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HOPE CONSULTING




                                          Money for
                                          Good

                                          The US Market for
                                          Impact Investments
                                          and Charitable Gifts
                                          from Individual Donors
                                          and Investors


                                          MAY 2010



M AY 2 0 1 0   H O P E C O NS U L TI NG
I NTRODUCTION AND CONTEXT



 The Motivation for the Money for Good Project


   It is our nature to see the world based on our own context, experiences, and
   points of view. People in all walks of life struggle with this bias every day. How
   can a new product fail when you and your cohort believed that it was a great
   idea? The need to understand the world as it is – not as we wish it were – has
   caused primary market research to become a multi-billion dollar industry.

   The motivation behind the Money for Good project was to seek the „voice of the
   customer‟ for charitable giving and impact investing. This perspective has been
   lacking in these sectors to date. As the Hewlett Foundation and McKinsey &
   Company noted in their recent report “The Nonprofit Marketplace,” there is a
   need to “invest in research that clarifies donors‟ motivations, needs, and
   decision-making criteria.”1

   With this report we have attempted to address that need, and to build a
   thorough understanding of the behaviors and motivations of Americans with
   respect to charitable giving and impact investing.

1. “The Nonprofit Marketplace: Bridging the Information Gap in Philanthropy”, The Hewlett Foundation and McKinsey & Company, 2008
M AY 2 0 1 0    H O P E C O NS U L TI NG                                                                                            1
I NTRODUCTION AND CONTEXT



The Goal and Structure of the Money for Good Project


The goal of this project was to understand US consumer preferences, behaviors, and
demand for impact investment products and charitable giving opportunities
(together, these make up the “money for good” market), and then to generate
ideas for how for- and nonprofit organizations can use this information to drive more
dollars to organizations generating social good.

We structured the project around three key questions related to this overall goal:

    1. How can nonprofits more effectively obtain donations from individuals?

    2. How can a greater share of donations go to the highest performing
       nonprofits?

    3. What is the market potential for impact investing and how can it be realized?

Note: We also looked at how these findings relate to people who donate or invest in developing
countries, with a particular focus on support to international entrepreneurship. Those findings can
be found in ―Money for Good: Special Report on Donor and Investor Preferences for Supporting
Organizations Working Outside the US‖

M AY 2 0 1 0   H O P E C O NS U L TI NG                                                               2
I NTRODUCTION AND CONTEXT



 Our Approach to the Money for Good Project


  WHO WE TARGETED                                       HOW WE RESEARCHED                            WHY SURVEY IS UNIQUE
  Individuals with household                            Used 3 sources of information:               Breadth and Depth: survey is
  (HH) incomes over $80K.                                                                            unique both in the number of
  These individuals represent                           External research, to learn                  respondents and the amount
  the top 30% of US HHs in terms                        from previous work in the field              of information it covered
  of income, and make 75% of
  charitable donations from                             Qualitative research,                        High Net Worth1: half (2,000)
  individuals                                           consisting of focus groups and               of the respondents had HH
                                                        interviews with over 30                      incomes >$300k, making this
  We oversampled people with                            individuals, to test survey                  one of the most robust
  household incomes over                                language and inform                          surveys of wealthy individuals
  $300K, due to these                                   hypotheses
  individuals‟ disproportionate                                                                      Behavioral Focus: survey
  share of charitable                                   Quantitative research,                       looked at actions, not simply
  contributions and investments                         consisting of an online survey               stated preferences. It also
                                                        of 4,000 individuals. This was               forced individuals to make
                                                        the main focus of our                        trade-offs to mirror real life
                                                        research                                     decision-making and
1. We refer to high net worth individuals throughout this report as individuals with HH incomes of
                                                                                                     minimize pro social responses
greater than $300,000, as this is one of the criteria to be an accredited investor
M AY 2 0 1 0     H O P E C O NS U L TI NG                                                                                             3
I NTRODUCTION AND CONTEXT



 Key Definitions



   Donations:                               Charitable donations by individuals to nonprofit organizations

   Impact                                   Investments that have an active social and/or environmental
   Investments:                             objective in addition to a financial objective

   Money for Good:                          Charitable donations + impact investments

   Retail Donor or                          People with HH income between $80k and $300k. $80k is the
   Investor:                                cutoff for the top three deciles of US HHs in terms of income

   High Net Worth                           People with HH income over $300k, an income threshold for
   Donor or Investor:1                      accredited investors. This represents the top 1.3% of US HHs

   Affluent Donor or                        Anyone with HH income over $80k (retail + high net worth).
   Investor:                                This was the full scope of our research


1. Technically these are high income, not high net worth individuals. However, given the high correlation between income and assets and the fact that
income is a more stringent measure of being an accredited investor, we have used the more common term “High Net Worth” in this report
M AY 2 0 1 0     H O P E C O NS U L TI NG                                                                                                               4
I NTRODUCTION AND CONTEXT



