Why Anchoring Improves Your Average Donation
Those of us who have been trained in making major gifts have been told to ask for a ‘stretch’ amount. Psychologists call the first amount to be mentioned an ‘anchor.’
Nobel prize-winning psychologist Daniel Kahneman discusses anchoring in chapter 11 of his best seller “Thinking, Fast and Slow.” An anchor has a priming effect, and Kahneman says that “Any prime will tend to evoke information that is compatible with it.”
How Anchoring Works
Anchoring works without the participant being aware of its influence. It is an automatic function of the brain. It works even on experts in their own field, even when they believe they are immune to it.
In an experiment conducted by Kahenman, real estate agents were asked to visit a house on the market and evaluate a booklet of information that included a listing price. They were then asked to determine what they would pay to buy that house. Half of the agents were presented with a high listing price, the other half with a low listing price.
The agents who saw the high asking price were willing to pay 41% more than the agents who saw the low asking price. All the agents were shown the same house and the same information and used their best professional judgment. The only difference was the asking price.
In another disturbing experiment reported by Kahneman, judges with at least 15 years’ experience reviewed the description of a shoplifter. They were then asked to specify a sentence. But just before deciding, they were prompted to roll a pair of dice. Judges who rolled a 9 specified a sentence of 8 months; those who rolled a 3 said they would sentence her to 5 months – an anchoring effect of more than 50%.
Does Anchoring Work in Asking for Donations?
Kahneman reports powerful anchoring effects in fundraising when people choose how much to contribute to a cause. In an experiment he conducted at the Exploratorium in San Francisco, participants were told about environmental damage and asked about their willingness to make an annual contribution to save 50,000 offshore seabirds from oil spills.
Some of the visitors were first asked an anchoring question: “Would you be willing to pay $5....”? Some were asked “Would you be willing to pay $400...?”
Those who were not given an anchor were willing to pay $64 on average.
When the anchor amount was $5, the average contribution was $20.
When the anchor was $400, the average contribution was $143.
Anchoring is why all direct mail fundraising experts advise asking for a specific amount based on that individual’s history of giving and capacity.
That’s why we’ve developed our Recommended Ask String Table for direct mail fundraisers to use. Read the posts at the end of this blog to find out how it works.
For more information on asking, read the following posts:
Let’s put anchoring to work for your nonprofit fundraising!
Ask strings, ask amounts, ask sentences—it's all part of fundraising strategy. Five Maples has used professional studies, thousands of data points from analysis of our clients’ results, and tips for fundraising gurus to come up with the strategies that will work best for you! Give us a call today for a free consultation.
Contact Sarah Gnerre, CFRE, VP of Philanthropy, at 1-802-387-3091 or sarahg@fivemaples.com!
