Does More Information About an Organization Equal More Donor Support?

I came across an extensive article in The Nonprofit Quarterly entitled “What Do Donors Want?” by Cynthia Gibson, PhD and William M. Dietel. Basically, they were interpreting data presented by  a $5 million grant from the Bill and Melinda Gates Foundation which hired consulting firms to encourage more charitable giving among high net worth individuals. Bottom line: “Do donors want more information about nonprofits and, if so, what kind? And if they have it, will it change their minds about what they support?”

In this day and age where many nonprofits have come under scrutiny, the public is demanding more accountability from the nonprofit sector. As with for profit investments, donors what a tangible record that their dollars are being used wisely and that there is a measurable outcome of success. Gibson and Dietel explain that there are many challenges when coming up with a formula as easy as income minus expenditures equals a changed world. “The fly in the ointment is that many of these new quantitative analyses focus on variables such as financial performance, the ratio of fundraising expenses to program expenses, governance structures, and other sorts of information that can be easily gleaned from an organization’s IRS-990 form. While important, these data make for a somewhat limited set of indicators, particularly for investors seeking evidence of high performance.

“Academic studies about philanthropic motivation and performance have also proliferated during the past decade, but these too have suffered from limitations that make it difficult to draw firm conclusions. Some studies, for example, have found conflicting results, while others used sample sizes that were too small to generate statistically significant results. Still others were poorly designed.”

So do donors want all of this jumble of collected data that may or may not be reliable? Well, yes and no. We all want numbers to justify our means and evidence to back up our data. However, philanthropy is a complicated blend of the heart and the mind. The mind analyzes the data for hard facts while the heart sees the cause and determines where to give.

Gibson and Dietel discovered that “According to interviews with a diverse group of high-performing nonprofits conducted by one of the authors of this article, nonprofit leaders said that ‘while it’s nice to have data,’ most of their donors continue to give ‘because of the relationships we cultivate with them.’ In fact, almost all said while high-performance data helped enhance their credibility in the business community, it wasn’t instrumental in attracting donors, especially new individual donors. They also said that they continued to believe that ultimately, their financial support was going to come from relationships and ‘emotional connections,’ rather than from data about performance and impact.

So this $5 million grant just goes to show that data is important, but the heart more so. Just think what you could have done with those funds!!!

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Foster those ‘emotional connections’ online with your donors. Learn more how we can help, at Fundly.