Quantitative Fundraising Research

Tony Martignetti
Hello and welcome to Tony Martignetti Nonprofit Radio, big nonprofit ideas for the other 95%. I'm your aptly named host and the podfather of your favorite hebdomadal podcast. Oh, I'm glad you're with us. My belly would ache with Helicobacter pylori if you missed this week's show. Here's our associate producer Kate with what's on the menu.

Kate Martignetti
Hey Tony, we're serving quantitative fundraising research. You can stop relying on conventional wisdom passed on through webinars and conferences. There's a plethora of quantitative research on how to optimize storytelling to get your best fundraising outcomes. What is social emotion? How do you evoke it? And why should you? How much story detail is not enough or too much? Better to talk about individuals or groups? What does the research reveal to maximize planned giving fundraising commitments? Professor Russell James of Texas Tech University walks us through what the research shows. This originally aired September 23rd, 2024, on Tony's Take Two.

Tony Martignetti
Thank you, Russell James.

Kate Martignetti
Here is Quantitative Fundraising Research.

Tony Martignetti
It's a genuine pleasure to welcome back Russell James to Nonprofit Radio. He is a chaired professor in the Department of Personal Financial Planning at Texas Tech University. He directs the on-campus and online graduate program in charitable financial planning, AKA planned giving. He has published research in more than 75 peer-reviewed scientific journal and law review articles. Russell has a law degree. He's the author of several books, including The Storytelling Fundraiser, The Epic Fundraiser, The Primal Fundraiser, The Socratic Fundraiser, and I don't know where this title came from, Inside the Mind of the Bequest Donor, and Visual Planned Giving. Those are outliers. And there's a new book coming. We may talk about that if he's willing. Texas Tech University. You'll find at ttu.edu, and you'll find Russell on LinkedIn. Welcome back, Russell. It's good to see you.

Russell James
Thanks so much. Great to see you as well, Tony.

Tony Martignetti
Thank you. It's been several years since you were on Nonprofit Radio. I regret that. I regret that. It's a mistake I'll try not to, uh, make a second time. Um, would you like to say anything about your, uh, upcoming book, or is it a complete— it's a secret and we can't talk about it?

Russell James
So, the upcoming book is called The Biblical Fundraiser: Helping Christians Enjoy Their Wealth, and certainly taking a very specific perspective on that. Not something that I teach here at a state university, but something that is of interest to some folks. So, I'll be happy to share that one as well. The first of 2025 should be available. I'm sharing it with a few beta readers right now and trying to get all the kinks worked out.

Tony Martignetti
And I'm one of them. I haven't gotten yet, but, but I will. Am I too late?

Russell James
No, no, no, absolutely not.

Tony Martignetti
You're okay. I thought not. Right. I'm not gonna be able to read the entire book, but I will understand. I will read some and I will give you my honest feedback to The Biblical Fundraiser, which fits in line with your most of your other, your other titles, The Storytelling Fundraiser, The Epic Fundraiser, etc. So, The Biblical Fundraiser. All right. So we're going to talk about some of the research. See, what's fantastic about having you is that this is not, well, this is kind of the way I learned it.

Russell James
Sure.

Tony Martignetti
Well, the way we've always done it is— the way I've always done it is the way fundraisers will sometimes say. So we have empirical research, and I often cite your research.

Russell James
Well, thanks.

Tony Martignetti
In in my trainings, and so we want to talk about the research today in use of use of language, some things to talk about, topics to talk about, topics to steer clear of, etc. Let's start with empathy in in storytelling. You you're you emphasize that this is really essential for people to get that motivation to give the empathy.

Russell James
Yeah, absolutely. So, you know, this is not a shock, right? The idea that our philanthropic or charitable impulses are going to involve empathy. I think it helps to understand a little bit about the processes behind making that happen because really our goal in this space is to evoke A clear image that will generate some kind of a social emotion like empathy. Now, if we're going to do that, I like to talk about the idea that what really helps is to make it specific, make it simple, and of course, ultimately make it empathetic. So, we do have to create this internal visualization to really trigger those kinds of— Yeah. social emotion. If we don't, it's— I like to put it this way. In order to get people to feel something, we've got to first help them to see something. And that means we've got to present that clear image. Of course, what they see ultimately must be empathetic, otherwise they're not going to be moved to do anything. But oftentimes in our messaging, Even that first part is where we trip up.

Tony Martignetti
And you even have neuroimaging research to back up what— this is empirical. This is not, this is not, well, I feel like this, you know, it has intuitive appeal. So it just, you know, that's what we should do. You have neuroimaging research to back up a lot of what you just said about people seeing something and then feeling.

Russell James
Yeah, absolutely. So this is an area where we see what I like to call triangulation. In other words, lots of experimental research. Different people get exposed to different things and we see how they, uh, how they respond. How do they give or not give? But also some of the things that I do. So here at Texas Tech Neuroimaging Institute, we'll stick people in brain scanners, have them make charitable decisions, volunteering decisions. Uh, even, uh, I, I do a lot of work in planned giving, so we'll And so, we have people do their estate planning while they're in the brain scanner and ask them about including different charities. And through that process, we learn about what does it look like in the brain when people decide to be charitable. And it turns out that one of the important components of that process is an internal visualization for those planned gifts, gifts and wills. It's really about an autobiographical visualization, that is people kind of taking an outside perspective on themselves. But we see it in other research, even with smaller gifts. It really needs to start with creating that imagery or vision that is going to then lead to the social emotion. And that doesn't mean that the communication must itself be visual, although that's fine and can be helpful. It more means that a person can internally visualize What the impact of their gift is going to be.

