I’m excited to share the release of Informed Giving: What Donors Want and How Nonprofits Can Provide It, a report based on research generously funded by the Hewlett Foundation.
We worked with an independent research firm to conduct qualitative and quantitative surveys of more than 200 Fidelity Charitable donors with donor-advised funds to learn more about the types and formats of information they are interested in receiving. This report focuses on the 71 percent of respondents who reported that they regularly or sometimes give to new social causes or nonprofits each year.
This research was conducted to confirm our premises about what engaged donors – those who use information to make decisions and are open to giving to new nonprofits – want in order to make their decisions. Do they care about results? Do they care about whether nonprofits are using best practices to address a specific social issue? Do they care about how one nonprofit is performing relative to its peers? Not surprisingly, the answer was yes to all of these questions.
Here are some findings that I thought were particularly relevant:
- Donors want to better understand the social issue being addressed: Of the donors giving regularly or sometimes to new charities/causes, 57 percent actively seek out information about social causes.
- Donors care about the impact a nonprofit is having: As many as 75 percent of donors use information about the nonprofit’s impact, while 63 percent use information about the social issue the nonprofit addresses.
- Benchmarking nonprofit performance is important: If information were readily available and accessible, the number of donors using benchmarking information would increase by 47 percent points, followed by the number of donors using information about best practices (44 percent).
- Donors have an overwhelming preference for using third-party sources: When looking for ratings/ reviews/recommendations, fundraising or overhead costs, and benchmarking data, donors turn to sources like GuideStar and Charity Navigator.
- Donors are interested in concise formats and comparative data: Donors indicated a strong interest in side-by-side (70 percent) and comparative formats (62 percent) in which nonprofits are compared against key metrics.
I joined Root Cause with the premise that donors should have access to more rigorous information about the nonprofit sector, similar to that made available to them when investing in public companies. Having worked in financial services, I believed that information should be available about the “industry” (i.e., social issue) that donors care about as well as the nonprofits they are giving to.
We have been providing social issue research and nonprofit assessments for donors and funders to make more informed giving decisions since 2008. And recently we launched Peer Performance Exchanges, in which a cohort of nonprofits working to address a specific issue are provided with an independent assessment and benchmarking against their peers so they better understand their position in the field. We believed that donors and nonprofits alike would benefit from understanding best practices and having access to comparative data within a social issue.
We’ve heard from the nonprofits in the Exchanges about how valuable the benchmarking is, and now this research indicates that donors are interested in it as well. The report also includes important findings for nonprofits about how they can most effectively report their results – from the types of metrics they report, to where they report it, and in what format – all aspects we work on with nonprofits through the Exchanges.
You can read more here about the preferences of engaged donors and action steps donors and nonprofits can take to be more deliberate in their decision making and fundraising based on the research findings.
To learn more about the Peer Performance Exchanges, please contact me at firstname.lastname@example.org or 617.649.1536. We are currently recruiting new members for the Youth Career Development Exchange. Learn more about the 2013 members here.
*Fidelity Charitable is an independent public charity with the Fidelity® Charitable Gift Fund, a national donor-advised fund program.
The preceding is a cross-post of an article by Colette Stanzler, director of research and assessments at Root Cause. You can read the original post on the Root Cause Blog here. With the research team, Colette hopes to provide the nonprofit sector with more rigorous information through the analysis of programs that result in more resources being allocated to high performers. Colette also leads the Peer Performance Exchanges to provide programs with independent analysis, benchmarking against the field, and the opportunity to take action through peer learning. Colette joined Root Cause in 2006 as a graduate student to launch the Research and Assessments unit. From her experience in the business sector, Colette brings an understanding of how data is used to inform investment decisions and investor expectations of performance. She has more than seven years of experience in product development and internal strategy consulting at financial service firms, including Franklin Templeton, Scudder Weisel Capital, and most recently as a vice president in equity research at Deutsche Bank. Colette is also the Vice Chair of Board of Trustees for the Phoenix Charter Academy Network.