I spent time recently looking at a study on donor obstacles. Many of them are obvious, but there were some things I had not thought of and that we all need to consider. The information used for this post comes from a study funded by The Gates Foundation, Arabella Advisors, The National Center for Family Philanthropy and Ideas 42.
Here are the general trends right now. There are WAY more choices than ever before. Anytime we have more choices, we take longer to decide. There are more nonprofits than ever in existence and most of them are great causes and need help like never before. There are more ways to give than ever before. Once a donor chooses a cause, they then have to consider the vehicle and how to make the gift in the most beneficial way to the charity, and their family.
People are feeling more connected to societal problems. We have constant access to the news and access to people through social media. It is hard to name something going on in the world and not be able to find a connection to it in some way.
There is more binary thinking. Gone are the days of “head of household makes all decisions.” There are more couples and more families making philanthropic decisions together and that just takes longer.
Donors feel less connected in meaningful ways. We have found a way to do all things electronically, but that does not always build trust and meaningful relationships. Nonprofits are becoming increasingly transactional and that is great for single transactions, but what about the closeness donors feel toward your organization that causes them to give year after year in order to stay connected to your cause.
Donors are focused on being very impactful and intentional with their giving. Make sure you are ready to answer the question, ”Why should I give to you?”
Keeping these trends in mind, here are the 10 barriers to giving uncovered in this study.
There are too many choices for giving and places to give. It is very overwhelming to look at all the nonprofits in your area and then to have to make a decision on the giving vehicle.
There are many more burdensome and tedious tasks in wealth management than charitable giving. A lot of this service sector has not kept up with the changes in wealth management creating barriers to giving and charitable giving is the last thing to be updated. If your financial advisor can’t answer your questions about how to give and specific giving vehicles, you must wait for the research to be done and then sift through that research.
Societal problems are so big that donors feel like they cannot make a difference so that creates a lack of urgency. If they can’t give enough to solve the problem, there is not a reason to be in a hurry to give.
Donor Advised Funds are growing rapidly and there is a lack of urgency there because donors have already received their tax deduction. With a donor advised fund, the money goes into a fund for charitable giving to be dispersed as the donor, or the holder of the fund sees fit. The donor gets an immediate tax deduction for the entire amount of the fund.
There is a fear of attention and public scrutiny. With choices comes the potential for a mistake. Donors want to learn everything before they even get started in philanthropy. No one wants to be in the news, local or otherwise, if it is in a negative light.
There is a general lack of trust in people, institutions and nonprofit organizations. We all know that one bad apple spoils the bunch and that is true in the case of one bad media story makes the entire sector look bad. With some of the larger news stories about CEOs of nonprofits and their misuse of funds, there is no wonder that there is a lack of trust. Donors want to solve societal problems, not fund trips to conferences in the Caribbean.
Families fear discord and are uncomfortable beginning the conversation about philanthropy. Families all have different dynamics and money creates an even stranger dynamic at times. If that is a concern, assure your donors that any gift current or planned can be confidential.
People are uncomfortable with risk. None of us wants to fail, but that is better than sharing resources only to find out that the charitable organization did not make smart investing decisions. Be ready to be transparent with your investing strategies and why these are your choices.
People are operating in a scarcity mindset because of the times we are living in. From the pandemic to inflation to changing political climate, all bring uncertainty and hesitance to share wealth.
Since Millenials have passed their parents in amount of giving, we know that people are creating their wealth early and they don’t have time to deal with the philanthropy conversation. Many times, professionals work so hard creating wealth that there is no time for family, friends or charitable giving decisions.
What a powerful study! How can fundraisers use this information? During this challenging time for donors and fundraisers, spend time forming meaningful relationships.
Deep, authentic relationships will allow you to cut through these roadblocks and will allow you to educate your donors with examples of other donors and their pathways. It will also allow you to make suggestions to accomplish their goals.
Be trustworthy! Donors need trusted advisors in the nonprofit world, be their advisor, even if the gift is not exactly what you envisioned. If you are interested in them and their goals, they will not see you as a salesman, but as a friend.
Donors need cleaner communications so that their time is not wasted. Ask them how they prefer you keep them updated and then do it for them! It will mean more work splitting communications in different formats, but I assure you it will pay off.
Developing longer term relationships is always the way to go. Take your time with donors and discuss their concerns. Don’t overwhelm them with too many options. Do your research and take them what is best for their situation. Ask the donor how they feel about things and what is feeling hard so that you can help with answers, and supply them with what they want or need. They will be grateful and they will remember your help when they get to the decision!
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