Tony Martignetti
So I'm dying to know what this brain scanner device looks like, because most people who are not— who are— most people who are writing charitable checks, you know, do not have a brain image scanner, you know, in their home. So, so how do you, you know, you're trying to recreate the giving experience as best you can in an experiential— I mean, experimental, you know, research setting,

Russell James
right?

Tony Martignetti
What does this look like? Is this a room that people walk into and the room is equipped with imaging devices, or are they in like a little bell coat? What are they in while they're your research subjects?

Russell James
Exactly. So, this is exactly the sort of thing you would walk into at a high-end hospital. It's an MRI machine, and the person physically is laying on a table, goes into the MRI machine. And then, the way it works is we actually have their head in the center of the MRI machine and they're looking at what is actually a mirror, but that mirror projects what we can put on a screen. And so, anything you can see on a computer screen, you can see in that. And then, they have different response buttons so they can make choices and you set it up to make it as real-world as possible. So, for example, if they were making—

Tony Martignetti
As real-world as possible, putting aside the fact that they're laying on the— laying down there supine in an MRI machine. MRI scanner. Okay. Well, putting that aside, it's as realistic as possible.

Russell James
Yes. So, setting that aside, and part of what we do is we make sure that they're used to the environment. We have them answer questions on various other things. So, it isn't strange for them by the time we're getting to the things we are interested in. And so, how do we make it realistic? Well, with small-dollar decisions, we make it real money, right? We make it like this is an amount of money that you're getting paid. You can choose to share some of it because you get paid at the end of the process, or you don't have to share some of it. Then with the estate planning, part of it is to say, hey, we're going to mail to you legally valid last will and testament, no charge to you. You just got to answer the questions while you're in the brain scanner. So, those are some examples of how we try to make it real decisions as we are scanning a variety of these processes. And the thing I like to emphasize there is that What we see is triangulation, meaning that we're not— the results that we're seeing in the brain scanner are connecting with, they're triangulating with what we're seeing from experimental research, sometimes even what we're seeing from data in large surveys, that sort of thing. And that's when we start to get more confident about the answer, saying, oh, nope, this is true. You can look at it through widely different methodologies and you come up with the same answer. That's where we get more confidence about those answers.

Tony Martignetti
I see. Right. So each, each of the 3 legs of the triangle is supporting the other.

Russell James
Yes.

Tony Martignetti
And that leads you to the most, most confident conclusions.

Russell James
Right.

Tony Martignetti
Okay.

Russell James
Right. I can give you an example of, of that in, in planned giving if you'd like. But so, so just to kind of—

Tony Martignetti
Yeah, go ahead. Don't tease us and then, and then we go on to a different subject. I do have a question for you about the brain scan, but Give the example that you're thinking of. Okay. Yeah.

Russell James
So, uh, there was a really cool in-depth qualitative research of, uh, this was done by Dr. Claire Routley in the UK, of people who had included a gift to charity in their wills, asking them about what motivated them to do so. Why did they pick those organizations? And one of the ultimate conclusions of that was it was really about the donor's life story, right? It was about— it wasn't so much the next project the charity was doing, it was about connection to the life story. Then And when we scan that same type of decision-making process in the brain scanner, we see that what predicts including a particular charity is a dramatic ramp-up in activation in brain areas that you might call visualized autobiography. These are regions of the brain that tend to activate when people are mentally traveling back in time or thinking back across their life. So, they're internally visualizing while taking an outside perspective on themselves. Wow. So then we take both of those things and we use it in an experiment where we were testing about 30 different ways to phrase the charitable gift in a will and trying to come up with what are people most interested in doing in the phrasing. And it turns out that we could really increase people's interest. We start with our sort of best base-performing phrase, which is to describe it as a gift in a will rather than some of the more technical terms we could use, but we could ramp that up. Yeah. If we ask them about their interest in a gift, in a charitable gift in a will to support causes that have been important in your life. And in fact, when we add that phrase onto almost any planned giving description, to support causes that, uh, to support causes that have been important in your life, it really ramps up people's interest in making those kinds of gifts. Well, what we, what we're doing is we're trying to trigger, by the way we're phrasing the question, a life review process. Because look, Nobody wants to be that guy who says, no causes have been important in my life, right? It makes you think about your life review connections, your life story connections to different causes. And we know from the brain scanner, that's what triggers these decisions. So, that's an example where we get all 3 different kinds of research, in-depth qualitative brain scanning research, and experimental testing, and we can come up with something that's functionally useful. Yeah.

Tony Martignetti
I gotta pull on this thread, even though it's a digression. I still gotta, I gotta pull a little more.

Russell James
Yeah.

Tony Martignetti
Is there, is, do we know anything about age dependency? So if you're, if you're, if reflecting back on the causes that have been important to you in your life is, is a valuable phrase to add, the more years you have to reflect back on. So if you're 60, are you more likely to be moved by that phrase than if you're 30?

