Inside the Minds of Donors (Part I): Researching Donors’ Behavior

The questions arising from the last post: Do we know why donors give? Do we know how they choose the recipients? Do we know how to motivate them? motivated me to search for answers. In-depth research/reports that focus on individual donors’ types, motivation, decision-making are rare, practically non-existent in our region. However, there is some interesting – and recent too – research done in USA (Money for Good I and II) on various aspects of donors behaviour that resulted in the reports that explored i.e. How can non-profits more effectively obtain donations from individuals (by Hope Consulting http://www.hopeconsulting.us/ and some of it in partnership with GuideStar). True, the research/reports were made in and for US market, but it seems to me that they nevertheless offers some insights into donors behavior – because people are people everywhere, aren’t they?

Here are some of the insights for individual donors (some of which surprised me a bit):

1)       There are different segments of donors that are driven by different interests. This is not so surprising, but it was interesting to see types of donors (see table below). According to Money for Good (MFG) there are six clusters of donors: Repayers, CasualGivers, HighImpact Donors, Religious, SeetheDiference Donors, PersonalTies Donors. Each of the types have typical organizations/recipients and different motivations/drivers. Most numerous donors are Repayers, but PersonalTies Donors provide the largest amount of donations.

Six clusters of donors, according to MFG report:

Type

Gives to:

Top driver/motivations

% don.  popul.

%

donat.  am.

Repayer

org. that once made an impact on them or their loved ones

Cause impact me or loved one

23

17

Casual giver

well-known org./ easy to give

Organization is established or respected

18

18

HighImpact

org. they feel is making important difference

Underserved social issue;

org. better at addressing social issues

16

12

Religious

church, or org. connected to church

fit with their religious beliefs

16

18

See the Difference

small org.

charities in own communities

can see the change

gifts to small org. make greater difference;

14

10

 

PersonalTies

org. with which they have ‘personal’ connection

they know org. leadership;

friends asked them to

13

25

 

2)       Few donors (~1/3) ever research a charity before donating. This was surprising – if you are giving your own money how come you are not researching to whom you should give? Well, it seems that individual donors are just not that into research… MFG report findings point out that only app. 35% of individual donors did some kind of research on potential recipients while as many as 65% never researched before making a donation!!!

3)       When they do research it is to validate the organization is acceptable, not to try to find the “best nonprofit” to which they could give. From 35% of donors that did the research only 13% were actually trying to choose between multiple recipients – others were just ‘confirming’ their choice or deciding about the amount. Report also found that donors are searching for simple facts and figures, looking “for comfort that their money will not be wasted” such as i.e. overhead ratio; it also showed that they care about organizational info more than about problem info. Some of the comments from focus groups were: “I want to ensure that I’m not throwing my money away”; “I can’t determine which is the ‘best’ nonprofit, but I can find out if a nonprofit is bad”.

4)       Donors are very loyal – in the case of almost 80% of donations there is “virtual certainty” that gifts will be repeated next year. It seems that if donors do not hear/find out something really bad about their last years’ choice – they just don’t bother to change anything and remain loyal to their chosen recipients.

Reports recommend to non-profits to re/search their donors/potential donors according to the identified segments (point 1) as research showed that demographics has little influence on how donors behave. Reports also recommends to tag and track donors by segments, capture donors early, understand how to manage different segments when approaching them etc. There is of course much more in the research/reports, but I’ll stop here.

Now I understand that this is US, which is by far much more developed “market” for individual (and other) philanthropy. However, I wonder – if we would invest effort in exploring types of donors in the region, their motivation, habits and ways in which they make their decisions – would that help us in understanding how to increase their numbers/amount of money they provide? Or is it too early for us to engage in this type of research?

I vote for more research/studies. Just reading through these reports demonstrated the wealth of information/data that lies out there; it also showed that data may surprise us. So, for all of us interested in promoting and advancing philanthropy (and especially individual philanthropy) in the region – it might just be useful to go out and do the homework before asking people for money?  

More information on Hope Consulting and  Money for Good I/II as well as other reports based on the research can be found on http://www.hopeconsulting.us  and http://www.hopeconsulting.us/money-for-good

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Aleksandra Vesic

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