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Sunday, 21 December 2014

Tugging on the behavioural heartstrings

In these austere times, charities are having to work harder at identifying the right place and the right time to ask people to contribute to their causes. Behavioural economics can help find that sweet spot.

I’ve written before about hot and cold zones and how organisations can take advantage of the more emotionally charged moments in a person’s daily life. The two examples below find different but equally effective ways for charities to motivate people into giving.

A bit of give and take

Take the high-street ATM. This is a potential hot zone for charitable giving. The user puts their card in and asks for an amount of money – and then charitable donations are mentioned either as a separate menu item on the ATM screen or as a post-transaction option.

There are three reasons why this could work to generate more donations. Firstly, you are being asked to contribute while engaged in a monetary transaction, so spending is on your mind. Secondly, the money is not yet in your hand – studies have shown that people find it harder to give away money they already have. Finally, depending on the reason for withdrawing the cash, you might be able to prompt the ATM user into feeling a little guilty – especially if they were planning to spend all that money on themselves.

The UK government is convinced and has given the go-ahead for this idea to run in more than 12,000 cash machines beginning in the summer. People will be able to donate between £1 and £250 to any of eight chosen charities. But we could look to take this further by using behavioural economics to think about how the donation amounts are framed: for instance, by using extremes such as £1 (too stingy) and £250 (too generous) to make a £10 sum feel just right, or considering default amounts such as 5%, 10% or 20% of your withdrawal total or absolute sums such as £1, £10 or £20. It might also be worth getting the machine to play a fanfare whenever a user donates, which in turn might influence the person standing behind you and so create new social norms.

A basketful of hope, happiness and joy

Another clever idea, this one from the Alzheimer’s Society, allows people to donate simply by picking up a block of wood in their local supermarket. These £1 chunks of sustainable wood have the word Hope printed on them. The block is scanned at the checkout with the rest of a person’s shopping but is then returned to the shelf ready for the next customer.

BE theory shows us that this leverages our endowment bias – we value things more because we own them, even when we only think we do: scanning the block at the checkout can actually making us feel as if we are acquiring something, which facilitates the act of giving. Shoppers, interviewed for the BBC, commented that “it looks like a product”, while Julian Baggini, the FT’s resident philosopher and editor of The Philosopher commented: “We find it difficult to get our head around abstract things. As soon as you make something concrete and tangible, then it becomes more real for us.”

The blocks also play on our impulsivity, with impulse purchases a common feature of many a weekly shopping basket. There is also talk of expanding the wooden block range so we could buy Happiness or Joy along with Hope – maybe shoppers will buy one of each and donate more in the process. Social norms might also kick in if the blocks become popular enough to cross the ‘norming threshold’.

Another factor in the success of the Hope blocks is that the low per-unit ‘price’ breaks down our donations to manageable sizes – chunking, we call it. A piece of Hope each week would add up to £50 per year per household. Add in Joy too and that’s £100 a year.

Crawford Hollingworth is a founder of The Behavioural Architects

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Readers' comments (3)

  • I love the ATM idea. Hope it takes flight.

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  • I love the ATM idea too. In "these austere times" (in the article's opening words) it will be lovely to see people in the queue being energized by the philanthropist in front of them getting oompahpah'd by a hole in the wall. We are all in this together.

    I'd question Crawford Hollingworth's costings, though. Useless blocks of wood with words written on them being re-sold for ever is a reasonable boiling-down of behavioural economics - but £100? This is a scientific discipline (who amongst us has not leveraged her endowment bias?) and £100/household is simply not enough.

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  • The block of wood idea is fantastic. A physical representation of one's desire to help. Also, could encourage others to buy these blocks if they can see that others are. Giving is not often something that happens in a public setting (save justgiving etc)

    As for the ATM. I'm less sure people would be inclined to give. There was no mention of the fact that cash machines will often be outside of banks, and one description of the transaction outlined above might be "a bank withholding 'my' money unless I choose to donate (forced into the choice), or not donate (made to feel guilt).

    coupled with the poor reputations banks have at the moment, this may further entrench views rather than shift them.

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