(Illustration by iStock/johavel)
People donate to charity for many reasons. Hardly an objectionable claim. Generosity. Self-satisfaction. Guilt. Reciprocity. Duty. Prestige.
People also do not donate to charity for many reasons. Also hardly an objectionable claim. Inattention. Insufficient income. Over-spending. Fear of charity failure.
But whether people are giving or not, it seems that two factors remain steady: donors rarely give as much as they would like and they are rarely able to articulate consistent, evidence-based approaches to choosing the recipients of their aid.
Charities struggling with these donor barriers can turn to behavioral economics for insight. The science, encompassing psychology, economics, and other fields, can help facilitate donations, whether impulsive—quick gifts involving little analysis but rapid and positive emotional feedback—or deliberate—thoughtful contributions that resist the temptation of fast, feel-good donor experiences and more deeply account for the recipient of the aid and its results.
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Using these two categories for giving guides us toward impulsive and deliberative marketing techniques—"nudges" rooted in behavioral economics—that can profoundly influence the amount that people donate and the choices they make about which organizations to support.
These techniques should not be viewed as an ethical quandary or a form of manipulation. One could just as easily argue that failure to use these techniques is akin to a manipulation to spend more money on jewelry, vacations, or meals out. These simple approaches to nudging toward more and smarter donations can help people become aware of the dynamics governing their decision-making and then harness those drivers for good. Behavioral nudges can thus help reduce some of the impediments to giving and giving effectively while still protecting potential donors’ freedom to make choices about their giving.
These simple approaches to nudging toward more and smarter donations can help people become aware of the dynamics governing their decision-making and then harness those drivers for good.
But these insights raise other questions. What if the best marketing is done by the least effective charities, leaving the better performing charities behind? Do these techniques lead people to give more or just shift their giving from one charity to another?
Under the right circumstances, marketing techniques based in behavioral economics can encourage both impulsive and deliberate givers to donate more generously and effectively, a result that benefits everyone. Read on to explore examples of organizations in different fields making sure people's desire to give doesn't drown in the deluge of daily life.
Feeling Good With Impulsive Giving
A significant portion of charitable donations come from impulse donors responding quickly to feelings of generosity. These acts of giving provide fast and easy emotional satisfaction. Impulsive donors are usually reacting to an appeal rather than considering long-term donation plans or carefully evaluating charity recipients. The rise of mobile platforms has contributed to the popularity of impulse giving, making it easier than ever for potential donors to immediately send money, usually in small amounts, via text, Venmo, Facebook, or other tools.
When an earthquake struck Haiti in 2010, for example, the American Red Cross raised over a million dollars in less than 24 hours through a text-messaging campaign.
This isn’t an inherently negative way to give; the generosity unleashed to help victims of natural disasters is inspiring. But similar to making impulsive purchases, this type of giving is especially susceptible to our brain’s mental shortcuts. And like impulsive purchases, these donations can be solicited with marketing techniques that make emotional appeals in an effort to tempt people to give. For example, donation requests from attractive people tend to raise more funds, and donors give more to a single child with a name and story to tell.
We must note that the charities benefitting the most from impulse giving are those that can pay for marketing tactics, not necessarily the charities that are the best at helping their cause.
Behavioral economics nudges offer an alternative, helping people follow through on their intentions while still preserving their sense of choice. Though we focus on impulse giving with these tactics, they may also be helpful to deliberative giving because they ultimately aim to remove the behavioral barriers blocking people from following through on their giving intentions. Making the act of donation easy, and making it feel good, are useful in all cases of charitable giving.
Yet we must note that the charities benefitting the most from impulse giving are those that can pay for marketing tactics, not necessarily the charities that are the best at helping their cause. Impulse givers are not researching and evaluating the effectiveness of the organizations to which they are donating. Instead, these quick donations only reward good marketing with the hope that dollars are used effectively. Additionally, some marketing tactics, especially as they are adopted by more and more organizations, may start to seem transparent to audiences, cheapening the cause they are supposed to champion.
