Why? Who? How Understanding Donor Motivation Can Identify New Potential Funders

Why? Who? How Understanding Donor Motivation Can Identify New Potential Funders

understanding-donor-motivation-blog

understanding-donor-motivation-blog

What motivates an individual to donate to an organisation?

There are many reasons people support a worthy cause. Understanding donor motivations – i.e. what’s behind someone’s philanthropic direction – can help an organisation identify new potential funders. However, as philanthropy has become more sophisticated so, too, have donors. Donors seek a return on their investment and want to make gifts that are more personal. The result is that the decision to give is much more thoughtful and seeks to align passion with interest. According to Birkholz:

“There is a fundamental change emerging in the 21st-century fundraising. This change is not driven by increasingly sophisticated non-profit organisations; nor is it propelled primarily by the integration of MBAs or other smart people into the sector. Not even the compelling need for support of worthy causes produced this evolutionary leap. In fact, the most important component of the philanthropic partnership that is moving us forward: We are changing because of our donors.”

This change starts with a better understanding of our donors.

Economically-minded donors

Historically, an individual’s level of altruism was viewed as the magic ingredient required of a donor. Research continues to extend beyond this traditional notion and altruism should no longer be assumed the sole reason people donate to charitable organisations. In addition to altruistic donor motivation, individuals can view charitable giving from an economic lens, they can identify with and feel associated with the organisation through their social identity, or view the giving from a service lens. An individual may donate because he or she views the non-profit sector as more efficient than the government sector in delivering a particular service. By adopting an economic viewpoint of charitable giving, the donor seeks to understand the need and value of the gift in economic terms; a fundraising professional should thus sharpen his or her skill in identifying economically-minded potential donors.

Donor-centred approach

Furthermore, individuals give to non-profit organisations when they align with the mission and objectives of the organisation, for tax incentives, or because he or she directly benefited — or, someone close to them directly benefited — from the organisation in the past. Russ Prince and Karen File conducted research that would assist fundraisers in developing a donor-centred fundraising approach; The Seven Faces of Philanthropy was developed using a preliminary segmentation study of 476 affluent individual donors (donors who maintain $1 million or more in discretionary investment and have made a gift to a non-profit organisation of $50,000 or more in the past two years), followed by intensive testing of the motivational items derived from the initial donor segments. The purpose of these identity tags is to assist fundraisers in properly targeting the non-profit’s message that best resonates with a particular donor:

The Seven Faces of Philanthropy

Donor personality Utilisation of charity network
Altruists Small charity network made up of close friends and family
Communitarians Charity network made up of other business owners, which overlaps with other affiliations
Devout Religious-based network
Dynasts Break away from parent’s charity network and develop own from his or her generation of friends
Investors Qualify organisations through business contacts
Socialites Charity network very important and there is group decision-making regarding support of non-profits
Repayers (The exception:) Selection of non-profits based on own beneficiary experience

 

Adapted from The Seven Faces of Philanthropy, by Russ Prince and Karen File, 1994.

Multiple faces

It is important to understand that the categories of the Prince and File model are not mutually exclusive. Donors are not limited to one category only, but can be motivated, for example, by God’s will (Devout) and by the benefit from the services the organisation provides (Repayers). The more an organisation can align the multiple faces of philanthropy to a potential donor, the better the organisation’s position when soliciting a donor.

You are what you do

Psychologists continue to conduct research to better understand human behaviour. However, this is a slippery endeavour, for humans are all individuals and the factors that influence their behaviour are vast and varied. Carl Jung — the famed psychologist — conducted extensive work on psychological type to explain random differences in people’s behaviour.  He examined the two mental activities a person undertakes: firstly, they perceive (take in information), and, secondly, they judge (organise this information and arrive at conclusions). A fundraiser should be keen to understand how an individual takes in information and makes judgements, i.e. not all donors are the same. Carl Jung stated, “you are what you do, not what you say you’ll do”. This statement is critical in understanding the potential donor who follows through on making his or her donation.

Individual attributes

When we seek new potential donors and discover their motives for donating, it does help to consider their individual attributes. In his research, Tim Mann used theoretical frameworks to examine the attributes of donors and to distinguished how important these attributes are to fundraising:

Theory

Attributes

Importance to Fundraising

Charitable giving People are motivated to give because of altruism, reciprocity, and direct benefits Donors feel an obligation to give back to make society a better place
Economics Donors look at the efficiency of the organisation and their impact from a resource allocation point of view Donors see a good return on their philanthropic investment and are more inclined to support the organisation
Service Donor behaviour is shaped by service value, service quality, and his or her level of satisfaction Donors feel they received professional service and value from the non-profit organisation and are likely to respond positively to fundraising appeals
Social exchange/
relationship marketing
Donors require an exchange with the organisation that is personal, and their social identity is partially defined via their association with the organisation (such relationships can range from transactional to highly relational) Some donors need a personal exchange with a part of the organisation so they do not feel like just another number, while other donors are satisfied with more of a transactional kind of relationship

 

Adapted from College fundraising using theoretical perspectives, by Timothy Mann, 2010.

Learn how to use donor attributes

Understanding donor motivation is important, and familiarising yourself with the theoretical frameworks, attributes, and the faces of philanthropy will assist you when you are building a relationship with a potential donor.

To sharpen your knowledge of personality type identification and to learn how to use these skills in moving a potential donor through the donor giving cycle, contact AskRIGHT.

 

  1. Birkholz, J. A. (2008). Fundraising analytics. Hoboken, New Jersy: John Wiley and Sons.
  2. Lindahl, W. E., & Conley, A. T. (2002). Literature review: Philanthropic Fundraising. non-profit Management and Leadership, 13(1), 91-112.
  3. Mann, T. (2007). College fund raising using theoretical perspectives to understand donor motives. International Journal of Educational Advancement, 7(1), 35-45.
Dr Jason Ketter

Dr Jason Ketter

Senior Fundraising Consultant at AskRIGHT

Jason brings more than 30 years of fundraising and engagement experience to clients in their quest to raise more money.

To find out how Jason can help your organisation, contact j.ketter@AskRIGHT.com.
Dr Jason Ketter

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