Ready to take advantage of this uptick in generosity, some charities are employing some rather sophisticated strategies that rely on our emotions and psychological triggers to create more powerful appeals.
Olivia Smith is a Senior Vice President of BKV, an Atlanta consultancy whose clients include The Salvation Army and the March of Dimes. In an interview with Smart Money magazine, she said that photos of sick children outperform photos of healthy ones, while extra inserts such as brochures and newsletters, increase the "length of engagement, leading to more donations.
Smith says the perfect solicitation letter creates a sense of anxiety by describing a terrible problem before providing an easy solution: Send a check! That way, she adds, you've given the donor a way to ease the tension you've created.
Other simple tricks include putting a first-class stamp on the outside envelope instead of a postal mark to generate a higher response rate. A return envelope that has several stamps adding up to 44 cents performs best because donors assume a hard-working volunteer made a big effort.
Playing on emotions
Basically, charities have embraced what advertisers have known for almost a century. We make decisions based on emotions, so why should we make decisions about making donations the same way.
According to Smart Money, in one widely noted experiment, researchers with Save the Children found donors who were given stats about a famine in Ethiopia gave 25% more when they were also provided a photo of a 7-year-old who faces a threat of severe hunger or even starvation. They gave 66% more than that when they got the photo and story line without the famine data. Statistics apparently reduces or dilutes empathy and interest in giving.
Researchers discovered a similar phenomenon in an experiment conducted with ChildFund International. Potential donors gave more when they were told the fund had an excellent rather than a poor efficiency ratio. But the highest response came from donors who were given no efficiency information at all. Princeton Psychology professor Danny Oppenheimer told Smart Money that people give less when they're thinking analytically.
Another ploy charities use is based on the notion that donors behave like sheep.
Donations to the Sierra Club increased 23% when prospects were told a major donor had made a big contribution. Researchers say that when you assume a rich philanthropist has inside information about the quality of a charity, you're more likely to trust it. They also found that when going door-to-door asking for donations, blondes raised 65% more than brunettes.
The takeaway is that when preparing to make a charitable donation, don't just act on impulse. A compelling appeal might stir your interest in a cause, but that charity may not be the best place for your money or have the best programs.
Most charities are legitimate, but there are a few who are just out to take your money without passing along your generosity to those who need it the most.
You have to separate the emotional tone of the appeals from the legitimacy of the organization making the appeal. The key questions to ask are what are you going to do with my money and what's the nature of your charity's program? Do you feed the hungry, provide shelter to the homeless, aid in childcare, or assist the elderly?
It's up to you to research the charity thoroughly to make sure that your dollar reaches those who need it and in the most efficient manner possible. Get references. Find out how long the organization has been around. The longer the better and then you can check to make sure it is registered as a legitimate qualified organization.
Most organizations, other than churches and governments, must apply to the IRS to become qualified. They include nonprofit groups that are religious, charitable, educational, scientific or literary in purpose, or that work to prevent cruelty to children or animals.
One place to look is the Internal Revenue Service's Publication 78, which lists organizations eligible to receive tax-deductible charitable contributions. This won't give you a complete list but it's a place to start. For example, churches may not be listed.
Another IRS document you should get is a charity's Form 990, which tax-exempt organizations - with the exception of religious institutions and certain church-affiliated charities - must file each year. Organizations that do file a 990 are required to provide a copy to anyone who requests it. This form provides information on the organization's expenses and program accomplishments and will show how much money is going to charitable activities vs. administrative expenses.
The bottom line when it comes to charities. You want to see more money going toward actually helping people than just helping the charity.
