Having just read ‘Nudge’ by Thaler and Sunstein I realised that much of fundraising is based on the idea of ‘nudging’ people to give.

Thaler and Sunstein’s basic argument is that people can be ‘nudged’ to do the right thing by constructing programmes and offers in the right way. So if for example you ask people to ‘opt-out’ rather than ‘opt-in’ to a pension most will join a pension scheme and never leave – but wouldn’t have joined if they were left to opt-in. Similarly they give examples of how a clever slogan in Texas ‘nudged’ people into dropping less litter, and how asking university students to look at their timetables and make a slot in their diaries increased the percentage who got tetanus jabs ten-fold over the group who were just told how important a tetanus jab was.

All this made me realise how fundraising is an activity dripping with the importance of ‘nudging’ people to give. Without realising it fundraisers are already carrying out nudging. The question is how could nudging help fundraisers even more. So here are 5 nudges from my experience that improve fundraising results:

Nudge 1: Get the first person on your list of sponsors or donors to be generous

Anybody who has collected sponsorship for an event has probably witnessed the ‘follow my leader’ effect of donors. If the first couple of sponsors are generous then the chances are the rest will follow suit. However if the first couple give £1 when they might have given £5 or £10 then donors will also follow suit. Whereas ten donors could have been worth £50 or £100 then they might be worth just £10. I have started sponsorship again if the donation size is too small.

The Cumbria Community Foundation was recently the beneficiary of the right kind of nudging. When the worst rains in English history hit the Lakes last November the first couple of corporate donors gave £50,000 or more. So the other corporate donors followed suit. The Foundation has now closed its appeal with over £2 million raised and a substantial portion of that raised from companies inadvertently nudged to be generous.

Nudge 2: A nice incentive increases average direct debit size

Back in the nineties one of the most successful nudges were incentives to increase donation size. WWF used to offer a nice set of (very cheap to produce) wildlife prints and Friends of the Earth offered a coffee table book on the environment to people who gave more than £10 a month. This doubled the number of people who gave £10 a month. The real advantage of these types of incentives is the extra cost of them is far outweighed by the extra funds that they raise.

Nudge 3: The minutiae of appeals make a big difference

Lots of people like to deride pens in mailing packs. But the reality is that test after test has shown that they nudge people to give. Similarly direct marketers everywhere could show you test after test in which the insignificant elements of a pack influence response rates and donation size. My favourite nudge is that a window reply envelope in which the donor places the donation form with the return address showing through the reply window increased response rate by 40%. Some nudges are related to the subject of the mailing (like the opaque piece of plastic for a mailing on cataracts) and some aren’t (like the window reply envelope).

Nudging can also work to increase donation size or response rate. Increasing the size of the donation asked for typically increases average donation size and decreases response rate. Decreasing the size of donation asked for typically decreases average donation size and increases response rate. Each organisation needs to find what size of donation request maximises total income for different donor segments.

Nudge 4: Remove those barriers to giving

Every fundraiser knows that a reply envelope increases response. This isn’t because the reply envelope crystallises the argument for me to give. It’s because it makes it easier. It reduces the barriers to giving. So what other ways are there that we could create that would act as a little nudge to reduce the barriers. Here are some that we could borrow from the commercial world:

• Money-back guarantees. How does a donor know that their donation will be well spent? They don’t and they probably never will. So how can a charity convince them to give? The commercial world solves this problem by offering a money-back guarantee. Why don’t charities offer this? Make a donation and we will give you your donation back if you are unhappy for any reason in the 12 months after you give.
• Incremental increases in donation. All the evidence is that little and often is much easier for people than big and lumpy when it comes to giving. So why don’t charities start with £1 a month and then increase it by a £1 per month every 6 months till they reach an agreed limit. That way the donor adjusts to giving (and probably feels a real twinge of guilt for cancelling a direct debit for just £1 month)
• Personalise the relationship. We all respond better to people than organisations. We feel guiltier about letting down an individual than an organisation. This is one of the reasons why street fundraising works so well – people give as much to the individual as to the charity. I have signed up to four direct debits because of who asked me, not because of the cause (one street fundraiser said it was his birthday and another their first day). Of all the charities I give to only one – the NSPCC – has attempted to give me an individual who might be looking after my donation and that I could contact.

Nudge 5: Get people to give and forget

There is a movement which likes to talk about getting people to give a certain percentage of their income to charities. Lord Joffe likes to talk about persuading people to give 1% of their income. There are all sorts of reasons why this is a bad idea (most people who give, give more than 1% of their income already). However the most fundamental reason that we should never set targets for giving is the basic reality that most people will do absolutely nothing when asked to give. They need not much a nudge as a good kicking to spur them into action and this is unlikely to be a sustainable approach to raising money. So rather than have to ask people to give again and again we need to create mechanisms by which the default position (as Thaler and Sunstein call it) is to go on giving again and again without a further donor decision. One decision is all we may get and all we should need. This is why direct debits work so well, as do payroll donations and affinity cards. Even a one-off legacy donation means the default position is that the person leaves a legacy (and let’s hope they are nudged into giving a percentage of their estate not a fixed sum). So we need to create ways of giving that allow people to give and forget. Only in that way will we raise more money and increase the total size of donations.

Underlying all of these ideas about nudges is the premise that people aren’t rational and giving isn’t rational. People give with their hearts not their heads. So nudging is one way in which we can gently move people in the right direction.

What nudges have you used in your fundraising? Or what nudges can you imagine that might work? We’d love to hear them – joe.saxton@nfpsynergy.net