How Donors Choose Charities

The U.K.’s Centre for Charitable Giving and Philanthropy has issued a paper titled, How Donors Choose Charities: Findings of a study of donor perceptions of the nature and distribution of charitable benefit. This, from the Executive Summary.

There is a widespread belief that charities exist primarily to help needy people and that the desire to meet needs is a key criterion in the selection of charitable beneficiaries. However, this study finds that people do not give to the most urgent needs, but rather they support causes that mean something to them. In particular, the study finds four non-needs-based criteria that commonly influence donors’ decision-making:

  • Donors’ tastes, preferences and passions, acquired as a result of an individual’s social experiences. These motivate many giving decisions, even among donors who perceive themselves to be motivated by meeting needs.
  • Donors’ personal and professional backgrounds, which shape their ‘philanthropic autobiographies’ and influence their choice of beneficiaries.
  • Donors’ perceptions of charity competence, notably the efficiency with which they are believed to use their money, often judged on the basis of the quality and quantity of direct mail.
  • Donors’ desire to have a personal impact, such that their contribution makes a difference and is not ‘drowned out’ by other donors and government funding.

Given the voluntary nature of charitable activity, these are not surprising conclusions. Giving and philanthropy have always been supply-led rather than demand-driven: the freedom to distribute as much as one wants, to whom one chooses, is what distinguishes giving from paying tax. Yet the methods used to encourage donations tend to assume that philanthropy depends on objective assessments of need rather than on donors’ enthusiasms. The tendency to overestimate the extent to which people act as rational agents results in fundraising literature that often focuses on the dimensions and urgency of the problem for which funding is sought. The assumption underlying this approach is that donations are distributed in relation to evidence of neediness, when in fact much giving could be described as ‘taste-based’ rather than ‘needs-based’.

The complete paper, How Donors Choose Charities, is available for download.