Give Locally
comScore has just published a study on how consumers are coping with the continuing recession and the impact this is having on brand loyalty.
Their conclusion is signaled in the title: The Effects of the Recession on Brand Loyalty and ‘Buy Down’ Behavior: 2011 Update. (registration required to download study)
What they find is that since 2008 consumers have steadily been trending down on the the following shopping option: “I buy the brand I want most”.
The percentage indicating this as their shopping behavior has dropped from 54% in 2008 to 43% in 2011. More people choose “buy less expensive brands to save money” or “sometimes buy a different brand if it is on sale”.
Thus the term ‘buy down’.
I’m wondering … what’s the equivalent to shopping ‘buy down’ when it comes to donating money?
Arguably there’s not much relevance in the nonprofit to a concept of a cheaper brand — a ‘cheaper’ enviro group or a ‘bargain’ child sponsor agency doesn’t seem to be pertinent.
I would point to three ‘buy down’ effects in giving …
First is giving to fewer organizations — so if you’re a ‘survivor’ group that makes the cut, you’d say loyalty was the reason; if your group doesn’t make the cut, you’d probably say ‘loyalty is down’ in the nonprofit space!
Second is smaller average gifts, rather than outright abandonment, which definitely has been an observed pattern.
Third might be a preference to give locally, rather than to national or international groups. More of a ‘circle the wagons’ and ‘take care of our own’ mentality sets in as resources diminish. And local results are often much easier to see … a high priority for financially stressed donors.
Whichever of these recession effects is more likely for your organization, it seems very unlikely that ‘buy down’ behavior isn’t happening throughout the nonprofit sector.
Personally, I think I might prefer to work with a high profile local cause or charity if I were seeking a fundraising job today. Refer to yesterday’s Agitator post on the Humane Society for Southwest Washington!
Tom
3 responses to “Give Locally”
Behavioral Science Q & A
Integrating an individual giving appeal with other communications from a charity can have both positive and negative effects, and the outcome largely depends on how it’s executed. Advantages of Integration Brand Consistency: Maintaining a consistent appearance and messaging across all communications can reinforce the org’s brand identity and strengthen brand recognition and trust among your […]
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I’m not aware of any in-market tests specifically comparing recurring vs. gift frequency language. I suspect the answer might not be the same with all gift frequencies, nor with all people. It sounds like a great opportunity for you to test and find out what works for your audience. Based on the literature, here’s a couple […]
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Based on what we know from existing data, those renewal notices can actually be pretty effective in getting people to donate. They tap into our psychology – creating a sense of urgency, reminding us of past support, and using personalization to make the message hit home. They’re playing on our natural tendencies to feel obligated […]
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Interesting question. I had a quick look at the testing done on this topic. On the positive side, in all cases, over half of donors decide to cover the fee. In some cases, it goes as high as 65%. Not a negligible percentage at all. Here’s another test from iRaiser showing consistent results (see point […]
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There’s just one thing to consider when designing a supporter journey: the supporter. More specifically, you need to take into account: Who the supporter is i.e. their identity, which is the reason they support this cause, and their personality, which describes the way they “see” and process the world. These will determine the kind of […]
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I’m not an expert in this but a quick search surfaced this article on the effect of tax reforms on 2019’s charitable giving. The researchers didn’t find a reduction. Actually, they observed an “increase in charitable contributions in 2019, even with the lower tax rates and the dramatically smaller number of taxpayers who itemize their […]
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This is an interesting notion to ponder. I wonder if donors might go for the “bargain” of having their gift (of whatever size) have a larger impact? It might benefit nonprofits to consider breaking down campaigns into smaller, accessible “chunks.” In other words, rather than asking people to donate to an amorphous annual campaign that needs to raise over $1 million, it might be more persuasive to ask for a particular program that only needs $25K (If 25 people give $1K; If 50 people give $500, If 100 people give $250…etc.) If you can see how much your single gift can help the organization get to its goal, you may be more likely to “buy” into the act of giving.
Give Locally? It depends… In a country such as Italy where more than 70% of your income goes in taxes people are not so keen to donate to local charities that are covering those areas that are neglected by the State inefficiency and ineffectiveness. The State should be accountable for providing local services and supporting internal causes and needs, they complain rightly. Therefore Italians (with Italy considered among the most generous countries in the world) are very reluctant to give to local charities and if they do they are very unwilling and they only give small amounts (such as the value of an SMS or so).
If it’s loyal donors that you’re working with, there’s a planned gift waiting to happen, especially if they’re making smaller current campaign gifts. Loyalty is THE CHARACTERISTIC most important to finding planned gift prospects. Say thanks for the heartfelt but smaller current gift and move on to asking about a bequest.