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Wise Giving? Most Donors Spend Little Time Researching Charities

(June 29, 2010) Only about one third of donors surveyed recently said that they did any research before donating to a charity, and those that did looked at overhead ratios above all else.

Only 35 percent of donors did research on any donation they made in 2009, according to a report published in May by Hope Consulting in San Francisco, and sixty-five percent did no research at all. Of those that did any research, about half (48 percent) spent an hour or less.

Donors indicate they are most concerned about their money being wasted by the charity, particularly money spent on overhead versus ‘doing good.' Interestingly, people were more concerned about making sure their money is not wasted than what particular approach the organization employs in solving a problem. Also surprisingly low on the list was donors' interest in knowing what the donation will actually provide.

Of the 35 percent of donors who actually research a charity before giving, well over half of them (62 percent) said that they are looking for simple facts and figures from charities. Only 15 percent said they wanted detailed reports about the charity.

People most often do their research by going directly to the charity for information--looking the charity's website, making direct contact with the charity's employees and volunteers, and consulting friends and family. They are less likely to consult third party sources to find out the effectiveness of a charity, such as the websites GuideStar and Charity Navigator.

Encouraging Donors to Seek Results

"Sadly, the reality is that very few donors actively try to give to high performing nonprofits when they make their charitable contributions," the authors of the report explain. They say changing these behaviors will be challenging, in large part due to three critical barriers:

  1. Donors don't give to ‘maximize impact' ("I give because it makes me feel good")
  2. There is no ‘burning platform' to motivate change ("I don't research, but I am sure that the nonprofits to which I donate are doing a great job")
  3. Donors are loyal ("I give to the same organizations each year. Some metric won't change that")

However, there is still hope, of course. Eighty-five percent of people said they do care about nonprofit performance, at least in theory. Plus, 60 percent of people say they will change their giving if nonprofits do a better job on areas that are important to them.

The goal of making donors "better givers" can be achieved by encouraging people to put more weight into the nonprofit's overall performance and actual results, the report notes. It's about getting people to care about making the ‘best' gift, not just a ‘good' gift.

The report, Money for Good, by Hope Consulting is available on the firm's website. Their report is based on online survey responses from 4,000 people, as well as qualitative analysis, conducted from December 2009 to May 2010. For more information go to http://www.hopeconsulting.us/.



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