Russell James
So we didn't find an age difference in that specific phrase, but we found a related age difference. One of the things that can really ramp up interest in a gift in a will is if we ask people about, do you have a family member who would have appreciated— for a deceased family member— would appreciate your support of this kind of a cause? And if so, tell us about their connection to the cause. And then if you match that with the opportunity to make a gift in a will in honor of or in memory of that loved one, That process actually can dramatically ramp up interest in leaving a bequest gift to an organization. Now, 2 things about that. One, that process is significantly more impactful for older adults, and it's not so much that when they have a family member connection, especially with a deceased family member, that the, that the hit or the increase in interest is so much greater. It's that as people age, they're more likely to have deceased family members who they have these connections with. And it turns out that deceased family members, more powerful connection than living family members. And it tends to be deceased ascendants, not descendants. And in particular, female ascendants tend to drive these, these kinds of things. So, so that's an example where we have an intervention that is age-dependent for exactly the same reason that you mentioned, that they're more likely to have those kinds of connections.

Tony Martignetti
Have those folks who have died in their lives. It sounds like mother and grandmother, they would do much better than son.

Russell James
Yeah, yeah, exactly. Friends don't work. Descendants don't work, but ascendants, grandmother number one, then aunt, then mother. Father was statistically insignificant.

Tony Martignetti
Fatherhood, statistically insignificant. Mother, less significant than aunt or grandmother.

Russell James
Yeah. The more you move up, then— and part of it is just that we don't leave money to those people. So we can use a gift because we wouldn't give it directly to them.

Tony Martignetti
Okay. All right, let's go back, uh, back to where we were. I, I asked you to— I had— no, it's my fault for, uh, pursuing the digression. But, uh, all right, so now back to the brain scanning. Is there an MD in the room with you? I mean, in case the person needs some anesthesia or something, or they freak out in the MRI? Or have you pre-scanned people who are okay in MRI machines?

Russell James
So, um, we have, uh— so the research that I'm doing is just part of the Texas Tech Neuroimaging Institute, and of course I'll have a co-author on of these that has worked with this. And so, sort of preexisting systems set up for those sorts of things. But yeah, we've had some interesting things. Perfect. And in fact, one of the things that we do just for such an event, because we schedule people for these 45-minute sessions and all of that, and we pay for the time, which is expensive time on the machine, is I'll hire grad students to just sit there and do homework all day. Because if somebody freaks out in the machine, presses the button, says, I don't— yeah, I can't do this, I'm out, we need to have somebody that is, uh, that is going in there as well. So that does happen from time to time.

Tony Martignetti
Is it true that charitable giving activates the same centers of the brain as, uh, eating chocolate? Or is that the hypothalamus or But the pleasure centers and eating chocolate, I always see the two, not that often, but through the years I've seen the two analogized. Charitable giving and eating chocolate activates a pleasure. Charitable giving activates the same pleasure center. Is that true or is that a wives' tale?

Russell James
Well, you know, it's true to the extent that charitable giving is enjoyable. And so, we do see activation in the brain. And it turns out there's some cool research that shows charitable giving is really enjoyable, but if they're doing the exact That same thing without being able to choose it, so it's taxation rather than charitable giving, that turns out to be not so much fun. I know, shocking result, right? But so, it does activate these reward centers. So, I guess a slightly more accurate way to think of it is that it activates the reward center rather than the same reward center in the sense of, oh, there's There's one part of the brain that only reacts to chocolate and giving, right? It's like, no, this is the more generic network that's used that is indicating a reward in the brain.

Tony Martignetti
Okay. Activates the reward center. Is it the hypothalamus or do I have that wrong?

Russell James
So, that's not what we're seeing in a lot of ours, more ventral striatum and some of the other areas that engage. But to be honest with you, most of these things like reward, they occur through a network. And so, you'll actually get activations, simultaneous activations in multiple areas. And so, there are different pieces that are involved. So, it tends to be networks rather than just one location does one thing. Although certainly, if there's damage or interference to one location, In a network, it can mess up the whole thing.

Tony Martignetti
Okay, cool. Thank you. All right, so refining my, uh, my thinking through the years. Okay. And my, my analogizing. All right, so it's the reward center, activate the reward center. Um, so, all right, let's, let's drill down to some of the details of your years of research, um, and others. You cite lots of other people in, in some of your, some of your trainings. Sure. Like details of individuals, in details of individuals are better than generic type individuals in storytelling. Flush this out, please.

Russell James
Yeah, you know, so this is something that comes back to that notion that we've got to create an image, and it needs to be an empathetic image. Now, the challenge is, That oftentimes the underlying issue we're working with has real complexity in that issue. And that complexity is true, but it's not motivational. And so, whenever there is a randomly assigned experiment between a simple story involving a single person, this is known as the identifiable victim effect. People are going to give more to that. And to the extent that you make that story more complex, people will give less. So, real simple example, if in one experiment where the total cost to save 1 child or 8 children was exactly the same, with the story of 1 child, 90% of people donated for that. Wow. But if you told the story with 8 children, only 58% donated to it.

Tony Martignetti
Hmm.

