What Donors Need to Hear to Open the Checkbook
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Marketing Dec 1, 2014

What Donors Need to Hear to Open the Checkbook

Insights from marketing on how charities can grow by appealing to different kinds of donors.

Consumer brands have long tailored their messages to different types of customers. You do not market sugary cereal the same way you sell bran flakes.

This rule also applies to nonprofits seeking donations. The pool of potential donors is not uniform and should not be treated as such. The powerful give differently than the powerless, for example, and committed donors want to be approached differently than the newly recruited. Charities should take a page from marketing research to gain consumer insight to better target donors and refine their fundraising messages to distinct groups of people.

“In the consumer world, companies recognize that they need to fit their product with the kind of product that consumers might want,” says Aparna Labroo, a professor of marketing at Kellogg School of Management. “When we think about charity, we don’t consciously apply that lens. But really, the idea is the same.”

Charities should ask two main questions in tailoring a message: How do their potential donors think and what do they value? Can the charity match its message to this mindset—or try to change the mindset through subtle cues in message?

Charities should take a page from marketing research to gain consumer insight to better target donors and refine their fundraising messages to distinct groups of people.

Derek Rucker, a professor of marketing at the Kellogg School, says that framing your appeal the right way is key as it lets charities put their best foot forward for donors.

“If they don’t want to give, they’re not going to give,” he says. “It’s giving them the right information. … It’s saying, ‘Given that you think a particular way, how can I better appeal to it?’”

Click on infographic to enlarge.

Power Dynamics

Consider the difference in donations between those who feel powerful and those who feel powerless.

Research from Rucker and Adam Galinsky, formerly a Kellogg School professor and now at Columbia University, and David Dubois, a Kellogg graduate and now a faculty member at INSEAD, shows that feeling powerful increases people’s propensity to spend on themselves, but feeling powerless can increase people’s propensity to spend on others.

In one experiment, those who felt powerful spent an average of $12 on themselves and $7 on others in an auction for Northwestern paraphernalia. Those who felt powerless, however, showed the opposite pattern of results, spending nearly $11 on others and only $6.50 on themselves.

Rucker’s research also shows that the powerful are more swayed by hearing about an organization’s competence, while the powerless are persuaded by hearing about a group’s warmth.

Charities should therefore ask themselves which type of donor they are targeting. If the donor is feeling powerful, then stressing the organization’s ability to meet goals and produce tangible results will likely be more persuasive and elicit more money. If the donor is feeling powerless, then talking about the group’s trustworthiness and ability to make people feel cared for is best.

But what if you do not have the right message for the right group? Say you are a new nonprofit without a track record of competence to tout to powerful potential donors. Or your reputation is strong on warmth and you are making an appeal to major donors.

Rucker has found that people can be induced into feeling psychologically more powerful or powerless. In one experiment, participants were told to imagine they were either a boss or an employee before deciding how many Hershey Kisses to buy for themselves or others. Those who imagined being bosses bought more chocolates for themselves. Those who imagined being employees bought more for others.

Fundraisers might not want to start a conversation by saying, “Imagine you’re a powerless employee.” But they could begin a fundraising appeal by saying, “We all depend on someone.” That could be enough to get powerful people thinking about those they depend on, Rucker says, and shift their mindset so they behave like a less powerful person in that moment.

Is Your Donor Motivated by Personal Goals or Relationship Building?

Another way to segment your donor pool is to consider those who see themselves as autonomous, independent individuals who value personal goals and desires versus those who see themselves as part of a group and value relationships.

Angela Y. Lee, a professor of marketing at Kellogg, has studied how these two groups donate differently. Both are willing to give, she has found, but with key distinctions. The independent minded prefer to give to tangible projects, such as a new building, while those who value relationships give more to programs that create relationships, such as a mentoring initiative. Another difference: this second group prefers to volunteer time compared with the more independent, who are more likely to give money.

These differences could come into play if charities are doing outreach among a specific population that is predisposed to one sort of outlook, Lee says. For example, Asians and Latinos generally place high value on being part of a group. So charities hoping for donors from those communities might consider emphasizing the parts of their work that foster relationships.

Charities can also frame their fundraising appeals to temporarily shift their potential donors’ mindset.

“We have both views of the self in us,” Lee says. “We can definitely make the less dominant one become temporarily more dominant.”

In a study, Lee and Tonya Williams Bradford, a Kellogg School alum and currently a faculty member at Notre Dame University, found that a very subtle change in the wording of a fundraising appeal could impact whether people were more likely to donate time or money.

Participants read an appeal for the Make-A-Wish Foundation with a headline that either said, “YOU can be the ONE to make a Difference” or “YOU can be part of the TEAM to make a Difference.” The body of the appeals were similar but worded slightly differently to stress individuals or teams, as well.

Sixty-one percent of those who read about how they, as individuals, could help were likely to donate money compared with only 39 percent of those who read about being part of a team. But 52 percent of those who read about being part of a team were likely to volunteer their time compared with 31 percent of those who read about individuals.

“It’s a very subtle change,” Lee says of the tweak in messaging. But its impact—and implications for fundraising—is significant.

A Little Bit of Effort Goes a Long Way

The extent to which potential donors are committed to the goal of being charitable can also make a difference.