Project Team


   The Money for Good project has been generously funded by the Metanoia
    Fund, the Aspen Institute of Development Entrepreneurs (ANDE), the Rockefeller
    Foundation, and the William and Flora Hewlett Foundation

   The project was led by Hope Consulting (www.hopeconsulting.us), with
    additional advice and services provided by Clavis Partners, Engage123,
    Compass(x) Strategy, and e-rewards

   The project ran from December 2009 – May 2010

   For more information on these results, please contact:
           Hope Neighbor – Founder, Hope Consulting – hope@hopeconsulting.us
           Greg Ulrich – Project Manager, Money for Good – greg@hopeconsulting.us
           Julian Millikan – Survey Design, Money for Good – julian@hopeconsulting.us

   The appendix contains additional information on the funders, partners and team


M AY 2 0 1 0   H O P E C O NS U L TI NG                                                 5
I NTRODUCTION AND CONTEXT



A Final Note on This Report



 This report summarizes the most important findings from our research


 In addition, we have developed recommendations for how various actors can
  use these findings to drive more dollars to organizations generating social good


 These recommendations are supported by the fact-base we have developed
  regarding the behaviors and preferences of donors and investors, but in some
  cases require additional research to properly vet the ideas
     • E.g., we found a demand for impact investment products with small minimum investments,
       and recommend that the sector look for ways to provide those cost-effectively. However,
       we can not state that it is in the best interests of any specific organization to develop these
       products without a thorough understanding of the costs and benefits associated with them


 We have noted areas where additional research is required throughout


M AY 2 0 1 0   H O P E C O NS U L TI NG                                                                  6
Agenda




    1. Executive Summary
    1. Executive Summary                                           p 8 – 10
                                                                   p 8 – 10

    2. Increasing charitable donations from individuals            p 12 – 34

    3. Increasing donations to the highest performing nonprofits   p 36 – 57

    4. Realizing the potential of the impact investing market      p 59 – 88

    5. Final thoughts and next steps                               p 90 – 92

    6. Appendix                                                    p 94 – 106




M AY 2 0 1 0   H O P E C O NS U L TI NG                                         7
EXECUTIVE SUMMARY



Increasing Charitable Donations From Individuals


                                                                   Recommendations – For Nonprofits to
                         Key Findings                                Improve Fundraising Capabilities

 A.    There is $45B of market opportunity, limited in part   A. Segment on behaviors, not demographics
       by high levels of loyalty in charitable giving
                                                              B.    Tag and track your donors by segment
 B.    Donors are generally satisfied with nonprofits, but
       cite being solicited too often as their key area of    C. Determine what segments are best for your
       frustration                                               organization, given your strengths

 C.    Few donors do research before they give, and           D. Develop consistent outbound marketing that
       those that do look to the nonprofit itself to             appeals to target segments
       provide simple information about efficiency and
       effectiveness
                                                              E.    Prioritize investments based on what will drive
                                                                    donor behavior
 D.    Behaviors matter: there are six discrete segments
       of donors with different primary reasons for giving
                                                              F.    Capture donors early
 E.    Demographics don‟t matter: HNW donors
       behave similarly to others                             G. Understand how to manage different segments
                                                                 when approached



M AY 2 0 1 0   H O P E C O NS U L TI NG                                                                               8
EXECUTIVE SUMMARY


Increasing Donations to the Highest Performing
Nonprofits

                                                              Recommendations – To Increase Funding
                         Key Findings                             to High Performing Nonprofits

 A.    While donors say they care about nonprofit             A.   There are three primary opportunities to
       performance, very few actively donate to the                improve the quality of giving:
       highest performing nonprofits                               1. Closing the “care vs. act” gap
                                                                   2. Closing the “quality information” gap
 B.    Changing this behavior will be difficult given              3. Closing the “good vs. best” gap
       donors‟ varied motivations for giving, their loyalty
                                                              B.   The “Care vs. Act” and “Quality Information”
       to the nonprofits to which they give, and the fact          gaps are the top priorities and can be
       that they believe that nonprofits perform well              addressed concurrently by
                                                                   1. Providing simple information donors will use
                                                                   2.    Pushing information to the donors
                                                                   3. Building broad awareness around some
                                                                        select key messages

                                                              C.   The opportunity to close the “Good vs. Best”
                                                                   gap lies with the High Impact segment

                                                              D.   Foundations can also help direct more capital
                                                                   to high performing nonprofits by helping them
                                                                   to develop superior fundraising capabilities


M AY 2 0 1 0   H O P E C O NS U L TI NG                                                                              9
EXECUTIVE SUMMARY



Realizing the Potential of the Impact Investing Market


                                                                  Recommendations – To Unlock the
                         Key Findings                                 Impact Investing Market

 A.    Most individuals are open to impact investing, but    For organizations trying to unlock this market:
       need to know more
                                                             A.   Clarify what impact investing means
 B.    There is $120B of market opportunity, half of which
       is for smaller (<$25k) investments; even the          B.   Build awareness of impact investing and the
       wealthy want small investments                             opportunities available for investors