Russell James
And we kind of see this again and again whenever we make the story more complicated and it's harder to easily visualize, then we don't get that social-emotional response. And when we tamp down that social-emotional response, then we tend not to get giving. Now, this comes up all the time whenever people start leading with numbers. This idea of let's talk about the impact in terms of the hundreds or the thousands or the tens of thousands. And from an accounting perspective, we'd love that. It sounds like impact, but that is not visualizable. And so, it turns out that when we lead with numbers, that is not going to engage the social-emotional regions of the brain. It lets the brain know, hey, This is a math problem and we're going to engage those math error-detecting part of the brains, the sort of accountant part of the brains. And that is not going to trigger the kind of social emotion that is necessary to begin the philanthropic process. Now, this does not mean don't ever talk about numbers. It means don't start with numbers. You've got to start with that motivational image. Yeah. And then for some people, they'll be interested in numbers. And so, after you have kind of got that motivation going of the visualizable impact, then you can tamp down their error detection mathematics side by providing sufficient information or at least access to that information. Don't push it on them because many people only need a limited amount of information. Yeah.

Tony Martignetti
If you go too far, then you're starting to reemphasize the mathematical again, and it's going to start to blunt the visual. The visual, visual.

Russell James
It'll get exhausting. And, you know, right. So, so make it accessible and available on the data because, you know, you'll get an engineer or somebody who just loves diving into that. That's fine. But don't ever lead with that. We want to think of it this way. The, the, that social-emotional imagery That's the engine in the kind of philanthropy decision-making car, whereas the math and the numbers and the error detection, that's the brake on the car. So, you do, for some people, have to get them to move their foot off the brake at some point, right? But the point is, if you haven't started the engine, you spend all day getting that foot off the brake, not going to go anywhere. Right. People will nod and say, oh yes, I understand, but they're not going to give. They're not going to actually do something. Whereas if you start the engine first, that, oh, this is exciting, I can visualize it, I can see it, I want to make this happen, then it matters whether you get them to take the foot off the brake.

Tony Martignetti
And even more so when you add identity to the individual that you're leading the story with. So, right, like if you had name, Age, these, those factors are, will increase the giving over just, you know, just, it's just Sarah.

Russell James
Exactly. So anytime we can add—

Tony Martignetti
Or even worse, an 8-year-old.

Russell James
Right. So anytime we can add a few, and I emphasize few,

Tony Martignetti
yeah,

Russell James
details that helps me create an image of the impact that I'm going to have, that's going to increase, uh, the likelihood of making the gift. Now, the reason I emphasize few is we find that if you just keep going and adding 8, 9, 10 details, now you're making it too complex. Now, the social-emotional reaction tends to go down. It tends to get more exhausting. And so, that's why it's that notion of you want to have this clear, simple image that evokes the social-emotional response.

Tony Martignetti
So, what belongs? Like a name, Age, uh, I don't know, location, maybe the, the town that they're in. If let's say it's, uh, disaster relief or something, name, age, and city, is that— that's not going too far?

Russell James
Yeah, yeah. So, you know, in general, for example, a lot of the tests are done with, uh, you know, let's say, uh, you just get the, uh, description without the name. Adding a name helps. If you get the name but you can't see the person, Being able to see the person or an image of the person, that helps. So, adding a name and picture, that is generally going to be very positive. And it's just like any other good storytelling, right? If you start reading a story and it says, introducing character number 1, and then you have like 5 paragraphs of details on them, like, we don't want to read that story, right? Yeah. You know, as we learn about the person and during the course of this, the story and what's happening and the impact, a detail here or there helps make it more emotional or easy to visualize, then that's helpful for the story.

Kate Martignetti
It's time for Tony's Take 2.

Tony Martignetti
I want to extend thanks to Russell James since he's in this week's show from the archive. Because he wrote the foreword to my book, which I'm very grateful for. And I'm not kidding, the first time I read the foreword that he sent me, I was tearful. It was so moving. And he, you know, very graciously said, if you want me to change anything, let me know. And I said, not a comma. Should you change? It's just glorious and giving the way it is. Exactly. Don't change a thing. Because, you know, it's, it's very gratifying. Here's a professor at Texas Tech University, and he agrees. Well, and his area of research is planned giving fundraising. That's what he does. Some professors study chemistry, some study history. He studies planned giving fundraising, which is why I'm repeating his show, because his research is outstanding. It's valuable. It's really valuable. So for him to agree with my philosophy of launching planned giving at small and mid-sized nonprofits, as explained in my book, is very touching and gratifying, you know, to be validated by a quantitative researcher in planned giving fundraising. Because I'm not that. I'm a practitioner, 29 years. But, you know, you could say, well, 29 years, all you got is a bunch of anecdotes, 29 years worth of anecdotes. So So to be validated by Russell James and his research— well, no, his research didn't write the foreword, he did. So to be validated by Russell James is, it's very gratifying. It's very fulfilling. So I say thank you. Thank you, Russell James, for writing the foreword and for agreeing with and validating my thinking and methodology of launching planned giving at small and mid-sized nonprofits. Thank you very much. That is Tony's Take 2. Kate?

Kate Martignetti
Do not remove a comma. I like that compliment. That's real sweet.

Tony Martignetti
Not a comma did I want changed.

