Giving: How Much Is Enough?
Seth Godin raises a provocative question in his recent post, Fear of Philanthropy.
Here’s the gist of it:
“Marketers at good causes have a real challenge as they try to raise money from people who aren’t billionaires. As they approach people with $10,000 or $100,000 in the bank, this fear of not seeing a limit is very real, and if it’s not confronted, they will fail at both raising the money and generating satisfaction for the donor …
What’s enough? I don’t think good cause marketers need to worry so much about which number or figure they choose, but I think they need to dream hard about whether giving people comfort with a ceiling will bring in a new class of significant donors … if people can’t figure out what ‘enough’ is, where the end lies, they may decide it’s not worth starting. Sad but true.”
So, how much is enough? How do you present an ask so that it’s meaningful in the frame of reference of the donor?
I personally, for example, cannot imagine texting $5 or $10 for emergency relief in Haiti (or any other natural disaster, for that matter). I can’t imagine that it will accomplish a damn thing. And when I was raising money for a major environmental advocacy organization, I couldn’t imagine that anyone giving $25 or $35 dollars could really believe that was making a dent in our lobbying budget. Effectively, I wanted donors to “get real” or get lost! Of course what I wanted was irrelevant … we tested high ask amounts and guess what? They bombed!
My nomination for which nonprofits have got this right are the child support groups … Worldvision, etc. They’ve nailed a monthly giving amount that yields a substantial annual contribution … many from a “demographic” that’s not nearly “appealing” as your typical national enviro group.
Borrowing a bit from Godin, and blending that with Roger Craver’s “mission competition,” here is what I think is going on in the donor’s head.
I think the donor is making two calculations:
1. Will the amount I’m being asked to give (accepting it will be combines with others I can reasonably imagine) make some meaningful difference to the problem/challenge immediately before me?
2. How does this amount fit into my overall “donation budget?” And is that amount an appropriate “share” of my donation budget?
Godin is pointing us at the first question. Roger lately has been pointing us at the second question. Godin is saying: If you don’t give the donor a meaningful frame of reference, they’ll probably just freeze in their tracks. Roger is saying: what is “meaningful” is also determined by the donor’s overall giving proclivity … and most nonprofits are clueless as to what that profile actually is.
Do you agree?
Tom
5 responses to “Giving: How Much Is Enough?”
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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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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I recently read an article that relates to this, but I cannot find the link… it was regarding a telethon, and if a person was told that the caller before them had donated XX amount of dollars, it would have an impact on how much that person gave. There was a sweet spot dollar amount that would get people to give a little more than they would’ve normally, but if the dollar amount they were told was too high, it hurt the amount they would donate. So suggesting an amount of money to donate can have an impact on the donation size, but it needs to be a reasonable dollar amount for that person’s budget.
Tom, i disagree with the assumption that most people — even most donors — have a fixed charitable budget. And so I think it’s important for nonprofits to equip themselves to compete effectively for funds against all manner of spending and investment options. Discretionary income can be spent to see a movie, to dine out, to buy a new something for the house — or to feed the hungry, cure disease, deliver health care (or whatever). It’s dangerously misleading to think that a nonprofit ONLY competes for certain time, talent and money. When one thinks in this way, the organization will underestimate its competition, indeed, will poorly equip itself for the competitive arena. Competitors are spending hundreds of millions to get the money the nonprofit is after! Understand that. As a donor, my choice is not between two or three charities, its between your charity and a universe of options. Think I’ll put in a new swimming pool now. No, wait. I want to support the orphanage down the road. Decisions, decisions!
Tom, I read the Seth Godin blog post you are referring to here and I got something very different from it. If I’m understanding you correctly, you believe that Seth is saying potential donors may not bother at all if they are asked for too little… the “what’s the good in donating $5, it won’t help anything” mentality. But what I think he was saying, is that a potential donor might walk away if they feel like the *organization* has that attitude. When someone gives to a cause they want to feel like they have done something good and are making a difference. The trick is to give our donors that warm-fuzzy sense of “I did good today” without low-balling them. No one wants to feel like the organization doesn’t value their contribution. Personally I have given to the starving-kids-in-third-world-countries organizations because as someone who doesn’t pull in the big bucks, I felt like my $20 a month was enough to get some part of the job done. And the org doesn’t keep hitting me up for more (which would make me feel like I wasn’t helping enough, and could cause me to go look for my warm-fuzzy feeling elsewhere).
Rather than focusing on a ceiling donation value in hopes of securing a certain group of new donors, perhaps one should ask for the small donation and throw the charitable net over a larger donor pool. Afterall, it worked for the Red Cross when they asked for $10 donations through text giving. A January 19th Washington Post article noted that over $22 million had been raised through text donation.
Personally I think that much of the giving was impulse giving. No analysis of whether the donation would make a meaningful difference and certainly not a decision that required the donor to pull out their annual donation budget before they hit the send button was needed.
This conversation is like the difference between annual giving and some kinds of legacy or major giving.
We spend lots of money little by little on ongoing things. This comes out of regular income, whatever our circumstances may be.
Monthly and other ongoing giving recognizes that charity efforts, like our daily lives, go on…and on and on and need to pay the bills week after week, month after month.
Investment decisions are different: Big, high-impact, asset.