Who Gives, Why do They Give, How do They Give to Nonprofits?

NEW YORK, Aug. 24 /PRNewswire/ -- A new research study was released Tuesday that may change the way many nonprofits approach their fundraising budgets.  The report, Heart of the Donor, Insights into Donor Motivation and Behavior for the 21st Century, uncovers valuable insights on donor behavior and preferences as well as insight into age, demographic and other factors.

The report will be unveiled at the Direct Marketing Association Nonprofit Federation conference at the Sheraton New York City.  The research was commissioned and created by Russ Reid and conducted by Grey Matter Research & Consulting.  The survey took place in June of this year.

As many would expect, the study finds that today's most valuable donors – boomers and older donors – primarily give through the mail.  But those in the 25-54 age range tended to give both online and through the mail.  "One thing we find interesting is this nexus in the 25-54 year old group," said Lisa McIntyre, Russ Reid Senior Vice President, Strategy Development.  "The donors who will be most important to us in the coming decade seem equally facile with both mail and online."

But according to the study, older donors are more generous.  

"The point is this: if the goal of a nonprofit is to effectively target today's best donors, then they should focus significant and smart attention on the donors giving the most money – seniors and boomers," said McIntyre.  "For example, the number of donors in the 18-24 group and 70-plus are comparable, but the 70-plus donor gives three times as much."

"Does that mean nonprofits should turn a blind eye to the younger segments?" McIntyre continued.  "Of course not.  Their value will likely increase as they age.  But fundraising expenditures must be weighted according to a strategy that maximizes those who are giving now."

The report suggests that fundraisers should focus their money on the channels that perform the best.  While social media is an exciting means of reaching the younger community, the report indicated those who are active there don't use it for donations.  

Another striking result of the survey shows that people want to give to charities that spend money on good management.  Given a choice, the respondents preferred organizations that hire top-quality managers, even with higher salaries, over hiring less experienced managers and spending fewer dollars on salaries.  An even greater percentage would rather support an organization that spends more on fundraising and brings in more money to help the cause than would support an organization that spends little on fundraising but raises less money.  "Only 28 percent would opt for efficiency over effectiveness," said McIntyre.

"Nonprofits are under relentless scrutiny for their fundraising costs," said McIntyre.  "The questions on costs tell us that what donors want more than anything else is value for their money.  Spending money on salaries is fine, as long as your leaders are effective.  If you spend more on fundraising, it's fine as long as it effectively raises more money for the work."

The report also focused on the impact of the disaster in Haiti on nonprofit fundraising.  38 percent of Americans gave to help Haiti.  52 percent of active donors – those who regularly give to nonprofits – donated.  Very surprisingly, nearly 30 percent of Haiti donors say they did not support any nonprofits in the last year, including 16 percent of fairly determined non donors.  Most likely to give to Haiti were African Americans (51 percent), Latinos (53 percent), Asians (59 percent) as were people not born in the US (59 percent).

Four out of ten donors said that if they had not given to the Haiti disaster, the money would have gone elsewhere.  Still, 58 percent of donors believe that what they gave to Haiti was unique – it was over and above what they normally give.  Haiti was a first-time giving impetus for 3 percent of all Americans, 6.7 million people.

Haiti donations saw massive channel donation differences, with text-to-give having a big impact.  While 32 percent of donors said they gave to nonprofits working in Haiti through places of worship, another 22 percent gave online, and 19 percent through texting.  Questioned if the limits on text donations resulted in lower donations, 90 percent of text donors claim they would have donated through another channel had texting not been provided.  

"The Haiti experience reminds us that emergency donors and everyday donors are different," said McIntyre.  "And the best donors will give over and above what they normally do, not instead of what they typically give."

DMANF participants were able to review portions of the study at the conference, and more elements of the study will be released in the coming months.

More than two-thousand respondents participated in the study.  It was conducted both by phone and through a pre-recruited online research panel.  The study was also conducted in English and Spanish.  

Russ Reid, founded in 1964, is part of Omnicom Group, Inc. (NYSE: OMC).  Omnicom is a leading global marketing and corporate communications company.  Omnicom's branded networks and numerous specialty firms provide advertising, strategic media planning and buying, direct and promotional marketing, public relations and other specialty communications services to over 5,000 clients in more than 100 countries.

Grey Matter Research is a market research firm specializing in serving non-profit organizations, offering sophisticated qualitative and quantitative techniques to uncover details that make a tangible difference for clients.

Interviews are available with McIntyre, Russ Reid President and CEO Tom Harrison, Executive Vice President Alan Hall, and Ron Sellers of Grey Matter.  To schedule, contact Steve Ruppe or Alison Rienas at the numbers above.  Go to www.HeartoftheDonor.com, for additional information.

SOURCE Russ Reid