Kate Martignetti
Not a comma.

Tony Martignetti
Not a comma. No.

Kate Martignetti
We've got beaucoup buttloads more time. Here's the rest of Quantitative Fundraising Research with Russell James.

Tony Martignetti
You also have really interesting research on, on groups. If, if it's, if it's a group of 8 and they seem individual, that is less motivating, I guess, less social emotion than a group of 8 That are cohesive, a cohesive group.

Russell James
Right. And so this comes back to being able to envision a single character. Okay. So for example, if I've got a story of the, you know, the 1 child versus the 8, the 8's harder to visualize, too much going on there. The 1 is going to outperform. But if that But if I got 8 or say 5 in one of the experiments, it was actually 6 children in one of the experiments, if they were described as siblings as part of a family, well, then that negative effect went away because now I'm kind of dealing with one character in the sense of one group. And we see this in like really weird ways also, like for example, if you're giving to a butterfly sanctuary and the butterflies appear to come across the video screen all moving in unison as one unified group versus they do what butterflies always do, which is to just be scattered and bouncing around. People give more when it's that group image. And so, this is kind of this consistent result. There's another study that showed the same thing with gazelles. And the idea is that what is an easier character to empathize with? We can't really empathize with a dozen or 20 different characters at once. But if that 20 or 50 characters becomes a group, then we say, oh, this is a character. I can identify with this group as a character. And that makes for a better story, meaning that easier to visualize, easier to have empathy for, and it generates more likelihood of giving.

Tony Martignetti
What about the cohesive group versus an individual? The individual story, does the individual still do better?

Russell James
Yes.

Tony Martignetti
In terms of giving outcomes than the cohesive group?

Russell James
Right. Yeah. So, identifiable victim effect, to use the technical term, always going to outperform. Then if it's a bunch of, you know, recipients, individuals, animals, whatever it is, then that's going to perform worse. But if we describe them as a cohesive group with a specific kind of story to that group, then that's going to outperform the sort of scattered, the numbers story. In other words, we're trying to reduce the negative impact from talking about numbers by just talking about one group. And this is, especially if it's a family, that's a cohesive group or a tribe or a community, whatever. Yeah. That makes it okay. Now we're back to the story about one character, in essence.

Tony Martignetti
Okay, but the one identifiable victim always outperforms?

Russell James
Yeah, in these, in these small gift decisions. Okay, it does.

Tony Martignetti
Okay. Yeah, that's what we're talking about. All right. Are there other layers to the research? I mean, I want to get to talking about tax deductions versus tax savings things, but before we get there, Are there other layers to the research that you want to share with listeners?

Russell James
You know, I think if I could share just one thing, and this I'm borrowing it from actually a script consultant, Michael Haug, who works with not only scriptwriters but even CEOs on what their message is. And he always says, number one problem, very simply, Their stories are way too complicated, and this is the constant challenge in the fundraising space: is how do we create a message that is an appropriate representation of the scenario? So we want it to be accurate, but complexity kills empathy; it kills giving. And so, so that's always the the notion of how do we have that story be something that. That is simple, straightforward, and evokes that emotion. So again, the reason this is such a big challenge is if you let non-fundraising people, administrators, get involved with writing your fundraising copy, they're going to kill it because they're going to make it more complex because they live in a world of complexity and they want to sort of force the donors to— they need to understand all of this. Like, no, no, no. Yeah. No, that, that's— yeah,

Tony Martignetti
we can put that in, put that in the annual report.

Russell James
Exactly, exactly.

Tony Martignetti
All right, all right. Um, so let's talk about including some of the mathematics, uh, in terms of talking about tax deductions or tax savings, different types of gifts. Now I know, I think we're moving away from the small dollar gifts, we're moving to the more structured, you know, planned gift like gift annuities. Uh, maybe stock, you know, stock gifts as well. But, but that's okay. You know, we've, we've spent a good amount of time on the small-dollar giving decisions. Um, let's go to the, the, yeah, the, I mean, the more, the more nuanced gifts and, and talk about tax, tax deductions, tax savings. What, what's the research there?

Russell James
Yeah, so one of the things to keep in mind that oftentimes gets confused, especially in the fundraising space, is that the tax benefits are not about motivating the gift. They're about reducing the cost of the gift, making it smarter, making it more attractive. So oftentimes fundraisers, um, they, they, uh, get bad information, uh, and, and, uh, it sort of has legs because it's something that they sort of want to believe. But the bad information is tax benefits don't matter. And since they don't matter, hey, you don't have to learn about them, right? So that's a lovely message for fundraisers. Makes your life easier. It's just not true. And so let me explain what I mean by that. It's not true. Like empirically, we can definitely see nationally that tax deductions make a difference. And one of the ways statistically we can identify this is that although people's incomes go up at a dollar at a time, their tax benefits which are based upon the income bracket, tax bracket they're in, don't go up a dollar at a time. They have these hard breakpoints at different places. So, we can separate those 2 things and we can see where, oh, that tax benefit went way up here and the behavior, we see that as well. Of course, there's also different things that we can compare year over year. We can also do this experimentally, just asking people about interest in, for example, in one of our studies, we compared asking people about Are you interested in learning about making a gift, or are you interested in making a gift of stocks or bonds to charity, versus are you interested in avoiding capital gains tax by making a gift of stocks or bonds to charity? And about half-fold more people were interested in the second thing. So, again, it's important to understand that sometimes the bad information comes from this approach where you'll have an organization or a consulting firm says, hey, we want to learn why people give. And so, they'll send out surveys and say, here's different reasons people give, which of them apply to you? And some of them will be because I want to change the world, because of my values, that's how I was brought up, because of the impact I want to make. And then, one of the options will be because I want tax benefits.