 C.    The opportunity is greater when positioned as         C.   Develop and disseminate information on impact
       investments, not alternatives to charity                   investing to financial advisors
 D.    Once people get involved, their willingness to        For all organizations involved in impact investing:
       invest increases (ramp in effect)
                                                             D. Structure products with small initial investments
 E.    People discover & transact through their advisor         (<$25,000)
 F.    The key barriers investors see relate to the          E. Tailor products and messages by segment, to
       immaturity of the market, not the social or              appeal to different motivations
       financial qualities of the investment opportunities
                                                             F. Make opportunities accessible to investors
 G.    Overall, downside risk is more important than
       upside financial returns                              G. Position these as investments, not as alternatives to
                                                                charity
 H.    However, those general preferences don‟t apply
       to each investor. We found six discrete segments      H. Address barriers related to the markets‟
       that have different priorities and motivations           immaturity, which are consistent across segments

M AY 2 0 1 0   H O P E C O NS U L TI NG                                                                             10
Agenda




    1. Executive Summary                                           p 8 – 10

    2. Increasing charitable donations from individuals
                  charitable donations      individuals            p 12 – 34

    3. Increasing donations to the highest performing nonprofits   p 36 – 57

    4. Realizing the potential of the impact investing market      p 59 – 88

    5. Final thoughts and next steps                               p 90 – 92

    6. Appendix                                                    p 94 – 106




M AY 2 0 1 0   H O P E C O NS U L TI NG                                         11
I NCREASING CHARI TABLE DONATI ONS FROM I NDI VI DUALS



Executive Summary


                                                                   Recommendations – For Nonprofits to
                         Key Findings                                Improve Fundraising Capabilities

 A.    There is $45B of market opportunity, limited in part   A. Segment on behaviors, not demographics
       by high levels of loyalty in charitable giving
                                                              B.    Tag and track your donors by segment
 B.    Donors are generally satisfied with nonprofits, but
       cite being solicited too often as their key area of    C. Determine what segments are best for your
       frustration                                               organization, given your strengths

 C.    Few donors do research before they give, and           D. Develop consistent outbound marketing that
       those that do look to the nonprofit itself to             appeals to target segments
       provide simple information about efficiency and
       effectiveness
                                                              E.    Prioritize investments based on what will drive
                                                                    donor behavior
 D.    Behaviors matter: there are six discrete segments
       of donors with different primary reasons for giving
                                                              F.    Capture donors early
 E.    Demographics don‟t matter: HNW donors
       behave similarly to others                             G. Understand how to manage different segments
                                                                 when approached



M AY 2 0 1 0   H O P E C O NS U L TI NG                                                                               12
A. MARKET OPPORTUNITY


 Nonprofit organizations receive a majority of their
 donations – $172B – from affluent individuals

    75% of all charitable donations –                                         The wealthiest 30% contribute
    ~$230B – come from individuals                                            75% of all individual donations
  2008                                                                 2008
Donations                                                            Donations
  ($B)                                                                 ($B)            Top 30% HH = $172B

 $300                                                                  $150

 $250          $229                                                                   $115
                                                                       $120
 $200
                                                                        $90
 $150
                                                                                                         $57             $57
                                                                        $60
 $100

                              $41                                       $30
  $50                                         $23          $15
   $0                                                                    $0
            Individual      Foundation      Charitable   Corporate               Wealthiest ~1% of    Next 29% (HH    Final 70% (HH
            Donations      Grantmaking       Bequests     giving                  Households (HH     Income >$80k)   Income <$80k)
                                                                                 Income >$300k)


    This research only looks at the most affluent 30% of households (>$80K in income)
Source: Giving USA, 2008

M AY 2 0 1 0     H O P E C O NS U L TI NG                                                                                         13
A. MARKET OPPORTUNITY


  There is $45B of charitable donations available for
  nonprofits from affluent individuals

Donations by top
 30% of HHs ($B)
 $250                                                              New Donations                                                  Market
                                                          A minority of donors are willing to
                                                          consider donating an additional
                                                                                                                                Opportunity
                                             $192         $20B over what they give today
 $200                                                                                                                        The market
                   $172                      $20                                                                           opportunity is the
                                             $25               Switchable Donations                                        sum of new and
 $150                                                    $25B of donors’ current donations                                   switchable
                                                          are not loyal to an organization,                                  donations:
                                                           and are therefore available to
 $100                                                       be switched to new charities                                              $45B

                                             $147
                                                                  Loyal Donations
  $50                                                      The majority of donations are
                                                          given to the same organizations
                                                                     every year
    $0
            2009 Donations           2010 Potential
                                       Donations

 Loyalty and switching determined based on donors‟ certainty around future gifts, and their historical giving patterns. Details in appendix

 M AY 2 0 1 0     H O P E C O NS U L TI NG                                                                                                      14
A. MARKET OPPORTUNITY


 The $20B of opportunity for “new donations” is
 concentrated in a third of donors

   Only 1/3 of donors were willing to donate
           more than they do today
                                                           Question asked “if nonprofits
     Willing only to                        Not Willing     improved on the areas you pay
      Reallocate                            to Change
                                                            attention to, would you change
           25%                                  41%
                                                            your giving?”

