You’re Being Irrational

For a sector born of raw emotion we’re surprisingly ‘rational’ in the way we view donors. Trouble is donors, a.k.a. people, aren’t rational.

The inherent contradiction undermining our sector is we’re trying to fit all the raw emotion, passion and drama that drive our causes (and donations!) into a behavioural model that’s rigid, mathematical and outdated. Campaigns are designed to appeal to people as we think they should act, not as they do.

Standard behavioural models based on classical, or standard, economics give us a delusory comfort zone. Algorithms neatly package people into an excel sheet, where it’s assumed people are logically evaluating everything, making informed choices based on all the information. What it doesn’t do is look at human nature which is often impulsive, short term and arbitrary.

That’s where the science of Behavioural Economics comes in. It studies actual as opposed to idealised thought processes and behaviour. This isn’t fuzzy theory, its neuroscientific fact. Behavioural Economics leading voice, Daniel Kahneman, won a Nobel Prize for his work. If you’ve read my review of his seminal work ‘Thinking, Fast and Slow’ you’ll remember his classic example of the difference between how we see things and how they really are. Take a look at these two lines…

LINES

Clearly line A is longer than line B right? Wrong. The horizontal lines are of identical length. Now you know the lines are equally long and if asked you’d say what you know. But you still see the top line as longer. You cannot decide to see the lines as equal. As Kahneman says “…we can be blind to the obvious but we are also blind to our blindness.”

If we can make such a fundamental mistake about something as simple as the length of a line, what other assumptions could we be getting wrong? Segmentation? Communication? Motivation? Asks? Frequency? The list goes on and on. As fundraisers we have to ask these questions and challenge outdated assumptions. We need to start by constantly reminding ourselves that a huge proportion of our sectors income is based on a premise that isn’t rational to begin with.

Giving isn’t rational. It’s beautiful, commendable, noble, but not rational. If it was, if the decision to donate was based simply on a cost benefit ratio, we’d tackle the world’s problems one at a time until they were all solved.

The decision to donate is an emotional one, and neuroscience has proved that emotion and reason can’t co-exist. When the neurons driving emotion are fired up they suppress the ones used to reason. Reason kicks in after the fact to justify the decision we made.

The emotional part of the brain is much larger than the rational. The signals that run from the emotional brain to the rational outnumber those running in the opposite direction by a ratio of 10 to one. (Yet you’ll still hear people claiming their donors are “rational”, as though supporting their charity gave them immunity from neuroscientific fact!)

Standard economics turns a blind eye to all of this. But the beauty of behavioural economics is that despite our surface level irrationality, we’re fairly predictable if you know what you’re looking for. For a great introduction and insight into the subject I highly recommended the work of Dan Ariely, starting with his book ‘Predictably Irrational.’

After all, if giving isn’t rational then we’re irrational to plan and communicate as though it was!

Charlie

2 thoughts on “You’re Being Irrational

  1. Pingback: IFC Round-Up 2013 | Pell & Bales

  2. Pingback: Thought trigger / Arsing from “Behavioural Economics” talk (@MSF) By: Sani Lim | sanilim2003

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s