A changing donor series

Summary

Do charities have to change their strategies in order to stay in the game? These are two important questions. If the target group changes, so should the organization. Right? Yes, probably but in which way? The philanthropic world is experiencing an overall participation decrease: fewer individuals donate. Are we still satisfying the needs of donors? Today’s generation of givers is less religious, less prosocial but higher educated. What do these donors need and expect from charities before and after they made a donation? In the blogs of this blog series we discussed several changes and expectations. This blog consists out of summary of the 6 pervious blogs.

Hé! Each month I will upload a new blog series. Each series will have one central subject; the subject of this month is ‘A changing donor’. A series consists out of several separate blogs. This is the fifth blog of the ‘A changing donor’ series. For the first blog of the series click here.  For the second blog of the series click here. For the third, about the three basics of philanthropy, click here. For the fourth blog, about the importance of trust and building a lasting relationship with donors, click here. For fifth blog, focused on religion and impact, click here.

We need them but what do they need? Blog#1

Philanthropy is changing, and with it, the donors. Fewer individuals donate and that this is partially explained by segregation (Bekkers, de Wit & Felix, 2017a). However, most religious groups donate to religious causes and in less extent to other causes (Bekkers & Schuyt, 2008). Thus, the lower level of religious individuals represented in the Dutch population, cannot fully explain the lower level of giving to charities as they already donated most of their money to religious causes. None the less, in the Netherlands charities are experiencing a decrease in giving (Bekkers, Schuyt & Gouwenberg, 2017b). Therefore, there must be an additional reason, next to segregation, why fewer individuals are making a donation.

Donors want to make a difference: blog #2

When I ask people about their motive for giving they often reply by saying: “I want to help” or “I want to make a difference”. The need to make a difference through ones donation is described by the term impact. Impact is identified as one of the drivers for giving (Bekkers & Wiepking, 2011): the idea that your donation makes a difference to the cause you want to support increases the change that you will give.

So how are we to determine if our donation will make a difference? This is an important question, since we just read that the feeling of making a difference increases giving. For nonprofits it is important to signal to a (potential) donor that their donation will make a difference and preferably how big the difference will be. One way to inform donors about the likelihood of making a difference is through a quality signal. A quality signal can help a donor determine this. However, donors find it hard to judge the quality of projects/non-profits. As a result, quality signals about the project/non-profit could greatly influence the donation, as they provide a donor with more certainty about the quality. One way to provide a quality signal is to use social information: the donation behavior of previous donors.

The three basics of philantropy: blog #3

In order for a donor to care about philanthropy they should know what it is. Do they? There seems to be a general misconception related to the word philanthropy. It appears that people think that philanthropy mostly relates to donations in the form of money, while philanthropy is so much more than that! So let’s take a step back in this blog and go back to the basics.

3basics
A simplified visual presentation of the 3 basics of philanthropy.

What are we giving? We are giving more than money, even though this is often the most populair one. There are several donation sources: time, providing expertise, goods (Payton, 1988) and body material. When someone donates time we call this volunteering. There are many forms of this type of giving. Another option is to give expertise, which we describe as crowdsourcing.  You can also think about donating products like clothes or old cell phones. And a final option is to give body materials. This might sound a bit weird but it is not uncommon, think about donating blood. Or the less common version: organs.

How: seven donation sources. There are many sources you can use to give. For instance a charity lottery (e.g. Nationale Postcode Loterij), or charity funds, sponsoring of companies, during church time, legacies. Another option is to make a donation online, like with crowdfunding.

To which: eight donation categories. There are several donation categories: church and philosophy, healthcare, international help, environment, nature, animal care, education and research, culture and arts, sport and recreation, societal care and additional. If you want to know which category receives the highest donation amounts, click here.

Trust and relationships: all about engaging. blog #4

 

Charities find it harder to reach donors. We asked ourselves: what are reasons to pass? Some people directly connect philanthropy with a more negative word: scandals. When an organization that is supposed to be dedicated to making the world a better place it is no surprise that it triggers a feeling of distrust when they are connected with a scandal. Trust is essential to form a relationship and if damaged it will also damage the relationship.

Trust affects decisions: if we perceive someone as more trustworthy we are more likely to believe the information. This is an important point. Charities are asking complete strangers to believe in their cause. Well, they are asking for a lot of trust there, right? One way to improve on this is to increase the flow of information: charities should become more transparent about their strategies. This way a donor can decide to donate or not based on a more cognitive basis, next to a more initiative basis.One way to improve on this is to increase the flow of information: charities should become more transparent about their strategies.

Donors these days want to do more than giving: they want to play a meaningful role by not only giving money but also time and expertise. Earlier I described this as ‘beyond the ATM’, you can find a description of this here. The central message in this blog is that donors show a distrust towards charities, while charities build highly on trust. In order to make up for the lacking trust, charities could focus on engaging more with their (potential) donors. This can be done in two general ways: (1) increase the information flow and (2) increase the social connections. The information flow refers to an increasing need for transparency: show donors what is done with their money and what it achieved. The social part refers to an increasing focus on engaging the donors in decisions and activities: they want to give not just money but also time and expertise.

Less religious and impact. blog #5

Bekkers, de Wit and Felix (2017) argue that since the general population is becoming less religious and pro-social values are declining it is only natural that less people are giving. The lower levels of religion likely contributed to the increasing focus on making an impact. Earlier generations went to religious houses and functioned in religious communities, there they learned strict social rules such as ‘be kind and generous’.

It is no surprise that if fewer individuals are weekly (if not daily) exposed to a environment where these kind of norms are an essential part of being part of the group, that individuals are becoming less pro-social and generous. |We can expect that the new (less pro-social and less generous) generation is driven by another motive (next to following social norms and caring about their reputation): impact. There is the connection: (1) lower levels of religion likely contributed to a decrease in pro-social values and a decrease in generosity, (2) the new generation is (increasingly) driven by impact.

The next step consists out of figuring out if this group driven by new motives is interested in the same causes as previous generation?

Next generation, next step. blog #6

Will the next generation give to the same causes as the previous generation? Do charities have to change their strategies in order to stay in the game? It is understandable that charities are concerned with these two questions. In the blogs before we discussed how donors are changing. We also concluded that if the target group changes, so should the organization.

The new generation wants to give to the same causes, but they want to give in a new way.  They want to change how to support the causes they care about. Goldseker and Moody (2017) describe that donors are asking  for “more strategic philanthropy”. You might have heard this term before, but what does this mean? The researchers explain that donors are giving more from the head than from the heart. Or as I put it: donors are in lesser extent moved by ‘ the norm to give’ and more by ‘ a need to give’. Donors are more driven by rationality and less by conformity. They want to give in the most effective way. Naturally for these donors, the right donation methods are essential. Thus, for the donor not only the cause is important but also they way they give.

What is different about the new way of giving? What should charities change? I hinted at the answer to this question throughout the blogs of this series. Donors increasingly care about relationships. It is important for charities to become more informal and open their doors: let the donor in. Donors also focus more on the impact of their donation. Remember that seeing is believing. Show the donors what their donation achieved. Another important thing is that asking will no longer result in giving. It seems that donors are less affected by the norm to give and more motivated by making a difference. 

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