Tony Martignetti
Right. People don't choose it.

Russell James
No, nobody chooses that.

Tony Martignetti
Because you look, you feel like you're a petty person. Exactly. What kind of altruist am I if I'm giving for the petty pecuniary reason?

Russell James
Right. And this is in fact a very common issue in social science research and something that we're well aware of. And it's why we don't test things in that way. You know, if you ask people for their motivations, you'll get the socially approved motivations. And so that's why We test them in different ways, you know, randomly assigning them to different descriptions and notice what happens to the impact and, or looking at the national data and all of that. So, all to say that it makes an impact. It's not the motivation, but it does lower cost and price matters. I mean, look, Economics 101, price matters. And whether you're talking about smoking cigarettes or making gifts Yes, price matters. It's not the motivation, but it does matter. And so it is helpful to, uh, to, uh, mention these things. Um, now—

Tony Martignetti
Can we— can I reference your graph, uh, that you, you rely on sometimes?

Russell James
Sure.

Tony Martignetti
You've got motivation and cost.

Russell James
Yes.

Tony Martignetti
And as cost goes down and motivation goes up, where the two cross, that's a giving decision.

Russell James
Exactly.

Tony Martignetti
So if we can bring the cost down, Then maybe a little less motivation is required.

Russell James
Yeah. Oh, you know, the other way to think of it is, you know, look, Tony, you could get me intensely motivated to make a $10 million gift to Texas Tech University to build a new library building. I don't have it. So, you know, the cost is too much, right? So you're going to have to lower that cost in order for me to participate. This is also true at kind of a smaller scale where We see that cost does matter. And so, there's another interesting thing about that, that it's not just about cost mattering, but it's also about the way that we frame that benefit that is coming in. So, for example, and this is real consistent across a lot of economic experiments, and that is that that if you describe the benefit as a matching where, okay, you're going to give a dollar, then this other organization is going to give 50 cents or a dollar or whatever, that is more motivational than if we describe the economically identical result as a rebate or a refund. In other words, well, you give $2 and then they'll give you a dollar back. Now, to an economist or an accountant, those are identical, right? The net cost is the same in both cases. The net to the charity is the same in both cases, but the story is different. So if I can use terms that describe it in a matching framework, which is to say, well, you put this in and then it gets matched and that increases your impact. Well, that's a very charitable story. And it's also me not only being philanthropic, but I'm being intelligently philanthropic. I'm making an even bigger impact. Whereas if you frame it as a refund or a rebate, well, I'm a little philanthropic, but I'm also getting something out of the deal too. And so, I, you know, so it kind of messes it up. Now, you could look at that and say, well, everybody does matching gifts. Nobody does refunds on gifts. Like, why do we care? Well, we care because the tax system is set up as a refund system, essentially a rebate system, because you give and then on your tax return, you know, you get this rebate back or this tax benefit back. So, we can't change the system, but we can change the language that we use to describe those tax benefits. We're not going to describe them as, hey, you make a gift and here's the, you know, here's the killing you can make on your tax return. This is a great benefit to you. We want to describe it more in matching terms, that your gift can become more powerful when you get the government to kick in their share through these kinds of benefits. And so that's how we use that kind of experimental research.

Tony Martignetti
All right. Fascinating. What about the— what about simple gifts in wills where there isn't a tax Implication for, for the vast majority of donors. I mean, the, the annual estate— the estate tax exclusion, not the annual— the estate tax exclusion now is about $13.6 million, I think, per, per person.

Russell James
Yeah, double for a married couple.

Tony Martignetti
All right, so 99.9%. So, you know, let's exclude the, uh, the 1/10 of 1%, right, that is going to benefit from that. Uh, so, so there isn't a tax implication to making a charitable gift by will. Simple charitable bequest. What do you have advice about messaging that?

