Lapsed donors and low donor retention make it harder for nonprofits to grow their donor bases and thrive off the stability that provides. We all know this. But what’s less clear is why donors stop giving.
A study by the Wise Giving Alliance at give.org explored the answers. The Donor Participation Report surveyed 2200 Americans to find answers to donor behavior across generations and income levels. What it found has very real implications for how nonprofits need to communicate and relate with donors and reach out to new potential ones.
Let’s walk through some of the most interesting findings.
3 Statements Lapsed Donors Agreed with
The study broke down how donors who stopped or reduced their giving in the last five years felt about three particular statements. Here’s what they found.
“Living Wage”
56% of people who stopped giving agreed that “I don’t earn a living wage that allows me to donate.” So, financial struggles are clearly a factor that motivates the cessation of giving. For some, this will be temporary if their financial situation improves again. Maybe, because once a habit is broken it’s harder to restart it.
Interestingly, 55% of people who make over $70k per year as a household and stopped giving also agreed with the same statement. So, the perception or reality of having money to spare seems to be having quite an influence, even on people who make what has historically been considered a decent income.
Also, 52% of those who decreased their giving agreed with the same statement. So financial struggles are affecting people who stop or reduce their giving.
“Others Are Doing Better”
51% of people who stopped giving also agreed with this statement:
“Most people seem to be doing better financially than I am.”
And 55% of people making over $70k who stopped giving agreed with it too. This has more to do with envy, perhaps, or at least with comparing ourselves to others, than the actual financial realities people are facing. It’s not necessarily true that these people can’t give. It’s that they feel like others are doing better than them, so they need to hold on to their money and catch up.
However you want to interpret this, it’s another way financial pressure is depressing generosity.
“Wealthier People Should Give More”
The third one supports the interpretation just given of the second one. Here, 47% of people who stopped giving agreed with this statement:
“There are people out there with significantly more money who should give to charity instead of me.”
Notably, 59% of people making more than $70k also agreed with this. So, you see again that more people with higher incomes are stopping their giving because of a perception that people with more money than them should be giving more. Of course, the reality is that wealthy people already give nearly all the money that gets donated to charity.
All three of these statements describe a reality that nonprofits will have to work hard to overcome if they want to expand their donor bases beyond just wealthy donors.
The idea that ‘every dollar matters’ seems to be getting lost, and it’s more about who is giving, rather than how much is being given, or the act of giving itself.
But the study found much more than this.
Here are more reasons people stopped or reduced their giving.
Prioritize Spending on Their Families
19% of those who stopped giving, and 28% of those who reduced their giving decided they wanted to put their own families before the needs being met by charities. This is very understandable, and 26% of households making over $70k agreed with this too.
To address this in a respectful way, nonprofits could consider messaging that talks about the value of a strong community. When we’re all doing better, everyone wins. Shared sacrifice. Working together. These sorts of themes and ideas might motivate people to see value in giving in addition to prioritizing their families.
Prefer to Be Generous in Other Ways
Around 20% of people who stopped or reduced giving said they prefer other forms of generosity, such as volunteering, donating items, and giving to individuals they personally know.
This is a good motive resulting in an action other than giving money to charity, and many nonprofits need volunteers. If you can find people like this and offer them other ways to get involved, you can enable them to give in their most preferred way while still making an impact with your mission.
Don’t Trust the Charities that Approach Them
About 17% of people who stop or reduce giving are struggling to trust charities. Here’s a deeper look at why trust is down among nonprofits, and what you can do to change that.
The trust deficit is real, and it isn’t something you can afford to ignore. You now have very strong evidence that significant numbers of donors who have recently stopped giving are doing so because they don’t trust the organizations asking them for money.
Don’t Feel Connected to Charities
Next up is the relational connection. Some donors feel disconnected from the organizations they used to support. They feel like a number. They feel unappreciated or unnoticed.
Your nonprofit’s communication to existing donors plays a big role in preventing this from happening.
Again, 17% of donors who stopped giving cited this as a reason, and 14% of those who reduced their giving did as well. An even higher percentage of donors making over $70k per year did too, so this is yet another negative motivator driving people who have more money away from giving it to nonprofits.