                                                           Only 34% of respondents said
                                                            they would donate more

                                                           Those 34% would donate $20B
                                                            more (after adjustments to
                                                            reduce overstatements1)

   Willing to                                              The 34% skew younger
  Donate More                                               • 38% of respondents under 50 willing
     34%                                                      to donate more vs. 32% over 50

1. See appendix for details

M AY 2 0 1 0     H O P E C O NS U L TI NG                                                       15
A. MARKET OPPORTUNITY


  Donors are very loyal, leading to only $25B of
  “switchable donations” (14% of total donations)


        The Majority of Donations are Loyal
                                                                    Loyalty was measured based on
% of $ Donated
                                % Total Gifts Loyal:                 donors‟ certainty around future gifts,
   100%
                                 86%                                 and their historical giving patterns1

                78%                                                 Almost 80% of all gifts made are “100%
    80%
                                                                     loyal,” meaning that there is a virtual
                                                                     certainty that these gifts will be
    60%                                                              repeated next year
                                                                      •   More loyal than typical industries

    40%                                                             Overall, on a weighted basis, 14% of
                                                                     gifts are available, or “switchable”
                                                                      •   Varies by income: 19% of donations by
    20%
                                       10%                                retail individuals are available, but only
                           7%                                             11% of HNW donors‟ donations
                                                2%        3%
     0%
           100% Loyal     99-67%       66-33%   32-1%   0% Loyal
                                                                    This leads to $25B in “switchable”
                           Loyal        Loyal   Loyal                opportunity ($172B * 14% = $25B)

 1. See appendix for details

 M AY 2 0 1 0     H O P E C O NS U L TI NG                                                                             16
B. DONOR SATI SFACTION


                       A key area of donor dissatisfaction is that donors feel
                       that nonprofits solicit them too frequently

                               Importance vs. Performance1
                                                                                                     For the most part, there is a high
                                                                      • Ease of                       correlation between what donors say
                                                • How org will          donating
                         • Too frequent                                                               is important and how well they feel
                                                  use donation        • Leadership
                           solicitations                                                              nonprofits perform
                                                • % of $ to OH          quality
                                                                      • Effectiveness                   •   Ultimately a barrier to getting people to
Importance to Donors




                                                                                                            change behavior
                                                •   Direct use
                                                •   Regular reports   • Prompt and                   Donors are not happy with how often
                                                •   Endorsements        sincere                       they are solicited
                                                •   Can get             thanks                          •   60% said this was very important to them,
                                                    involved                                                but only 40% said they thought nonprofits
                                                                                                            did a good job
                         • Innovative
                                                                                                        •   Consistent with external findings2
                           Approach
                         • Contact w/
                           beneficiaries                                                             This analysis is for donor views of
                         • Social events                                                              nonprofits overall; it is useful for
                         • Gifts
                                                                                                      nonprofits to ask their donors how
                         • Recognition
                                                                                                      they perform specifically
                                           Performance of Nonprofits
          1. Donors were asked to rate the importance of various elements of giving, and the performance of the nonprofits to which they donated, on 1-6 scale
          2. “2008 Study of High Net Worth Philanthropy,” March 2009. Said #3 reason people stop donating to an organization is “Too Frequent Solicitation” (42%)

              M AY 2 0 1 0        H O P E C O NS U L TI NG                                                                                                          17
B. DONOR SATI SFACTION

  With a few exceptions, donors believe nonprofits
  perform well on the important elements of giving
  (Note: this is additional detail on previous page‟s chart)

   Donors‟ View of How Important Various                                         Donors‟ View of the Performance of the
  Attributes Are When Giving to a Nonprofit                                         Nonprofits to Which They Give
                                              0% 20% 40% 60% 80%100%            100%    80%     60%        40%        20%   0%

                     Org's Effectiveness                                  90%    87%                                             Ease of Donation
   How the Org will Use my Donation                                      87%           75%                                       Quality of Leadership
                   Quality of Leadership                                78%            72%                                       Org's Effectiveness
        Percent of Costs to Overhead                                    76%             69%                                      Prompt and Sincere Thank You
                       Ease of Donation                           62%                   68%                                      How the Org will Use my…
Not Being Asked for Money Too Often                               59%                         60%                                Regular Progress Reports
       Ability to Direct Donation's Use                     46%                               59%                                Percent of Costs to Overhead
                Regular Progress Reports                    41%                               59%                                Ability to Get Involved
       Endorsements by Person I Trust                    34%                                    52%                              Endorsements by Person I Trust
       Prompt and Sincere Thank You                     31%                                                                      Ability to Direct Donation's Use
                                                                                                    48%
                  Ability to Get Involved               30%
                                                                                                      40%                        Social Events Hosted by Charity
  Org Approach - Novel / Innovative                   28%
                                                                                                      40%                        Not Being Asked for Money Too…
  Contact with the End Beneficiaries                  24%
                                                                                                      39%                        Org Approach - Novel /…
      Social Events Hosted by Charity              16%
                                                                                                      38%                        Public Recognition of Donation
                         Worthwhile Gift          11%
                                                                                                          36%                    Contact with the End…
      Public Recognition of Donation             9%
                                                                                                                25%              Worthwhile Gift



