Donating is kind of a big deal. In any given year, a majority of Americans decide to share at least some of their money with a charitable cause.
In a poll conducted in April 2020, for instance—during the peak of the coronavirus pandemic, and the economic chaos surrounding it—Gallup found that 73% of Americans had donated to a charitable cause in the past year. This was the lowest percentage recorded to date—and it still accounted for nearly three-fourths of the population.
In other words, even during a global crisis that threatened incomes, retirement savings, and career plans, people found ways to take their hard-earned cash out of their own pockets and give it to their favorite charities.
How does this happen? Why do people donate to charities in general? What makes them more or less likely to donate? And how can fundraisers, marketers, and others in the nonprofit world encourage people to donate to their organizations in particular?
In this post, we’re going to explore five of the most important reasons why people donate—and how you can make sure they’re giving to your cause.
At a very basic level, we may feel inclined to share our money with worthy causes due to the way the human brain is structured.
During a 2007 neurological study, researchers at the University of Oregon noticed surprising similarities in test subjects’ brain activity across several distinct money-related tasks. Specifically, they learned that “three very different things—monetary payoffs to oneself, observing a charity get money, and a warm-glow effect related to free choice—all activate similar neural substrates.”
In other words, the researchers found that the similar parts of our brains light up whether we are giving money to ourselves or to charity—suggesting that the experiences of holding on to money and giving it away have more in common than we might expect.
To put it another way, it seems that the rewarding sensations, feelings, and thoughts that go along with saving money for ourselves and giving it to others share some of the same neurological roots. That is, the mechanism that encourages us to look out for our own financial security also encourages us to take care of the needs of others—possibly with a comparable level of urgency.
The human need to give runs deep...all the way down to our neurons!
Psychology also plays a big role in the giving process. Specifically, recent findings suggest that, for people who donate, charitable giving is about more than helping a favorite cause serve people in need. Charity also serves as an important tool for the management—and improvement—of self-image.
In a study conducted at the Yale School of Management, researchers tested participants’ willingness to give to a hypothetical charity by comparing the cost of a donation to either a “hedonic product”—something enjoyable, like a tasty treat—or a “utilitarian product”—something useful, like a tool. They found that people were much more likely to give when the hedonic product was mentioned.
The reason? According to the researchers, the difference has to do with the fact that “people believe that their actions or choices can signal positive or negative information about their own traits.”
In other words, when given the choice between donating $5 to a person in need and using that same $5 to buy a delicious cup of hot coffee, participants were thinking about more than just the merits of the charity itself. They were also being forced to consider what choosing the coffee over the donation might imply about them—whether they would still be able to think of themselves as “good” people if they passed up the chance to help someone else in favor of buying some personal pleasure.
Knowing that people use giving to build up their self-image as kind, compassionate persons willing to sacrifice for the needs of others, fundraisers and nonprofit marketers can increase the odds of success by framing their asks in ways that allow the donor to experience the greatest possible boost to their self-esteem.
Comparing the cost of a donation to that of a similarly-priced hedonic product is one strategy: a small, one-time donation might be compared to the cost of a candy bar, for example, while a massive building grant might be compared to that of a pleasure yacht.
In either case, the counter-intuitive goal is to help the donor experience just a little bit of pain—to make the value of giving higher in the prospect’s eyes by contrasting their own pleasure with the satisfaction of sharing their money with those who need it most.
Skilled fundraising, in other words, isn’t simply asking for money. It’s asking for money in exchange for something of real, hard-to-find value—the ability to honestly feel better about oneself with good cause.
Moving away from biological influences and unconscious motivations, we come to the explanations that donors openly offer when asked about their reasons for giving to a particular organization. One of the most important of these is belief in the cause that the organization represents.
Legendary British fundraiser Henry Drucker, in a lecture delivered to the Royal Society of Arts, Manufactures and Commerce, claimed that “People give because they believe in the cause and the people presenting the cause [...] An institution that does not know what it believes in, or how those beliefs can be realised by raising money, will never get very far.”
In other words, to be successful, an organization has to have a clear idea of its own reason for existing, and must communicate a clear match between the donor’s goals and those of the organization. Indeed, Drucker insisted that fundraising organizations should focus on “Negotiating a match between [donor] interest and [organizational] need” if they want to raise meaningful amounts of money.
Moreover, a 2016 study by Bank of America’s U.S. Trust and the Indiana University Lilly Family School of Philanthropy supports this claim, at least as far as high-net-worth donors are concerned. According to the study, researchers surveying high-net-worth households found that the majority give “because they believe in the mission of the organization (54.1 percent).”
