Impact, gratitude, and reciprocity in primal fundraising: I can make a difference!

The “one big thing” in fundraising is this: Advance the donor’s hero story. The previous book in this series explored this in detail.

The universal hero story (monomyth) progresses through four steps:

The compelling donation experience includes these same steps. It starts by connecting with identity. This can come from the following:

1. I am like them. (This is subjective similarity.)

2. I am with them. (This is reciprocal alliances.)

Biologists model reciprocal altruism with a game.¹¹⁷ This primal-giving game can include simple alliances. But the game can do more. It can also include challenge and victory. It can include enhanced identity. It can include similarity and even heroism. But all this requires “leveling up” the simple game.

Impact

In the simplest primal-giving game, impact is fixed. And it’s identical. Two unrelated players face the same payoffs. Each must choose before knowing what the other will do. However, payback is possible because players can meet again. The payoffs are these:

Giving is costly. But it helps the other player more than it costs. If I give 1 point, the other player gains 2.

Now suppose the impact of my gift changes. The payoffs might instead become these:

Now, my gift has a higher impact. If I give 1 point, the other player gets 22 points. This might come from low cost. (The gift costs me $1. But a matching grant means the recipient gets $22.) Or it might come from high need. (The recipient’s benefit from $1 is 22 times my benefit from $1). How might this change alter gameplay?

Impact and gratitude

Impact is great. But in the game, or in nature, why would unrelated players even care? Let’s go back to the first law. In the primal game, giving has an unbreakable law:

Giving must be seen by partners who are able and willing to reciprocate.

Impact matters because it can lead to gratitude. Gratitude matters because it can lead to reciprocity.

Impact →

Gratitude →

Willingness to return a favor

A person expressing gratitude sends a signal. Gratitude signals their view of

• The impact of the gift

• The value of the relationship, and

• Their willingness to reciprocate.

This gameplay matches experimental research. Increasing impact works in donation experiments.¹¹⁸ Expressing gratitude does, too.¹¹⁹ Both work by supporting reciprocal social relationships.¹²⁰

Impact encourages giving. Now consider the opposite. Suppose my gift has no impact. Payoffs become these:

Now, there is no reason to expect gratitude. My gift makes no impact. It does nothing to justify reciprocity. This gift makes no sense.

The hidden impact problem

What if I’m not sure of the other player’s payoff? I see the payoffs as these:

Should I give or not? It’s hard to know. There isn’t enough information. But with multiple rounds, I could test with a small gift.

Suppose I make a test gift and get silence. This signals no impact. It signals no willingness for reciprocity. Playing this game with this player makes no sense.

Suppose I make a test gift and get a report of impact and a meaningful expression of gratitude. I’ve learned something about the other player’s payoff. I’ve also received a reciprocity signal. Playing this game with this player does make sense.

The pro forma response

Not every response is meaningful. A “thank you” can be powerful.¹²¹ But only if it signals gameplay. In the game, expressing desire for a social, helpful-reciprocity relationship is meaningful. Why? Because it signals gameplay. Not all gift responses do this.

Suppose I get a receipt that’s just stamped “thank you.” Or maybe only months later a “thank you” call comes. But it’s not from the charity. It’s from an outside telemarketing firm. The caller says things like,

• “This call may be monitored or recorded for quality assurance,” and

• “If you have any questions regarding your donation, please call member services.”

Do these signal a social, helpful-reciprocity relationship? Probably not.¹²² Do these reveal information about my gift’s impact? Probably not. These don’t work in the game. So, it’s no surprise that testing finds they don’t work in real-world fundraising, either.¹²³

The new donor problem

The hidden impact problem in the game often matches the new donor experience. They get a request. But they aren’t sure about the outcomes. So, they make a test gift.

How well do charities manage this hidden impact problem? Not well. About 70% of first-time donors to a charity never give to that charity again.¹²⁴ The game suggests why they are failing. Authentic signals of gift impact and gratitude work. Silence doesn’t.

How well does game theory match reality? In one large study, lapsed donors explained why they quit giving. The top three reasons related to the charity were these:

• “I feel that other causes are more deserving.” [Impact]

• They “did not acknowledge my support.” [Gratitude]

• They “did not inform me how my money had been used.”¹²⁵ [Impact]

In the primal game, impact is important. Gratitude is important. Without these, game strategy says, “Play with someone else.” In fundraising, the same rules apply.

Impact vs. reciprocity: The false gratitude problem

Gratitude reflects willingness to return a favor. Unless. Unless the signal is false. Suppose the other player expresses gratitude. But later, when they could easily return a favor, they don’t. The reciprocity signal was fake. Gratitude signaled future game play. But it was a false signal.

