Homer Simpson for Nonprofits

How to win your supporter’s left brain, right brain and heart with behavioral economics.

For too long, nonprofit marketers and fundraisers have decided how to communicate based on thinking grounded in direct marketing and economics. The problem with this approach is that it assumes people are coolly logical and make their decisions about supporting a cause based on a rational, linear thought process. We've laid out the cases for why our causes matter based on facts and numbers.

The problem is that most people don't think like Alan Greenspan. They are more like Homer Simpson — limited in attention, over-endowed with impulse and ruled by emotion.

Enter behavioral economics

Behavioral economics is a reaction to this truth. It rejects "rational choice theory" or "rationality" — the dominant theoretical paradigm in economics. When we say rationality, we mean the idea that a person balances the costs against benefits before taking an action and makes the decision that is in his or her best interests. Behavioral economics challenges the notion that people choose the best action or the most logically presented choice and explore the bounds of rationality — identifying social, cognitive and emotional factors that can influence the decisions people make.

The big takeaway? People don't arrive at most decisions through a process of weighing costs against benefits. We are irrational. In their book, "Nudge: Improving Decisions About Health, Wealth, and Happiness," Richard Thaler and Cass Sunstein put it simply: Real people make decisions like Homer Simpson, not Spock. (Or Alan Greenspan, for that matter.)

So why is behavioral economics important to nonprofits? For us, these irrational decisions have high stakes. We're not asking people to buy a Coke. We're asking them to protect our environment, safeguard our children, fight for human rights. We're asking them to change the world. Their individual decisions — which often don't take into account one's own best interest, let alone the interest of the greater good — matter a lot. We need to be sure we're asking people in the right way, or their Homer brains might undo our Spock arguments.

I've spent the last month working with Alia McKee and Mark Rovner of Sea Change Strategies on what the growing field of behavioral economics means to fundraisers. We wrote an e-book — "Homer Simpson for Nonprofits: The Truth about How People Really Think and What It Means for Promoting Your Cause" — on the topic, parts of which are featured in this column, and we'll be presenting our findings this month at the Nonprofit Technology Conference. In this column, I share the first three of eight principles we've identified:

1. Understand Homer, but don't use his ethics.

There is a line between using principles of behavioral economics to manipulate rather than persuade. In "Nudge," Sunstein and Thaler refer to this concept as "Libertarian Paternalism." In this context, libertarian means people should be allowed to do what they like — even if it is eating junk food, using plastic grocery bags, driving Hummers or not saving a dime. Paternalism means it is legitimate to try to influence people's behaviors in order to make their lives better and guide them to choices that benefit the greater good.

When combining libertarianism and paternalism, choices are never blocked off. People may continue to do as they please. However, the choices are designed to influence a particular outcome that will make the choosers better off.

Each time you have the luxury of designing a choice for your audiences, consider the concept of libertarian paternalism. Design the choice not to block off options, but to influence a certain outcome. A simple example of this in action is a pre-checked opt-in box for your online communications subscription. Or even holding your fundraising auction before your gala dinner.

2. The left brain need not apply.

We are literally of two minds: the rational mind and the emotional mind. Both sides compete for control, and the emotional mind typically wins. To get people to donate money means we need to focus on the emotional mind first and foremost. Don't be afraid of emotion. It's not sappy; it's what makes people care.

The best way to tap in to the emotional mind is through storytelling. Tell very human stories that exemplify the work of your organization, without using statistics. Incorporate these stories into your fundraising and marketing channels.

Consider ways you can connect your donors to the individual beneficiaries of your work. If you can't do restricted fundraising, think of other creative ways to do this. Can your beneficiaries call new donors and thank them for their support? Can you feature donor and beneficiary profiles in your monthly cultivation message?

3. Stick to social norms, not market norms.

Humans have two distinct decision-making rule books: social norms, which are governed by values of community selflessness and altruism; and market norms, which are governed by calculated self-interest.

Social norms are stronger motivators than market norms. In experiments, under many circumstances people will work harder for free than they will for money. Not long ago, AARP asked lawyers to offer services to the elderly at a reduced rate (market norms). The response was dismal. Then they asked for lawyers to provide free services (social norms). Lawyers tripped over one another to volunteer.

If you are a fundraiser, you live every day on the razor's edge between norms. Major-donor fundraising operates primarily on social values. Direct-marketing fundraising operates on a weird hybrid. What does a major donor get for her support? A sense of camaraderie with like-minded philanthropists; influence and access to organizational leaders (which makes her feel even more a part of things); and the potent psychological rewards of knowing she has made a difference in making the world a better place. What does a low-dollar donor get? Tote bags. Water bottles. Calendars. Certificates of adoption. It's largely a market exchange.

Scrutinize your appeals: Are you emphasizing social norms or market exchanges? Make sure you are focused on the emotional rewards of giving. Segment to avoid a hybrid. Some nondonors and low-dollar donors will solely be motivated to give because of market norms — they want the certificate or the calendar. But others are looking for that emotional connection. Identify who in your file responds to what — and give them that. If you must engage in marketplace rewards, ensure they are highly tied to your cause. If you are saving the whales, think plush toy whales, not coffee mugs.

The full e-book is available at www.fundraising123.org/homer. FS

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