This suggests that great nonprofit marketing—just like any other kind of marketing—involves figuring out how to present your organization as the ideal way for members of your audience to fulfill their own deep-seated goals.
4. Making a Difference
Equally important, according to Drucker, is the ability to get potential donors excited about the idea of giving by encouraging them to think big. As he put it in his lecture, “Size inspires respect and emulation. People will respect a determined attempt to maintain or create something first class, the more so when the attempt is seen to be risky.”
In other words, meekly asking for just enough money to keep the lights on will get you that much in donations, or possibly even less. On the flip side, painting a wild, audacious picture of what you can achieve with donors’ help is more likely to inspire the support your organization needs—and then some.
Why does giving work this way? Why put on a whole song-and-dance routine to get people jazzed up about a project when you could just email them a PowerPoint presentation with all of your needs spelled out?
According to Jerold Panas, author of the classic fundraising manual Asking, this is because most people have zero interest in fulfilling the needs of a given nonprofit—whereas many people do “want to invest in great causes, in bold and exciting dreams. They want to feel they’re helping change lives and save lives. [Accordingly,] It’s your job to help them understand their money can make that happen...with a little help from you.”
In order to succeed, a fundraiser must raise a prospect’s hopes that they can make a unique difference in the world—through the fundraiser’s organization in particular.
Panas’s claims are backed up by the findings of the above-mentioned Bank of America study, which found that “ nearly half (44.0 percent) of donors give when they believe their gift can make a difference.” That is, people write checks when they are confident their money will make a noticeable impact. The nonprofit marketer’s challenge, then, is to draw the lines between the donor’s gift, the organization’s operating costs, and the remarkable results of its work—to tell a story that gets the prospect’s blood pumping.
Finally, Panas also argues that the way we relate to potential donors is just as important as what we say to them. Specifically, he claims that “belief and regard for a staff person [are essential]. The vast majority (85.8 percent) of high net worth donors indicate that their connection to the recipient organization is very or somewhat important to them when deciding to make a charitable gift.”
To put it another way, donors don’t give money to faceless organizations—they give to the living, breathing people who represent those organizations, and champion their causes personally. Communication, whether in person or in writing, is a vital part of the process. Whether they are speaking face-to-face with a fundraiser or reviewing a brochure, potential donors need to feel like they are engaging with a real human voice—that the story they’re being told comes from a place of genuine commitment.
(Panas even says that fundraisers shouldn’t even think about asking for money until they make a significant donation themselves! By putting their own cash on the table, the fundraiser sends a powerful message of belief and confidence to the prospect.)
On the other hand, nothing kills a potential donation faster than over-communicating. According to the Bank of America study, “The largest percentage (40.7 percent) of wealthy households that stopped giving cited too many requests from the organization or that the requests were too close together.”
Given the importance of human relationship to the donation process, it makes sense that donors would run from this kind of pestering. Part of the value a donor seeks by making large or recurring gifts is the opportunity to engage in an enjoyable, mutually fulfilling relationship with someone who cares deeply about a cause that is dear to the donor’s heart. Such a relationship—really, any good relationship—is impossible when one party is constantly badgering the other, hitting them up for cash, and generally being a nuisance.
To put it bluntly: how long would you stay connected with a friend who sent you ten panicked Venmo requests every week?
The sweet spot for fundraising communication lies between the extremes of aloofness and begging. Again, as in any relationship, the nonprofit marketer or fundraiser should aim at communicating enough, and in enough detail, to convey real warmth, concern, and joy—without flooding a prospect’s inbox with more messages than they can handle. Gradually building a satisfying donor-fundraiser relationship will help secure that initial gift, and increase the likelihood of further giving.
Putting It All Together
Now that you know some of the underlying mechanisms, motivations, and reasons behind charitable giving, it’s time to apply what you’ve learned to your next giving campaign or donor visit.
Be confident, knowing that people want to donate! As a species, we’re built for sharing (Hard-Wiring), and are always looking for excuses to spread our wealth around. Donating helps us feel good about ourselves (Self-Image), meaning that as a fundraiser, you’re not looking for a handout—instead, you’re selling something of great, undeniable value.
To remove barriers between people and the gifts they want to make, present your organization as aligned with donors’ goals (Belief)) and capable of carrying them out (Making a Difference). Lastly, remember that donors give to people, not presentations. So be a person when you’re interacting with them (Relationship): be real, and show a little vulnerability without seeming desperate. Your organization—and the people it serves—will reap the benefits for a long time to come.
Of course, none of the above is necessarily easy! But it is all doable. And, as you know better than anyone, it’s essential—because organizations like yours are making the world a better place.