Latest / The Nonprofit Podcast / Ep 128| 5 Effective Nudges for Monthly Giving

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Ep 128| 5 Effective Nudges for Monthly Giving · The Nonprofit Podcast

• 0:04
  SPEAKER_02: The Nonprofit Podcast, powered by DonorBucks.
• 0:09
  SPEAKER_02: Ever bought something extra just because it was on sale or signed up for a newsletter because it promised an exclusive deal?
• 0:16
  SPEAKER_02: These choices aren't just random.
• 0:19
  SPEAKER_02: They are smart retail strategies based on behavioral economics and designed to influence how you make decisions.
• 0:26
  SPEAKER_02: And they can help you tap into the natural tendencies of your donors too.
• 0:31
  SPEAKER_02: Welcome to the Nonprofit Podcast.
• 0:33
  SPEAKER_02: I'm Jenna, Education and Community Engagement Manager at DonorBox.
• 0:37
  SPEAKER_02: We are here each week with practical actions you can use today to increase donations and take your nonprofit to the next level tomorrow.
• 0:45
  SPEAKER_02: Today, we are talking about behavioral economics, understanding how people make decisions, and exploring how you can use these strategies to boost your nonprofits' monthly giving.
• 0:57
  SPEAKER_02: And joining me today is Kara Augsberger, Executive Director of the Grace Care Center Foundation and DonorBox Podcast co-host.
• 1:05
  SPEAKER_02: Welcome, Kara.
• 1:06
  SPEAKER_01: Hey, Jenna.
• 1:07
  SPEAKER_01: Thanks so much for having me.
• 1:08
  SPEAKER_01: You know, I've been looking forward to this discussion.
• 1:11
  SPEAKER_01: I am working on a big monthly giving campaign in September, and I'm putting some of the pieces together, like getting the tools on my donation form and building out a special web page.
• 1:21
  SPEAKER_01: When you mentioned to me that you were prepping for a presentation on how some simple insights into some principles that drive decision making can boost my monthly giving, I knew I wanted to learn more.
• 1:32
  SPEAKER_01: So I think that donor behavior piece is what is missing for me as I prep for this campaign.
• 1:38
  SPEAKER_01: So you mentioned behavioral economics.
• 1:41
  SPEAKER_01: That's not a term I know.
• 1:42
  SPEAKER_01: So could you kick things off by explaining what that is?
• 1:46
  SPEAKER_02: Yeah, sure.
• 1:47
  SPEAKER_02: I have been looking into how to uplift monthly giving programs for organizations.
• 1:54
  SPEAKER_02: There are so many tips out there, but I thought, why not tap into psychology, how we all operate?
• 2:00
  SPEAKER_02: So behavioral economics is a little bit of psychology, but it's also a little bit of economics, right?
• 2:06
  SPEAKER_02: So it looks at why people sometimes make choices that aren't purely logical, like spending money impulsively or sticking with a default option just because it's easier.
• 2:18
  SPEAKER_02: Think about when you're shopping online, you see a limited time offer for a product.
• 2:23
  SPEAKER_02: Even if you don't really need that item, the urgency and that perceived value push make you make that purchase.
• 2:30
  SPEAKER_02: And so this taps into what is called like a psychological bias.
• 2:35
  SPEAKER_02: So specifically the idea of scarcity.
• 2:38
  SPEAKER_02: We are driven to act when we feel something might be running out, even if we didn't initially plan to buy it.
• 2:44
  SPEAKER_02: And to be honest, uh, this happened to me already this week.
• 2:48
  SPEAKER_01: Those always get me.
• 2:49
  SPEAKER_01: Um and so that I get it.
• 2:50
  SPEAKER_01: That makes sense.
• 2:51
  SPEAKER_01: I know I fear losing something, especially a good deal or a special offer or something that really makes me act sooner than I probably would have if I was thinking it through a little bit more.
• 3:02
  SPEAKER_02: Yep.
