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Donors Happy but Hard to Dazzle

Resource Center - Foundation

(Aug. 4, 2008) Marketing research conducted in February of 3,400 charitable donors shows that a large majority of donors (82 percent) say the nonprofit they donated to has met their expectations. Only 13 percent say their expectations were exceeded, and five percent say their experience fell short of their expectations.

These results were presented at the Bridge Conference in Washington, DC, held jointly by the AFP Washington DC-Metro Area chapter and the Washington chapter of the Direct Marketing Association.

So what do donors want from a charitable organization, and what might be keeping them from giving in the first place?

Understanding donor expectations is a complex equation, says Dirk Rinker, president and CEO of Campbell Rinker, a marketing research company in Valencia, Calif., that produced the donor research study.  Furthermore “the equation is different for a donor who has never given compared to one who has given before” he says.

“Donors expect to be respected, appreciated and thanked.  They expect to be told how their gifts have helped, to receive appropriate contact, and they also expect a charity to demonstrate sound management and to maintain a good reputation,” Rinker says.

“An organization’s reputation often precedes its message to prospective donors,” says Rinker.  And these donors have certain expectations that can become barriers to giving in the first place if not met. “Low overhead is one factor that contributes to reputation.”

Building a Good Reputation

Based on his company’s donor research, Rinker has found the following elements to have the greatest impact on fostering a solid reputation for charitable organizations (in no particular order).

  • Name recognition
  • Organizational longevity
  • Proof of effectiveness, or “making a difference”
  • Acceptable administrative expenses
  • For faith-based organizations, a mission statement that aligns with the donor’s spiritual beliefs
  • Harmony between the organization’s mission and its message (e.g. an environmental group mailing less paper)
  • Communications that demonstrate sound management (e.g. avoiding fundraising by crisis, especially when effective management could have averted the crisis)

(Editor’s Note: Fundraisers can also look to the Donor Bill of Rights for an idea of donor expectations and charity responsibilities.)

A Tall Order on Overhead Expenses

Just how large of a role do “acceptable administrative expenses” play in a donor’s motivation to give? On a scale where 1 equals Not At All Motivating and 5 equals Extremely Motivating, donors rated “keeping administrative expenses low” at 3.5, Rinker said. In comparison, a “reputation for effectiveness” is rated at a 4.1.

But, Rinker says “There does not appear to be any hard and fast rule that donors use when establishing whether or not an organization’s overhead to program ratio is acceptable. Some say a 50/50 ratio is acceptable, others say they will only support nonprofits who claim no overhead whatsoever.”

The typical donor (who has given $25-$100 in annual gifts to an organization) usually responds that an overhead figure of less than 10% is impressive, Rinker says.

AFP eWire recently covered a new study that looks at the impact of fundraising cost reporting. More information about fundraising costs can also be found at the Nonprofit Overhead Cost Project website.

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