Crowd-out is another important consideration. For example, encouraging many small donations may lead to more donations. On the other hand, a lot of small donations could actually displace larger, more thoughtful gifts. Social scientists refer to these patterns as crowding-in or crowding-out. Behavioral economics suggests that human desire for consistency would support a theory of crowding-in—that making a lot of small donations would make you feel like a generous person, which would lead to more donations. But the science also supports the opposing theory—that making so many donations would lead the donor to feel licensed to decline giving larger gifts. Little is known about the circumstances under which impulsive donations lead to more or less aggregate giving. This is a significant gap in current research, but impulse giving may indeed limit the potential for more generous donations or for gifts to more effective charities.
With those caveats in place, let's explore nudge techniques, their use in various fields, and how to apply them to increase charitable giving.
Six Nudge Techniques for Impulsive Giving
1. Make Giving Easy
The human factor | Small hassles such as finding a stamp, filling out a form, providing payment information, or searching for the right website can easily prevent people from following through on giving. With impulse spending and giving, the intention emerges suddenly, and the less friction between that moment and the ability to take action, the more likely a person is to follow through.
Real-world examples | Filling out the form for federal student financial aid could help potential students access college by providing tens of thousands of dollars in aid, yet the complex application process can derail the academic intentions of many would-be undergrads. Studies have shown that making completion a little easier by pre-populating some of the information not only made eligible families more likely to submit the application, but also made the students significantly more likely to enroll in college the next fall. And when it comes to online shopping, Amazon’s 1-Click ordering demonstrates the power of removing small hassles in the retail sector.
How to use the technique | Make it easy to act immediately on any charitable intention. Mobile phones and apps have already helped make donations easier, but charitable impulses often arise outside the events in the news. For example, walking by a homeless person on the way to work may trigger a desire to give. Saying “no” to giving an extra dollar at a grocery store may leave potential donors wishing they had another chance a few minutes later. Consider creating a quick outlet for these intentions: a simple phone app, something physical and transportable like Amazon’s Dash buttons, or physical kiosks. Some cities, for instance, turned parking meters into change collectors for the homeless.
2. Make Giving Feel Really Good (Immediately)
The human factor| Feedback guides our actions. When something tastes good, we eat it; if it tastes bad, we stop. When we get a speeding ticket, we drive the posted limit for a few days afterwards before returning to our normal pace. We like doing actions that return an immediate, emotional, and positive response, such as petting a dog to see it grin.
Real-world examples | The budget app Digit links every dollar you save to goals like a vacation in Mexico or cutting your credit card debt. And Amazon offers impulse book buyers immediate, free online access to the first few chapters of the purchased book so to mitigate the frustration of waiting for delivery.
How to use the technique | Charities can strengthen the emotional reward of impulsive giving by reducing the delay between the donation and the positive feelings it produces, and by augmenting the good feeling itself. Charities should immediately and vividly show donors the effect of their gift. For example, donors could view personal photos of the people benefitting from the aid, a video with a beneficiary saying thank you, or a live feed of a forest they helped protect. Charities could also include an estimate of what a donor saved on taxes.
3. Spotlight Social Norms
The human factor| We’re largely influenced by our perceptions of what our peers—both friends and those whom we consider similar to us—are doing. Marketing strategies can take advantage of this by implying that many people like us already love a particular product. But they can also correct misperceptions of norms to help people more accurately understand and respond to the behavior of their peers.
Real-world examples | College students notoriously overestimate how much alcohol their fellow students drink, and this misperception pushes drinking rates higher. Programs that inform students of their peers’ actual drinking behavior have successfully changed perceptions and reduced consumption. Online marketers have used social media to illuminate product usage that was previously private. People can see their friends' support for everything from razors to restaurants on Facebook, Instagram, and other platforms.
How to use the technique | Charities have already begun exploring ways to leverage social visibility, with signals ranging from subtle—yellow Livestrong bracelets—to blatant, such as the ALS Ice Bucket Challenge. More collaborations with social media can help link impulse giving with peer behavior. For example, social networks could support live donation events, where participation is acknowledged with visual changes to people's online profiles. Charities could provide comparison ranking of donation levels among peers, similar to the Home Energy Reports that show people how their energy consumption stacks up against their neighbors'.