“People generally believe that charities should make it as easy as possible for potential donors to help the cause because people don’t like to exert effort,” Labroo says.

This rule is true when potential donors are not committed to the idea of being charitable. But this changes when potential donors are more committed to the goal of doing good, as they may be during the holiday season. In such cases, creating a small effort in order to make a donation can increase the likelihood the person will donate as well as increase the amount given, Labroo says.

This difference could apply to a charity’s list of repeat donors who are committed to the organization versus new potential donors who haven not given to the organization in the past.

Creating a small effort in order to make a donation can increase the likelihood the person will donate as well as increase the amount given, Labroo says.

Having to exert a token effort can increase the person’s perception of how worthy the donation is. Labroo says this perception stems from people’s belief that doing meaningful things requires effort, and they channel their efforts toward doing meaningful things. So if they are exerting effort, they must be doing something meaningful.

Labroo and Sara Kim of Hong Kong University, designed an experiment where they created two versions of an advertisement for a local charity. The text was identical, but one was a little harder to read because the text was slightly blurry and participants had to squint to make out the words.

Participants who were committed to being charitable donated on average 70 cents when they had to strain their eyes to read versus 30 cents when the letters were clear. Participants who were not committed to this goal gave 53 cents when the wording was clear and 26 cents when it was blurry.

In another study, the fundraising appeal was exactly the same. But the donation box was placed either next to the participant or a slight distance away at the end of the table, creating a token effort to reach it. Labroo and Kim again found that donors committed to doing good donated more money when they had to stretch to drop money into the box at the end of the table. Uncommitted donors gave more when the box was next to them.

Charities should think creatively about including a token effort for committed donors. “Anything that makes them feel that their contribution is more meaningful will make them willing to donate more,” Labroo says.

This could be as small as making donors click through twice in an online appeal, she says.

But there are limits.

“If it’s a phenomenal amount of effort, nothing is going to happen,” she says.

Anticipating Your Donor’s Mood

Thinking about the timing of your message and the mindset people likely have at that moment is important, too.

Kelly Goldsmith, an assistant professor of marketing at Kellogg, has studied how feelings of scarcity impact people’s willingness to part with money. Along with Kellogg alumnae Caroline Roux at Concordia University and Andrea Bonezzi at New York University, she has found that people are less generous when they feel resources are scarce, that is, unless you remind them of the benefit to themselves in spending money. A shopper, for example, might not buy an energy-efficient refrigerator to help the environment if he or she is feeling strapped for cash. But emphasizing instead how that fridge will reduce the monthly energy bill could prompt a purchase.

The same holds true for charitable giving.

Goldsmith paints the picture of the holiday season when, at different times, we feel very flush in our resources or very limited in them.

“People may feel like everything is abundant. There are feasts and family and time off for most of us,” she says. But then there is the gift buying. “There’s my aunt and my cousins. We really didn’t get a good enough present for Grandma last year and we need to get her something better this year. … You’re seeing money fly out of your bank account.”

Charities should time their messages so they are using the right language depending on whether they hit people when they are feeling flush or strapped. Think about the difference between a fundraising appeal on Thanksgiving versus Black Friday, Goldsmith says. On Thanksgiving an appeal should stress the good that giving to charity will do for others. On Black Friday it should stress how giving to charity will make you feel good about yourself.

Goldsmith cautions that charities need to be subtle. Using too heavy a hand in appealing to donors’ emotions can backfire.

“If we feel like people are trying to manipulate us or trying to hustle us, we will rebel against what they are trying to do,” she says.

Artwork by Yevgenia Nayberg. Infographic designed by Kelly Goggins.

Featured Faculty

Member of the Department of Marketing faculty until 2017

Professor of Marketing

Mechthild Esser Nemmers Professor of Marketing; Faculty Director, Golub Capital Social Impact Lab

Sandy & Morton Goldman Professor of Entrepreneurial Studies in Marketing; Professor of Marketing; Co-chair of Faculty Research

About the Writer
Emily Stone is the Research Editor for Kellogg Insight.
About the Research

Rucker, Derek D., David Dubois, and Adam D. Galinsky. 2011. “Generous Paupers and Stingy Princes: Power Drivers Consumer Spending on Self versus Others”. Journal of Consumer Research. 37: 1015-1029.

Bradford, Tonya Williams, and Angela Y. Lee. “Tangible Assets versus Social Connectedness: A Self-Construal Empathy-Altruism Fit Model of Charitable Giving”. Under revision.

Labroo, Aparna A., and Sara Kim. 2009. “The ‘Instrumentality’ Heuristic: Why Metacognitive Difficulty is Desirable during Goal Pursuit”. Psychological Science. 20: 127-134.

Kim, Sara, and Aparna A. Labroo. 2011. “From Inherent Value to Incentive Value: When and Why Pointless Effort Enhances Consumer Preference”. Journal of Consumer Research. 38: 712-742.

Roux, Caroline, Kelly Goldsmith, and Andrea Bonezzi. 2014. “On the Consequences of a Scarcity Mindset: Why Thoughts of Having Less Can Lead to Taking (and Giving) More.” Conditionally accepted at the Journal of Consumer Research.

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