Money for Good 2015 is out today, and, like its two predecessors, it offers plenty of food for thought.
Published by the Camber Collective (the result of the merger between Hope Consulting and SwitchPoint LLC), Money for Good 2015 examines donors’ motives for charitable giving and what they mean for philanthropy overall.
Here are some key findings from the 159-page report:
Donors Are Suspicious
The Money for Good team surveyed more than 3,000 people with household incomes greater than $80,000 (half of the group had incomes greater than $300,000). This audience represents the top 30 percent of US households and accounts for 75 percent of individual charitable donations. The team also interviewed more than 50 donors.
The results? Many donors don’t trust nonprofits. They don’t know how the organizations use their money, and they’re not sure who benefits from the gifts.
Donors Are Confused
Some 13 percent of donors feel they don’t have the information they need to make solid giving decisions. Nine percent “feel overwhelmed” as they make their decisions. And 5 percent “don’t know what to consider.”
Donors Are Creatures of Habit
Given these factors, donors default to the familiar. The vast majority—67 percent—intend to give to the same causes in the future as in the past. Although 38 percent research at least one donation a year, only 9 percent compare organizations. And 61 percent prefer to give to well-known organizations.
The Good News
- Most donors—84 percent—are committed to giving.
- More donors are comparing organizations before giving. As Jacob Harold, GuideStar’s president and CEO, points out in today’s Alliance Magazine, only 3 percent of donors said they compared nonprofits when the first Money for Good report was published in 2010. A year and a half later, that figure had increased to 6 percent. Now, it’s 9 percent. “That may sound like a small number,” Jacob writes, “but there are 319 million people in the US and 83 percent of people donate. So, we can fairly estimate that we’re talking about 23 million Americans, who are responsible for tens of billions of dollars in giving each year.” These are the donors who “seek out the best nonprofit, not just a good one.”
- An additional $22 billion could flow into the sector if nonprofits met donors’ needs better.
- Another $25 billion could be directed to the most effective organizations.
The Money for Good Game Plan
- Reframe giving—nonprofits need to inspire donors and help them feel connected to the organizations and to beneficiaries.
- Target the donor segments most likely to change their behavior—the report identifies them as “Busy Idealists,” “Cautious Strivers,” and “Unaware Potentials.” It includes a segmentation tool kit to help nonprofits identify these donors.
- Leverage giving channels—specifically, workplace giving, point-of-sale giving, and donor-advised funds.
- Learn and share—create a learning community for testing, iterating, and sharing the results of the three previous steps.
To learn more, download your free copy of Money for Good 2015.