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Giving and the Psychological Reasons Behind It

Posted: 9/14/2020

Click here to read on NonProfitPRO

by Duke Haddad

I don't know about you, but it seems I am asking for some type of donation each day. I could be talking to a corporation about a sponsorship, a foundation for a grant, an association for a partnership, an organization about a special project or an individual for unrestricted or restricted program focus reasons. At times, all of us in the profession should take a deep breath and seek transformational long-term engagements instead of brief transactional moments. We all want gifts now and over time, greater in quantity and quality, meaning higher gift levels. The question is what is giving and the psychological reasons behind it? Understanding these concepts could easily be the difference between success and failure.

Network for Good provided reasons why people decide to donate. Giving is a human connection. You need to show prospects why they matter and how they can make a difference for your organization. Network for Good surveyed 3,000 donors to find out what inspired them to give. People act from the heart not from the head. Giving is a very personal act and lets your donors support your cause now and in the future.

The top eight reasons from most important to least important in inspiring donors to give were:

  1. I know the nonprofit's mission and it does good work.
  2. I believe the nonprofit will use my gift to stabilize or expand programming.
  3. The nonprofit communicates program outcomes.
  4. I know someone that benefited from the nonprofit work.
  5. I want to be associated with the organization and its brand.
  6. I see the organization online and on social media.
  7. I want a tax deduction.
  8. I know someone who volunteers or serves on the organization's board.

Understanding donor behavior is important to establishing an effective fundraising campaign. An article by Classy points out that the psychology of giving reveals that certain words and best practices can induce a higher rate of giving. According to Jen Shang, philanthropic psychologist, nine effective words that should be used for fundraising include kind, caring, compassionate, helpful, friendly, fair, hard-working, generous and honest. You need to allow potential donors to reflect on who they think they are and how that relates to an appeal. The article suggests to use words according to your targeted base of prospects and donors. Males and females react differently to words. Crafting the right message, using the power of words, can increase your giving response and revenue.

Scientific American noted that most humans want to be as generous as possible. Studies have shown that human brains enjoy the sense of joy of being a gift giver as opposed to being a recipient of gifts. Generosity of time is as important as the gift of treasure. Thoughtful giving seems more personal than giving for giving's sake. The goal for any organization should be for the prospect to become a happy donor that leads to repeat and increased giving. A donor must feel good about their giving experience to want to continue this practice.

A Psychology Today article states that your brain's pleasure circuits are activated by acts of charity. The neurotransmitter dopamine plays a critical role in making someone feel good. Studies have been made to examine three areas of giving: giving caused by altruism, a warm glow theory and that people like making giving decisions because of social status. Results of studies have shown that pure altruism and warm glow models are higher level motivators of charitable giving. Donors enjoy a warm glow, a sense of agency or the approval of others. The key is to give because it makes you feel good.

Global Giving studied the psychology of giving through a decade of research in behavioral science, economics and marketing. This study attempted to see if nonprofits could design giving experiences around non-financial incentives to promote a habit of giving. One frame for potential donors was to have them believing they are helping an organization reach their fundraising goal sooner than just helping "move the needle" at an earlier stage in the fundraising campaign increased their desire to give. One study found that donors that felt they are pushing the organization to their final goal through urgency gave 200% larger donations.

Nonprofit Expert recommend creating an annual giving plan that is donor-focused. Ask yourself if you contact your donors besides just asking them for money? People give to people and understand why people give. Make sure your organization has public trust and a positive reputation. Know your donors and communicate your thanks. Understand your prospects and donors seek to make their interaction with your organization win-win in nature. If your donors feel good about their giving experience, they will return each year with support.

According to a QGiv.com blog on donor retention, the average donor retention rate is hovering around 40% to 45%, which means that if 100 donors give to your organization each year, only about 40 of those donors will give again the following year. To retain donors besides understanding the psychology of donors, offer recurring gift options, thank donors, share impact stories, set up donor accounts, offer different ways to give, offer peer-to-peer fundraising, learn from your donor data and re-engage year-end donors.

Fundraising is hard, so try to make success easier to attain. Understanding why your donors give today will prepare you for proactive fundraising processes and greater success.

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