Does impact really matter to donors?

According to a new study highlighted by the Chronicle of Philanthropy article, Do Donors Size Up Charities Before Giving, more than 80% of individual donors indicated that they care about supporting effective charities over mediocre ones, but this intent does not seem to translate into action – namely taking the time to research organizations to understand their effectiveness and impact or making giving decisions based on their findings. According to the study only 35% of the donors did any kind of research before making a gift and only 2% actually made a gift based on the organization’s relative performance.

This research reinforces some of the challenges that we have observed in our work, including:

What information is available? One challenge for donors, particularly those with limited resources and limited time is finding information on an organization’s “performance” if often not readily apparent – as many nonprofit organizations do not lead with their results; rather they lead with their activities and programs. So, finding and understanding an organization’s actual performance can be a bit of an archeological expedition. 

What is the definition of good? A second challenge for donors is filtering through competing messages in the sector to determine the definition of “good”. Charity Navigator has a definition of good, but does not help donors understand if the organization is really making a difference. Additionally, if an organization communicates its impact without some context, it is not always clear if the results are better or worse than last year or better or worse than other comparable organizations or if the things that the organization is using to tell their story really demonstrate progress toward social change. 

How can we capitalize on the intent and willingness of some donors to make more informed decisions? Give them the information that they need! There is an opportunity to really activate the portion of donors that are willing to conduct research – and make it easy on them, by communicating results in a simple, compelling and accessible way. The dollars will follow.