Choose Your Tuesday: Greed or Goodwill?
Think carefully about the ‘frame’ in which you place your appeal
Are you framing your ask as an “annual appeal” or as “we only ask once a year?”
It matters, because people will account for how much they spend on usual annual giving differently than how much they’ll spend for exceptional, one-time occurrences.
A growing body of research in psychology and behavioral economics shows how you frame your ask can have a big difference in your fundraising results. Much of this has to do with how people mentally account for consumer ‘purchases’ — including charitable giving.
Researchers have found people don’t treat their money, time, effort or other resources as if they have one big pool of it. Rather, people have separate mental accounts.
When we spend resources we keep track of each expenditure based on the mental account it came from.
This has significant fundraising implications, so it’s important to delve further into this mental accounting principle. Especially this year, when you can legitimately frame your work as a response to exceptional times.
The Idea behind Mental Accounting
Mental accounts are typically based on people’s goals.
Research by Richard Thaler in 1985 (he went on to win the Nobel Prize in Economics in 2017) surmised that keeping separate mental accounts is a way people exercise self-control. No one wants to go too crazy or overextend in one area.
Thaler’s researched followed upon that of Daniel Kahneman, who participated with Amos Tversky in groundbreaking research in the 1980’s showing people often track spending by posting their purchases to specific categories (Kahneman also went on to win the Nobel Prize in Economics in 2002). They too found differences in how these mental categories are formed and evaluated can influence subsequent spending decisions.
If two Nobel-winning economists agree, perhaps we in the social benefit sector should pay attention!
As people track their different mental accounts they try not to spend too much from one resource.
Value is seen as relative:
- If you spend $100 for dinner, you might not go out for dessert or music afterwards because you feel you’ve used up your ‘entertainment budget’ for the evening.
- Later that evening however, you might spend $50 on a new jacket — because that comes from your ‘clothing budget’ (a different mental account).
Charitable Expense Framing
Framing charitable expenses as exceptional occurrences, rather than regular ones, increases giving.
Or so found a 2015 study in the Journal of Experimental Psychology (Sharma, Sussman & Alter):
- If folks are budgeting for a recurring expense they tend to “book it” either by writing it down or taking note of it mentally.
- If it’s a one-time expense, folks tend to take less formal notice.
Per Sussman & Alter, people have difficulty placing exceptional expenses into budget categories at all. This likely explains how we account for vacation spending differently from the exact same spending when we’re at home. We’ll buy an expensive meal while traveling that we’d never buy on our home turf. We don’t consider it “dining money.”
People consider exceptional purchases “free” money because it’s done only once in a while.
It’s not just the frequency of the expenditure that may be perceived as exceptional; it can also be the amount (which is why donors will make a major, one-time outright or deferred gift).
Exceptional expenses are perceived as unusual, infrequent and/or irregularly timed.
So?
The outcome of framing a gift ask as exceptional is you create a perception the donor has “free” money that’s available for a rare charitable expenditure!
Exceptional Framing Disrupts People’s Philanthropic Budgeting Process
In a good way.
Let’s look at a couple of different ways this can work.
PENNIES A DAY
Research by Gourville in 1998 suggested framing a single donation as $1/day vs. $365/year could increase giving. The “pennies a day” framing mechanism caused folks to compare the $1/day cost with similar small expenses rather than the aggregate $356 cost with other larger expenses. Folks had plenty of room in their budget for one cent purchases; not so much for $365 purchases. This is the psychology at work when you ask folks to give $10/month rather than $120.
EXCEPTIONAL, NOT NORMAL
Research by Sharma, Sussman & Alter suggests framing a donation as extraordinary, rather than ordinary, prevents folks from registering the full magnitude of the expense and in turn positively influences their willingness to donate. This is the type of psychology at work when you ask folks to make a one-time gift rather than an annual one.
Exceptional Framing Enhances Charitable Behavior
In a good way.