4. Prime the Right Identity
The human factor | How we view ourselves—our identity—is an important motivator of our actions. We want to act in alignment with our beliefs about ourselves. We have many identities, such as student, friend, employee, helper, and husband. Our actions might align with our identities in multiple ways. But it’s the environmental context—specific words, images, and situations—that determine which identity drives our behavior.
Real-world examples | During American election seasons, ubiquitous volunteers try to increase participation in the polls by asking people if they are going to vote. But asking people if they will be a voter is much more effective, increasing turnout rates by more than 10 percentage points in one study. On Kickstarter, people who pledge support are called “backers,” and some projects offer unique names and rewards for early investors in new technology, art, or products. Rewards often include public recognition or limited wearable accessories, emphasizing the backers’ alignment with the creators’ vision.
How to use the technique | In one study, reminding American Red Cross donors of previous gifts—priming their donor identity—increased the chance that they donated again. Framing the request as part of a city community drive—priming their community member identity—also increased donation rates, but with smaller communities producing higher donation rates. Priming the “correct” identity can be a challenge. Charities should test the effectiveness of different priming strategies to learn what resonates best with their donors.
5. Emphasize Different Attributes
The human factor | We have a limited amount of attention to weigh the pros and cons of our decisions. We tend to focus on the attributes that stand out the most to us. People with kids may care more about childhood asthma, and self-proclaimed tech geeks may care more about facial recognition software. For others, price might be the determining factor. Regardless, we quickly grow used to our environments and products, so new and novel attributes—or those we haven’t thought of—tend to stand out.
Real-world examples | Everyone knows that using more energy than you need costs money. Fewer people have an awareness of energy use and its impact on carbon emissions. But most people don’t consider the health impacts, such as childhood asthma and cancer, connected to pollution from energy-producing facilities. Reframing energy conservation to emphasize health benefits led to an 8 percent reduction in households' energy use overall and a 19 percent reduction in households with children. Samsung and Apple provide another example. They release new smartphone models almost every year, emphasizing additional features and updated designs. Despite the core functions remaining mostly unchanged, more than half of all iPhone users upgrade their smartphones as soon as their service providers allow it.
How to use the technique | Charitable organizations can frame new developments or approaches in humanitarian or social causes as novel and urgent, encouraging donors to be a part of groundbreaking work. And to mitigate the boredom of repeatedly giving to the same efforts, charities can tell recurring donors about new projects their dollars are funding.
6. Bundle Short-term Temptation With Long-term Benefits
The human factor | People are more motivated to complete activities with long-term benefits if they are paired with something desirable in the short term. Think of a parent who hides spinach in brownies to get more greens into a child's diet.
Real-world examples | Many educational games use this principle, imparting knowledge through activities traditionally associated with leisure. Free Rice takes this a step further, offering educational games that can help users prepare for exams like the SAT while donating 10 grains of rice to the United Nations World Food Program for every right answer.
How to use the technique | Temptations can increase giving by cutting people off from desired activities until they donate a certain amount of money. For example, imagine if you had to give the value of a drink to the charity of your choice each time you had a beverage at a bar. Also, many companies contribute part of the proceeds from products and events to charity, bundling consumption with giving. Or charities might offer something many donors truly want: a promise to hold off on solicitation for a meaningful period of time if the donor gives.
Deliberate giving is still susceptible to the human biases that make it hard to act in a logical manner.
Doing Good With Deliberative Giving
Despite the rise in microgiving, deliberate, thoughtful donation is still essential to charitable activity. Indeed, many people claim that they don’t want to be impulsive with their giving—they want to make sure they think about the use of their money before giving it away. In one study, 85 percent of survey respondents said that nonprofit performance was an important criterion for their donations. Still, it’s hard to be deliberate: Despite stated intentions, the same survey found that only 3 percent of people actually used relative performance data when considering which charity to support.
