The Decisions Our Donors Are Making, Part 2

I chose a long time ago not to see fundraising through the lens of methods (direct mail, special events, grant-writing, major gifts, etc.) and instead choose to see charitable giving through the decisions that inform an individual’s gifts. I believe understanding these types of decisions that our donors are making (and not making) matters more than ever before. I also prefer to see fundraising through the disciplines of behavioral economics, complexity science, and cognitive psychology. I have found that these domains offer a more holistic and human-centered perspective of what’s happening rather than the reductionist and very mechanical approach that we tend to get from our colleagues who hail from PR and marketing.

Perhaps the best place to start if we are interested in using the aforementioned disciplines is with the dual-process modes of thinking, a concept that Nobel prize winner Daniel Kahneman introduced in Thinking Fast and Slow which I often recommend to my clients. Kahneman describes two modes of decision-making which he refers to as System 1 and System 2. In System 1 we make fast, impulsive decisions relying on our instincts and intuition, and in System 2 we make slow and careful decisions.

What I believe many of us in fundraising fail to understand are the implications of being overly reliant on System 1’s fast thinking during difficult times while neglecting to consider the eventual consequences when times get better. In our seminars, we demonstrate how two distinct cultures emerge from the types of decisions we ask our donors to make on behalf of our organizations. When the culture is characterized by impulsivity, we tend to get trapped in an exhausting hamster wheel of efficiency. In contrast, when the culture is patient and responsive, we tend to rely on System 2 decisions. What far too few fundraising experts acknowledge is that leaning heavily on System 1 decisions lends itself to unfortunate long-term side effects, namely high donor attrition and rapid professional turnover, which are most detrimental to our efforts during difficult times.

I realize an endless number of my colleagues will argue that System 1 works. I have been around long enough to know that impulsivity works in fundraising. I am just questioning whether it works for us long-term. For example, I don’t necessarily disagree with Scott Rubush, a Senior Consultant at American Philanthropic, who describes direct mail as an “assault on System 1”. And perhaps that’s ok in good times, but not necessarily what’s best advised during difficult times such as these? He explains that it’s no mystery that most fundraising relies almost exclusively on impulsive, System 1 thinking and he applauds our efforts at avoiding System 2 thinking altogether, admiring our use of “heated rhetoric, the emotional appeals, everything designed to provoke an immediate visceral response.”

What has always concerned me about our over-reliance on System 1 decisions is that it undermines our opportunities to eventually arrive at System 2 decisions. A donor who never transitions to a more deliberate and intentional decision-making process never becomes the donor that we can count on for more significant gifts that necessitate a more careful and deliberate decision-making process. It seems now more than ever that those are the types of decisions we’d like our most committed donors to be making.

What many fundraising experts seem to overlook is that, when the world is throwing us curve balls from all directions, System 1 begins to surrender to System 2. One of System 2’s primary responsibilities is to overcome and put a stop to the impulsive decisions that we can no longer afford to make in the midst of uncertainty. Kahneman himself warns that System 1 can create a “cognitive minefield.” That’s not where I believe our donors want to be right now. Is it fair to say that we have designed our fundraising practices to work relatively well when things are good but not so much when things get hairy?

But perhaps we’re not convinced that everyone is slowing down? I read this just last week in the Harvard Business Review from Art Markman, PhD, a professor of psychology and marketing at the University of Texas at Austin. Markman answers the question of how we can make good decisions in the face of what is happening all around us right now. He insists we slow down. He writes, “The best way to resist the siren call of action is to slow down. Panic makes people want to act right now to avoid a threat, but most of the actions you are likely to take will not be prudent in the face of a potential pandemic.”

Is Markman encouraging us to stop making decisions? Not at all. He’s just encouraging us to rely on System 2. He writes: “There are many actions people should take over the next several weeks and months, but the decision to act should be based on deliberation, sober reflection on data, and discussion with experts — not in reaction to a headline or a tweet… It is best to take your time when making decisions rather than acting on gut feelings. Those quick actions may reduce some of your anxiety in the short-run, but they are likely to create more problems than they solve.”

What advice might Markman give your organization? Would he suggest that you totally throw fundraising out the window right now? I don’t think so. However, he might suggest that you slow down, think more very carefully about what you’re doing, and consider that your donors are inclined to be doing the same thing. If our donors are making slower, smarter decisions, perhaps we should too. Let’s contemplate how we can best achieve our goals right now in light of what we understand about human behavior and the types of decisions our donors are making.

Next, I would like to wrap up this series with how your organization can utilize the three lanes to prepare for the road ahead. In the meantime, if your organization would like to coordinate some time with me and a member of our consulting team, please feel free to reach out. We will be more than happy to help you think critically through the challenges that your organization is encountering and provide some suggestions as to how we might help.

If you'd like to read the first installment in this series, click here.