One of the reasons fundraising is such a challenge is that all of us – donors and fundraisers alike – live simultaneously in two different worlds:
- “Story World,” the part of the human mind that acts on emotion, social cues, and stories.
- “Commerce World,” where we look at facts, figures, and consider things in the cold light of objective reality.
Story World is the more important one. It’s the engine that drives charitable giving. That’s where we fundraisers need to spend most of our time and energy.
But Commerce World is always there too, lurking in the background, bringing accounting, contracts, and complexity to the table. And what it mainly does is put a brake on giving.
Ineffective fundraising typically assumes that Commerce World is where the action is. That’s partly correct, but the problem is that when you ignore Story World and enter Commerce World, you are solidly in the territory that talks donors out of giving.
Here’s an example from a business proposal:
Suppose you are an investor considering buying in to a partnership to build a $100 million apartment complex. You’re thinking about buying 1% ownership for $1 million.
Would you care what part of the construction your $1 million would purchase? Would you demand, “I want my money to be spent on plumbing, but not on architecture fees!” No.
Would such a demand even make sense? Also no.
Asking which part your money would be used for is silly. It’s silly because money is money, no matter what you plan to spend it on. Every dollar is worth exactly a dollar. My dollar is the same as any other. You should only care about the project’s total cost, not what specific dollars do within the overall project.
This makes sense in Commerce World.
But it’s not how fundraising works.
Fundraising lives in Story World. In Story World, dollars are magical. They are characters in a fantasy drama. Some dollars are assigned to compelling roles. (Maybe your dollars buy the apartment’s fire alarm. They play the role that saves sleeping babies!) Others are not. (Maybe your dollars only pay for debt charges.)
In Story World, the project’s total cost isn’t all that relevant. What matters is that your dollars play a compelling role.
Fundraising in Commerce World: experiments
In a lab experiment, some donors received positive financial reports about a charity. These proved the charity’s efficiency. The result? These “did not translate into increased actual giving.”
In another experiment, some donors learned that their selected charity’s overhead ratios were better than they expected. The result? A third of these donors actually reduced their giving. Donors argued that they, “Give less but give smart.” (They got the same charitable impact with fewer dollars.)
What happens in the real world? One field experiment tested appeal letters. Some people got an appeal letter. Others got the same appeal letter plus a second page including positive financial information.
The result? Adding this information reduced the likelihood of giving.
Apparently, donors don’t give to financial efficiency. They don’t even want to read about it. Positive financial information doesn’t help.
However, negative financial information can still hurt. Some experiments show that donors will avoid projects or charities with higher overhead.
Math isn’t the engine for giving, but it can be the brake. This is true.
Unless we change the story.
Fundraising in Story World: experiments
Donors are not always averse to high-overhead projects or charities. They just don’t want their dollars to be spent on overhead. If their dollars are spent on overhead, then overhead is a problem. If other donor’s dollars pay for it, then overhead isn’t a problem.
What matters is not the project’s efficiency. What matters is their donation story. Of course, assigning their dollars to the more exciting parts doesn’t change the project’s efficiency. But it does make their donation story better.
One experiment found that just avoiding the word “overhead” helped. So did replacing “overhead” with “overhead to build long-term organizational capacity.” It wasn’t about the numbers. It was about the story.
Another experiment looked at student giving to a campus synagogue. The synagogue had expenses for:
- Prayer books and religious books
- Electricity, cleaning, and food
Both types of expenses were necessary. But when gifts paid for the first type of expense rather than the second, donations were four times larger. Of course, donors didn’t want a dark and dirty synagogue. They just wanted someone else’s money to pay for that boring stuff.
In commerce world, a dollar is a dollar. But in story world, donors want their dollars attached to the interesting parts of the story.
Commerce world cares about accounting and efficiency. And rightfully so. But fundraising doesn’t live in commerce world. Fundraising lives in story world. Accounting can confirm or contradict a social/emotional story. But it can’t create it. Effective fundraising doesn’t start with accounting. It starts with story.
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