A new research study was released Tuesday that may change the way many nonprofits approach their fundraising budgets. The report, Heart of the Donor, Insights into Donor Motivation and Behavior for the 21st Century, uncovers valuable insights on donor behavior and preferences as well as insight into age, demographic and other factors. The research was commissioned and created by Russ Reid.
As many would expect, the study finds that today’s most valuable donors – boomers and older donors – primarily give through the mail. But those in the 25-54 age range tended to give both online and through the mail.
But according to the study, older donors are more generous.
“The point is this: if the goal of a nonprofit is to effectively target today’s best donors, then they should focus significant and smart attention on the donors giving the most money – seniors and boomers,” said Lisa McIntyre, Russ Reid Senior Vice President, Strategy Development. “For example, the number of donors in the 18-24 group and 70-plus are comparable, but the 70-plus donor gives three times as much.”
“Does that mean nonprofits should turn a blind eye to the younger segments?” McIntyre continued. “Of course not. Their value will likely increase as they age. But fundraising expenditures must be weighted according to a strategy that maximizes those who are giving now.”
The report suggests that fundraisers should focus their money on the channels that perform the best. While social media is an exciting means of reaching the younger community, the report indicated those who are active there don’t use it for donations.
Another striking result of the survey shows that people want to give to charities that spend money on good management. Given a choice, the respondents preferred organizations that hire top-quality managers, even with higher salaries, over hiring less experienced managers and spending fewer dollars on salaries. An even greater percentage would rather support an organization that spends more on fundraising and brings in more money to help the cause than would support an organization that spends little on fundraising but raises less money. “Only 28 percent would opt for efficiency over effectiveness,” said McIntyre.
“Nonprofits are under relentless scrutiny for their fundraising costs,” said McIntyre. “The questions on costs tell us that what donors want more than anything else is value for their money. Spending money on salaries is fine, as long as your leaders are effective. If you spend more on fundraising, it’s fine as long as it effectively raises more money for the work.”