Emotion vs Logic — The Economists Weigh In

June 4, 2014      Admin

Late last month we stated what is obvious to any direct response fundraiser: emotion trumps logic.

Most Agitator readers readily agreed. And the scriveners over at FutureFundraising Now and Ahern Communications looked up from their illuminated manuscripts and smiled knowingly.

But now, the economists have weighed in with proof positive. Well, positive and negative. Life for a fundraiser is never simple. Always gray.

In a Bloomberg View column, Cass Sunstein, a Harvard Law professor in his column on “Philanthropy” reports the results of a new study by Yale economist Dean Karlan and Clemson economist Daniel Wood on the effects of statistics vs. emotion in charitable appeals.

No surprises, but some nuance:

  • Large donors ($100+ in the study) respond positively to statistical evidence of effectiveness.
  • Small donors (Under $100) respond negatively.
  • At the end of the day one group cancelled the other out and the net effect was neutral.

You can read how the study was conducted here.

Bottom line: Frequent donors of large gifts showed a 2.2% increase in their likelihood of giving if proof of effectiveness was included in the appeal.  Smaller gift donors showed a 1.4 % reduction in the likelihood of giving when statistics were invoked — a reduction of 81 cents.

You can purchase the full study here.

Karlan and Wood, the researchers, contend that large donors are more likely to be “slow thinkers”, focusing on their donations, whereas small donors are “faster thinkers” and more likely to be reacting.

Maybe this explains why Charity Navigator and the other watchdogs have never gained much traction. As Prof. Sunstein notes:

“In recent years, many people have been trying to evaluate the real-world effectiveness of various charities. These evaluations are important, but if a charity wants to attract small donors, it might be a mistake to highlight them. For charities, as for institutions of many different kinds, the central lesson is clear: Statistical information might have a major impact on some people, but to others, it might be irrelevant — or even counterproductive.”

No surprise to The Agitator readers.

Of course empirical proof of our tribal knowledge is always nice.

Any argument about these findings and conclusions?

Roger

P.S.  Special thanks to Bob Tigner of ADRIFCO for drawing this to our attention.

3 responses to “Emotion vs Logic — The Economists Weigh In”

  1. Chris Washington-Sare says:
    June 4, 2014 at 3:22 am

    Traditionally fundraisers focus on tapping into donor motivations – to make a difference, to give something back, to be part of a wider community of like-minded people, to be entertained and informed.

    But maybe we should also be thinking in terms of values. What makes a donor value a product, service or organisation? Essentially the research seems to be saying donors with an extrinsic value bias (a preference for swift action and demonstrable results) tend to give more whilst donors with an intrinsic value bias (a preference for emotion, personality and uniqueness) tend to give lower amounts.

    If we incorporate this fundamental value difference it may make proposition development a bit easier.

  2. Tom Ahern says:
    June 4, 2014 at 8:40 am

    Thank you (as ever, Roger) for a great piece of coverage. Who is this Dean Karlan? I’ve been quoting his research into the Obama campaign’s fundraising for years … and now this? Very impressive.

    There is a small danger, I think, that people could draw from your bulleted summary a wrong conclusion … because of a belief pre-existing in most skulls.

    I see a bit of that maybe in Chris’ comment (which is brilliant, articulate and helpful, BTW, so Chris don’t take this as anything like criticism). He separates the donors into two camps. And he assigns one camp, the folks with “an intrinsic value bias,” a “preference for emotion.”

    ALL people have a preference for emotion in their decision making. They just don’t know it, or they dismiss it, or they don’t like to think it.

    The venerable, ancient, impossible to kill notion posits that emotions and reason wrestle for control of mind. Which is a bunch of malarky promoted by a shunned and sulky reason to explain its impotence. Emotions masterfully control the human decision-making process, as two decades of neuroscience discoveries have shown.

    Karlan and Wood’s study found that statistics are dangerous for donors making smaller gifts and can actually suppress their impulse to give, confirming what Dan Ariely’s research also found.

    But their finding implies nothing, zero, nada, nought, nil, nix, zip about the importance of emotional content. “Emotion” and “demonstrable results” are not in opposition. Ever.

    … written without the assistance of my first cup of coffee

  3. Heather Eady says:
    June 11, 2014 at 2:38 pm

    I just want to second Tom Ahern’s comment (although, when have I ever disagreed with his wonderful communication advice?). It is oh so tempting for people to ascribe more meaning to individual studies than is actually there. This study tells us about donor reactions to a type of statistics. And while statistics may be closely related to logic, the two are not the same.

    Some research has shown that statistics depress response because they make people feel their individual donations would not make a difference to such a large problem. That doesn’t seem to be the case in this study, as statistics were used to demonstrate IMPACT, not NEED. But I think this point is worth noting. Context is important.

    Thanks, as always, for sharing scientific research!

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