 M AY 2 0 1 0      H O P E C O NS U L TI NG                                                                                                                 18
C. DONORS‟ I NFORMATION NEEDS


Most donors don‟t spend a lot of time researching,
and those that do look for simple, digestible info

                                               Of those, ~75% spend                  …and they are looking for
 Only 35% ever do research                    <2 hours researching…                   simple facts and figures

                                                       0%   10%   20%   30%   40%
Did Research on
Any Donation in                                                                                    Quotes /
      2009                                  <15 Min               14%                             Testimonials


                                                                                       Stories         10%
                                           15-60 Min                          34%
               35%                                                                               13%

                              65%          1-2 Hours                    26%
                                                                                               15%               62%
                                                                                    Detailed
                                           2-6 Hours              16%               Reports
                              Never
                           Researched                                                                        Facts and
                         Before Making a   >6 Hours           10%                                             Figures
                            Donation



M AY 2 0 1 0    H O P E C O NS U L TI NG                                                                                 19
C. DONORS‟ I NFORMATION NEEDS


Donors are looking for information on the efficiency
and effectiveness of an organization…

“Select the most important piece of information you
             sought out before giving”
                                                     0%   5% 10% 15% 20% 25% 30%
                                                                                    For better or for worse,
                  Amount to "doing good" (vs. OH)                           25%      Overhead Ratio is the #1
  The amount of good the org is accomplishing                               24%      piece of information
                                                                                     donors are looking for
                 How the org will use the donation                    18%

                 Approach to solving the problem                8%                  In general, people are
       Endorsement by trustworthy org or person                 7%                   looking for comfort that
                                                                                     their money will not be
                    Quality of organization's team             5%
                                                                                     “wasted” (top 3 answers)
                    What the donation will provide         4%

       Size of the challenge org trying to address         4%                       People care about
                                                                                     information on the
               Negative information (scandal, etc)        2%
                                                                                     organization more than
                                            Other         1%                         information on the size of
                                                                                     the problem (4%)

M AY 2 0 1 0     H O P E C O NS U L TI NG                                                                         20
C. DONORS‟ I NFORMATION NEEDS


…and donors typically look to the organization itself to
collect information

   “Please select the single most valuable source of
                information you used”
                                                      0%    5%       10%        15%         20%    Many donors go directly
                 The organization’ s web-site                                         16%           to the organization
               Employee/Volunteer at the NP                                       14%
                                                                                                    (3 of top 4 responses)
                   A friend or family member                                      14%
                                                                                                   Only 10% use
                                    Beneficiary                             11%
                                                                                                    intermediaries that
               Internet search (e.g., Google)                             10%                       evaluate a wide range of
       Website that has info on many NPs                                  10%                       nonprofits as their primary
     Presentation at an event I attended                             8%                             source of information
               E-mails or mailings from the NP                  4%
                                              Other             4%
                                                                                                   If there was a strong
                                                                                                    demand for information,
          Grant proposal or annual report                       4%
                                                                                                    there would likely be more
   TV news report or media article/video                    3%
                                                                                                    activity with internet
   Advisor (e.g., lawyer, financial advisor)               2%                                       searches and advisors

M AY 2 0 1 0       H O P E C O NS U L TI NG                                                                                       21
D. DONOR SEGMENTS


 Donors are not alike. We found that, statistically, donors
 break out into six behavioral segments

                Repayer                                          Casual Giver                 High Impact
    ―I give to my alma mater‖                              ―I primarily give to well      ―I give to the nonprofits
                                                         known nonprofits through a      that I feel are generating
      ―I support organizations
                                                         payroll deduction at work‖      the greatest social good―
     that have had an impact
       on me or a loved one‖                               ―I donated $1,000 so I          ―I support causes that
                                                          could host a table at the         seem overlooked by
                                                                  event‖                          others‖


               Faith Based                                  See the Difference                Personal Ties
      ―We give to our church‖                               ―I think it’s important to     ―I only give when I am
                                                            support local charities‖      familiar with the people
         ―We only give to
                                                                                          who run an organization‖
     organizations that fit with                            ―I only give to small
       our religious beliefs‖                            organizations where I feel I       ―A lot of my giving is in
                                                          can make a difference‖         response to friends who ask
                                                                                         me to support their causes”

Note: Segments based on statistical analysis. See appendix for details

M AY 2 0 1 0     H O P E C O NS U L TI NG                                                                               22
D. DONOR SEGMENTS



 Each segment has different motivations for giving


                                                                    Casual            High               Faith          See the           Personal
    Core Drivers of Giving1                      Repayer            Giver            Impact             Based          Difference           Ties