Don’t Feel Like They’ve Been Asked
This one is interesting. 17% of people who stopped giving say they did so because they didn’t feel like anyone was asking them.
This seems to reflect the sentiment that some people want to be asked to give. They’re not actively seeking out organizations to support. But they want to give, and they want to be asked.
Interestingly, when the study broke this down by generations, 45% of young people from Gen Z cited this as a reason they stopped giving. That’s huge! The other generations were nowhere near this figure.
It appears to be the youngest generation that, at least at this time, wants to be asked to give to charity. And it’s a fair assumption that this applies to repeat giving too. They gave the first time you asked. And they might give again if you ask again. But if you just assume they’ll keep giving, they’ll be sitting there waiting, and nothing will happen.
So this is another strong argument for ongoing communication – with current donors. It really is true that you retain more donors if you keep communicating, keep talking about the impact of their gifts, and keep asking – but not in every single communication you send out.
Believe Responsible Businesses Have More Impact
Another reason some people stop giving is because they think businesses do more good than nonprofits. This is a startling shift from previous generations.
28% of people who stopped giving believe this to be true, which is substantially higher than those who increased giving, didn’t change, decreased giving, or aren’t actively engaged.
Likewise, it is again the young people from Gen Z who predominantly feel this way, with 26% of Gen Zers who stopped giving saying they believe shopping at a socially responsible business has more impact than giving to charity.
This also says something about their awareness of what charities do and do not do, since businesses primarily deal with economic or environmental issues. But supporting a business doesn’t stop abuse, help kids learn, support higher education, or fight disease, at least not directly. So this may also speak to some of the issues that most concern young people.
Other Reasons Given
The above reasons got the biggest responses in the survey, but several other reasons were cited by notable numbers of people for why they stopped giving. Here are several of them:
- Afraid charities will hound them if they give once (9%)
- Don’t think their gift makes a difference (9%)
- Charity isn’t politically aligned with them (7%)
- Charity doesn’t seem to value their contribution (6%)
In all four of these instances, the percentages of people who reduced their giving and cited these as a reason were the same or higher as those who stopped giving.
More Insights into Generations
There’s a lot more in the study. It explored each of the reasons given above for why people stop giving to charity – broken down by generations. A few notable observations:
Boomers were by far the most likely to say they couldn’t afford to keep giving as their primary reason for stopping, with 77% of them citing this as a reason. It was also the most common reason given for other generations, but not even close to Boomers in terms of the percentage.
Boomers (27%) and Millennials (21%) put far greater emphasis on prioritizing spending on their families as a reason to stop giving compared to Gen X and Gen Z (9% each), an interesting generational fluctuation.
And, Boomers (23%) and Gen Z (18%) had the most in common in having trouble trusting charities.
It was the younger generations that stopped giving because they didn’t feel connected to charities that asked them to give, with 30% of Millennials citing this as a reason, and 27% of Gen Z. The younger generation wants to feel connected to your organization. Are you helping them do that?
Sizable numbers of all generations except Boomers (about 20% for the other three) said they stopped giving because they prefer other ways of being generous.
And it was Gen Z (18%) that primarily struggles to feel like their donations make much of a difference and that the charities don’t seem to value their contributions (14%).
What Nonprofits Can Take Away From This
You know your donor base. You know which generations they come from predominantly. As you can see, the reasons vary among generations for why they stop giving, and there’s a lot you can do to more effectively engage donors from all walks of life.
And this includes donors who come from households with higher income too. As you saw, many people who make over $70k have stopped giving and gave clear reasons for why.
Take a look at your donors, and especially your lapsed and first-time donors. And ask yourself a few questions:
- How often are we communicating?
- Are we showing the impact of their donations and the difference they make?
- Are we showing appreciation and gratitude?
- How are we positioning the act of giving – do people see how it benefits the whole community?
- Are we asking for gifts too often? Not enough?
- Are we making it easy for people to see themselves making a gift or giving monthly?
- Do supporters know non-financial ways they can serve and be generous through our organization?
Data is what drives smart, effective, and efficient fundraising.
The data from the Donor Participation Report reveals great insight into donors who have stopped giving or are giving less than they used to.
Apply these findings to your fundraising activities, and then use the Fundraising Report Card to track your data and see if you can reverse some of these trends at your organization.
