This is a guest blog post written by Kevin Patterson, Senior Account Executive, PatronManager, first published on February 6, 2018.
With the current tax legislation now the law of the land, there has been much angst over how various parts of it will hurt donations to non-profits. Though there is some merit to these discussions (changes in tax policy always creates winners and losers), too much attention has been given to only one reason why donors give to non-profit organizations. I would submit that the financial consequences of the tax legislation will not be equal to all the fuss that is being made. To borrow a lyric from pop troubadour Billy Joel, “It’s always been a matter of trust.” The majority of donations are not about taxpayer financial benefits, but organizations that are effective in building donor trust.
In a recent article in The Conversation, authors Sara Konrath and Femida Handy published their findings, 5 reasons why people give their money away – plus 1 why they don’t. In it, Konrath and Handy not only draw from previous research done by two Dutch researchers that collected information from 500 other papers, but they also conducted their own research into why people choose to support the causes they do.
Some of the results confirm what we already know about donors:
- Most people give to causes that affirm important values, including compassion for those in need.
- Donors are more likely to give when they think their donation will make a difference.
However, donors also consider the costs and benefits of making a donation. How will it benefit them? Will donating leave them feeling or looking good to others? It is interesting to note that in all the research conducted, donors rarely gave just because someone asked them to do so. So what motivates donors to give?
Konrath and Handy concluded that donors are most likely motivated to give based on 5 key factors from most important to least: altruism, trust, social, egoism and taxes.
It’s All About Trust
People will often give to an organization that they feel will make the best use of their donation. In being altruistic in nature, they are identifying with the mission of the organization and are willing to help. Let’s step back for a moment and think about how patrons come into contact with an organization. They may seek out an organization with a mission in which they self-identify. They may have been introduced by a friend. They may have attended an event or performance.
From that introduction, however, the onus is on the organization to cultivate that patron into a donor. Building trust is the key to successful cultivation. There are many stories of non-profits that violated the trust of their donors and took a financial beating, even though their mission was noble and people were interested in supporting them. As in any good relationship, trust is a key factor.
So when looking at the bigger picture, organizations should be cognizant of those who might make an end of the year donation for tax benefits, but at the same should be identifying them and developing strategies to cultivate a deeper level of engagement. Based on the research by Konrath and Handy tax benefits had very little to do with why people give. This doesn’t mean that the new tax legislation won’t hurt some non-profits. However, if your organization is truly engaging your donors and building lasting relationships, your chances of being impacted are diminished.
To read the full study by Konrath and Handy you can review a draft published in the Nonprofit and Voluntary Sector Quarterly.