 Cause impacted me or a loved one                           38%          4%                2%                2%               6%                7%
     Org is established and respected            4%                           27%          7%                3%               7%                8%
  I will be recognized or appreciated            1%                      4%               0%                 0%              1%                1%
                 Easy to give through work       0%                      3%               0%                 0%              1%                1%
                Good social events or gifts      0%                      3%               0%                 0%              0%                1%
 Focused on underserved social issue             2%                      4%                  18%             1%               4%                2%
Org better at addressing social issues           1%                      5%                 12%              1%               3%                2%
                    Fit with religious beliefs   1%                      2%               2%                        65%       3%                2%
    Org works in my local community              3%                      4%                3%                3%                    30%          5%
 Org is small - gift makes a difference          2%                      2%               2%                 1%                16%              3%
               Familiar with org/leadership      3%                      4%               2%                 3%               5%                      26%
                   Friend/Family asked me        2%                      1%               1%                 0%              1%                  10%
      In social or professional network          1%                      1%               0%                 0%              1%                 5%
         Try to support friends' charities       0%                      0%               0%                 0%              0%                 3%

1. The segments were derived by grouping individuals who had similar priorities across these “Core Drivers” of giving. We tested for multiple
segmentations (from 3-9 groupings) and found this breakout of six segments to be the most robust. The %‟s represent the relative importance of each
variable to each segment‟s decision making for charitable giving. “I care deeply about the cause” was important to all segments so was removed from
the analysis (it‟s more of a table stake than a driver of segment-specific decision making). See appendix for further details on the methodology
M AY 2 0 1 0       H O P E C O NS U L TI NG                                                                                                           23
D. DONOR SEGMENTS


 Repayer has the largest number of donors;
 Personal Ties has the largest amount of donations


                                                 %                           %                           MEAN                       MEDIAN
                                             POPULATION                   DONATIONS                    DONATION1                   DONATION2

    Repayer                                          23%                          17%                      $11,000                      $1,800

    Casual Giver                                     18%                          18%                      $15,000                      $2,500

    High Impact                                      16%                          12%                      $11,000                      $3,500

    Faith Based                                      16%                          18%                      $18,000                      $7,700

    See the Difference                               14%                          10%                      $10,000                      $2,500

    Personal Ties3                                   13%                          25%                      $27,000                      $3,700


1. Refers to all donations. 2. Refers to all donations. Estimated as people entered their giving in ranges (e.g., $1,000 - $2,499) vs. directly inputting the
amount. 3. The reason that Personal Ties has such a large % of donations is because, in our survey, a disproportionate # of people who gave >$1M / year
fell into this category. This may be unsurprising, as many other reports discuss the importance of personal connections for very high net worth donors
M AY 2 0 1 0     H O P E C O NS U L TI NG                                                                                                                   24
D. DONOR SEGMENTS


 There is at least $5B of market opportunity in each
 segment

       Market Opportunity by Segment ($B)
                                                            New Donations
                                                          Switchable Donations    Sufficient market opportunity
    Repayer            $3.4         $2.2
                                                                                   exists in each segment

       Casual
                        $4.0                      $5.9
                                                                                  Faith Based and Repayer are
        Giver
                                                                                   the most loyal segments (93%
                                                                                   vs. 86% overall)
High Impact           $3.0          $3.0
                                                                                  The least loyal segments are
Faith Based             $4.0               $2.6
                                                                                   Casual Givers & See the
                                                                                   Difference (80%)
   See the
  Difference
                  $1.6         $3.5                                               The Personal Ties switching
                                                                                   opportunity is driven by the
Personal Ties         $3.3                         $8.4
                                                                                   high current donation per
                                                                                   person

M AY 2 0 1 0    H O P E C O NS U L TI NG                                                                           25
E. DEMOGRAPHICS


 Segments don‟t vary significantly by demographics;
 demographics are not critical predictors of behavior

   Segment mix is similar
     across gender…                                               …age…                                       …and income
                                                                                                     100%
  100%                                                100%
                                      Personal Ties

                                                                                                      80%
   80%                                                80%
                                      See the
                                      Difference
                                                                                                      60%
   60%                                Faith Based     60%


                                      High Impact                                                     40%
   40%                                                40%

                                      Casual Giver                                                    20%
   20%                                                20%

                                      Repayer
                                                                                                       0%
     0%                                                 0%
                                                                                                                $80-     $150-      $300-     $750K+
               Male   Female                                  18-39    40-49   50-59     60+
                                                                                                               $149K     $299K      $749K


     Responses to other questions in the survey did not vary much by demographics –
     most importantly, high net worth individuals responded similarly to everyone else
Note: breakouts on this page are for the raw data in from the survey, before adjustments were made to rebalance for population demographics

M AY 2 0 1 0      H O P E C O NS U L TI NG                                                                                                       26
I NCREASING CHARI TABLE DONATI ONS FROM I NDI VI DUALS


Recommendations for obtaining more donations from
individuals by improving the donor experience



