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Our Weirdly Wired BrainsThe Neuroscience of Grantmaking & Giving
Tony Macklin, CAP®
for Indiana Philanthropy Alliance, June 2016
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“Humans are to thinking as cats are to swimming – we can do it when we have to, but we’d much prefer not to.”
Daniel Kahneman
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Graphic by Upfront Analytics
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System 2 tires easily
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Uncovering Our Mental Shortcuts
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Quiz
Answer the three questions on your own – don’t overthink it
Discuss your answers with your peers
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I.
Q8: Loss Aversion or “Endowment Effect”
• We dislike losses more than equivalent gains
• Same gamble, same result, but different words
We’re bad
at assigning
value & risk
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I.
Q14: Risk Aversion
Prefer an assured result over a favorable gamble with same or slightly higher result
Q18: Sunk Cost Fallacy
Place undue significance on previous decisions
We’re bad
at assigning
value & risk
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II.
Overconfidence
• “Curse of expertise”
• Too much faith in our own knowledge
Fundamental Attribution
Over-emphasize personality traits, abilities, motives over external situational factors
We believe
ourselves too
much
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III.
Anchoring Bias
“first impression” bias - fixate on initial information
Confirmation Bias
Seek info confirming existing beliefs, downplay info refuting them
• Worse with experts
• More data = backfire
We misinterpret
and limit
information
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IV.
Groupthink
“Bandwagon effect” – desire for harmony outweighs realistic appraisal of alternatives
Reputation Risk
Decision will damage standing with friends, peers, higher-ups
We overly rely
on social cues
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Self ReflectionIdentify the hidden biases in your grantmaking or scholarship program
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Countering Our Mental Shortcuts
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I.
Check Yourself
• Built in time for quiet reflection?
• Purposefully sought evidence that disproves an idea or shows something isn’t working?
• Purposefully tapped a range of sources, many angles?
• Assume current options off the table. Then what?
Individual
Decision-Making
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I.
Find an accountability buddy or trusted challenger
Individual
Decision-Making
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II.
The People
• Devil’s advocate or trusted challenger role
• Observer or group dynamics role
• Broader range of perspectives, including “outsiders” and clients/customers
• Rotate positions more often
Group
Decision-Making
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II.
The Process
• Pre-mortems
• Successive “if-then” or “why” statements
• Present 3 possible pathways of action, encourage real dialogue
• Blind reviews
• Delphi method & ladder of inference
Group
Decision-Making
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III.
Scenario planning with grantees
Risk conversation with grantees
Collaborative learning agendas
Allow for course correction, exploration of alternatives, failure
Implementation
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The 4 “A’s” Triggering & Reinforcing Generosity
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Warm Glow Theory
Anchoring – amounts I
can relate to
Part of something bigger
I. Aspiration
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Storytelling:
Lead with emotion
Benefit to one
Relatable situation
$ believably = change
Shareable
II. Association
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Beneficiary striving and self-efficacy
Donor as hero
Donor choice
III. Agency
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Integrity, trustworthiness, transparency
“Wise use” may not = “no risk”
Donor-Centered Fundraising
IV. Assurance
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What are you going to change back at the office?