• 3:02
  SPEAKER_02: Yeah, exactly.
• 3:04
  SPEAKER_02: And then another example of behavioral economics in action, thinking about this in our daily life.
• 3:11
  SPEAKER_02: And this is coming directly from an experience I had this weekend.
• 3:15
  SPEAKER_02: Think about certain stores like HomeGoods.
• 3:17
  SPEAKER_02: You know, they place small, enticing items in the aisles when you're waiting to check out.
• 3:22
  SPEAKER_02: Yes, they do.
• 3:23
  SPEAKER_02: They almost get me every time.
• 3:25
  SPEAKER_02: And these products are strategically placed.
• 3:28
  SPEAKER_02: They're not just there because they only had space to put them there.
• 3:31
  SPEAKER_02: They are strategically placed to catch your eye and prompt those impulse purchases.
• 3:36
  SPEAKER_02: And this tactic shows how subtle changes in our environment and our offerings can influence our decisions, even in the final moments of a shopping trip.
• 3:45
  SPEAKER_02: It's true.
• 3:46
  SPEAKER_01: And retailers study this extensively, I imagine.
• 3:50
  SPEAKER_01: So I love it when we as nonprofits look at what retail's doing, and then we get to apply it to raising more money for some really good causes.
• 3:57
  SPEAKER_01: So we're using all of their work and reaping some of the benefits.
• 4:01
  SPEAKER_01: So, how might something like this apply to monthly giving?
• 4:05
  SPEAKER_02: Okay.
• 4:06
  SPEAKER_02: To understand how behavioral economics can boost monthly giving, there are two things that we need to dig into first, two key concepts, and that's nudges and incentives.
• 4:18
  SPEAKER_02: So nudges are subtle changes in the way that choices are presented that can significantly influence our decisions.
• 4:27
  SPEAKER_02: The idea here is not to restrict options, but to guide people toward a desired choice.
• 4:33
  SPEAKER_02: And the idea here is that we as humans are swayed by the way that things are presented because it's easy.
• 4:39
  SPEAKER_02: It's simple.
• 4:40
  SPEAKER_02: All right, so that's nudges.
• 4:41
  SPEAKER_02: And then incentives.
• 4:43
  SPEAKER_02: Incentives are basically rewards or perks aimed at getting people to take specific actions.
• 4:49
  SPEAKER_02: So these can be things that you actually use, like discounts or special offers, or they can be more about the feeling of doing something good, like supporting a cause that you care about.
• 4:59
  SPEAKER_02: Both nudges and incentives are all about working with our natural instincts to make decisions easier and more appealing.
• 5:08
  SPEAKER_02: When used smartly, they can be really big game changers for boosting your fundraising efforts.
• 5:14
  SPEAKER_02: Today, specifically, we're going to focus on nudges because we can really get into the weeds here.
• 5:18
  SPEAKER_02: So we will have a part two to talk more about incentives.
• 5:22
  SPEAKER_01: Awesome.
• 5:22
  SPEAKER_01: Yeah, um, I love this.
• 5:24
  SPEAKER_01: So nudges, let's start there.
• 5:26
  SPEAKER_01: What do you have in store?
• 5:28
  SPEAKER_02: Okay, so one classic example of a nudge, again, is the use of default options.
• 5:34
  SPEAKER_02: When people are presented with a default choice, they are more likely to go with it because it requires less effort compared to actively choosing an alternative.
• 5:44
  SPEAKER_01: Yeah, that makes sense.
• 5:45
  SPEAKER_01: I've seen that in action.
• 5:46
  SPEAKER_01: So, like um, I recently upgraded our Wi-Fi plan at home.
• 5:51
  SPEAKER_01: And so when you sign up for a script subscription like that, they often have a default option for a higher tier plan.
• 5:57
  SPEAKER_01: So that's a nudge.
• 5:59
  SPEAKER_02: Yes, exactly.
• 6:00
  SPEAKER_02: That is the perfect example.
