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October 28, 2019

Behavioral economics and donor nudges: Impulse or deliberation? (SSIR)

Dean Karlan, Piyush Tantia, & Sarah Welch

Originally published as “Behavioral Economics and Donor Nudges: Impulse or Deliberation?” in Stanford Social Innovation Review in January 2019, authors Dean Karlan, Piyush Tantia, and Sarah Welch discuss the psychological insights that can help nonprofits facilitate both impulsive and deliberate support from donors.

People donate to charity for many reasons. Hardly an objectionable claim. Generosity. Self-satisfaction. Guilt. Reciprocity. Duty. Prestige.

People also do not donate to charity for many reasons. Also hardly an objectionable claim. Inattention. Insufficient income. Over-spending. Fear of charity failure.

But whether people are giving or not, it seems that two factors remain steady: donors rarely give as much as they would like and they are rarely able to articulate consistent, evidence-based approaches to choosing the recipients of their aid.

Charities struggling with these donor barriers can turn to behavioral economics for insight. The science, encompassing psychology, economics, and other fields, can help facilitate donations, whether impulsive—quick gifts involving little analysis but rapid and positive emotional feedback—or deliberate—thoughtful contributions that resist the temptation of fast, feel-good donor experiences and more deeply account for the recipient of the aid and its results.  

Using these two categories for giving guides us toward impulsive and deliberative marketing techniques—“nudges” rooted in behavioral economics—that can profoundly influence the amount that people donate and the choices they make about which organizations to support.

Read the full article here.