    A. Segment on behaviors, not demographics

    B.     Tag and track your donors by segment

    C. Determine what segments are best for your organization, given your strengths

    D. Develop consistent outbound marketing that appeals to target segments

    E.     Prioritize investments based on what will drive donor behavior

    F.     Capture donors early

    G. Understand how to manage different segments when approached




M AY 2 0 1 0   H O P E C O NS U L TI NG                                               27
RECOMMENDATIONS FOR NONPROFIT ORGANIZATIONS



A. Segment on behaviors, not demographics


                        Why Do This                            How to Segment

  Nonprofits segmentations are often                  Repayer                  Casual Giver
   based on demographics, especially             ―I support organizations      ―I give to well known
   age and income                                    that have had an          nonprofits because it
                                                    impact on me or a        isn’t very complicated‖
                                                        loved one‖
  However, differences in age and
   income do not point to differences in
                                                    High Impact                   Faith Based
   how donors give, or what they want
      • While it may be useful to spend more     ―I give to the nonprofits         ―We give to
                                                       that I feel are         organizations that fit
        time with affluent donors because they
                                                 generating the greatest     with our religious beliefs‖
        are often willing to donate more, they
                                                       social good‖
        should not be targeted differently

                                                    Personal Ties            See the Difference
  It is more useful to segment based on
   what drives donor behavior, and                  ―I give when I am          ―I only give to small
                                                 familiar with the people     organizations where I
   would thus influence the message and                 who run an              feel I can make a
   approach for that type of donor                     organization‖               difference‖


M AY 2 0 1 0   H O P E C O NS U L TI NG                                                                    28
RECOMMENDATIONS FOR NONPROFIT ORGANIZATIONS



B. Tag and track your donors by segment


                        Why Do This          How to Tag and Track (Illustrative Ex’s)
  Because different donor segments          Please answer the following three questions:
   respond to different hooks, it is         1.   Why do you donate to our organization?
   important to know into which segment            A. A loved one was afflicted by the disease
   a current or prospective donor falls            B. A friend asked me to
                                                   C. Donated at 25th anniversary event
                                                   D. …
  Segment tags can (and should) be
                                             2.   What do you like most about our organization?
   tracked in an organization‟s donor              A. Strong religious principles
   database                                        B. More effective than similar nonprofits
                                                   C. …

  Determining which segment a donor is      3.   How…
   in is very doable; it can be as easy as
   asking a few behavioral questions for     Name      Address        Donation When     Segment
   each donor (again, this can‟t be done     John Doe 142 Oak St…     $500    12/5/09   High Impact
   based simply on demographics)             Sue Kim   88 Chestnut…   $250    9/15/09   Repayer
                                             Jim Smith 42 Pine St…    $75     1/1/10    Casual Giver
                                             …


M AY 2 0 1 0   H O P E C O NS U L TI NG                                                                29
RECOMMENDATIONS FOR NONPROFIT ORGANIZATIONS


C. Determine which segments are best for your
organization, given your strengths

                        Why Do This               How to Pick Target Segments

  Nonprofits can‟t be all things to all      1. Define what you stand for
   people, and certainly can‟t effectively
   market themselves as such                  2. Assess what you do best, and what
                                                 makes you distinct
  The best way to set your organization
   apart from others is to be clear on        3. Look at your current donors – why do
                                                 they donate to your organization, and
   your strengths, and market yourself
                                                 into which segment do they fall?
   accordingly
                                              4. Now, look at the six donor segments –
  There is sufficient headroom in each          select those that are the best fit for your
   segment, so the available dollars             organization
   should not dictate where a nonprofit
   focuses                                   Some potential examples:
                                             • Susan G. Komen: Repayer, Personal Ties
                                             • A Local Shelter: See the Difference, Faith Based
                                             • TechnoServe: Repayer, Personal Ties, High Impact


M AY 2 0 1 0   H O P E C O NS U L TI NG                                                           30
RECOMMENDATIONS FOR NONPROFIT ORGANIZATIONS


D. Develop simple, consistent outbound marketing
that appeals to target segments

                        Why Do This                               Some Ideas…
  Donors give for different reasons, and          Create outbound marketing approach
   thus respond to different appeals                that appeals to target segments, i.e.,
                                                    • Channels for communication and asks
  Donors want simple information, and              • Look and feel of website and images
   are not willing to do a lot of research          • Consistency in all messages

                                                   Communicate a few, simple messages
  While many donors want general
                                                    • Simple story that appeals to 1-2 segments
   performance information, and want to             • Supported by a few key metrics
   know how their gift will be used,
   different segments have different
                                                   Create brief summaries / asks for
   “hooks” that will inspire them to give
                                                    donors, nuanced by target segment
      • E.g., a hospital could focus on:
        a) appealing to the families of current       When you donate to [org name], 99 cents out of
        and past patients;                            every dollar go to help the end beneficiaries…

        b) how they benefit the local community            Do you remember the great times you had at ___
        c) their quality vs. other hospitals               University? Well, now we need your help…