• 6:01
  SPEAKER_02: So let's apply this to monthly giving.
• 6:04
  SPEAKER_02: If your donation form defaults to recurring gift rather than a one-time donation, many donors will stick with that option.
• 6:12
  SPEAKER_02: Or when a default option is set on a donation form, like a suggested$50 amount, donors are more likely to go with that amount because it requires less effort than selecting a different value or typing in a different value.
• 6:26
  SPEAKER_02: This isn't just about convenience, though.
• 6:28
  SPEAKER_02: It's also tied to the principle of status quo bias.
• 6:32
  SPEAKER_02: So when you set a default option, most people will just go with it.
• 6:36
  SPEAKER_02: It's like giving them a gentle nudge towards the behavior that you want them to choose, and they don't want to mess with that status quo, right?
• 6:42
  SPEAKER_02: Like this is the default option, I'm gonna go with this.
• 6:45
  SPEAKER_01: Yeah, especially when I'm scrolling on my phone and I'm in a comfortable place.
• 6:49
  SPEAKER_01: So yeah, that's interesting.
• 6:51
  SPEAKER_01: I appreciate that.
• 6:52
  SPEAKER_01: And I'm going to make that change on my donation form this afternoon.
• 6:56
  SPEAKER_01: So are there any other types of nudges we should be aware of?
• 6:59
  SPEAKER_01: Oh, yes, lots and lots.
• 7:01
  SPEAKER_02: Another popular nudge is social proof.
• 7:04
  SPEAKER_02: And we talk about social proof a lot, but this is actually a nudge.
• 7:07
  SPEAKER_02: So this taps into the idea that people tend to follow what others are doing.
• 7:11
  SPEAKER_02: We know this feeling.
• 7:12
  SPEAKER_02: When we see others making a certain choice, um, we may be more likely to go along with it.
• 7:17
  SPEAKER_02: For instance, you can show a simple message on your donation page, like join the 1,000 people who have already donated this month.
• 7:26
  SPEAKER_02: And that can encourage new donors to contribute.
• 7:30
  SPEAKER_02: Another great way to accomplish this is by using a goal meter to show how many people have donated and it shows that progress towards your goal, or using a virtual donor wall to allow donors to leave a positive message after donating and showing how much they've donated if they choose.
• 7:44
  SPEAKER_02: Again, these things tap into the natural human tendency to follow the crowd.
• 7:49
  SPEAKER_02: And another very effective nudge is something called framing.
• 7:54
  SPEAKER_02: So this is how information is presented and how it can influence your decisions.
• 7:59
  SPEAKER_02: So, what do you mean by framing?
• 8:01
  SPEAKER_02: Can you give me uh maybe an illustration of how that works?
• 8:04
  SPEAKER_02: Yes.
• 8:04
  SPEAKER_02: Yes.
• 8:05
  SPEAKER_02: And you're probably already doing this.
• 8:07
  SPEAKER_02: Imagine you're asking for donations to fund a new, let's say a community garden.
• 8:12
  SPEAKER_02: You could frame your request in two different ways.
• 8:14
  SPEAKER_02: You could use the positive frame.
• 8:16
  SPEAKER_02: So help grow a vibrant community garden that will provide fresh produce for hundreds of local families.
• 8:22
  SPEAKER_02: Okay.
• 8:23
  SPEAKER_02: Or on the flip, you could use the negative frame.
• 8:26
  SPEAKER_02: So without your help, the community garden project might not get off the ground and local families will miss out on fresh produce.
• 8:34
  SPEAKER_02: So both frames here aim to elicit donations, but they do so differently.
• 8:40
  SPEAKER_02: The positive frame emphasizes the benefits and the positive outcomes of the donation, while the negative frame highlights the potential loss or negative consequences of not donating.
• 8:50
  SPEAKER_01: Oh, that makes total sense.
• 8:52
  SPEAKER_01: I actually do use that in appeal writing all the time.
• 8:54
  SPEAKER_01: I just didn't know it was called framing.
