Do you know if your donors personally benefit from your charity or believe strongly in your cause? The psychology behind donating to charity is as detailed and comprehensive as any science. Understanding the psychology of giving is also a necessary step for nonprofits to effectively influence donors. Understanding the why behind their gifts will help you communicate and increase their donations in the future.
The psychology of fundraising delves into why and how individuals donate their time, money, and services to charities and those in need. The goal is to learn the underlying motivations, emotions, and cognitive processes that convince people to donate. In this article, we’ll discuss several reasons why people donate and how nonprofits can effectively strategize to reach each group.
Nonprofits ask several questions before running a fundraising campaign, including:
While each of these questions is important, the most critical question is why are people giving? Charitable giving is influenced by many key psychological principles based on individual motivations, emotions, and beliefs.
People are more likely to give when they empathize with the suffering of others. This is why the ASPCA or Lurie Children’s Hospital fundraising campaigns are so successful. After all, who cannot empathize with a sick child or a pet who needs care? Sharing images of an individual or causes in need is an excellent way to connect with new donors and get them to empathize with your mission.
Public influence can be equally compelling. Social norms, peer pressure, and the desire to conform can all play roles in donors’ reasons for giving. The entire field of marketing is based on this fact. That’s why companies will share testimonials, ratings, and statements from authority figures to back up their claims.
Have you ever found a quarter in the cart at your local Aldi grocery store? You likely left it there because you wanted to “pass it on to the next person”. Reciprocity suggests that people feel obligated to repay acts of kindness, and it is a strong motivator behind charitable giving. Nonprofit organizations can use reciprocity to build long-term relationships with donors through public recognition and membership programs.
You may be surprised how often a “Fear of Missing Out” can encourage people to donate. Once again, marketing professionals use this psychological desire to their benefit with enticing imagery of people living their best lives, convincing people to act now! Nonprofits that can effectively create a sense of urgency during fundraising campaigns will drive these donors to give.
In many cases, donors’ gifts are very personal. If your nonprofit’s cause is involved in fighting a disease, it’s likely that your donors either know someone with the affliction or have it themselves. Their reason for giving is to find a cure. In other cases, donors are motivated to give to causes that align with personal values, beliefs, and identities. The drive to find their tribe compels them to give to your organization. Don’t discount the proximity factor either – perceived closeness and physical location. Donors who perceive recipients as close by are more inclined to give.
If a donor doesn’t yet have a personal relationship with your organization, the trust factor comes into play. Donors prefer to give to causes they trust and see as fair and just. Charities can develop that trust and credibility with donors by showing transparency when collecting and distributing their gifts.
Once you understand the donors’ reason for giving, you can segment them into groups and ascertain which events and activities may lead to a donation.
Pro Tip: Add the donors’ reason for giving to your donor management system to ensure all correspondence relates to their reasons for giving.
Individuals who’ve given their first gift because of a compelling story or commercial are empathetic to your cause and driven by compassion. These donors are more inclined to give when they can identify a specific person or group in need.
You can further connect with these donors by sharing personal narratives or case studies highlighting how your nonprofit has saved a life or helped a beneficiary meet their goals. Enthralling imagery and videos will solidify their connection to those you serve and increase donor gifts.
Pro Tip: A video campaign of beneficiaries telling their stories can be an excellent way to attract these donors.
Beneficiary stories aren’t the only way to convince people to donate. You may find that the donors who came from peer-to-peer campaigns are more likely to give based on social proof. These donors may respond better to testimonials or endorsements from other donors. Building trust with these donors is essential.
Pro Tip: Another way to convince these donors to give is by sharing testimonials from authority figures in the community. Interviews and speeches by community and business leaders can significantly impact donor gifts.
Donors may have a personal connection to the cause, but some may be more inspired by tangible benefits like tax breaks and auction prizes. Tax deductions are a compelling reason for higher earners to donate. 86.3% of taxpayers with incomes of $10,000,000 or more claim charitable deductions. These individuals are also more likely to attend and participate in your annual live auction.
Conversely, only 1.6% of taxpayers under $50,000 claim deductions. So, what tangible benefits can you offer them? Gratitude and public recognition can be equally effective. Donor appreciation events, social media, and website posts provide a tangible benefit to donors, foster positive relationships, and encourage repeat donations.
The best way to motivate people to take action is with a sense of urgency. Deadlines and limited-time opportunities will catch donors’ attention and convince them to act now! Nonprofits can do this with discounted event tickets, challenge gift campaigns, promotions, and fundraising challenges.
Pro Tip: Choosing the right words for your fundraising campaign can help create a sense of urgency. You can easily turn a tired slogan into an exciting appeal with the right content. Check out this article for nine magic fundraising words that increase donations for nonprofits.
Many of your donors have a personal reason for giving to your organization. Their experiences and values align with your cause, and they are the most interested in seeing you succeed. Building a community where donors can meet, discuss their ideas, advocate for your cause, and regularly donate is the best way to connect with these donors. Membership programs that offer donors what they want and help to build a tribe will increase donor retention.
One of the easiest and most appreciated membership and donor benefits is impact reporting. Transparency with donors is critical to building trust and forming long-term relationships. Impact reporting gives clear and specific information on how their donations are used and what tangible outcomes were achieved.
Pro Tip: You can send regular impact reports via annual reports, newsletters, and social media. Impactful images, infographics, and beneficiary testimonials can turn these reports into an enticing fundraising tool.
Bonus Resource: Listen to this insightful podcast on how to encourage monthly giving in donors:
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Understanding the psychology of giving can help nonprofits better understand and segment donors based on their reason for giving. Once you’ve done that, personalized communication will become much easier. You can then develop strategies to engage your supporters and build long-term relationships.
Before your next campaign, visit your donor management system to see how and why your donors give.
If you can’t find these details, it’s time to create a system to collect this information for the future. Donorbox’s CRM platform makes it easy to collect, analyze, and utilize donor information. Capture donor moments like the anniversary of their first gift and membership dates, and add specific notes to your donor profiles to help your team engage with them.
Sign up to see how Donorbox can help you better understand your donors and develop fundraising strategies to raise more funds. Don’t forget to check out the Nonprofit Blog, it’s loaded with tips, tools, and resources to make your fundraising journey easier!
Kristine Ensor is a freelance writer with over a decade of experience working with local and international nonprofits. As a nonprofit professional she has specialized in fundraising, marketing, event planning, volunteer management, and board development.
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Kristine Ensor