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Using Strategic Nonprofit Website Design to Keep Donors

Allison Carpenter

by Allison Carpenter

Behavioral Economics

03.09.2018

If you’re wondering how to retain donors for your nonprofit, one of the first places you should look is behavioral economics. While it’s one thing to establish a fundraising campaign and hope it works, it’s entirely another to create a research-based giving program that takes into account the things that do and do not make people donate.

When you take the first route, you might raise some funds, but likely it won’t be anything to write home about. When you take the second route, however, you’ll have a much larger chance of securing the donations you deserve and ensuring your campaign turns out the way it should.

With that in mind, here’s what you need to know about using behavioral economics to retain donors for your nonprofit.

What is Behavioral Economics? And How Can It Influence Nonprofit Website Design?

First things first, what is the definition of behavioral economics?

According to most definitions, behavioral economics is a school of thought that combines economics and psychology to provide insights into how individuals behave, and what drives those behaviors.

Specifically, it looks at how people spend money, what drives them to spend that money, and what makes them more likely to give. In this sense, it’s a very valuable field for nonprofit organizations to pay attention to and to incorporate into their donor retention strategy.

How to Build Your Donor Retention Strategy Around Behavioral Economics: 3 Fast Tips 

Regardless of who your NPO is and what you do, there are dozens of ways to build behavioral economics into your donor retention strategy. Here are some methods to consider:

1. Consider Having People Commit to Donating in the Future 

Have you ever considered asking donors to donate something they don’t yet have?

According to a study conducted by Kahneman & Tversky in 1979, there is a theory called loss aversion. This theory states that people feel the “pain” of losing money about twice as intensely as they feel the pleasure of gaining money. As such, people are more likely to make decisions that insulate them from a loss than they are to make decisions that ensure a future gain.

Implement this on your website donation forms by offering an option beyond just asking visitors to donate a certain amount online once. Avoid loss aversion by giving donors the additional option of donating a certain amount of their future paychecks to your nonprofit. By asking donors to give money they don’t yet have, they will feel less averse to part with the money, making them more likely to give.

2. Host An Event (And Use Your Website to Publicize It) 

If you’ve ever considered hosting a fundraising event like a marathon, triathlon, or community run to raise money, you might be onto something. As it turns out, these events support an important tenet of behavioral economics known as the martyrdom effect.

This tenant of behavioral economics states that people are willing to suffer for a cause they believe in, and will donate more time, money, and effort to things that are difficult to contribute to than to things that are simple to contribute to.

With this in mind, consider publicizing your next “big ask” event on your website. For instance, play into the martyrdom effect by asking people to enroll on your site for the next walk or run your nonprofit is sponsoring to raise money for your cause.

While many NPOs are worried these events won’t be well attended, the martyrdom effect states the opposite. In fact, according to this effect, asking an individual to exert a significant amount of effort for a cause can actually promote people contributing to the cause. The willingness to contribute is shown to increase when the contribution process is more arduous.

3. Keep Choices Minimal

In behavioral economics, there’s also something called the “paradox of choice.” This paradox states that people become paralyzed when faced with too many decisions. Instead of appreciating the influx of choices, they struggle to make decisions when there are too many choices available. Even if people do make a choice, they may feel they could have made a better choice after the fact.

This is essential for NPOs to pay attention to during the nonprofit website design process. If you have many ways for your website visitors to contribute to your cause, that’s great, but only consider sharing three to five ways on your site.

More options than that and site visitors may be left in either a state of choice paralysis or regret. Fewer choices streamlines the decision-making process and helps cut down on the rate of choice paralysis your supporters will experience.

Increase Your Donations with Intelligent Nonprofit Website Design 

By incorporating the tenants of behavioral economics into your nonprofit, you can create a lucrative and stable giving environment that makes your supporters want to participate. What’s more, understanding the tenants of behavioral economics allows you to avoid common pitfalls, promote online giving, and structure more efficient campaigns.

Ready to learn more about incorporating behavioral economics into your website design? Contact the team at Creative Science today!

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