September 11, 2008
New Study Sheds Light on What Wealthy Donors Care About; Many Say They Will Support Operating Costs
By Holly Hall
In deciding which charities to support, many wealthy donors do not judge nonprofit organizations by how much they spend on overhead costs — despite the popularity of that measure among watchdog groups and others, a study released today has found.
Interviews with 33 people who give away an average of $1.5-million annually, found that most had built businesses in finance, technology, pharmacology, and other fields. Several said they understood charities’ need for money to pay for overhead and other operating costs and were willing to provide it.
The survey, conducted by researchers at the University of Pennsylvania’s Center for High Impact Philanthropy, was aimed at providing insight into how the nation’s wealthiest donors choose the charities they support, how they obtain information on those organizations, how they assess the impact of their gifts, and the roles they see themselves playing in nonprofit organizations.
Social Contacts
In choosing the recipients of their contributions, some donors said that they make their largest gifts only after becoming personally involved with an organization. But most donors said they choose which charities to support by relying on information obtained from peers and other social contacts, rather than doing research or turning to watchdog organizations and sources such as Guidestar, the online database of charities in the United States.
“Knowing someone on the board or from your peer group that recommends the issue or organization” was rated as important or very important by 26 of the donors.
Several donors said that time constraints have prevented them from coming up with adequate criteria to decide which charities deserve large sums. As a result, those donors said they are not giving away as much as they could afford.
Many of the donors said they felt a need for better information on the causes they support, but most said that they do not actively seek out detailed information on the effectiveness of organizations to which they give or others involved in the issues they care about. Others said that the information they had seen on effectiveness was not helpful.
The researchers identified two reasons behind donors’ reluctance to ask for information: They did not want to create inappropriate expectations on the part of charities, or they feared unwanted solicitations.
“We were not surprised to discover an acute sense of charity inundation among participants,” the researchers wrote. “Many described receiving dozens of solicitations on a weekly basis.” In addition, most donors said that it is difficult to extricate themselves from relations with a charity they have supported for some time, even when they have decided it is time to stop giving.
Tangible Projects
Donors frequently reported that it is difficult to track the results of their gifts. Consequently, some said that they intentionally give to tangible or time-limited projects such as a new building or a scholarship with easy-to-observe results.
They also expressed some reluctance about asking for data to show an organization’s effectiveness: Many said that they did not want to burden the charities they support with additional demands for details, come across as a “high-maintenance” supporter, or imply a lack of trust in an organization’s work.
Asked about formal evaluations, some donors expressed ambivalence about their usefulness, saying that the data in evaluations are often poorly presented, do not provide the right information, or are unnecessary.
When asked about their role as donors, nine of the 33 donors stated that they do not think of themselves as “philanthropists,” despite giving far more money away every year than most Americans. They preferred to be known as a “community volunteer” or “community supporter.”
Most donors said that their roles at nonprofit organizations had grown from simply writing checks to more involvement as their experience, available time, and wealth grew. Many said that they aspired to help generate awareness of the causes and organizations they support, do advocacy work for those causes, and work with other donors on charitable projects.A report about the survey, “I’m Not Rockefeller”: 33 High Net Worth Philanthropists Discuss Their Approach to Giving,” is available on the Center for High Impact Philanthropy’s Web site.
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It’s delightful news that big donors aren’t looking at nonprofit overhead costs with a magnifying class. Successful businesspeople understand that organizations have legitimate overhead expenses. Nonprofits should stop apologizing for needing $$ to pay for rent and utilities.
— Bob Zimmerman Sep 11, 02:51 PM #
It appears that peer groups continue to be the place major donors reach out to for advice on donating to organizations. Perhaps your Board Members should be encouraged to promote their special cause to friends more often!
— Candace Taylor Sep 11, 05:17 PM #
I am a London-based teacher. Spent some time this year teaching in rural schools in Nigeria with no electricity, no books, no resources, no facilities. Any idea how I can improve things before my next visit in 2009? I have collected hundreds of books so far for these children. Can’t afford to ship them! How do I raise funds or meet interested donors in the UK or USA?
— Gertrude Chinegwundoh Sep 14, 03:02 PM #
To me, it’s interesting that these donors want to learn more about the charities they support, but don’t want to be seen as doing it, and don’t rely on third-party services (e.g., GuideStar). Further, they report that evaluative data are often less than satisfying.
Question for the charity watchdogs and the accountgability/transparency crowd: are we giving donors what they want, or are we focusing on what we think they need? Hmm….
— Michael L. Wyland Sep 15, 12:31 PM #
Charities can manipulate the overhead expenses.What they tell the donors does not have to match facts.When the donor dies, if there is no one who will oversee the reports on their endowment, the charity can use the funds any way they want.This happens more frequently than anyone would like to admit.There is no mechanism to oversee how an endowment is spent,if someone doesn’t have oversight and reads the reports from the charities.
— Jack Sep 16, 09:12 AM #
Iam enquiring into the possibility of making a partnership for the support of a private Primary School orphans and vulnerable children care and welfare project; in Bugiri district, Uganda. The project is intended to enrich the lives and enhance the prospects for disadvantaged orphaned and vulnerable children in the school; giving them a chance at bright future.:-1. to support the school feeding and child nutrition program that fight child hunger. By providing meals, school feeding will acts as an incentive to get children into classroom and to stop the drop out rate.HIV/Aids children are suffering, facing terrible poverty, discrimination and neglect resulting in poor health, poor performance and vulnerability to child abuse. Food is therefore essential in the fight against HIV/Aids.2. to provide for the children’s immediate and basic needs.3. to increase awareness of HIV/aids and its impact on children; in the district, through the school’s awarereness programs.4. to expand the implementation of Agriculture and vocational training in the school so as to address poverty issues among the beneficiaries and to stop depending on donors. We seek to intervene early in the lives of children in the belief that education is a lifelong gift that empowers people to ultimately improve their social-economic conditions and future generations.I would be very grateful to receive a partner for the funding of the project.Iam mostly interested in individualfamily donors and the school will be named in memory of that donor.
Yours faithfully,
Waako Michael David.
Professional teacher and a born again Chritian; aged 47, married in church with one wife and 9 children.
— Waako Michael David Sep 17, 10:30 AM #
It would be interesting to conduct similar studies in developing countries.
— BHEKINKOSI MOYO Sep 21, 09:37 AM #