In the final part of the #5 Myths of Arts & Culture Fundraising blog series by National Arts Fundraising School Director Bernard Ross, he touches on the use of behavioural economics in fundraising.
There’s been a massive growth in desire to justify the social or economic impact of the arts and culture. (And to prove the impact of charity programmes generally.) And often statistics like the ones below are produced. It’s not clear to me who these figures are for or what outcome they are meant to generate.
If it’s to convince local authorities to support the arts, you can judge the effectiveness by the massive reduction in support over the last five years. Have another look at the graph that started off this series of blogs.
But do facts convince the majority of private donors? (Leaving aside another possible myth that they convince institutional donors.)
If you want to get to grips with the science of decision-making, then you need to understand a bit about behavioural economics and neuroscience – there’s a great download here http://www.managementcentre.co.uk/management-consultancy/behavioural-economics/. Essentially this outlines that traditional economics is based on the assumption people are rational beings who make choices based on a logical cost/benefit-type analysis. In other words, we will act consistently in our own or the wider best interests, weighing up the pros and cons. Behavioural economics says we all work within a “bounded rationality.” Human rationality is limited by a number of factors: our mental abilities, the level of information we have to deal with, our cognitive and emotional biases, peer pressure, and time pressure. With such factors at work, behavioural economists say, we resort to heuristics, or mental shortcuts, to make fast and frugal decisions. These can be useful and save us time and energy, but they can also lead us astray. They may not be in our own best interests. They are definitely not rational.
We can illustrate the basic principle through a famous and simple classic experiment carried out for Save the Children. Two groups of similar potential donors were asked to support either a specific 7-year-old girl named Rokia, facing starvation in Zambia, or three million children facing starvation in Zambia.
The exact text for the two appeals is outlined below. Which would be more likely to elicit a response from you – A or B?
A) Any money that you donate will go to Rokia, a seven-year-old girl who lives in Zambia in Africa. Rokia is desperately poor and faces a threat of severe hunger, even starvation. Her life will be changed for the better as a result of your financial gift. With your support, and the support of other caring sponsors, Save the Children will work with Rokia’s family and other members of the community to help feed and educate her, and provide her with basic medical care.
B) Food shortages in Africa are affecting millions of children. In Zambia, severe rainfall deficits have resulted in a 42% drop in maize production from 2000. As a result, an estimated three million Zambians face hunger. Four million Angolans — one-third of the population — have been forced to flee their homes. More than 11 million people in Ethiopia need immediate food assistance. They need your help now and by donating to Save the Children you can help.
Which of these two appeals would you be most likely to respond to? You probably answered A which is what most people did in a study conducted by Deborah Small, Marketing Professor at Wharton. The research team working under her found that if an organisation want to raise money for a cause, it’s more effective in donation terms to appeal to the heart – and focus on individuals like Rokia – than to the head, which might say ‘please help whichever person or persons is most in need.’
Perhaps more distressingly for those of us who are keen to win over hearts and minds the study found that if the fundraising appeal highlighted Rokia and included data about overall need in the country, donors gave less than they did when the wider data were left out.
It gets worse. The real challenge of working too hard to get donors to give with the head instead of the heart is most clearly illustrated in the final experiment of the Wharton study. This suggested that simply activating logical thought processes actually reduced charitable giving. So when donors were asked to complete five simple logic problems before they were told about Rokia, they gave significantly less money than if they had not been ‘primed’ with a set of activities designed to stimulate rational thinking.
The Rokia study points to a real danger in the movement to encourage donors, or certainly private donors, to give more rationally. Almost everyone in the field of fundraising would like to see supporters allocate their money based on a rational understanding of the size and relative challenge represented by the very considerable problems many people face. Often this is presented as a desire for unrestricted money, ‘Give us support so we can put it wherever it is needed most.’ Or, ‘Help us underpin the central role of culture in society.’ Or ‘Make sure that this museum is free to everyone.’ But the Rokia studies tell us that encouraging donors to consider their support in this rational way may undermine their ‘natural’ urge to give. There is more science and research here if you need it.[1]
Key learning from this myth
This is perhaps the most profoundly troubling of our funding unicorns. The idea that we can make a rational case for the arts and culture. Or that, even if we can, it will convince private supporters to come on board. The arts won’t succeed philanthropically by making the case as a form of economic regeneration, or psychotherapy, or social leveller, or opportunity-maker for the disadvantaged. You should focus on the emotional experience that makes people love the arts.
So that’s the last of the 5 Myths we need to address in fundraising for the arts, museums and culture. If you want to know more about the real world future for arts fundraising why not attend the National Arts Fundraising School? Six days of genuine, practical, – unicorn free – insight, and the world’s only fundraising training with a money back guarantee.
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[1] http://sofii.org/images/Articles/The-Commission-on-the-Donor-Experience/3.2.-Kiki-Koutmeridou-the-behavioural-scientists-view.pdf
And
http://www.newyorker.com/magazine/2017/02/27/why-facts-dont-change-our-minds
