But… Do Donors Want More Data on Nonprofits?

comments 11/08/2012

But... Do Donors Want More Data? Greg Ulrich, Director, Advisory Services for Hope Consulting, offers a different perspective on people who donate to nonprofits and supports it with research. As individual donors, each one of us tends to “give from the heart,” but there’s more to it than that.

Markets for Good is an initiative to discover how the social sector can better use and share information. There are many people and organizations that would clearly benefit from this, including nonprofit directors, policy makers, foundation officers, impact investors, and many others.

But what about the millions of Americans (individual donors) who give to nonprofits? Together we provide over $215 billion each year to nonprofit organizations, accounting for the majority of the total contributions that nonprofits receive. Will better information affect that way that WE behave in our charitable giving?

Over the past few years we at Hope Consulting have been investigating these types of questions. Do individual donors research their giving today? Do they want better information to inform their decisions? If better information is available, will they use it? The story we find has a somewhat sad start but a hopeful conclusion (kinda like Finding Nemo, but without the cool sea turtles).

Today, we see that most donors do not use any sort of data or information when they give to charity. Only 1/3 of all donations are researched, and of those, only a small minority are researched in order to identify the “best” nonprofit. Most donors just want to ensure they aren’t giving to a nonprofit that will “waste” their money. And donors say they are satisfied with the nonprofits to which they donate, and the process of making donations.

However, for those hoping that individuals will do more research on their donations, we have also found some encouraging news:

  •  Most donors – 90% – say that they DO care about the effectiveness of a nonprofit.Many donors DO want to understand more about what a nonprofit is doing, and particularly to get a sense of the impact that the nonprofit is having through its work.
  • Donors DO research more in certain instances, especially when they don’t have a relationship with the organization. The majority (58%) of donations are researched when the donor does not have a personal connection, and the organization is not a “brand name” nonprofit.
  • And donors DO research certain causes more than others (e.g., only 22% of donations to religious organizations are researched, vs. 59% of donations to international disaster relief).

But that still does not answer the question of “if we give donors more and better information, will they use it?” We conducted controlled tests on several nonprofit information platforms including GuideStar and Charity Navigator (with more in the works) where we varied the amount, type, and format of information presented.

The results are encouraging.

  • When people search for a nonprofit on GuideStar, they see a range of information from the nonprofit’s mission statement to biographies of the leadership team to the organization’s financials, and more. We found that when we showed more information on that page, activity increased 44% and donors felt they had a much better sense of the organization’s performance.
  • Charity Navigator produces many “Top 10” lists for charities (e.g., Ten Super-Sized Charities; Ten Most Followed Charities). We found that when we included additional information on the performance of those charities within the Top 10 lists, donors spent almost twice as much time on the page. Further, when we added performance information to a Top 10 list focused on a specific cause (Top 10 Non-University Education Charities) we saw higher satisfaction scores, more click-throughs to get more data, and a higher likelihood of donating.

As I wrote in another blog post, giving isn’t simply either emotional or rational. Our findings show that donors are certainly not completely “rational” givers who predominantly rely on (or want to rely on) information to guide their giving.

But we have uncovered that the traditional view—that there is no appetite for information among emotionally-driven donors—is too cynical.

If one believes more informed donors will donate more to the best nonprofits, and that those nonprofits will do more to better our world, then there may be hope after all…

For more on this research please download our free guidebook, More Money for More Good. It’s designed to help nonprofit executives and fundraisers improve their fundraising, increase the effectiveness of their organizations, and better engage with current and potential donors and funders. Inside, we summarize the findings from our research and provide nonprofits with three steps to provide donors clearer, crisper information, in the methods and on the channels that donors prefer. You can download the guidebook and related content for free at www.guidestar.org/moneyforgood. [Note: Results on the market tests will be released in January 2013.]

Curator’s Note:

In this blog post and the resources it refers to, any nonprofit can find real places to jump in and improve their use and sharing of data to drive the success of a mission. In the data flood we’re living right now, the temptation is to stay fascinated with possibilities at the expense of action – or to simply fear making a move. Start here in two ways: (1) Download the guide (2) Comment on this post and let us know what you think, whether you agree or disagree. We’re aiming to move the sector forward with open debate.

We welcome relevant, respectful comments. Please read our Community Guidelines.
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