• 8:56
  SPEAKER_01: So positive frame focuses on the good that can be achieved, and the negative frame focuses on what could go wrong if people don't give.
• 9:04
  SPEAKER_02: Yep, exactly.
• 9:05
  SPEAKER_02: Okay.
• 9:06
  SPEAKER_02: And I don't want to get too into the weeds here, but this is tapping into a theory called loss aversion.
• 9:13
  SPEAKER_02: So the basic concept is that we are always thinking about pains and gains when we're deciding whether we're going to do something or not.
• 9:21
  SPEAKER_02: So basically the theory states that the pain of losing is psychologically about twice as powerful as the pleasure of gaining.
• 9:31
  SPEAKER_02: If if$10 were to fall out of your pocket on the street, it's gonna feel twice as bad than if you found$10 on the street.
• 9:39
  SPEAKER_02: So that's kind of what this taps into.
• 9:41
  SPEAKER_02: And there are lots of other ways to frame things in fundraising too.
• 9:44
  SPEAKER_02: On your donation form, for example, you can frame your donation amount, or you can use comparison framing in your copywriting.
• 9:51
  SPEAKER_02: So framing your donation amount, and this is um something that we talk a lot about at Donor Box, instead of asking for a specific amount like$50, you could frame it in terms of what the donation will accomplish.
• 10:03
  SPEAKER_02: Your$50 uh will provide a month worth of meals for family in need.
• 10:08
  SPEAKER_02: This frames the donation in terms of its impact, making it more tangible and relatable.
• 10:13
  SPEAKER_02: And with DonorBox, of course, you can even do this directly on your donation form, easy peasy.
• 10:19
  SPEAKER_01: And it works for a lot of organizations that use it that way.
• 10:22
  SPEAKER_01: It's really impactful.
• 10:23
  SPEAKER_02: Yes.
• 10:24
  SPEAKER_02: I love to see where my money is going specifically.
• 10:27
  SPEAKER_02: It does feel very impactful and tangible.
• 10:29
  SPEAKER_02: Yeah.
• 10:29
  SPEAKER_02: And then comparison framing, this one I think is really cool.
• 10:33
  SPEAKER_02: This involves comparing the cost of a donation to something familiar.
• 10:37
  SPEAKER_02: So, for example, for the price of a cup of coffee each week, you can support a child's education by comparing the donation to a daily expense that we're very familiar with.
• 10:46
  SPEAKER_02: It makes the giving amount seem even more manageable and maybe a little less intimidating.
• 10:51
  SPEAKER_02: Oh, yeah.
• 10:52
  SPEAKER_01: And I've I see that all over the place.
• 10:54
  SPEAKER_01: So I think it probably is very impactful.
• 10:56
  SPEAKER_01: Yeah.
• 10:56
  SPEAKER_01: I wanted to ask you something about something I saw from DonorBox recently.
• 11:01
  SPEAKER_01: There is a recurring upsell notification on the donation form.
• 11:05
  SPEAKER_01: And so I looked into it a little bit, but I haven't added it to my donation form just yet.
• 11:10
  SPEAKER_01: So is that a nudge?
• 11:11
  SPEAKER_01: Is that something that would work for my donors that upsell?
• 11:15
  SPEAKER_01: Yeah.
• 11:15
  SPEAKER_02: Oh, that's a great question.
• 11:17
  SPEAKER_02: And that's one of our newer features too.
• 11:18
  SPEAKER_02: So glad looking out.
• 11:20
  SPEAKER_02: Um, yes.
• 11:21
  SPEAKER_02: So nudges can also look like reminders or notifications.
• 11:26
  SPEAKER_02: And donor boxes recurring donation upsell uh definitely fits into that.
• 11:30
  SPEAKER_02: Absolutely.
• 11:30
  SPEAKER_02: So it's kind of like the equivalent of standing in that home goods checkout aisle and then picking up more things.
• 11:36
  SPEAKER_02: So it's it's tapping into your psychology, even though you're already ready to check out.
