What Are Donors’ Reasons for Giving?
It is April 15,so thoughts of tax returns are in the air. This is either a time when donors smile because of the amount of money they have given to charity or frown because they feel they should have given more. I personalize my tax return because I give to nonprofits. I do not give primarily for tax reasons, but since the government provides incentives for giving, why not take advantage of the opportunities?
When you work in this field, you must interact with prospects and donors daily. I love the exchange of information between people. I cannot understand people’s motivations for giving until they tell me their organizational story. I seek to generate a basis for giving from each donor’s perspective. Through those stories, you can learn a great deal. You must listen to gain a strategy for a solicitation approach over time.
Individuals financially support nonprofits for a variety of reasons. Donors respond to giving triggers that they do not realize, according to Get Fully Funded. The process of donating is complex. Psychologists, through research, provide insight to development professionals on the topic of giving. This research indicates that people give because of personal social dynamics that includes a focus on a specific fundraising cause.
People also give because of altruism, impact of gifts affecting others, organizational trust, financial implications of challenge gifts, martyrdom effects, personal ego and the fear of missing out if they do not support a cause. These deep-seated reasons are embedded in humans. Resource development professionals must find keys to unlock donor traits to be successful in generating significant dollars.
People typically do not give to charity because of tax incentives. They contribute funds because the act of giving makes people happy. People also give when they are confident their goals and values align with the institution they are supporting. Individuals also donate out of empathy for the less fortunate plus the social connections generated through giving circles. Making a gift to charity makes sense to those who are philanthropically minded.
People act from the heart instead of the head when making contribution decisions, according to Network for Good, which generated data from more than 3,000 donors. The survey found that the main reasons for why donors gave were because giving felt good, the organization caught their attention, and the donors trusting the recipient organization, immediately seeing the impact of their gifts, feeling a special connection to the cause, wanting to be a part of something and wanting a tax deduction.
The No. 1 reason donors stopped giving is that they did not know how their gift was being used. That’s why it is imperative to constantly communicate with your donors. Altruism should be the top motivation to give, according to Charity Navigator.
In addition to altruism, if donors give because of tax benefits, they should understand the following key points:
- A gift to a qualified charitable organization may entitle you to a charitable contribution deduction against your income tax if you itemize deductions.
- A contribution is deductible in the year in which it is paid.
- Most, but not all, charitable organizations qualify for a charitable contribution deduction.
- Rules exist for non-cash donations.
- You need to maintain proper documentation of your contributions.
What is a donor’s reason for giving? Everyone is unique and so are their motivations behind giving, which can constantly change. As your relationship grows with donors, you will receive deeper perspectives on the ways they give, how they give and when they give. Understand their motivations for giving and reinforce those feelings with them for maximum results.
Although April 15 reminds donors of taxes and indirectly of giving, remember that the tax benefit is the only one reason for their promotion of giving. Humans are complex and so are their reasons for financially supporting charities.
Duke Haddad, Ed.D., CFRE, is currently associate director of development, director of capital campaigns and director of corporate development for The Salvation Army Indiana Division in Indianapolis. He also serves as president of Duke Haddad and Associates LLC and is a freelance instructor for Nonprofit Web Advisor.
He has been a contributing author to NonProfit PRO since 2008.
He received his doctorate degree from West Virginia University with an emphasis on education administration plus a dissertation on donor characteristics. He received a master’s degree from Marshall University with an emphasis on public administration plus a thesis on annual fund analysis. He secured a bachelor’s degree (cum laude) with an emphasis on marketing/management. He has done post graduate work at the University of Louisville.
Duke has received the Fundraising Executive of the Year Award, from the Association of Fundraising Professionals Indiana Chapter. He also was given the Outstanding West Virginian Award, Kentucky Colonel Award and Sagamore of the Wabash Award from the governors of West Virginia, Kentucky and Indiana, respectively, for his many career contributions in the field of philanthropy.