How Donors Choose Charities

Last Friday I launched the final report from the first project I’ve been undertaking within the new ESRC Centre for Giving and Philanthropy, How Donors Choose Charities.

Having interviewed 60 committed donors about how they make their giving decisions, I found that  most people tend to support organisations that promote their own preferences, help people they feel some affinity with and support causes that relate to their own life experiences.  These non-needs-based drivers exist despite widespread beliefs that charities exist primarily to help the needy,

Other key findings include:

• Donors find it difficult to make choices between the vast number of potential beneficiaries; the overwhelming amount of choice makes it impossible to rationally assess all possible alternative destinations for donations
• Donors create their own classifications and ‘mental maps’ to try and cope with the complexity of the charity sector – for example making binary distinctions between ‘animal’ and ‘people’ charities, or automatically excluding certain types of causes
• Donors’ personal backgrounds are a key criteria behind gifts; people draw on their personal and professional experiences and use their ‘philanthropic autobiographies’ to shape their giving decisions
• Donors often base their judgements on how efficiently charities spend their money by evaluating the quantity and quality of direct mail appeals, rather than by accessing information such as annual reports and accounts
• Donors are motivated by a desire to ‘personally make a difference’ and are keen to avoid their donations becoming a substitute for government spending

Given the voluntary nature of charitable activity, it’s not so surprising that giving is more accurately characterised as ‘taste-based’ rather than ‘needs-based’. The freedom to support things that people care most deeply about is what differentiates charitable giving from paying tax. Donors value the control they have over their charitable giving decisions, and expect to distribute their money according to their judgements about what is important and worthwhile.

But the findings do raise a timely question about the extent to which governments can realistically expect donations to replace public spending cuts on charitable activity, as people have far higher hopes for their donations than simply plugging gaps in government spending.

I hope this report is useful to charities and their fundraising staff, and would be happy to hear what you think.