Competition for Donations Is Going Global, Fund Raiser Predicts

An online world full of donors who are not concerned with geographic boundaries could mean American charities will soon be competing with a world of nonprofit organizations for donations, an international fund-raising expert told nonprofit officials gathered here last month.

Globalization is forcing charities to adapt to a world with more choices than ever before, a greater focus on the individual, and fewer boundaries, said Jon Duschinsky, founder of Bethechange Consulting, a Paris company. He spoke at a meeting, organized by the Direct Marketing Association of Washington and the Washington chapter of the Association of Fundraising Professionals.

For instance, said Mr. Duschinsky, American donors interested in medical research can increasingly find information on the most promising trials and studies in the world, rather than limiting their money to American researchers and organizations.

Mr. Duschinsky pointed to GuideStar, an online database of American nonprofit groups that helps donors find charities to support, and said GuideStar now has a site in Britain, and is starting GuideStar Europe, which will cover Germany, Hungary, Ireland, and the Netherlands.

Mr. Duschinsky predicts that within five years, and probably sooner, those sites will allow donors to make global, not just domestic, choices about which charities to support.

“International giving could blow the socks off of the charity world, and blow a lot of organizations out of the water,” he says.

He recognized that tax issues do have to be considered in international giving, but noted that many studies have shown that tax breaks are not the biggest motivator for donors.

Most charities do a good job meeting donors’ expectations, but few are actually exceeding them, according to preliminary results of a new survey released at the meeting.

The Great American Donor Survey, conducted by Campbell Rinker, a marketing-research company in Valencia, Calif., that specializes in nonprofit work, found that 83 percent of donors consider the giving experience to be what they expect. Only 13 percent say the charity they supported went beyond their expectations.

The finding is important because donors talk, says Dirk Rinker, president of the survey firm. “How much donors are communicating about their giving is just astounding to me,” he says.

Of the 3,400 donors surveyed, 66 percent said they occasionally recommend one of their favorite charities to a friend or family member, and 19 percent said they frequently do so.

Says Mr. Rinker, “Word of mouth is your best form of advertising.”

The donor survey was conducted online and by telephone in February.

In tough economic times, fund raisers must devise a “truly compelling” vision for their organizations before they do anything else, Steve Meyerson, a Washington fund-raising consultant, told conference participants.

When money is tight, very wealthy donors find themselves swamped with appeals, he said. “If you want to reach people at the top, it’s very important” to have a message that cuts through the clutter.

Mr. Meyerson, who said he expects the recession to last for some time, suggested that charity officials ask themselves how their fund-raising plans would change “if you knew for a fact that there’d be no recovery until 2010.” The answer, he said, should drive planning now.

Mr. Meyerson also offered other tips for raising money during a recession:

• Communicate to donors how the charity changes people’s lives. “Donors are not that interested in numbers,” he said. Rather, they want to hear that they’re helping to make a real difference in someone’s life.

• Be open. Cautious donors are going to be even more cautious during a recession, Mr. Meyerson said. The only way to deal with that is to share all information with them, including fund-raising ratios, budgets, and other details that charities might fear to disclose.

• Offer donors more flexibility in making a gift. Let a donor fulfill a pledge over six years rather than five, for example. Be prepared for donors of small sums to say they can’t afford to give as much as they did in past years, and offer other options.

• Take very good care of donors. Too many charities still don’t do a good job of communicating with their donors, he said, and in a recession, when donors on tight budgets may be thinking they could save money by not giving, stewardship is more important than ever.

• Craft extra-warm appeals, the kind that tug at the donor’s heartstrings. Ask the marketing department for help, Mr. Meyerson said: They are experts at telling human-interest stories that appeal to a broad audience.

Ultimately, both fund-raising and marketing departments want the same thing: to develop more resources and advance the charity’s mission, said Mr. Meyerson. Each department could benefit from understanding how the other manages relationships, and with whom it maintains them.

The suppliers the marketing department works with, for example, are both potential donors and a connection to other potential donors. Donors, on the other hand, may provide excellent stories or contacts for the marketing department.

Mr. Meyerson suggested that the news releases sent out by the marketing department would also be a great way for fund raisers to keep donors in touch with the organization’s work. Other possibilities for reaching donors with marketing materials include sending reprints of articles and copies of the annual report.

If the marketing department conducts surveys, it might be willing to incorporate one or two questions related to fund raising, he added.

Collaborating on a specific project is wise, he said. For example, he said the departments could cooperate on an educational presentation about their work to the board of directors. It’s often difficult for either department on its own to get time in front of the board, but when the marketing and development directors make a joint pitch, “you’re on the agenda,” Mr. Meyerson said.

New research on how women give should cause charities to reconsider how they solicit female donors, an expert on women’s philanthropy told conference participants.

Sondra Shaw-Hardy, a founder of the Women’s Philanthropy Institute, in Indianapolis, and Carmen Stevens, a consultant to wealthy families, conducted an online survey in early 2007 of 176 women who make gifts to charities. They looked at how two generations of women approach giving. The research focused on baby boomers (which they defined as women born from 1945 to 1960) and Generation X (defined as women born in 1961 to 1980).

The women in the study said they gave to a variety of causes, with education organizations getting support from the most women. Generation X women leaned more toward “hands-on” involvement with the charities they support, and expressed more interest in giving through participating in volunteer trips to learn about an organization’s needs and the people it serves.

The research also showed that both generations of women are open to donating to causes outside the United States, but gave different reasons for their support. Baby boomer women tend to be motivated by extreme need when giving overseas, while Generation X women are more likely to see a link between local and global issues and are willing to give for that reason. Both generations agreed, however, that passion for a cause is at the core of their giving.

Other findings included:

• Baby boomer women gave from 4 to 7 percent of their income, on average, and would like to give 11 to 25 percent. Generation X women gave between 1 and 3 percent of their income, and would like to give 8 to 10 percent.

• Generation X women want to donate money during their lifetime, while more baby boomers want their giving to go on beyond their lifetime.

• More Generation X than baby boomer women say they were influenced to give when the solicitation was made by someone close to their own age.