Why Do I Make These Decisions?
Last week I wrote about loss aversion, a human bias that often results in people shying away from taking action or changing a behavior. Simply stated, loss aversion means that the pain of a loss is roughly twice the pleasure of a gain. The effect of this bias can be seen in all walks of life, even sports.
In football, statistics show that on fourth down it is far better to go for the first down than to punt. Yet coaches rarely do so—why? Because the benefit of gaining a first down is perceived as being outweighed by the loss of the yardage if a team fails to convert.
The movie Moneyball shows us a situation in which Oakland A’s Major League general manager Billy Beane, due to enormous pressure to perform, casts aside his natural bias (using visual attributes about players to make decisions) and instead turned to a non-natural way to make decisions—using statistics.
Who but a crazy person would rely almost totally on statistics to make decisions, throwing aside the wisdom of baseball sages giving advice? Billy Beane was in a desperate situation regarding his career, and he superseded his own biases to make counter-intuitive decisions.
For those of us in fundraising, the baseball sage who said “he’s got an ugly girlfriend ... he’s not confident ... probably can’t hit” can look like a boss who, in spite of clear indications of declining revenue, stays the course on marketing and fundraising techniques. The baseball sage can look like a staff person who, in spite of your perfect clarity on required changes in their methods, just won’t change. The baseball sage can look like an organizational chart that no longer matches reality, but won’t change because the humans in that organizational chart can’t conceive of a different structure.
Per Otis Fulton, my psychologist buddy, “We have evolved with many biases like loss aversion baked into our DNA. They kick in automatically and subtly nudge us this way or that way all the time as we experience our surroundings. Biases affect us physically, releasing hormones and adrenalin; we experience them emotionally as feelings of unease, happiness, anxiety, etc. We have lots of these psychological shortcuts; in this regard humans are no different from other animals. Dogs chase cars because cars move kind of like prey, and over the eons chasing down prey has been very good for dogs. In animals we call that kind of behavior instinctual, whereas we prefer to call our human reactions to biases intuitions, hunches—even wisdom.”
What can we do to get rid of biases like loss aversion, which can keep us from making good decisions? “Unfortunately, nothing," Otis said. "Biases are completely unconscious and automatic, totally inaccessible to us. That said, we are not doomed to chase the school bus in meetings and on conference calls. What we can do is be aware of biases and the effect they have on how we operate."
Billy Beane had to find a way to go against his natural bias because of a threat to his livelihood. We can do it before then, simply by knowing we have a bias, even though we can’t impact those biases.
Acknowledging our bias makes us more likely to change course when a revenue program is going south, or go for the first down when it’s fourth and one with the ball on our own 30 yard line, or hire a player who throws funny, but has great pitching statistics. We will still have sweaty palms (evidence of our bias at work) but our self-awareness, developed along with our opposable thumb, helps us make counter-intuitive, yet more productive decisions.
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 the 2023 book, "Social Fundraising: Mining the New Peer-to-Peer Landscape," 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 regularly shares her wit and business experiences on her and Otis Fulton's NonProfit PRO blog “Peeling the Onion.” She and Otis are also co-authors of the books, "Dollar Dash: The Behavioral Economics of Peer-to-Peer Fundraising" and "Social Fundraising: Mining the New Peer-to-Peer Landscape." 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.