The Science of Effective Fundraising: Four Common Mistakes to Avoid

This might come in handy for a friends of mine that is seeking sponsoring for his advanced skating training. Upvoted.

(I know that there's a stigma against the OP. I think that as self-appointed rational beings we should be able to separate wheat from chaff.)

[Comment cross-posted to the Effective Altruism Forum]

[I will use "Effective Altruists" or "EAs" to refer to the people who self-identify as members of the community, and "effective altruists" (without capitalization) for people to whom effectiveness matters a lot in altruism, regardless of whether they self-identify as EAs.]

I think this post makes some important and valuable points. Even if not novel, the concise summary here could make for a good WikiHow article on how to be a more effective fundraiser. However, I believe that this post falls short by failing to mention, let alone wrestle with, the tradeoffs involved with these strategies.

I don't believe there is a clear and obvious answer to the many tradeoffs involved with adopting various sales tactics that compromise epistemic value. I believe, however, that not even acknowledging these tradeoffs can lead to potentially worse decisions.

My points below overlap somewhat.

First, effective altruists in general, and EAs in particular, are a niche segment in the philanthropic community. The rules for selling to this niche can differ from the rules of selling to the general public. So much so that sales tactics that are considered good for the general public are actively considered bad when selling to this niche. Putting an identifiable victim may help with, say, 30% of potential donors in the general public, but alienate 80% of potential donors among effective altruists, because they have (implicitly or explicitly) learned to overcome the identifiable victim effect. In general, using messaging targeted at the public for a niche that is often based, implicitly or explicitly, on rejecting various aspects of such messaging, is a bad thing. A politician does not benefit from taking positions held by the majority of people all the time; rather, whereas some politicians are majoritarian moderates, others seek specific niches where their support is strong, often with the alienation of a majority as a clear consequence (for instance, a politician in one subregion of a country may adopt rhetoric and policies that make the politician unpopular countrywide but guarantee re-election in that subregion). Similarly, not every social network benefits from adopting Facebook's approach to partial openness and diversity of forms of expression. Snapchat, Pinterest, and Twitter have each carved a niche based on special features they have.

Second, in addition to the effect in rhetorical terms, it's also important to consider the effect in substantive terms on how the organizations involved spend their money and resources, and make decisions. Ideally, you can imagine a wall of separation: the organization focuses on being maximally effective, and a separate sales/fundraising group optimizes the message for the general public. However, many of the strategies suggested here actually affect the organization's core functions. Pairing donors with individual recipients significantly affects the organization's operations on the ground, raising costs. Could this in the long run lead to e.g. organizations selecting to operate in areas where recipients have characteristics that make them more interesting to donors to communicate with (e.g., they are more familiar with the language of the donor's country?). I don't see a way of making overall effectiveness, in the way that many EAs care about, still the dominant evaluation criterion if fundraising success is tied heavily to other outreach strategies.

Third (building somewhat on the first), insofar as there is a tradeoff between being able to sell more to effective altruists versus appealing more to the general public, the sign of the financial effect is actually ambiguous. The number of donors in the general public is much larger, but the amount that they donate per capita tends to be smaller. One of the ingredients to EA success is that its strength lies not so much in its numbers but in the depth of convictions of many self-identified EAs, plus other effective altruists (such as GiveWell donors). People who might have previously donated a few hundred dollars a year for an identifiable victim may now be putting in tens of thousands of dollars because the large-scale statistics have touched them in a deeper way. GiveWell moved $103 million to its top charities in 2015, of which $70 million was from Good Ventures (that's giving away money from a Facebook co-founder) and another $20 million is from individual donors who are giving amounts in excess of $100,000 each. To borrow sales jargon, these deals are highly lucrative and took a long time to close. Closing them required the donor to have high confidence in the epistemic rigor from a number of donors, many of whom were probably jaded by psychologically pitch-perfect campaigns. I'm not even saying that GiveWell's reviews are actually rigorous, but rather, that the perception of rigor surrounding them was a key aspect to many people donating to GiveWell-recommended charities.

Fourth, if the goal is to spread better, more rational giving habits, then caving in to sales tactics that exploit known forms of irrationality hampers that goal.

None of these imply that the ideas you suggest are inapplicable in the context of EA or for effective altruists in general. Nor am I suggesting that EAs (or effective altruists in general) are bias-free and rational demigods: I think many EAs have their own sets of biases that are more sophisticated than those of the general public but still real. I also think that many of the biases, such as the identifiable victim, can actually be epistemically justified somewhat, and you could make a good epistemic case for using individual case studies as not just a sales strategy but something that actually helps provide yet another sanity check (this is sort of what GiveWell tried to do by sponsoring field trips to the areas of operation of its top charities). You could also argue that the cost of alienating some people is a cost worth bearing in order to achieve a somewhat greater level of popularity, or that a wall of separation is not that hard to achieve.

But acknowledging these tradeoffs openly is a first step to letting others (including the orgs and fundraisers you are targeting) make a careful, informed decision. It can also help people figure out new, creative compromises. Perhaps, for instance, showing an identifiable victim and, after people are sort-of-sold, then pivoting to the statistics, provides the advantages of mass appeal and epistemic rigor. Perhaps there are ways to use charities' own survey data to create composite profiles of typical beneficiaries that can help inform potential donors as well as appeal to their desire for an identifiable victim. Perhaps, at the end of the day, raising money matters more than spreading ideas, and getting ten million people to donate a few hundred dollars a year is better than the current EA donor profile or the current GiveWell donor profile.

Putting a human face on things does seem to be terribly important to get smaller donors to donate long term.

My own mother has been donating for years to a particular charity which puts young girls in a particular country who did very well in end-of-primary school exams but live in absolute poverty through secondary school in a third world country. Donors are explicitly paired with a child and exchange letters twice a year. (donors are asked to write something or other even if it's just a postcard because it scares the girls if their donor goes silent even though the charity doesn't kick kids out if their donor dies but rather pairs them with a new donor) Donors also cannot "overfund" one individual to avoid jealousy and unequal treatment based on funder.

I doubt the scheme is the absolute best bang for your buck though it probably does pretty well if you value education highly.

It amounts to a couple of hundred euro per year but they have exceptionally good donor retention with some donors explicitly putting aside enough in their Will to put their girl through the rest of her education.

They're not sending money into a generic money-hole, they're taking care of an individual who they've talked with and who dots her 'i's with a squiggly line and draws faces in her margins in purple pencil.

Perhaps ubiquitous cheap tech will allow some big problems to be handled in such a manner as to give feedback to donors. Tell them about the million people in the refugee camp but put a ring around a half dozen families who are getting the malaria nets you funded and the vaccines you paid for.

Right now coordination in those situations is such a nightmare as to make that impossible but I could imagine cheap electronics solving communication long before solving refugee camps.

I think the idea is that extraordinary claims require extraordinary evidence is the main factor is the "less funded" charities. Appeals to emotion are seen as either manipulative or not extraordinary enough. Appeals to intellect (a million is a statistic?) are looked upon as more favorable because you can tell what actually happens.

Many people might disagree with you but I think you have the right idea here. Some people might just disagree with selectivity in the way you interact with others. Does LessWrongers believe that selective interaction is morally or ethically unjust?

Alternate summary: many potential donors are not very rational, so appeals to emotion are more effective than appeals to numerical analysis. In order to be "effective" in extracting their money, you should feel free to manipulate your presentation to appeal in this way.

tl;dr: Here is how you can extract money of donors effectively.