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Taming the Fear of Fundraising Costs

(Sept. 14, 2010) Many surveys and donor comments portray people as wanting organizations to spend less money on fundraising (if they spend anything at all). However, when asked about fundraising costs in terms of impact, donors clearly favor spending more to make more.

According to a survey conducted in June, people are almost twice as likely to be on the side of spending a lot to bring in a lot as compared to spending little to bring in little. Where organizations may be lacking is making sure donors understand value, rather than just perceiving expense.

People also 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.

"Nonprofits are under relentless scrutiny for their fundraising costs," notes Heart of the Donor study author Lisa 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."

Other Findings - The Haiti Phenomena

The report also focused on the impact of the disaster in Haiti on nonprofit fundraising.  Thirty-eight percent of Americans gave to help Haiti.  Fifty-two 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."

The report, Heart of the Donor, Insights into Donor Motivation and Behavior for the 21st Century, was commissioned and created by Russ Reid and conducted by Grey Matter Research & Consulting.  The survey took place in June 2010 and involved 2,005 adults in the U.S. over the age of 18.



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