We are not as intentional as we think we are. The unconscious biases and mental shortcuts in our hidden brains make us predictably irrational, including in our grantmaking and giving. In this session, you’ll learn what philanthropy is learning from the newer fields of neuroscience, cognitive science, and behavioral economics. And, you’ll learn tips for helping your staff, board, yourself, and your grantees make more informed decisions.

1. Our WeirdlyWired Brains
The Neuroscience of Grantmaking & Giving
Tony Macklin, CAP®
for Indiana Philanthropy Alliance, June 2016

4. “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

5. Graphic by Upfront Analytics

6. System 2
tires easily

7. Uncovering Our Mental Shortcuts

8. Quiz
Answer the three
questions on your own
– don’t overthink it
Discuss your answers
with your peers

9. 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

10. 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

11. 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

12. 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

13. 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

14. Self
Reflection
Identify the hidden
biases in your
grantmaking or
scholarship program

15. Countering Our Mental Shortcuts

16. 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

17. I.
Find an accountability buddy or
trusted challenger
Individual
Decision-Making

18. 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

19. 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

20. III.
Scenario planning with grantees
Risk conversation with grantees
Collaborative learning agendas
Allow for course correction,
exploration of alternatives, failure
Implementation

21. The 4 “A’s”
Triggering & Reinforcing Generosity

22. Warm Glow Theory
Anchoring – amounts I
can relate to
Part of something bigger
I.
Aspiration

23. Storytelling:
Lead with emotion
Benefit to one
Relatable situation
$ believably = change
Shareable
II.
Association

24. Beneficiary striving and
self-efficacy
Donor as hero
Donor choice
III.
Agency

25. Integrity, trustworthiness,
transparency
“Wise use” may not =
“no risk”
Donor-Centered
Fundraising
IV.
Assurance

26. What are you going to change back
at the office?