• 11:41
  SPEAKER_01: Okay.
• 11:41
  SPEAKER_01: So you know a little bit more about this than I do, but how does it work?
• 11:45
  SPEAKER_01: How does that upsell work?
• 11:47
  SPEAKER_02: Yeah.
• 11:47
  SPEAKER_02: So imagine a donor has just selected to give a one-time$50 donation.
• 11:53
  SPEAKER_02: And then they click next on your donation form, but then they'll be presented with a new option on the form that says something like, would you help meet the need week after week by upgrading your$50 donation to a$25 monthly gift?
• 12:08
  SPEAKER_02: Your ongoing support is what keeps mouse fed, the lights on, and the mission thriving.
• 12:13
  SPEAKER_02: So that's right up there when they're clicking next on the donation form.
• 12:17
  SPEAKER_02: And so with donor box, the amount of the recurring upsell is actually calculated automatically depending on the original amount that your supporter has chosen to donate initially.
• 12:29
  SPEAKER_02: And then they can choose the new recurring donation amount or move forward with their original donation with a simple click of a button.
• 12:36
  SPEAKER_02: So this nudge actually works really well because it builds on the donor's initial commitment.
• 12:42
  SPEAKER_02: Since they're already in a giving mindset, they're feeling generous, it is the perfect time to suggest ongoing support.
• 12:49
  SPEAKER_02: And it's a really kind of gentle way to inspire them to make a greater impact without coming across too pushy, I think.
• 12:57
  SPEAKER_02: All right.
• 12:58
  SPEAKER_01: Well, I'll need to get that upsell feature added to my donor box account before monthly donor campaign.
• 13:03
  SPEAKER_01: Anything else to consider with my donors in mind?
• 13:06
  SPEAKER_02: I I've got just two more nudges: urgency and scarcity.
• 13:10
  SPEAKER_02: Uh, that's a biggie.
• 13:11
  SPEAKER_02: This is all about creating a sense of immediacy or limited availability, kind of like how we talked about earlier.
• 13:17
  SPEAKER_02: For example, you might use messages like only 24 hours left to double your impact with the matching gift.
• 13:24
  SPEAKER_02: I see this all the time, especially around year end, or only 50 spots available for our next exclusive donor networking event.
• 13:32
  SPEAKER_02: And this again just taps into the fear of missing out, FOMO, and then the desire to act before that opportunity slips away.
• 13:40
  SPEAKER_01: Yeah, that one always works really well, that matching gift, especially at year end, like you said.
• 13:45
  SPEAKER_01: That's terrific.
• 13:46
  SPEAKER_01: For sure.
• 13:47
  SPEAKER_02: And then my last tactic is called spotlighting social norms.
• 13:51
  SPEAKER_02: This is a little different from social proof, actually.
• 13:54
  SPEAKER_02: Social proof is about showing how many others have donated, like saying join the 1,000 people who have already donated this month.
• 14:02
  SPEAKER_02: Spotlighting social norms is about nudging donors to follow what's typical.
• 14:06
  SPEAKER_02: For example, you might say most of our supporters give$50, or our most popular gift is$150, or a monthly commitment of$20.
• 14:16
  SPEAKER_02: So this subtly guides new donors to match that contribution with what's common among others.
• 14:24
  SPEAKER_02: So it creates a sense of belonging and just encourages people to do what they see as standard behavior.
• 14:31
  SPEAKER_01: Oh, that's good.
• 14:32
  SPEAKER_01: I love how these nudges can be so subtle, but they seem really effective too.
• 14:37
  SPEAKER_01: So here are my big takeaways from what you said.
• 14:39
  SPEAKER_01: So, first, defaults.
• 14:41
  SPEAKER_01: I've already set up my donation form to make sure recurring donations are the default option on my form to encourage more ongoing support.
• 14:49
  SPEAKER_01: So that's good.
• 14:50
  SPEAKER_01: Um, and then social proof.
