What Makes Donors Give

From the December 8, 2005 edition of the Chronicle of Philanthropy.

By Ruth A. Wooden, President, Public Agenda

When the average American makes a charitable gift, he or she makes the decision based on gut feelings and personal connections. A nonprofit group that becomes tainted by scandal or seems more intent on collecting checks than in fulfilling its mission rarely gets money from a donor again.

While nonprofit leaders obsess about federal accountability regulations currently being considered by Congress and nonprofit-executive compensation levels, what concerns donors most is whether nonprofit groups are losing their hearts, or, in other words, the characteristics that make nonprofit groups different from business or government.

Those are the key findings from a new study that my organization, Public Agenda, conducted to learn more about people we term "heart and soul" donors -- those who are among the estimated 70 percent of donors who give $500 or less a year. That is a large, important audience when charting attitudes about credibility and public trust in nonprofit organizations.

The vast majority of donors we interviewed for our study are enthusiastic and positive about the organizations they give to and about charities in general.

For most donors, the work of the nonprofit world is almost entirely defined as the work of the charitable, human-service organizations. Many seemed surprised and even a little resentful that large organizations like hospitals and universities that charge significant fees for their services actually fall into this category. Foundations barely registered when donors were asked about them, but most people wanted to give them wide latitude. "It's the donor's money" to do with as he or she wishes, focus-group participants told us.

Most were well aware of highly publicized scandals at some charities, and their recollections were specific and clear-cut. In most cases, the scandals had led them to stop giving to the organization. Most said that once an organization became tainted in their minds, they never gave to that particular organization again. But that didn't make them more cautious about giving -- they simply redirected their gifts.

Despite personal feelings of betrayal tied to nonprofit malfeasance, those strong feelings did not seem to produce either the desire for stronger government oversight or a personal motivation to investigate organizations more thoroughly before making donations.

Typical donors check "top 10 charities" lists issued by newspapers, magazines, and other organizations and listen to the views of friends, peers, colleagues, and others. While they would say they don't necessarily know everything about how charitable organizations work, they have a sense of propriety for such groups. For example, they do believe that executive salaries in nonprofit organizations should be "appropriate," and they have a "smell test" for nonprofit activities that just don't seem right.

High-profile scandals aside, larger controversies about nonprofit credibility, use of tax-subsidized funds, and nonprofit regulations barely entered the radar screens of the donors we interviewed. Most were totally unaware of the higher-level policy debate occurring among nonprofit leaders and in federal and state government.

What modest donors did complain about was some of the fund-raising techniques used by charities. They often volunteered examples of what they saw as "slick," inappropriate, or wasteful practices.

Interestingly, while nonprofit organizations are increasingly being encouraged to streamline, do a better job of marketing to their "consumers," and run a tight ship, those donors had quite negative reactions to the thought of charitable organizations being run "like a business."

Highly polished direct-mail campaigns, telemarketing, unsolicited premiums, and multiple or duplicated appeals in a short period of time were often cited by the donors interviewed as ways in which charities act too "businesslike."

Ironically, the more the charities used the more-sophisticated techniques of marketing and sales, the more donors believed that they were acting just like any other business: selling to people. Most of the donor comments about marketing focused on large charitable groups, including local chapters or affiliates of national organizations. The "slick" marketing of appeals seemed to create a distance between the people and the charitable work of the group, blunting their level of enthusiasm for the organizations. It is not that donors necessarily believed that these organizations are bad or that they don't do good and important work. They were simply viewed as too calculating and therefore were perceived as having lost the charitable "heart."

It is not that donors resented all forms of outreach. Some even made specific distinctions about which practices turn them off versus which were more likely to elicit the desired contributions. For example, a number of focus-group participants volunteered that they had positive feelings toward Doctors Without Borders because the international aid organization announced honestly that it had collected all the money it needed for tsunami relief and that all additional donations would be directed to other efforts to help those in need.

In addition to interviewing donors, we talked to 15 leaders of national nonprofit organizations. They were highly focused on the regulatory discussions in Washington and concerned about the impact of possible changes. Many feared the prospect of greater regulation and especially the financial and reporting requirements that might come with it.

Many of the leaders we spoke with overestimated donor interest in and attention to the policy debates. Many overestimated skepticism among the giving public.

At the same time, very few focused on the actual concerns raised by modest donors and other research among the public, that is, the growth of slick marketing techniques and the possibility that they might be alienating donors.

Relatively few nonprofit leaders voiced concern about the downside of assertive marketing and fund raising. Still, several did see a need for the charities to be mindful of how marketing is perceived and what is truly effective in the long term. One nonprofit leader said, "When making appeals, be elegant without using expensive papers. Don't look too slick. It's a line you walk all the time."

One of the most pronounced laments we heard from small donors was that "everything is a business these days," and that it seemed like too many nonprofit groups are becoming so wrapped up in fund raising that they become vulnerable to a number of pitfalls. Those pitfalls ranged from the egregious management scandals profiled in the news media to executive overcompensation to overzealous marketing  but none were more disconcerting to donors than simply losing the charitable instinct.

Average donors see the nonprofit world as unique and special, providing care and personalized concern in areas where the government and business can't or won't. Donors believe that charitable organizations must provide services efficiently, as well as create human connections and be the organizational embodiment of Americans' shared values.

The nonprofit world's most important obligation, donors say, is to hold tight to the authentic charitable impulse. Donors accept that scandals occasionally happen and missteps are part of the territory, but the one unforgivable act is losing the "heart" of the nonprofit enterprise.

Ruth A. Wooden is president of Public Agenda, a New York organization that conducts public-opinion studies and seeks to get people more involved in civic causes. A copy of the report on the organization's study on donors, "The Charitable Impulse," is available free on the organizaton's Web site.