Increase Nonprofit Results With Behavioral Science and Loss Aversion

By using human behaviors, you can gain a competitive advantage and increase donations. The human drive to avoid the pain of loss is extremely motivating. In part 1 of this series, I discussed how to use emotion in nonprofit direct mail to drive results. Now let’s discuss how to use loss aversion to increase your donations. By doing this in your fundraising campaigns, you will motivate people to donate. 

We all know that benefits sell, but are you really using benefits that are genuinely for donors? Make sure that you use real benefits, not fun features of your organization. However, benefits alone will not generate donations. You need to also explain what prospects are missing out on or what they stand to lose if they don’t donate to your organization. The copy’s focus needs to be on what they want to hear, not on what you want to say.

Surprisingly, behavioral scientists have found that people are approximately twice as motivated to avoid the pain of loss as they are to acquire the pleasure of gain. In nonprofit direct mail, we can use loss aversion to our advantage. Fear does not just drive donations; it can drive higher donations.

Here are a few ways to add fear of loss into your fundraising direct mail:

• When you have a limited number of donation levels, list how many are left.
• When you are doing an event, let people know they don’t want to miss it because this will only happen once this year.
• Provide a one-time special donation category and how that will help a person you highlight.
• Use “don’t miss out” in your copy.
• Create response deadlines and make sure they are bold.
• Offer a free gift with higher level donations.
• Create a teaser about mistakes they could avoid by helping the person in need.

The rule you must follow in using loss aversion in nonprofit direct mail is to always use it ethically and responsibly. You need to give your prospects and donors the respect they deserve. You don’t want to be shifty. Honesty is important. You are not making up fake loss, you are showing prospects how a donation helps them avoid a real loss for the people you help.

How do you find that loss? You look at a benefit and turn it into a loss because your organization doesn’t have what it needs unless the reader donates. Free gifts are a great option because people use the item and feel indebted to you each time they do. This drives higher donations. Direct mail with a free gift offer is very powerful.

If you are presenting two options in your direct mail offer, lead with the strongest one. Once they read about all the great things that come with that option, the next option, which has fewer benefits, will appear to be a loss of benefits, and the person will donate to the more expensive option. 

As you can see, loss aversion is a powerful direct mail strategy to drive donations. Are you ready to get started using it? Not sure if this will work for you? Test it! Split your list in half and try loss aversion for half of your list and send your regular mailer to the other half. You may be surprised with your results. 

Increase Nonprofit Results With Behavioral Science

Part 1: Emotions
Part 2: Loss Aversion

The preceding blog was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.