heavily influenced by who communicates information
INCENTIVES – our responses to incentives are shaped by mental shortcuts
NORMS – we are strongly influenced by what others do
DEFAULTS – we go with the flow with a pre-set of options
SALIENCE – our attention draws to what seems novel and relevant to us
PRIMING- our actions are affected by subconscious cues
AFFECT- our emotions can powerfully shape our actions
COMMITMENTS – we like to be consistent with our promises and reciprocate acts
EGO – we act in ways that make us feel better about ourselves
These behavior science-based tools can be used in appeals:
Improve Donor Response by Giving Them Less Choices either on website appeal pages or in paper mailings. Donors like choice, but less is more and keeping the preferred choice in the middle (called the Goldilocks effect) can improve response and increase giving.
Showing Giving Thermometers or Scales: This reflects the progress to a goal, as well as encouraging donors to “join the giving team.” Breaking down the gifts by day, month, or year also can be very effective in demonstrating donors’ impact.
Leverage Reciprocity – the need to repay invitations, favors and/or gifts
- Unsolicited gifts: coffees, dinners and gifts do work
- ‘Rejection-then-retreat’: unrealistic request followed by workable solution
- Offer what you want in return to donors: trust, cooperation, respect
Focus on Consistency – the instinct to maintain a consistent private and public life
- Public quotes and endorsements from partners create loyalty to cause
- Reinforcing their loyalty to you before undertaking a renewal conversation
- Reinforcing their active, public, voluntary commitments
- “Do you believe in X?” before asking for the gift
Scarcity – the instinct to pursue scarce resources
- Deadlines, competition and urgency
- “Windows of opportunity”
- Loss aversion – stand to lose, rather than stand to gain (Fear of Missing Out Concept)
Free resources and follow-on reads