Russell James
Yeah. So, so a couple of different things. First, I will, again, coming from a department of financial planning, if we want to talk about taxes, what I'm going to do is start out the conversation by saying that, you know, any of that money in your IRA or 401, Any of that that goes to your family, they're going to have to pay income taxes on that when they take it out. And in fact, the new rules, they got to take it out even faster than before. But any of that that you name to go to our organization, no income taxes on any of that. Now, I mention that because as a financial planner, the very first dollars we want to send to charity in the estate is the qualified plan money. That is the IRA, 401. Right. And so, there— So, they don't have estate tax issues in their estate planning, but they do have income tax issues in their estate planning. So, that can be a way to get into that conversation. But it is interesting how the gift in a will is fundamentally a different decision than the current giving decision. And we see that the behavior itself is different as well. Now, part of the reason that it's different is that it's about planning for your own death. And most people, that's not their favorite subject. Right. subject. There's a bit of avoidance that goes on with that. Um, so, so there's a couple different things that we see here. One is, what's the most powerful way to get in a will? Honestly, it's to just be top of the mind at the right time when some other life event happens and people are going through that process. And by top of the mind, I mean always just sharing stories about, oh yeah, people like us include gifts in wills. Uh, all the time that, uh, benefit the organization and reflect their life story. And so, it's just kind of this constant communication because one thing we see from some pretty cool experiments is that, uh, this charitable giving decision in the will is relatively fluid. Like, uh, so for example, there was one experiment, 1,000 people went through the normal will planning process, uh, didn't have any specific question about a gift to charity. 4.9% of those people included Another 1,000 people had the same questions, but one extra question, would you like to leave anything to charity? 10.3% of those people included a gift to charity. So, you more than double it just by being top of the mind, right? And so, that is kind of the first step. Now, there's a second step involved if you want to get to the really major gifts or the substantial kind of inheritances. And that deals with the why. So, with this second-stage response to being reminded that we're going to pass away, first-stage response is just avoidance, like, I don't really want to deal with that. If you get past that, the second-stage response is technically called the pursuit of symbolic immortality. This is the notion that, okay, I'm going to disappear, but some impact of mine will continue on after I'm gone. And so, If a charity can provide an opportunity for a gift that reflects that person's life story, then they'll be included in the plan. If they can provide an opportunity that also provides some permanence or sense of permanence, that's when those major gifts come in. So for example, whether that's an endowment for a particular part of the operations, you know, at the universities we have professorships and scholarships Or in financial planning, private family foundations or some of the donor advised fund substitutes for that. In fact, believe it or not, Tony, if we go back to 2007 when the exemption levels were down to $5 million, so we were able to see more of that data. This is a number that's going to blow your mind. In 2007, actually, when we look at the total charitable bequest giving that's taking 78% of the dollars for estates $5 million and above went to private family foundations. Now, that means only 22% are going to actual public charities. Psychologically, that's important because we know that the private family foundation is kind of the ultimate expression of symbolic immortality. It's named for the donor or the donor's family. It's legally required to follow his rules or her rules or values forever. And it's intended to live, you know, forever, permanently, to continue making that impact indefinitely, uh, that even after the donor is gone. And so why that is important is to understand that anytime we can replicate some piece of that private foundation experience for our donors, that's what's going to drive these And honestly, that's actually what we see in any big giving, not just the estate giving, is that it will come with instructions. It is the donor's instructions that make that gift motivational. And so, the study that came out about 18 months ago from Case looking at the largest gifts that were received from all different levels of colleges and universities, When it analyzed those largest gifts, only 14% of those gifts included even a single dollar that was unrestricted. You know, the bulk of them went for endowments, some went for buildings. We've— it is that sense

Tony Martignetti
of symbolic permanence.

Russell James
Yes,

Tony Martignetti
endowments, buildings. There's no, there's no, there's no, there's no more permanence than a Right, right. So, all right,

Russell James
so something that reflects my values and life story that lives on beyond me.

Tony Martignetti
And so, I mean, fundraisers would say perpetuity. You, you're the researcher and you're saying, you know, symbolic permanence, but we would say perpetuity. Maybe not in talking to donors, but in trying to, uh, you know, just internally trying to encourage these types of gifts. That, that, uh, the donor's values will live on. It's interesting, you don't, you don't use the word legacy.

Russell James
So I don't—

Tony Martignetti
yeah, go ahead. It doesn't matter what I— because you're the researcher.

Russell James
So we've tested a bunch of these phrases, right, about, okay, what works best. So for example, do people want to— are they interested in making a gift in a will? Do they want to read about will planning? Are they interested in making a legacy gift? They want to read about legacy planning, or they're interested in estate gift, they want to read about estate planning. It turns out the most attractive term is simply gift and a will or will planning. Why is that? Some qualitative research unpacked this a bit, and that is for a lot of people, when we start using terms like estate or legacy, they feel like those terms don't apply to them. grand, you know. Oh, an estate, that's like for the people on Downton Abbey who go riding their ponies across the vale in the morning, but it doesn't really apply to me. But oh, a gift and a will, yeah, everybody needs a will. And so there is that barrier with some of these terms that legacy is absolutely the right idea, but sometimes the term itself can be— it's not quite as attractive.

Tony Martignetti
Okay. I can say that my anecdotal experience over 27 years doing planned giving is identical to that. I've turned— in my early years, I saw people, you know, they just would bristle at the idea of a legacy, that that's for the Gateses and the Bloombergs. You know, now it's for the Taylor Swifts and the Elon Musks, right? It's, I don't have a legacy. I mean, we all do have a legacy. And you're making that point. You're saying the concept is right,

Russell James
Yes.

Tony Martignetti
But the phrase— so I've— yeah. So for a long time, I've been training that that's not the best way to talk to people about their legacy when you're talking to folks of normal, modest means. Just talk about longevity and the importance of your mission in the community, etc., but not their legacy.

