The science behind fundraising in nonprofit media

The latest effort to decipher the secret to fundraising in nonprofit media came from this Freakonomics blog where two economists explore why people give money and the logic behind it.

Economists John List and Uri Gneezy are co-authors of the book The Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life in which they narrow down two reasons why people give: Pure altruism and impure altruism, also known as warm-glow giving. That is, people give either out of loyalty or out of getting that soul-nurturing feeling.

In the podcast, List and Gneezy talk about what works, what doesn’t work, and the thinking behind it. Among their insights:

  • About 2.2 percent of personal income is given to charitable causes in America.
  • Between 1971-2011 the given rates have gone up about 12-fold.
  • Cold calls, asking for money can account to 1 percent of total fundraising—that’s ten out of a thousand donations therefore not so effective.
  • Appeal to donors rather than the recipients of those dollars.

We listened to the podcast and picked up a few takeaways for anyone who wants to try it out during their next fundraising campaign. Here’s what the authors suggest:

  • General theme: Focus your call on the services you provide to your audience.
  • Put the power in the hands of the donors: This means how to control the communication, how often you contact the donors and how effectively you communicate the message.
  • Appeal to exactly what the donors want to consume: Tell the donors this is what we provide and this is what you will lose.
  • Lottery prize: Donors love lottery prizes, and giveaways. A chance to win a big prize for a small donation.
  • Beauty effect: Good looking people raise the most money. Men give more to good looking women. However, women don’t give more to good looking women nor good looking men.
  • Matching grants: Works but a three-to-one match isn’t any better than a one-to-one match. (Not as effective).

Listen to the full podcast here.