Crowdfunding Is a Quick Hitter
Recently we collaborated with one of Turnkey’s clients on the strategy to launch a crowdfunding campaign to run concurrently with its peer-to-peer events. Crowdfunding and peer-to-peer are different animals. The former is a direct-response outreach; the appeal is made directly by the nonprofit to potential donors. The latter organizes volunteers to raise money on behalf of the organization. The key to getting it right is to understand the differences in the psychology that underlies the two approaches.
People who contribute to crowdfunding campaigns and those who participate in peer-to-peer events are motivated by some of the same factors, but they are in vastly different psychological spaces. A major motivator of prosocial behavior generally is what psychologists refer to as “image motivation.” Image motivation is the desire to be seen as a good person, as someone who performs good acts on the behalf of others. In addition to being motivated to have others regard us in this way, we are motivated to feel that way about ourselves. Participating in crowdfunding campaigns is a way to fulfill that desire—for a relatively low cost, I can feel that I am kind, generous, altruistic, etc.
An advantage that crowdfunding enjoys is that people can participate (donate) without the expectation of taking on an ongoing commitment. Most times, a donation is framed as a “one and done,” and there is no pressure to contribute to the cause in the future. People will go to great psychological lengths to avoid ongoing commitments generally, and this is true regarding relationships with nonprofit organizations as well. For example, research on the so-called “exchange fiction” describes how people are more likely to donate to charity when they can frame the donation as a financial transaction, like giving in order to get a tax break. The exchange provides psychological cover for their altruistic behavior, absolving them from future involvement.
People who are involved in peer-to-peer activities are also influenced by image motivation, but unlike those who donate to crowdfunding campaigns, their continuing engagement is all about their relationship with the organization. Unlike crowdfunding donors, the commitment to the mission over time becomes part of their personal identity. As marketing guru Seth Godin says, they believe that “people like us do things like this.” Their continued engagement depends greatly on the recognition that they receive from the organization, which is powerfully reinforcing.
As an example, the “2016 National Awareness, Attitude & Usage Study” surveyed 98,000 multiyear donors to nonprofit cultural organizations. These donors subsequently stopped donating. It was found that people who weren’t acknowledged or thanked for a previous gift were five times more likely to stop donating than those who felt they were asked too often. In ongoing relationships with supporters, like peer-to-peer volunteers, continued engagement with the organization is critical. And the more personal and timely, the better.
One thing that is important to provide both to prospects for crowdfunding campaigns and peer-to-peer participants is specific information on how their contribution is (or will be) used, an “impact statement.” For example, “Your donation provided… five days of meals for refugees, six mammograms, a backpack of school supplies for an entire year, etc.” This kind of specific information helps satisfy an individual’s personal image motivation—that they are a good and generous person. The second thing that is important to provide to both groups is a way to publicly “advertise” their donation to friends and family. This satisfies the motivation to be seen as someone who engages in prosocial activities by others.
Finally, crowdfunding donors are great prospects for further engagement. People have a consistency bias that pressures them to be consistent in their behaviors over time. Classic social psychological research has demonstrated that people who have done small behaviors (donating $10) are much more likely to engage in larger behaviors (donating $100) to remain consistent. However, it would be wise to avoid any suggestion of future engagement when making an initial crowdfunding solicitation. No one wants to talk about getting married when they’re on a first date.
Katrina VanHuss and Otis Fulton have written a book, Dollar Dash, on the psychology of peer-to-peer fundraising. Click here to download the first chapter, courtesy of NonProfit PRO!
Otis Fulton, Ph.D., spent most of his career in the education industry, working at the psychometric research and development firm MetaMetrics Inc., Pearson Education and others. Since 2013, he has focused on the nonprofit sector, applying psychology to fundraising and donor behavior at Turnkey. He is the co-author of the 2017 book, ”Dollar Dash: The Behavioral Economics of Peer-to-Peer Fundraising” and is a frequent speaker at national nonprofit conferences. With Katrina VanHuss, he co-authors a blog at NonProfit PRO, “Peeling the Onion,” on the intersection of psychology and philanthropy.
Otis is a much-sought-after copywriter for nonprofit fundraising messages. He has written campaigns for UNICEF, St. Jude’s Children’s Research Hospital, March of Dimes, Susan G. Komen, the USO and dozens of other organizations. He has a Ph.D. in social psychology from Virginia Commonwealth University and a Bachelor of Arts from the University of Virginia, where he also played on UVA’s first ACC champion basketball team.
Katrina VanHuss has helped national nonprofits raise funds and friends since 1989 when she founded Turnkey. Her client’s successes and her dedication to research have made her a sought-after speaker, presenting at national conferences for Blackbaud, Peer to Peer Professional Forum, Nonprofit PRO, The Need Help Foundation and her clients’ national meetings. The firm’s work is underpinned by the study and application of behavioral economics and social psychology. Turnkey provides project engagements, coaching, counsel and staffing to nonprofits seeking to improve revenue or create new revenue. Her work extends into organizational alignment efforts and executive coaching.
Katrina also regularly shares her wit and business experiences on her and Otis Fulton's NonProfit PRO blog “Peeling the Onion.” When not writing or researching, Katrina likes to make things — furniture from reclaimed wood, new gardens, food with no recipe. Katrina’s favorite Saturday is spent cleaning out the garage, mowing the grass, making something new, all while listening to loud music by now-deceased black women, throwing in a few sets on the weight bench off and on, then collapsing on the couch with her husband Otis to gang-watch new Netflix series whilst drinking sauvignon blanc.
Katrina grew up on a Virginia beef cattle and tobacco farm with her three brothers. She is accordingly skilled in hand to hand combat and witty repartee — skills gained at the expense of her brothers. Katrina’s claim to fame is having made it to the “American Gladiator” Richmond competition as a finalist in her late 20s, progressing in the competition until a strangely large blonde woman knocked her off a pedestal with an oversized pain-inducing Q-tip. Katrina’s mantra for life is “Be nice. Do good. Embrace embarrassment.” Clearly she’s got No. 3 down.