That’s how the game works. What about the real world? What happens when reciprocity fails? One study of over half a million donations to a public university gave an answer.¹²⁶ If the university failed to admit a donor’s child, the donor quit giving.

Logically, this shouldn’t have happened. Donors knew that donations were not part of the admissions process. But the emotion is hard to overcome. The university had a chance to help, and it didn’t. The relationship is broken. Only a fool gives to a player who won’t return a favor.

Impact vs. reciprocity: The charity crisis problem

The game is about predicting ability and willingness to return a favor. Impact can help by signaling higher willingness to return a favor. Unless. Unless it also signals lower ability to return a favor.

A charity may find that an organizational crisis appeal “works.” The charity is in trouble. The need is desperate. The gift will make a big impact. The appeal raises quick cash.

But this also cannibalizes the future large gift. It signals that the charity is unstable. This is now a less trustworthy player. They might leave the game anytime. Stable charities attract major gifts. Unstable charities don’t.

The conflict disappears if the crisis is not an organizational crisis. A stable charity can appeal on behalf of others in need. This doesn’t suggest that the charity is at risk. This is a crisis. But it’s not an organizational crisis.

The conflict also disappears if the charity faces an opportunity rather than a crisis. The gift still makes a big impact. But the charity isn’t signaling instability.

Impact vs. reciprocity: Weird results

Impact is important. But in the game, it’s important only as a reciprocity signal. Understanding this helps to explain some weird results.

In experiments, describing another player as needy increases giving to them.¹²⁷ Unless. Unless the other player had already shared money with the potential donor in a previous round. In that case, donors still give a lot. But they give the same, regardless of need.¹²⁸ The researchers explained,

“When the stranger is very willing to sacrifice [to help the potential donor], their need does not appear to matter.” ¹²⁹

Need can signal reciprocity willingness. But actual reciprocity behavior makes the signal redundant. The signal no longer matters.

Impact vs. reciprocity: Matching gift vs. lead gift

Reciprocity signals also help to explain the unusual power of lead gifts. The simple primal-giving game matches funding for a shared project, such as a neighborhood park. The project benefits the group. But there’s always a temptation not to give, hoping that others will take care of it.

How can a donor make a large gift in a way that encourages others to give, too? One approach is to promise a “matching” gift. A donor commits that for every dollar another donor gives, he will match it with his own gift. The impact of the other donor’s gift is doubled. This works.¹³⁰

A different approach is to make a lead gift. A donor simply announces his large gift to help fund the project. Here’s the weird thing. This also works.¹³¹

In fact, an announcement of a lead gift works better than an announcement of a matching gift of the same size. This is true in both real-world fundraising and lab experiments.¹³²

What’s going on?

The promise of a match can help. But it creates no reciprocity obligation. It’s contingent. It says, “If you don’t give, I won’t either.”

The lead gift is different. I lead with a gift that helps you (or something you care about). I give, hoping for your response. If you don’t give, you violate reciprocity norms. I gave; you left me holding the bag. Everyone can see that you are a bad partner.

The promise of a match helps. But it sends a contingent signal. A lead gift helps more. It sends a stronger signal.

Adding similarity to the game

So far, the game has included only unrelated players. In that version, I care about the other player only to the extent that it affects me. Things change if I feel that the other player is like me.

This returns us to Hamilton’s simple math.¹³³ I give when

My Cost < (Their Benefit X Our Similarity).

In the original game, both players faced these payoffs.

Now, suppose I treat the other player as a brother. This equates to 50% similarity. Based on Hamilton’s genetic math, I now count 50% of their benefit. My payoffs change to these:

Before, giving was costly for me. Now, it’s not. But it still makes the world a better place. More giving still means more total points. Adding similarity makes giving more attractive.

It also makes impact more important. With unrelated players, impact is important only indirectly. It affects the game only through reciprocity. But with related players, it also has a direct effect. It directly benefits someone who is like me.

Conclusion

Compelling fundraising story starts with identity. It starts by identifying with another. Identifying with others can come from two sources:

1. I am like them. (This is subjective similarity.)

2. I am with them. (This is reciprocal alliances.)

In natural selection, giving has the same two origins: similarity and reciprocal alliances. The expanded game models both.

We’ve taken a deep dive into natural selection principles. We’ve come back with story principles. The biologist’s game and the storyteller’s game start at the same place. They both start with identity.

But for transformational gifts we need to “level up” the game once more. It’s time to move beyond the natural origins of the donation. It’s time to explore the natural origins of the heroic donation. The next chapter looks at this.