Manana money: The curious psychology of pledging
- Tue, December 20 2011
- Filed under: Fundraising essentials
We humans find it harder to deny ourselves an immediate benefit than one to wait for something further in the future, even if it’s a better investment to be patient. (I love the name of this phenomenon: hyberbolic discounting.)
As shown in the research summarized in the book, Consumer Insights: Findings from Behavioral Research, this is why we buy the cheaper refrigerator now even if a pricier, energy saving version leads to bigger savings over time. It’s why we hire an experienced person who can contribute right away rather than going for the brilliant but inexperienced job candidate who will do more for our organization over time.
Interestingly, the rate of our discounting of the future depends on context. Discounting is higher, according to Consumer Insights, when the amount is smaller. It’s higher for gains than losses, and it’s higher when delaying a current amount than when expediting a future amount.
Which brings me to pledging. It’s another form of delaying the pain of spending. As I read more and more about hyperbolic discounting, I see useful insights for fundraisers. It’s easier to give away money mentally ahead of time than in a moment when there are other temptations. That is an interesting way to look at people who just aren’t giving now.
If you are struggling with donors who won’t donate now, give them the immediate benefit of donating while deferring the cost. Let someone have the quick reward of feeling good about themselves by pledging to give money - but let them cough up the cash later. Pledging is a great call to action for those folks. But for those ready to give, ask for the dollars. Always. Especially this time of year.
Comments
This seems…almost logical. I enjoy knowing that my bills are coming out of my account directly without thinking about it.. so, pledging a commitment to give continuously “in the future” may work for those who think like me. But, for others who have the desire to give but are experiencing turbulence/uncertainty in their finances may be our 1-time, periodic donor.
Some good insights. I think there’s a different psychology, though, in pledging toward an annual fund when a college student calls an alumna than making a multi-year large pledge during a campaign.
The first can be impulsive, yet the second is much more considered and planned into the donor’s budget.