Charities’ Treatment of Donors Key to Understanding Why They Stop Giving

Many donors stop giving because they hate the way charities approach them for money — or they don’t feel they get enough information about how their money is used.

That is the conclusion of several

researchers who have examined why people don’t give.

Penelope Burk, president of Cygnus Applied Research, a Chicago fund-raising consulting firm, has conducted research on the giving attitudes and behavior of more than 250 donors in the United States and Canada. She has also examined more than 370 charities in the two countries that responded to 200 questions about their fund-raising operations.

Donors were nearly unanimous in what they said they wanted from charities in return for continued support. Large majorities said that they would continue to give — and even increase their contributions over time — if they received prompt acknowledgments of their gifts, confirmation that the contributions were used as they intended, and evidence of measurable results about what their donations had achieved, all before they were asked for more money.

But the same donors said that most charities do not communicate with them in any meaningful way about how their donations are used. And more than 90 percent said that “none” or “hardly any” charities had contacted them without asking for money.

“The pattern of receiving a gift and acknowledging it while at the same time asking for another donation doesn’t work for donors,” Ms. Burk says, adding that charities fail to respond to donors’ needs in other ways.

Trinkets Trashed

Charities told Ms. Burk that they spent a third of their fund-raising budget on plaques, certificates, and other trinkets that acknowledge donors for their gifts. But while more than three-quarters of donors said they had received such tokens of appreciation, only 5 percent of them said they display them. Most donors said they throw them away.

Nearly 90 percent of the charities publish a newsletter for donors, with 59 percent reporting that their newsletter is from 8 to 16 pages long. Two-thirds of the donors said that they don’t have time to read such newsletters, and 65 percent said that they would prefer a one-page bulletin about the specific program or service their money supported.

One reason charities don’t give donors this information is that they apply the gifts to their operating budgets and send donors only generalized information about their work, “the tenor and content of which leaves donors cold,” says Ms. Burk.

“Put the gift somewhere so you can give donors measurable results,” she says. “If you assign their modest gift to a program or service, you can talk about that, which is much more compelling.”

Charities, she notes, spend the most time and effort on people who have made large gifts, and those donors are allowed to designate gifts to the specific projects they care about.

But fund raisers should consider taking the opposite approach: lavishing attention on new donors and giving them specific projects to support to help ensure that they become loyal supporters too, Ms. Burk says. Once a donor becomes a longtime supporter who trusts an organization and makes large donations, she says, that person is often willing to let the charity use his or her money where it is needed most.

“Many fund raisers take the position that since such a large percentage of first-time donors will not renew, their investment should be minimized for this uncommitted group,” she says. “In fact, few first-time donors renew precisely because they do not receive the essential information they feel is needed — measurable results on their gifts at work that would make them want to give again.”

Manipulative Tactics

In addition to meaningful results, donors expect other things from the charities they support. In another study involving more than 3,000 donors to religious organizations, 70 percent said that they would stop giving to charities if the groups did not meet their expectations, by not using their gifts as promised, for example, or if the groups tried guilt-inducing or manipulative tactics to raise money.

The survey, commissioned by Campbell Rinker, a Valencia, Calif., marketing company, found that donors stop giving largely based on how they are treated by charities rather than because of anything in their personal lives. No more than 20 percent of the donors said that financial problems, health issues, or other such personal constraints would cause them to cease giving.

In another series of studies with 20,000 donors in Britain and the United States who participated in focus groups and surveys from 1998 to 2004, large numbers of donors said they had stopped giving to charities because of the poor “quality of service” they receive from the organizations’ fund-raising departments.

According to the research, described in Building Donor Loyalty: The Fundraiser’s Guide to Increasing Lifetime Value, by Adrian Sargeant and Elaine Jay, people judge the overall effectiveness of an organization by how they are treated as donors, particularly when they have no firsthand experience with a charity’s work.

Those who had stopped giving to one or more charities were significantly more likely than repeat donors to say they had been solicited too often, not thanked appropriately for their gifts, or not given an adequate choice on how much to donate.

“It appears from our data that many nonprofits do not thank donors adequately, inform them how their money was spent, or offer them sufficient choice in communications,” the researchers conclude.

To keep donors, Mr. Sargeant and Ms. Jay advise fund raisers to conduct periodic evaluations of how satisfied donors are with solicitations and other information they receive from their organizations and make changes that improve donor satisfaction.

But despite the fact that companies routinely measure their customer-service efforts, and charities often evaluate their programs and services to help others, they write, “Nonprofits have shown surprisingly little interest in the notion of service quality in the context of fund raising.”