In contrast to impulse giving, which exhibits a similar behavior pattern to impulse purchasing, giving as a deliberate, planned action looks more like the way someone might engage in good-for-you behaviors, like planning for retirement, going to the gym, eating well, or recycling. These types of behaviors aren't done automatically, resisting the brain’s tendency to use mental shortcuts. They instead require self-control and attention.
But deliberate giving is still susceptible to the human biases that make it hard to act in a logical manner. For example, our tendency to procrastinate saving and succumb to immediate temptations often means that we spend more today at the expense of tomorrow—a problem with implications for retirement savings as well as charitable giving targets. In addition, we can pay attention to only a limited number of things at any given time. So it may be difficult to stay on track with targets for charitable giving, relying on instinct and emotional triggers, and then not finding enough cash in the bank account to fulfill one’s intended levels or quality of giving. Finally, deciding which organizations to support requires significant attention to comparing their effectiveness. Groups like GiveWell and ImpactMatters are trying to help by providing meaningful metrics of impact.
Behavioral economics helps us take on these challenges. It has been used to nudge people toward their goals in financial planning, health, and other fields, providing principles that can help get potential donors to give more generously and deliberatively.
Deliberative donors are important because they're more likely to give to charities that are effective. A rise in deliberative giving could produce more resources for best-in-class charities, leading to greater social benefit. This type of giving can also help support effective use of charitable funds and encourage organizations to maintain good evaluation and reporting practices.
Four Nudge Techniques for Deliberative Giving
1. Create a Commitment Mechanism
The human factor | Self-control is a challenge, but concrete commitment devices can help us to avoid costly behavior that’s pleasurable in the short run and stick to long-term beneficial behaviors that require immediate sacrifices. It’s harder to give up on intentions if someone or something is holding you accountable.
Real-world examples | StickK is an online platform where users can make “commitment contracts” to improve their chances of accomplishing a personal goal such as losing weight or quitting smoking. They put something on the line—a sum of money, for example, or their public reputation—and commit to following through or facing their pre-selected consequences. Another version of this is restricted-withdrawable college funds, which keeps account owners responsible to their original good intentions.
How to use the technique | Charities often encourage individuals to pledge a certain amount when they’re most inspired, with the payment coming later. Having people automatically give an amount out of each paycheck is another effective commitment. Or donors could agree that whenever a certain event occurs, they will give a set amount of money to their charity of choice. To make this commitment even stickier, donors could promise ahead of time to meet with family members, fellow donors, or the charity themselves to discuss their planned gift.
2. Set Goals and Make Plans
The human factor | Setting a specific goal and making a plan has been shown to increase follow-through. It helps us solve potential logistical problems and keep our goals top of mind when they need to be.
Real-world examples | National Novel Writing Month is an annual creative writing event that challenges participants to complete an entire 50,000-word manuscript during the month of November. The project has had great success in encouraging new writers to put words to paper because it presents them with a goal, a concrete deadline, and a community of encouragement. In 2015, the project attracted 431,626 participants, with more than 40,000 reaching the 50,000-word goal.
How to use the technique: Charities can prompt users to set a giving goal in advance to track their progress toward the donation. Charities could also set goals together with the donor to improve charities' performance and donors' giving.
3. Leverage Social Norms and Identity
The human factor | Social norms and identity—useful for increasing impulsive giving—have a place in deliberative giving, too. Big Bang Theory made being a geek cool. Can we do the same in charity—make it cool and desirable to be geeky about choosing effectively?
Real-world examples | Weight Watchers organizes meetings for members, helping create a supportive community while also providing a place where program participants can see and hear about the weight-loss progress of others. A 2016 marketing campaign for specialized lender SoFi, “Great Loans for Great People,” targeted an audience of graduates who might identify as being “great.” SoFi combined specialized lending with financial advice, referral programs, and events that aimed to bring users together and increase the social visibility of the company.
