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There are over 85,000 registered charities and foundations in Canada, and an equal amount of nonprofit organizations. Although not all are active or busy soliciting donations for their missions, thousands of them are. And many of them struggle, or at least wish their fundraising were more fruitful. This was the focus of a Sector3Insights study; exploring the insights and drivers of greater giving. What can charities do better to raise more donations from Canadians?
Sector3Insights is a social enterprise market research firm providing insights for nonprofits. Our goal is to help the nonprofit sector increase giving. We are happy to share some of our learning from our unique study in hope it helps charities to improve their fundraising.
We ran an online quantitative survey among a representative sample of everyday people: 2,000 respondents, half from Canada and half from the USA. Respondents were 18-80 years of age and had donated at least $50 to charitable or nonprofit organizations in the past 12 months. They completed a survey about their giving behaviour to various charities, and they also evaluated these charities across a standard list of characteristics. This created a significant database of evaluations for charities big and small. Using this data, we conducted multi-variate driver analysis to explore which characteristics drive greater giving, and how well charities perform on these characteristics. Here is what we learned...
Greater giving is about a ‘good story, well told’. It is about the charity’s story, and how to tell the story effectively.
Insight #1 - 4 out of 5 donors are “in play”. Charities need to solicit if they expect a donation: 59% of North American donors decide spontaneously on their giving, and 63% of donors have no annual giving budget. So, just 21% of donors have a rough budget for giving, along with a list of preferred charities to support. In short, the majority of donors are just waiting to be asked. And without asking, a charity is very unlikely to get a donation. About 95% of donations follow a request (within the past 12 months). No solicitation means no donations.
Insight #2 - A charity needs to be understood if it hopes to get a donation: Many charities (70%) perform well for awareness (“I have heard of them”), but only 34% of them are well understood. Donors do not tend to donate to charities they do not understand. Thus, charities need to do more than just build awareness. They must also ensure people understand what they are all about. However, 78% of people who have a good understanding of a charity still decide not to donate to them. Even more is required...
Insight #3 - The understanding must create positive feelings. Donors need to feel that the charity or nonprofit is relevant, trustworthy and impactful. These are “price-of-entry” characteristics. Without these positive perceptions, a donor is unlikely to donate much. However, having these associations is not nearly enough to earn the big donations: 86% of those who have a good regard for a charity will likely still not donate.
Insight #4 - Charities need to leverage emotions and personal connections. In addition to the above, the charities that score well on leveraging emotion and personal connections also earn greater levels of donations. The challenge is that most charities perform poorly on these elements, and instead focus too much on the rational elements referenced in Insight #3. They fail to appreciate that the main focus of the appeal or solicitation needs to be emotional (and not just rational).
Insight #5 – Not just any emotions. Focus on donors’ own personal and emotional needs. In terms of a good story well told, charities would benefit by having their solicitations and communications focus on the emotions that donors wish to experience for themselves. It is useful to leverage emotions about the charity within the communication, but this alone is only half the battle. For example, charities may wish to leverage sadness or anger to evoke an emotional response in their solicitations, but donors do not want to feel sad about themselves. Instead, they want to feel like a hero. They want to feel good about themselves for making a difference and living a meaningful life. This is about Maslow’s Hierarchy of Personal Motivations. To drive greater donor motivation, strong appeals should leverage the emotions donors wish to feel about themselves. Solicitations that do so, earn above average donation levels compared to those that do not.
- Charities or nonprofits that leverage happy sentiments within the advert or appeal outperform, (on average), those that leverage sadness or anger. It is possible to have success with negative emotions, but generally, happy emotions are stronger drivers than negative ones.
Insight #6 - Create a sense of urgency for donors to act, now. A sense of urgency is the number one driver of greater donation behaviour; much more important than relevance, trust and impact. Without a strong sense to act now (“a call-to-action”), donors will likely procrastinate and/or get intercepted by some other charity appeal. This sense of urgency does not need to be an emergency (although that works). It can also include deadlines for matching gifts, the end of the tax year, a capital campaign closing event or a giving date like “GivingTuesday”. Ensure the solicitation creates a sense of urgency to donate now.
In summary, good salesmanship is not saying what you wish to say about your charity mission, but instead it is saying what the donor wishes to feel and experience about themselves. Your mission is only the price-of-entry, but not the reason for greater donation support. Make sure you are focused on the donor’s feelings, and you create a sense of urgency. And then solicit, often.
In 1986, John Hallward created Tandemar Research, with his partner, and sold it to Ipsos in 2000. Since then, John has had a global role supporting the expansion of Advertising + Brand Equity Tracking expertise within Ipsos. More recently, John has opened a new social-enterprise market research consultancy, Sector3Insights, to leverage his corporate insights to help nonprofit organizations in the USA and Canada achieve greater donor appeal and impact in their communications.