10 Reasons Why We Make Bad Fundraising Decisions

Looking back at a botched fundraising campaign, every wonder why things didn’t pan out or test out the way you anticipated?  Most likely it wasn’t because you didn’t have enough information, maybe it was due to faulty thinking or poor pre-planning.  Maybe it was just a dumb idea in the first place.

The Bad Analysis blog (no joke), has published a list of the ten most compelling reasons why we make bad decisions in an article by that name.  You’ll find the full article here.  Below are the main points:

10. We’ve come this far… (sunk cost bias) - We all know that the past is past and we can’t get back money or time that we already spent. But many people irrationally take sunk costs, time, money, or other resources which have already been spent and can’t be recovered, into their decision making.

9. Me me me! (egocentric bias) - Putting yourself in another person’s shoes is harder than it sounds for most people.

8. That just proves my point. (confirmation bias) - Isn’t it a coincidence that no matter what happens in the world, politicians can spin it to show why that confirms their opinions? A cynical explanation is that politicians twist the truth to get what they want. But a more subtle explanation is that our brains tend to search for and interpret information in ways that support our pre-existing opinions.

7. That’s easy. (overconfidence) - While overconfidence is definitely a good thing in many situations, it probably means people don’t work on their weaknesses as much as they should.

6. I’m #1! I’m #1! (dysfunctional competition) - Have mixed feelings when you find out your co-workers get a promotion that you weren’t even interested in? You’re not alone. People’s happiness is often a function of what they have relative to others.

5. Mine mine mine! (endowment effect) - Why is it so hard for people to throw, give away or sell things that are past their prime? One theory is that people tend to place a higher value on objects they own relative to objects they do not.

4. Watch out for sharks. (availability bias) - People are suckers for recent and memorable events. So much so, that they think these types of events are more likely to happen than they actually are.

3. If everybody else thinks so… (conformity) - People make decisions based on what they think and not what everyone else thinks, right? Wrong!

2. Lets go hard 8! (illusion of control) - We all know that there’s no difference between my chances in craps if I have the dice or someone else at the table does, right?  It should also cause you to question the confidence of your co-workers who know they will hit an aggressive deadline even though there are many factors out of their control.

1. He’s just a moron. (attribution error) - Is the driver that cut you off a jerk? Or is he a good guy who didn’t see you because he’s distracted? So maybe it’s better to withhold judgment about a person until you’ve actually talked to them.

Tags: Blog, Data Analysis, General Fundraising, Nonprofit