Charities are having to do more with less to meet rising demand for their work while adapting to a fall in the sector’s income. It is vital, therefore, that fundraising efforts are as effective as possible.
Today, New Philanthropy Capital publishes a major new study into charitable giving, Money for Good UK. Based on interviews and an Ipsos MORI survey of 3,000 UK adults, our report explores the habits, attitudes and motivations of UK donors, with a particular focus on the high-income segment. The research has been designed to find out how we can encourage donors to give, and to give more thoughtfully. We discovered that there is a real opportunity to increase giving – by a staggering £665 million each year in fact. But to access these donations, charities will need to better meet the needs and preferences of donors.
Of course, fundraisers know that donors give for different reasons, and many have sophisticated segmentations of their own based on socio-demographic data and patterns of donation. Money for Good adds underlying motivations into the mix to try and understand the information that donors want – and do not want – when donating to charity. The data has been used to create a segmentation of seven donor types to help fundraising charities and others in the sector understand what motivates different donors.
Some donors are motivated by a dedication to the cause, others by duty, religion, a desire to set an example, or their personal relationships with friends and family members. It has been gratifying to discover that the two areas of particular interest to donors are knowing how their donation will be used, and seeing evidence that the charity is having an impact. However, the level of interest in these areas is not being matched by charity performance. For example, 63% of high-income donors say that they pay attention to how a charity will use a donation; but only 42% say that charities are doing well at this.
And despite this stated level of interest, we saw far lower levels of donors actually seeking out information on impact and using this to choose critically between different charities when deciding where to dedicate their support. This indicates a real breakdown between what donors say they are interested in, and what they are actually willing or able to do with the information available.
The issue of impact is obviously of great interest to NPC in looking at how it can encourage donors to think about where their money goes, what need it is addressing, and the change it creates for the charity’s beneficiaries. We believe, as many do, that if charities seek to measure and demonstrate their effectiveness it will drive improvements in how they deliver on their missions. By making this information available to donors and communicating with them in such terms, this research indicates it could also be a successful fundraising strategy.
But it is not only charities that can help steer this change. Our recent research, Making An Impact, showed that three-quarters of charities, to varying extents, already measure their impact. It also revealed that funder requirements are a key driver of this. Foundations hold a wealth of due diligence information on what charities are achieving – and there might be scope to make this data available in an accessible format to individual donors. Funders may also have a role in encouraging their grantees to make this information available, and in helping to structure reporting requirements flexibly, ensuring the information collected is of interest to a number of different audiences.
So, an increased emphasis on results from funders, as well as government, means that charities supported by these funders have a greater incentive to measure their impact. As the Money for Good UK research clearly shows, the preferences of individual donors provide an extra motivation for all charities to measure and communicate what they’re achieving.
For any funders looking for ways to support individual giving, NPC is interested in developing a further programme of work to test the findings and put them into practice. If you’d like to hear more, or to work with us further, please contact moneyforgooduk@thinkNPC.org.
Sally Bagwell is a consultant at NPC and the main author of Money for Good.