Posted November 1st, 2012

Why Do People Give?

In times of economic prosperity, when potential donors may have large amounts of discretionary income and capital, fundraising activity tends to focus on the basics: planning and organization, training and motivating volunteers and staff, tracking progress, acknowledging gifts, and stewarding ongoing relationships.

In good times, gifts are often presumed to be motivated primarily by the donor’s desire to support the mission of a particular organization or institution. For those 11-2012-1with a strong case for support, asking for gifts from enough people on a consistent basis normally leads to results that are at least acceptable, if not exceptional. Today, however, the economic climate is uncertain and many donors have less disposable income—and in some cases assets—than in past years.

Now may be a good time to examine why individual donors have given in the past and, more importantly, how they may be motivated to give in the future. Examining the reasons for past generosity can offer some indication of the likelihood of future giving, but personal priorities and values can and do change over time. Donors may require different and, in some cases, more compelling reasons to give when demands on their income and capital seem to come from every direction.

What motivates a gift?

There is no simple answer. People give for many and varied reasons. Those outside the world of development may assume that donors give primarily to gain recognition or tax savings, but that is only part of the picture.

Religion appears to inspire more charitable gifts than any other motivation. In fact, more charitable gifts are designated each year for religious-based charities than any other type of charitable interest.

In 2011, the most recent year for which figures are available, 32 percent of all charitable gifts went to religious organizations. By comparison, education and health care combined accounted for just 21 percent of individual giving.1

Despite the personal nature of religious beliefs, successful fundraisers who want to help donors make gifts most effectively should make every effort to understand this factor and its role in the gift planning process.

For example, in a number of religious traditions, the greatest satisfaction in giving is achieved only by making gifts anonymously. In this case, offering a naming opportunity or otherwise emphasizing recognition for a gift may seem insensitive or even offensive.

Social motivations also influence charitable giving behavior. Many donors hold definite ideas about social responsibility, including a perceived duty to share with others and invest in social infrastructure.

Many who have accumulated or inherited substantial wealth believe they have an obligation to help meet the needs of society. Philanthropy has long been expected of those who would be community leaders and members of influential social circles in a culture built on a combination of democracy and capitalism.

Political beliefs can also come into play in the decision to make a gift. Some people, for example, are opposed to government taxation and spending for social welfare and cultural purposes. Some also believe they are stewards of capital and have a duty to reinvest it through a voluntary system of wealth redistribution. Still others believe in European-style social democracy with involuntary redistribution of wealth and little or no private philanthropy. Understanding where donors fit on the political spectrum can be a key to helping them decide whether, when and how to make their gifts.

Emotions and how they influence philanthropic behavior is a subject that could fill volumes. Virtually every human emotion can inspire a charitable gift. Gifts in memory or in honor of others are emotional decisions. Quite different emotions, however, may motivate donors who seek recognition for themselves.

Other gifts may be guided by a combination of emotions. Consider, for example, the complex forces at work in the mind of a man who has been asked to make a major gift to a university medical facility. This university  is pursuing state-of-the-art research on a genetically linked disease that has already taken the life of his wife of 40 years research that may in the future save the lives of his own children.

Suppose the same institution recently announced a decision to allow on-campus behavior the donor finds morally objectionable. Experienced development officers appreciate the challenges such conflicting emotions can present and will work to obtain a mutually agreeable outcome.

Because emotions can be so powerful, it is tempting to overemphasize them at the expense of other factors that may be more relevant. The key is to find a way to understand and satisfy donors’ emotions and desires without manipulating those who may be at their most emotionally vulnerable, particularly older donors and those who have recently lost a loved one.

This is one of the areas of fund development in which experience, personal integrity, maturity and judgment are especially important. Board members and development officers should seek out these characteristics when hiring staff with planned and major gift responsibilities.

11-2012-2

Economic quid pro quo is perhaps the most misunderstood motivator of charitable gifts. While it is true that there are significant tax and other financial benefits associated with certain types of gifts, it may be a mistake for fundraisers to assume these factors are frequently the prime motivator for gifts. Remember that donors receive the same tax benefits regardless of the recipient of their charitable gifts, and most nonprofits offer the same or similar payment rates.

This is why planned gift marketing activities based primarily on tax and other benefits seldom produce meaningful or long-term results. In fact, such efforts may simply educate donors who then decide to complete gifts with other charitable interests that satisfy their true donative intent that is ultimately rooted in the other motivators previously discussed.

Herein lies the paradox. In today’s world of major gift development, it is vital to understand the economics of larger charitable transfers, but it is also important to realize that those economics rarely motivate the gift itself.

The most successful gift planners know the importance of non-financial motivations and thus tend to put the gift before the plan. They know it is difficult if not impossible to transform even the best what, when and how into the why behind a gift.

This interconnection of motivations shows how rare it is to find just one motivator for a gift. Most larger gifts tend to involve complex relationships among a number of these factors. Understanding the interconnection and overlap of motivations is a major key to arriving at the correct gift solution.

Completing the puzzle

After fundraisers develop a greater understanding of the basic motivators for charitable gifts, the other pieces of the puzzle tend to fall into place. The property a donor chooses to make a gift may be decided upon in part by economics, in part by emotion and in part by other considerations. A similar combination of factors usually determines the timing of a gift.

The property and timing naturally tend to drive the process toward a particular gift planning vehicle. In times such as these, when donors may be more likely to closely scrutinize requests for gifts, fundraisers would be wise to devote more energy to gaining a better understanding of why donors give. Learning about gifts donors may have made in the past can shed some light on their motivations. In the final analysis, however, there is no substitute for carefully maintaining relationships with donors over time. That is the best way to learn about motivations that are not detectable through electronic screening and other impersonal means.

The best laid plans

Even in the best of times, donors will sometimes express reluctance to make a gift in the context of a capital campaign or other fund development effort, despite earlier expressions of interest. What then?

Next month, we will examine the reasons why otherwise motivated donors will sometimes decide not to make a gift, and how to respond in ways that can salvage gifts that otherwise might not come to fruition.

 

 

1. Giving USA 2012, The Annual Report on Philanthropy for the Year 2011. The Center on Philanthropy at Indiana University.

 

 

 

 

 

 

The publisher of Give & Take is not engaged in rendering legal or tax advisory service. For advice and assistance in specific cases, the services of your own counsel should be obtained. Articles in Give & Take may generally be reprinted for distribution to board members and staff of nonprofit institutions and other non-donor groups. Proper credit must be given. Call for details.

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