• 14:51
  SPEAKER_01: So highlighting how many people have donated or using goal meters to show progress.
• 14:56
  SPEAKER_01: I used a goal meter for my summer fundraising campaign, and it was really effective.
• 15:01
  SPEAKER_01: I really think it's what helped me exceed our fundraising goal this summer.
• 15:05
  SPEAKER_01: Um, but I really want to kind of put on like a bar on my website or something, just highlighting how many people have donated.
• 15:12
  SPEAKER_01: Um or, you know, like you like you mentioned, a thousand people are are giving monthly to make this happen, you know, join them.
• 15:19
  SPEAKER_01: So I'm gonna definitely do that.
• 15:20
  SPEAKER_01: And you shared a new term with me, so framing.
• 15:22
  SPEAKER_01: So this means showcasing donation requests in a way that highlights the positive impact or the benefits they create, or the negative side if they don't give.
• 15:32
  SPEAKER_01: So I need to really do a better job of this, especially on my website.
• 15:35
  SPEAKER_01: Sometimes I have those kind of in my mind, but they're not always clear what I write on the page or through what what I write in the mail.
• 15:42
  SPEAKER_01: Yeah, so those were three.
• 15:44
  SPEAKER_01: What were the next two?
• 15:45
  SPEAKER_01: You captured those perfectly.
• 15:47
  SPEAKER_02: Okay.
• 15:47
  SPEAKER_02: So the the last two were urgency and scarcity.
• 15:50
  SPEAKER_02: So that means creating that sense of immediacy with messages with limited time offers or opportunities.
• 15:56
  SPEAKER_02: And then again, spotlighting social norms.
• 15:58
  SPEAKER_02: So uh guiding donors by showing what's typical.
• 16:02
  SPEAKER_01: Could I put that in the call to action on the donation form itself?
• 16:05
  SPEAKER_01: Sure.
• 16:06
  SPEAKER_01: Yeah, that'd look okay.
• 16:07
  SPEAKER_01: Absolutely.
• 16:08
  SPEAKER_01: So I'm not doing a great job of those right now, those two.
• 16:11
  SPEAKER_01: Um, but I think it's a somewhat easy fix that I can work on in the next week or two that I know that they're important.
• 16:18
  SPEAKER_01: You always leave us with a little practical action.
• 16:20
  SPEAKER_01: Do you have a practical action for our listeners today that we can start doing right away?
• 16:25
  SPEAKER_02: I would say choose one or two, maybe three nudges to implement before rolling out your next campaign or while prepping for your year-end fundraising.
• 16:35
  SPEAKER_02: So whether that's setting the recurring donations as default or adding a sense of urgency somehow, updating your call to action or the way that you're framing things in your donation page, just pick a couple strategies that you feel could use improvement and test them out.
• 16:49
  SPEAKER_02: All you can do is do an A V test and see what's working for you and just see how they influence your donor's behavior.
• 16:56
  SPEAKER_02: Awesome.
• 16:57
  SPEAKER_01: Well, I'm gonna knock out a couple of these in one afternoon this week.
• 17:00
  SPEAKER_01: So I'm gonna block some time and do that and get myself ready for that monthly giving takeover in September for my organization.
• 17:08
  SPEAKER_01: So thanks.
• 17:09
  SPEAKER_02: Awesome.
• 17:09
  SPEAKER_02: Well, I can't wait to see your campaign get rolled out.
• 17:13
  SPEAKER_02: And as always, thanks so much for chatting with me today.
• 17:16
  SPEAKER_02: Oh, my pleasure as always.
• 17:17
  SPEAKER_01: I absolutely love being here.
• 17:19
  SPEAKER_01: Thank you.
• 17:20
  SPEAKER_02: And for our listeners, keep an ear out for part two, where we will dive into effective incentives and how they can further enhance your monthly giving.
• 17:30
  SPEAKER_02: And thank you for joining us on the nonprofit podcast.
• 17:33
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