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5 Tips for Keeping Board Members Engaged
Donations are the lifeblood of non-profit organizations. They fund operational costs, build endowment reserves, and most importantly – advance an organization’s mission. Because non-profits rely so heavily on this source of support, understanding what drives donor behavior and sentiment is essential. Behavioral finance is the study of how emotions and mental shortcuts shape financial decisions, often leading people away from purely rational choices. It helps explain why we invest, spend, and give the way we do, even when those choices don't always align with logic. Keeping these influences in mind can help you engage donors in the right way, at the right time.
1. Donors Don't Treat All Money the Same
The concept of mental accounting explains why people treat money differently depending on where it came from. A bonus, for instance, often feels different to spend (or give away) than a paycheck.
Tip: Build a campaign around a “windfall” moment. Year-end bonuses, tax refunds, required minimum distributions (RMDs), and stock market gains can unlock giving that a general appeal wouldn’t.
2. Framing Shapes the Size of the Gift
Urgency in your messaging can inspire donors to give more, and to give now. It reframes a gift as avoiding a missed opportunity rather than simply making a donation.
Tip: Include clear deadlines and goals in your call to action. For example, “Give by [date] and your gift will be matched,” or “We’re $X short of our goal.”
3. Status Quo Bias Can Leave Money on the Table
Many recurring donors take a “set it and forget it” approach, rarely revisiting their gift amount even as their capacity to give grows over time. This is known as status quo bias.Tip: At the start of the year (when salary increases typically take effect) proactively suggest an increase, and frame it as something peers are already doing: “Many donors like you increase their monthly giving by $X each year.” An extra $20 a month adds up to $240 a year; multiplied across a strong donor base, that adds up quickly.
4. Herd Behavior Can Work in Your Favor
People look to others for cues on how to act, especially in moments of uncertainty. Publicizing what fellow donors are doing (i.e.; how many have already given to a campaign), can inspire others to follow suit.Tip: Donor walls and peer-to-peer campaigns are effective ways to put that herd behavior to work.
5. Reference Points Sharpen the Ask
Donors evaluate a gift relative to a reference point rather than in absolute terms. That’s why the ask amount itself matters so much: it sets the benchmark against which the donor measures their response.Tip: Include a specific reference point in your ask, whether it’s the donor’s prior gift amount, a peer’s gift, or a suggested amount. A clear reference point helps ensure the donor meets or exceeds it.
Conclusion
Understanding donor behavior is essential to fundraising success. Keeping these principles in mind can help donors feel seen and understood, and most importantly, help you raise the funds your organization needs to fulfill its mission.
We can help
We can help your organization translate today’s changing tax and planning landscape into practical strategies to help advance your mission, grow long-term support, and deepen donor relationships. Schedule a call with a member of our Endowment & Foundation team today to get started.
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