How to use the technique | Increase the visibility and “coolness” of the deliberate giver. Charities could use identity-focused messaging to promote the deliberate giver who thoughtfully donates in alignment with the causes she chooses to support. Highlighting giving in general, not just donations to a single charity, can also help increase the visibility of a more deliberate approach to giving. On social media, the emphasis should be on long-term, larger commitments to a cause. For example, rather than just feature fundraisers for individual organizations, create and highlight tools to help donors (in view of their peers) select causes and plan giving over the next year or longer. Other methods include using respected leaders in the world to help promote effective giving or creating giving circles with a strong emphasis on the exchange of information about effective charities.
4. Bring Attention to the Choice
The human factor | Sometimes, we lose track of important things or forget to think of them at all, ranging from getting a flu shot to donating to our favorite charity. Carefully bringing our attention to key decisions can help. A commitment device is best. But if that's not possible, we should create space for a moment to actively choose to follow through on our intentions or be forced to articulate that we will not. Enhanced active choice takes this one step further by including information in the process that reminds choosers of the impact of their decision, as seen in the CVS example below.
Real-world examples | Fifty percent more CVS customers opted to get a flu shot when they were asked to select “I will get a flu shot this fall” or “I will not get a flu shot this fall” instead of checking a box to get a flu shot. When a recorded telephone message about enrolling in an automatic prescription refill program was sent to CVS pharmacy customers, take-up more than doubled when, instead of just asking customers to opt-in, the message offered them two options: refilling prescriptions by themselves each time or having the pharmacist do it for them automatically.
How to use the technique | During tax time, donors could complete a survey about what they want to do for charity; perhaps tax preparers could help. Givers could compare these intentions to what they gave the previous year, then explore options for fulfilling their goals for the upcoming year. Givers could sign up for personalized reminders to bring attention to their donation objectives throughout the year.
Impulsive or Deliberative?
For fundraisers, deciding how much effort to allocate to each model—the impulsive, small giver versus the large and deliberate donor—is a complicated decision.
Most givers do not fall solely in one camp. And research in the charitable giving field is ongoing. Little is known about the circumstances under which nudges to increase giving impulsively or deliberatively affect aggregate giving levels. There is also more to learn about how deliberate giving may build support for the most effective charities. Three critical research questions need answers in order to best harness impulsive and deliberative giving:
- How does each type of giving affect other gifts? We need to measure not just how much an impulsive or deliberative campaign raises, but how much total giving changes, and to which organization, as a result of different types of campaigns. These patterns of crowding-in and crowding-out are hard to assess—determining what is causal (and not just correlated) is challenging; comprehensive data on donor behavior is lacking; and overlapping campaign timing can muddy findings. With access to the right data and research partners, we can generate more evidence on how any particular giving campaign changes aggregate giving by participating individuals.
- Which type of giving is better for which charities? We need to understand how each type of giving may or may not be better at garnering support for certain causes. For example, impulsive giving is often triggered by an emotional appeal. Some causes (charismatic animals, children) produce more appealing emotional images. But is there room for deliberate, thoughtful giving to these causes as well? And for causes that are not quite as camera-friendly, can microgiving be harnessed to support them, too?
- Where is the opportunity for impact? We also need to determine whether impulsive giving or deliberative giving will increase the overall amount of philanthropy. Relatedly, what type of giving is more likely to generate support for charities with evidence of impact? Clearly, deploying marketing techniques can help increase impulse giving, but those types of donations tend to be much smaller than the more deliberate, planned type of giving. Impulse giving also rewards the charities with the best marketing tactics, rather than the charities that help the most. A movement to change the way many Americans currently approach charitable giving and encourage more planned donations could fundamentally alter the way charities raise funds. But we need more and better evidence on how donors respond to various appeals, in order to best harness impulsive and deliberative appeals to grow the charitable pie and encourage more effective giving.
As research that can help answer these questions emerges, more specific recommendations for charities will follow. In the meantime, charities should employ new strategies from both types of giving. Some donors prefer to give impulsively and embrace strategies that encourage intuitive, quick actions that make them feel good. Other donors want to be more deliberate with their giving, and the right tools can help them follow through on those intentions. In both cases, rigorously testing new approaches and strategies can help charities learn what works best for them and the impact they have on the world.
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Read more stories by Sarah Welch, Dean Karlan & Piyush Tantia.