Donors will consider the impact of a donation on their budget to a lesser degree when the donation is framed as exceptional (just once) because they aren’t then triggered to consider the consequence of similar donations recurring over time (every year). Here’s what the researchers found:
EXPERIMENT-Alzheimer’s Walk: Two posters were used to advertise an upcoming Alzheimer’s Association walk. Each framed the frequency of this event slightly differently. Results were stunningly different.
Framing the walk as exceptional (“only once a year”), rather than recurring (“held annually”), increased response rate and average gift. Additionally, the exceptional framing made people think less about the effect the donation might have on their budgets.
EXPERIMENT-Lemonade Stand: Two mailers framed a lemonade stand sale to fight childhood cancer differently. One made it clear this fundraiser happened annually and participants would be asked for a donation every year going forward; the other noted it happened only once a year and they were being asked only for one donation.
Participants were asked how much they’d consider the annual, recurring event ask as part of their budget, and alternately how much they’d consider the one-time event ask as part of their budget.
“Given that the donation occurs [every single year/only once a year], to what extent would you consider the effect of this donation on your budget?”
Participants in the exceptional condition (only once/year) reported being significantly more likely to donate to the charity than did those in the ordinary condition (every single year).
Exceptional Framing Likely Helps with Emergency Response and Rage Giving
In a good way.
Even those with a set-aside annual budget for philanthropy will give ‘above and beyond’ in response to an emergency or perceived threat. This accounts for the outpouring of support seen in the wake of hurricanes, earthquakes, wildfires and, yes, pandemics.
Most people don’t stop and think about their philanthropic budget in times like these. ‘Emergency response’ money comes from a different mental account, perhaps more akin to helping a sick neighbor in need. Or fixing a broken window or hole in the roof.
Framing an appeal as genuinely urgent positively influences a donor’s response to your call to action.
When something appears urgently needed, people don’t deliberate. They think fast, not slow; emotionally, not rationally (this happens to be the premise of Kahneman’s later work, Thinking, Fast and Slow).
Of course, you don’t want to cry wolf. The urgency must be authentic. A lot of people gave last spring in response to increased, pandemic-related need and/or the threat of doors needing to be closed due to lack of revenue. If your situation is still urgent — and for most charities, though hope may be on the horizon, the current situation is unchanged — people will still give another exceptional gift. This is why you should not suddenly revert to asking for a traditional, business-as-usual “annual gift.”
CAVEAT: Exceptional Framing is Likely Easier with Prospects than Current Donors
The research cited worked primarily with new donor prospects.
Repeat donors tend to have a more concrete understanding of the regularity of a particular charity drive, so it’s likely more difficult to shift their perception of whether the donation is ordinary or exceptional. In fact, research from Robert Cialdini shows one of the principles of influence and persuasion is “commitment and consistency.” There’s a body of research showing people are inclined to repeat past behaviors. I’ve long advised folks to remind donors of past giving because this acts as a decision-making shortcut. People think: “Oh, I guess I already made the decision to give to this organization. I guess I’ll keep it up.”
Action Suggestions:
1. For current supporters: Follow Cialdini’s research when asking current donors to give before December 31st. Remind them they usually give, and express gratitude for their consistent, committed support.
2. For prospective supporters: Consider the research on framing from the psychologists and behavioral economists when approaching new prospects. Let them know the exceptional purpose of your appeal, and that you’re asking them to give — just this once.
3. Purpose of appeal: Follow the framing advice for any truly “exceptional” appeals (e.g., Giving Days; Special Programs; Capital Campaigns; Endowment Gifts; Emergency Appeals). Make sure people know this is an exceptional, not an ordinary, situation.
Before you hit “send” on your next appeal, think carefully about the frame you’re putting it in. It matters.
Interested in More Year-End Fundraising Tips?
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You’ll find plenty of tweaks to boost your results, in many cases quite significantly. I’ll bet you can find just one or two strategies that will improve your results, perhaps in ways you may not have imagined. The only way you lose is by not trying.
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