Russell James
And to agree with that even more, One of the things we find is that you, you don't actually have to be selling a permanent structure. You can just use permanence language to describe the impact of your organization. So this was a really cool experiment where people were at the end of the experiment. They had an opportunity to make a gift, and it was always to the same organization in poverty relief organization. In one case, it was described as making an immediate impact on on the lives of people. People, and in the other it was described something along the lines of making a permanent impact that will benefit people in the future. Well, it turns out that for just the normal group that wasn't reminded of their death, wasn't doing estate planning, it was better to talk about the immediate impact. But for the group that had first been reminded of their own mortality, which of course happens in the estate planning process, for that group, uh, that immediate impact message Which did not work at all. People did not donate to that. They donated very little to that, but they actually donated 3 times as much if you describe the organization as making lasting improvements that would benefit people in the future. And that just sort of psychologically shows the attraction in these death-related contexts of permanence. We found the same thing when we were trying to figure out how do you get somebody to make a memorial gift in honor of a deceased loved one. You know, the first one happens at the funeral and like, okay, I'm making a gift to the organization, but the organization never gets a second gift. So, what we found, we tested a bunch of different messages. The most powerful message to increase the likelihood and the size of a second gift is to have an opportunity that if we hit this goal for total giving in honor of this person, the fund becomes a permanent fund. Wow. So, again, that same notion of anything death-related, if we can offer

Tony Martignetti
Interesting. That has, that has a lot of implications for— I'm thinking of healthcare specifically, where there are so many gifts in honor, or hospice, right? Someone, someone dies in a hospice facility, and the family says, you know, gifts to— in lieu of flowers, please make gifts to the hospice. And people do it, but they do it, they do it once, and you never hear from those donors again. So there's a way— it's not exclusive to healthcare, but that's the first thing that comes to mind. Yeah. And I think that's a way to

Russell James
Sure.

Tony Martignetti
Because there's a death often in healthcare and, and related, related work. So, all right, bringing those folks back for a second time with, uh, with permanence again, there's that, there's that implied, uh, implied, uh, what did you call it? No,

Russell James
so the pursuit of symbolic immortality.

Tony Martignetti
Symbolic immortality.

Russell James
I love that.

Tony Martignetti
That's right.

Russell James
We'll catch up. And in fact, if you want to make it super powerful, then you communicate for the second gift near the anniversary of the person they made, uh, the anniversary of the passing of the person they made the gift in honor of, because that really elicits that kind of mortality reminder very strongly. And then that causes the attraction to the permanence outcome.

Tony Martignetti
Interesting. All right, this is, this is bordering on manipulative because you want the per— oh my God, it's been a year since she died. I can't believe it's been a year now. So So, you're saying, you know, capitalize on the— I'll avoid using the word exploit— capitalize on the anniversary.

Russell James
Yeah. So, we can think of it in the sense of we're providing this positive experience.

Tony Martignetti
Yeah.

Russell James
And so, when is that positive experience going to be of most interest? Well, it's when that sense of impermanence is the strongest, that sense of loss that is the strongest. That's when this particular, you know, experience or product that we're offering, it really hits the spot when it becomes of most interest.

Tony Martignetti
All right. I know the cynic would say you're manipulating people, you're taking advantage, you know, but this is fun. It's— I'm not that cynic. I was just— I was musing a little bit.

Russell James
Sure.

Tony Martignetti
All right. But yeah, really, you know, this is quite valuable. Not only the groundbreaking parts that are new, but the unwinding of the old saws that are told, you know, get perpetuated at conferences. And, you know, it's detrimental. You know, it's— I mean, it's valuable for folks to know there is science. It's not all tales from the past and anecdotes. All right. All right. I'd like to leave it there, if that's okay.

Russell James
That sounds great.

Tony Martignetti
Is there anything itching? Is there anything that, like, a tip of your tongue that we got close to but I didn't know enough to ask about?

Russell James
No, I appreciate the opportunity to share. It's always fun to have these conversations.

Tony Martignetti
Okay, my pleasure. Absolutely. Russell James, chaired professor in the Department of Personal Financial Planning at Texas Tech University. You'll find Russell on LinkedIn. Thank you for, for debunking myths, for breaking new ground, for the quantitative evaluation of, uh, of, of fundraising and, and, and what, what it takes for successful outcomes.

Russell James
And Tony, let me say, I share all my stuff for free. If somebody connects with me on LinkedIn, I send them links to all my books for free, videos, slide sets, academic journal articles. All of that, some of that's on my website, encouragegenerosity.com, but share all my stuff for free. Doesn't do any good if it sits on the shelf here at the university. It needs to get out to the people that are actually making a difference in the world.

Tony Martignetti
All right, encouragegenerosity.com.

Russell James
That's me.

Tony Martignetti
Thank you very much, Russell. Real pleasure.

Russell James
Thanks, Tony. Thank you.

Kate Martignetti
Next week, there will definitely be a Oh, guaranteed. If you missed any part of this week's show,

Tony Martignetti
I beseech you, find it at tonymartignetti.com.

Kate Martignetti
Our creative producer is Claire Meyerhoff. I'm your associate producer, Kate Martignetti. The show's social media is by Susan Chavez. Marc Silverman is our web guy, and this music is by Scott Stein.

Tony Martignetti
Thank you for that affirmation, Scotty. Be with us next week for Nonprofit Radio, Big Nonprofit Ideas for the Other 95%. Go out and be great. There's one line I have to redo because I said heliobacter instead of helicobacter.