Who and what influences giving decisions? | npENGAGE

Who and what influences giving decisions?

By on Feb 17, 2011 | NONPROFIT-FUNDRAISING

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Much has been written and many have prognosticated about how new and emerging fundraising channels, fueled by technology, would spell the end of direct mail as THE predominate fundraising conduit. Last year, Convio, Edge Research and Sea Change Strategies announced the results of a national research study into the charitable giving behaviors and attitudes across Gen Y, Gen X, Boomers and Matures.

While there are several surprises, it is clear that the death of direct mail is an exaggeration. But, the traditional direct mail centric acquisition and solicitation model is undergoing rapid and permanent change and the research indicates that fundraising will grow increasingly complex. (Read last week’s post “Direct mail is alive and, well…changing” for more details and insights.)

Anecdotally and intuitively nonprofit professionals know that changing demographics and technology are driving a shift in charitable engagement. This research begins to answer a few of the pressing questions, including: Who and what influences giving decisions?

Influence, exposure, insight

In the giving realm, particularly in the world of major gifts the concept of influence is widely known and leveraged. Having the right board member influence or make “the ask” is a common and very successful practice. Yet when it comes to the exposure and insight your most ardent supporters provide to their networks and how people leverage technology, influence is not well understood – or well managed in most cases. This research indicates that organizations that understand and manage peer-to-peer relationships and empower their supporters and fans to provide exposure and insight to family, friends and peers can expand their fundraising “staff” and revenue base. Empowering individuals to reach others through multiple channels including email, social media and face-to-face will improve your results with the next generation of donors.

  
 Across all generations peers play a significant role in exposing friends and family to charitable causes as well as influencing giving. Requests for donations from peers rated as the most appropriate channel for survey respondents.

The study suggests that peers will continue to play a bigger role in influencing donations, and that technology is driving greater expectations of engagement through multiple channels, including online, face-to-face and mobile. For all donors, but especially Gen X and Y, the biggest influence on their decision to donate comes from peers, friends, family. Word of mouth (WOM) is critical for the next generation of donor to learn about charities and how they can engage. Today’s donors share their causes and contributions, and that action gets passed to others within that person’s network both through traditional face-to-face communication and through social media and other technology.  The next generation of donors is very comfortable asking and being asked for support of a cause.  Peers are amazing advocates for a nonprofit or cause if tapped correctly. Today, too few organizations are providing their advocates with language, opportunities and the technology needed to turn these constituents into fundraisers beyond event fundraising or the use of Causes on Facebook.

Peer-to-peer based fundraising in support of your organization is an exceptional way to leverage your most valuable assets — your supporters. By giving them the ability to create personal websites where their friends and family can donate, you empower these loyal constituents to raise more money for your cause easily and effectively.

Social media ready for primetime?

At a minimum, social networks are a critically important word of mouth engine and starting to play a far more prominent role for donors of all ages.

Study findings show:

  • Nine percent of Gen Y and six percent of Gen X, report giving through social networks
  • Sixty-nine percent of Gen Y and sixty percent of Gen X report that a posting or message from friends on Facebook or other social media is an appropriate solicitation channel compared to 38 percent of Boomers and seventeen percent of Matures.

Where the debate over social networks gets muddy is their role as transaction devices. Will people at the end of the day choose to give via a Facebook app or TwitPay rather than go to a cause’s website? The jury on that question is still out. But that is only a small part of the value of these digital water coolers, whose brand building and viral message distribution value is now beyond debate.

Will an organization get a return by targeting the next generation today?

The study found that while Matures still account for more of the money given to charity each year, Boomers and Gen X now make-up nearly 60% of the donor population and report that they plan to give more in the future. Gen X is more likely to volunteer to organize an event, become participant fundraisers or help promote their favorite nonprofits via social media and their personal networks. While Boomers are more likely to support a friend or family member participating in a fundraising event such as a ride, walk or run.

Both Gen X and Boomers are beginning to approach Matures when it comes to their average estimated donations to charity and the number of charities they support:

Gen X (b.1965-1980)
39.53 million Americans; 52% give
Avg. $796/year to 4.2 charities

Boomers (b. 1946-1964)
45.17 million Americans; 66% give
Avg. $901 to 5.2 charities

Matures (b. 1945 or earlier)
25.41 million Americans; 77% give
Avg. $1,066 to 6.3 charities

“With changes in technology, the economy, and demographic make-up of donors, organizations are trying to cut through the clutter and make the right investments for their future success,” added Pam Loeb, Principal for Edge Research who conducted the study. “It is important to recognize that we are living in a multichannel world. Marrying traditional channels with emerging ones will have a lasting benefit as organizations attract and inspire the next generation of donors.”

The modern nonprofit needs to take multichannel engagement seriously and embrace the people and technology that can help them reach, inspire and move people to support their mission. And while the death of direct mail has been exaggerated, the value of this approach has not yet been realized.

 

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