I have a pet theory that in Australia when governments decide to fund a community program of any description, they pitch their contribution at roughly 70% of the true cost of delivering a highly impactful result.
While some not-for-profits are prepared to tolerate this, many others are not and try to cover the shortfall from reserves or by various fundraising activities.
Since individual donors can mean the difference between a “so-so” and a “truly outstanding result”, questions like…
“what do donors think about when deciding where and how much to give? And what would inspire them to give more?
….. are fairly fundamental.
Recently I came across a UK study that attempts to answer these questions by shedding light on the habits, attitudes and motivations of UK donors and their findings are highly informative.
Entitled “Money for Good UK” and published in New Philanthropy Capital. this study surveyed both mainstream and high-income (£150k+ household income) donors.
The standout finding was that donors place their highest need around information about how donations are used and evidence of impact. Just over half of the mainstream donors surveyed think not for profits perform particularly well in demonstrating impact or explaining how gifts are used. While approx. 45% of the high-income donors shared this view.
The study also enquired what would happen if not for profits did a better job in these areas and concluded that it could lead to donations increasing by £665 million.
Clearly a focus on demonstrating how donations are used will not only raise more funds from your current donors, it will cut attrition and improve recruitment as you attract new donors who currently give to other charities.
As Dan Corry, CEO of NPC said:
“This report also identifies a huge opportunity for charities by tailoring their conversations with the public and talking about the difference they make, they could significantly increase the sectors income”.
At your next leadership meeting set some time aside to check how well your organisation explains how donations are used and provides evidence of impact. Improvements in these areas could make a real and material difference to your bottom-line.
Author: This post is by Chris Gandy MAPS, the Founder and Principal of Cause and Effective (www.causeandeffective.info) – a group utilising their knowledge and experience to help cause-based organisations to make even greater social impacts. You can now follow Chris on Twitter.