Understanding the Charitable Impulse
In a world swept by natural disaster, social ills, poverty and credibility problems in the nonprofit sector, a new report shows that typical Americans are still willing and enthusiastic to donate—but when charities ask for money, they should take care not to turn off today’s marketing-savvy public.
“If it feels authentic they can smell it,” says Ruth Wooden, president of Public Agenda, a research organization in New York that released the report.
“Everybody today is wise to marketing. Donors today have the same reaction to charities that they do to consumer goods. They’re very quick to make judgments. If it seems more about selling than mission, they really get angry.”
At the top of the list of donor annoyances: producing expensive brochures, conducting frequent mailings, running high-profile events and soliciting by telephone. Ironically, the more charities use sophisticated marketing techniques, the more the efforts were “putting them in the same category as companies selling makeup or tennis shoes,” the report notes.
“Ikea marketing”
Part of the problem for small donors is they worry that their donation of a couple hundred dollars or so is being wasted, Wooden says, and they may also worry that the people at the charity have taken their eye off the ball. Donors in the study cited multiple or duplicated solicitations in a short period of time as examples of charities acting “like business,” and they weren’t being complimentary.
They also said they were turned off by “slick” fund-raising efforts.
Nonprofit leaders, on the other hand, suggested they were caught between a rock and a hard place: On the one side is the broad public, turned off by slick business practices; on the other side are foundations, boards of directors and large donors who urge nonprofits to be more businesslike.
Some suggest it may be a problem of semantics.
“There’s a difference in my mind in being ‘businesslike’ and ‘like a business’,” Wooden says. “Businesslike” has positive connotations and has to do with using good business practices such as accounting, recordkeeping and employee reviews, she explains. “Like a business,” on the other hand, connotes extravagance.
Likewise, marketing materials don’t have to be fancy to work well. “It needs to be well crafted but not necessarily expensive, says Wooden, who calls it the “Ikea brand of marketing,” after the retailer famous for its attractive, utilitarian furniture that sells at a fraction of the cost of high-end goods.
Let common sense be the guide when deciding if marketing efforts are too slick for your audience, Wooden says.
And be aware that there’s a fine line between what’s extravagant and what’s utilitarian. As Missy Ryan, regional director for FundraisingINFO.com says: “One man’s slick is another man’s necessity.”
Heart and soul
“The Charitable Impulse,” as the report is titled, shows another gap between officials at charities and the donors that support them. In focus groups and one-on-one discussions, the study found these two groups can operate in different worlds.
Specifically, nonprofit officials spend a lot of energy on public-policy debates, such as the extent to which government should regulate charities, the report says, while donors admitted they gave money out of gut feelings and didn’t even look at a charity’s Form 990 informational tax return.
Lessons to be learned from the study:
1. Keep the focus on the charitable purposes. Rather than talking about what the organization needs, talk about how the organization plans to meet its mission.
2. Since the connection of donors to the organization is emotional, not rational, explanations about finances aren’t enough—people need to see how the charity is making a difference. “When you send out quarterly newsletters and your annual giving appeal, be sure to talk about what your organization accomplished and what is planned for the future,” Ryan says. “We educate every time we touch a donor.”
3. People want to volunteer and make in-kind contributions, so don’t disparage this kind of thing. Donors in the focus groups were impressed by organizations that use volunteers. The presence of volunteers was held up as evidence that the organization is efficient and focused on its cause.
4. Honest communications. When enough money is received for a particular effort, tell the public. Several donors in the focus groups frequently mentioned that Doctors Without Borders sometimes announced that they didn’t need any more money for a particular initiative because the goal was reached.
Of special note: The report links volunteering to fund-raising efforts. Volunteering is the “heart and soul” of charitable work, the report says. That’s because groups that use volunteers benefit doubly.
First, they create a lasting impression that the group is thrifty, which in turn makes donors confident that more of their money is going to meeting the mission. Second, volunteering generates an expanding pool of involved, enthusiastic donors.
Public confidence
The report’s advice echoes the tried and true formula for running a good nonprofit, notes FundraisingINFO.com’s Ryan: Follow your mission, publicize your good works and get people engaged. “When somebody is passionate about an organization,” Ryan says, “they’re going to give time and talent because they want to see the mission of the organization continue.”
Volunteers are likely to become donors, she noted, just as donors are likely to become volunteers.
The Charitable Impulse study is based on six focus groups conducted with men and women who were considered "civically engaged." (They had voted in the last election, belonged to a civic group, had given at least $300 to charities and had volunteered at least once in the past year.) Participants were of modest to middle-class means, what many would call “salt of the earth” givers.
The report is also based on one-on-one interviews with 15 officials of charities around the country. It was paid for by the Dayton, Ohio-based Kettering Foundation and prepared for Independent Sector, a coalition of more than 500 charities and foundations.
The opinion of these small givers is important, Wooden noted, because while large donors may account for more money, the pool of small donors is larger in number: 70 percent of people who make a charitable donation give $500 or less.
The study concentrated on small donors “because we’re talking about maintaining public trust,” Wooden says. “If you lose the confidence of those small donors, that would have a dramatic effect on public confidence.”
The full text of The Charitable Impulse is available free online at www.publicagenda.org.