Why don’t more people give money to charity? Are they greedy? Miserly? Too broke? Too anxious about if they’ll have enough for themselves?
While these may be factors for some people, the fact is, most people have enough money to spare, and if they wanted to donate it, they could easily do so. All it would take is a couple fewer trips to the coffee shop or one less meal out per month.
For most people, there are other factors in play that inhibit them from giving.
The Wise Giving Alliance Report from the Better Business Bureau explored this question, and came up with four primary reasons why more people don’t give to charity.
What’s interesting is that there are some notable differences among the generations and between various income levels. We’ll break it all down so you can apply the results to your donors.
Survey Methodology and Trust
The Wise Giving Alliance report surveyed 3200 people across the US and Canada. They conducted this survey every year from 2017 through 2022.
The report also breaks down the differences between the US and Canada, considering the 2100 Americans separately from the 1100 Canadians surveyed. For our discussion today, we’re focusing mostly on the American data. And the reality is, the data wasn’t that different between the two nations.
One important note is that 70% of people taking the survey rated the importance of trusting a nonprofit before donating to it as a 9 or a 10 out of 10. So donors consider trust highly important. And yet, only 20% said they highly trust charities.
This article today explores some of the main reasons why so many potential donors don’t trust charities.
Take note of this, because if your nonprofit is exhibiting any of the four issues listed below, this may be a hindrance for many would-be donors who might otherwise care enough about your cause to support it.
Money Spent on Fundraising and Management
We all know that it takes money to make money, and fundraising is no different. Most people understand this, and they accept that nonprofits have to have a staff. But, there seems to be an internal sense of when the amount organizations spend on themselves has become “too much.”
That sense is probably different for different people, and the study doesn’t explore it at that depth.
But the fact remains, this was the number one reason why more people don’t give to charity. 32.8% of people in the survey said this was a primary cause of them choosing not to give.
Generational differences
A vast discrepancy between generations showed up with this issue. Older generations – which the study labeled as Matures and Boomers, were far more likely than Gen X, Millennials, and Gen Z to consider the money spent on fundraising and management as a reason not to give. Here’s the breakdown:
- 45% Matures
- 42% Boomers
- 25% Gen X
- 21% Millennials
- 19% Gen Z
So, if a large portion of your donor base falls into particular generations, these results give you insight into how they might feel about what you’re spending on internal expenses.
And that doesn’t necessarily mean you need to fire a bunch of people. What it might mean is that you need to more clearly connect those efforts to your overall mission, and communicate the vital role they play in the cause the donor cares about.
Income differences
This issue also tended to matter quite a bit more for people who have more wealth. 40% of households making over $200k per year marked internal expenses as a hindrance to giving, as did 38% of households between $70-200k.
But for households under $70k, only 24% considered this a reason not to give. So if the largest share of your donors come from wealthier households, your internal expenses will matter more to them than if your organization engages with a lot of low-dollar donors.
And again, what is considered “too high” of a percentage of money spent on fundraising and management? The study doesn’t say, and it’s likely that many people who say this haven’t actually thought about specific figures. It’s the concern itself you want to be aware of. It’s not a mandate to go cutting through your staff.
Not Knowing What the Charity Does with Their Money
Next up, 25% of people in the survey said they are hesitant to give when they don’t have a clear sense of what the organization does with their gifts. It’s a significant drop from the 33% figure for the previous item. But still a large share.
This is a communication issue. Donors care about impact. They want to know what their money is accomplishing. They want you to share that with them.
Unlike the first item on this list, this one is relatively easy to address. Communicate more effectively what your mission is achieving and how donations are used, and people will feel better about giving. You have control over this, so don’t neglect it.
Generational Differences
Interestingly, the concern for how their money is used almost flips from the concern over how much is spent on fundraising and management.
Here, the younger generations care much more about this, and the older generations less so. Here’s the breakdown:
- 15% Matures
- 21% Boomers
- 33% Gen X
- 33% Millennials
- 38% Gen Z
We see that the younger generations are far more likely to resist giving when they don’t have a clear sense of how you’ll use their money. They want to know it is making a difference. Their trust in your organization depends on this.
Income Differences
As you might expect, more people from younger generations have less wealth than older generations, so the household income levels reflect the generational ones.
32% of households making under $70k per year said they hesitate to give if they don’t know what the charity will do with their money. 24% of those making over $70k felt the same way.
Charity Not Sharing Clear Accomplishments
19% of survey respondents indicated this as a major reason why they might not give to charity. As you can see, this is in many ways the same reason as the last one, just stated differently. If an organization clearly communicates the accomplishments they have made, they will also be explaining to donors how their money is used.
So, you can basically combine these two metrics and consider them the same issue, because you can address both at the same time.
That would mean combining 25% from the last one with the 19% who chose this results in 44% of would-be donors being hesitant to give if they don’t feel assured you’ll use their money well to accomplish things they care about.
The generational differences here were not as stark as the others, but 23% of households under $70k chose this as their primary concern, compared with 17% and 15% of middle income and wealthy households, respectively.
So this mirrors the data from the last item, bolstering the notion that these are similar concerns for donors.
Charity Executive Salaries Are Too High
Donors don’t give to charities to make their leaders rich. And they tend to blanche at the idea of executives making huge salaries, because that’s their money, and they gave it to further the mission of the organization.
Again, donors understand organizations need leadership, and they need good leadership. But still, like the first item on this list, there seems to be a point when they feel like an executive is making “too much,” and 19% of survey respondents chose this as a reason that can prevent them from donating.
The generational and income differences here were minimal.
Charity Holds Large Amount of Money in Reserve
What if a charity has lots of money in reserve? Will donors feel like they don’t need to give because the organization is already flush with cash?
As it turns out, not so much. Only 6% of survey respondents chose this as a reason they might not give, and most of them were in the younger three generations.
Most donors probably appreciate that an organization is stewarding funds well and not spending it all every year. That buffer makes them look more stable, and thus a better option for giving because they feel like the organization will be around for many years to come.
So if you’re saving money, keep saving it. Donors seem to respect that as a wise use of funds.
What Kind of Donors Do You Have?
With the Fundraising Report Card, you can quickly find out how much your donors are giving. We break down your data into five giving categories:
- Under $100 per year
- $100 to $250
- $250 to $1000
- $1000 to $5000
- Over $5000 per year
Knowing how much your donors give is one indication of their giving capacity. It’s certainly not the only metric you can use for this. Very wealthy households might only give $20 per month to some charities, and less wealthy ones might give much more to ones they care about. But this data shows how many donors you have in these five categories.
From there, you can use the concerns identified in the Wise Giving Alliance Report to improve your donor communication and fundraising activities so some of the concerns that keep people from giving get addressed. That way, there will be fewer hindrances between donors and their support of your mission.
