By Hope Neighbor
Greg wrapped up yesterday’s post with the assertion that we should work with donor behaviors before we work against them. That’s easy to say, but harder to do. It begs the questions: What does working with donor behaviors look like? I do think the Money for Good research points to some principles and ideas that can guide any effort to improve the quality of giving.
To start off, take a look at the donor information use funnel:
At the risk of beating a dead (but in our view very important) horse, the funnel shows that there are many more people who care about performance than there are who do research. What’s more, although this graphic represents share of donors, it’s also a fairly close representation of dollars. That means that not only do few donors engage in extensive research, but the dollars those donors give are also a small part of the overall pie.
In other posts, we’ve described opportunities to get more money to higher performing nonprofits, by addressing three critical opportunities: the “care vs. act” gap, the “quality information” gap, and the “good vs. best” gap.
Today, I’d like to step back to offer some general principles that we believe can be helpful in making decisions about which gap to focus on, and what to do to close it. They include:
Principle 1: Focus where the dollars are. This may seem like it goes without saying, but it’s a principle many efforts seem to ignore. Closing the ‘care vs. act’ gap by 10% will move far more dollars to better nonprofits than will closing the ‘good vs. best’ gap by 90%
Principle 2: Focus where the behavioral and attitudinal changes required are the smallest. As Greg wrote in his post yesterday, changing donor behavior is hard. Accommodating donor behavior is more likely to have impact, dollar for dollar, than asking donors to change their way of thinking and giving. We should aim to improve the quality of giving in ways that are consistent with how donors think and act today
Principle 3: If you do seek major change, be very selective what you’re trying to achieve and how you’re trying to achieve it. Whenever I read something like this, I think, “Captain of the obvious.” However, I’ve seen many projects struggle because they haven’t thought through why they’re focused on a given behavior change, nor what the best approach for achieving change is. To have a shot at success, both of these elements are very important
Like you, we have lots of specific ideas about how we can put these principles to work. We can shift focus from the 3% of donors who compare between organizations today (not a lot of dollars) to the 32% who already do research (that’s many more dollars – and that’s Principle 1 at work). We can offer donors simple information that will allow them to quickly validate their choice of gift, which is what most donors who do research are trying to do today (that’s Principle 2 at work). Or we can carefully choose the messages and channels that are most likely to motivate the 85% of donors who say they care about nonprofit performance to do some research when they give (that’s Principle 3 at work).
But whatever our ideas (or yours), we believe that the three principles above can help to ensure that we’re focused where we’re likely to have the most impact, as organizations and as a sector.
Why should we care? Our analysis shows that Americans are willing to put an additional $45B in charitable dollars at play, if the giving experience better meets their needs. By using the principles above, we can make sure that the effective philanthropy community doesn’t leave those dollars hiding in plain sight.
To hear about more money “hiding in plain sight,” check in here tomorrow – when we’ll discuss the US market opportunity for impact investments for individuals.