M AY 2 0 1 0   H O P E C O NS U L TI NG                                                                     31
RECOMMENDATIONS FOR NONPROFIT ORGANIZATIONS


E. Prioritize investments based on what will drive donor
behavior

                        Why Do This                             How to Prioritize Investments
                                                  We measured the importance of various traits
 Nonprofits should only invest where it
                                                  for the sector as a whole (see pages 17 - 18);
  will change behavior – and should not           nonprofits could survey their donors to see how
  invest where it won‟t                           they perform on each of those dimensions

                                                                1.0
 Nonprofits need to understand what                                        Unsatisfied needs
                                                                0.9
  donors want and how donors feel that
                                                                0.8
  the nonprofit performs on those criteria
     • Nonprofits can attract more donors by                    0.7




                                                   Importance
       improving on „unsatisfied needs‟                         0.6

     • Nonprofits can save time and money by                    0.5
       cutting back on areas of over-investment                 0.4

                                                                0.3
 Requires being strict – “Will changing                        0.2
  what we do here really cause donors to                        0.1                                         Areas of potential
                                                                                                             over-investment
  [no longer] give to us?”                                      0.0
                                                                      0.0    0.1   0.2   0.3   0.4   0.5   0.6   0.7   0.8   0.9   1.0
                                                                                               Performance
M AY 2 0 1 0   H O P E C O NS U L TI NG                                                                                                  32
RECOMMENDATIONS FOR NONPROFIT ORGANIZATIONS



F. Capture donors early


                        Why Do This                               Some Ideas…

 Most elements of donor behavior                   Engage young people who
  don‟t vary with age or income                      correspond with your target
                                                     segments and have strong
 Further, donors are rather loyal, so:              earning potential
     • Once they donate, they are yours to lose      • Young donors program (e.g., Bravo Club)
     • If you don‟t have them once they‟ve           • Bring young, connected professionals to
       started to give, they are hard to convert       the Board (e.g., Young Associates Board)

 So, while many nonprofits target                  Because an organization‟s volunteers
  wealthy, older donors, it may be                   are disproportionately likely to give to
  better to target younger, less affluent            that organization, create opportunities
  donors that have earning potential                 for young people to volunteer
                                                     • Partner with firms with young professionals
                                                       (banks, consultancies, technology, etc)

                                                    Invest in the lifetime potential of donors,
                                                     not just this year‟s potential

M AY 2 0 1 0   H O P E C O NS U L TI NG                                                              33
RECOMMENDATIONS FOR NONPROFIT ORGANIZATIONS


G. Understand how to manage different segments
when approached

                        Why Do This         How to Manage Different Segments

 Targeting and messaging to chosen
                                            1. Develop 3 reasons why each segment
  donor segments is for outbound
                                               should donate to your nonprofit, and
  marketing                                    communicate to all fundraisers

 However, when donors from „non            2. Create a simple set of questions that you
  target‟ segments come to you, they           ask each prospective donor when you
                                               meet him/her
  should not be turned away                   •   Can be standard questions with responses
                                                  that will assign each donor to a segment,
                                                  e.g., “Why are you interested in our
 As a result, it is important to have a
                                                  organization”? (See Rec #2)
  clear set of talking points to use with
  each donor segment, not just your         3. Emphasize the messages appropriate for
  target segments, to maximize your            that segment
  ability to appeal to them
                                            4. Tag and track the donor over time



M AY 2 0 1 0   H O P E C O NS U L TI NG                                                       34
Agenda




    1. Executive Summary                                           p 8 – 10

    2. Increasing charitable donations from individuals            p 12 – 34

    3. Increasing donations to the highest performing nonprofits
                  donations                                        p 36 – 57

    4. Realizing the potential of the impact investing market      p 59 – 88

    5. Final thoughts and next steps                               p 90 – 92

    6. Appendix                                                    p 94 – 106




M AY 2 0 1 0   H O P E C O NS U L TI NG                                         35
I NCREASING DONATIONS TO HI GH PERFORMING NONPROFITS



Executive Summary


                                                              Recommendations – To Increase Funding
                         Key Findings                             to High Performing Nonprofits

 A.    While donors say they care about nonprofit             A.   There are three primary opportunities to
       performance, very few actively donate to the                improve the quality of giving:
       highest performing nonprofits                               1. Closing the “care vs. act” gap
                                                                   2. Closing the “quality information” gap
 B.    Changing this behavior will be difficult given              3. Closing the “good vs. best” gap
       donors‟ varied motivations for giving, their loyalty
                                                              A.   The “Care vs. Act” and “Quality Information”
       to the nonprofits to which they give, and the fact          gaps are the top priorities and can be
       that they believe that nonprofits perform well              addressed concurrently by
                                                                   1. Providing simple information donors will use
                                                                   2.    Pushing information to the donors
                                                                   3. Building broad awareness around some
                                                                        select key messages

                                                              B.   The opportunity to close the “Good vs. Best”
                                                                   gap lies with the High Impact segment

                                                              C.   Foundations can also help direct more capital
                                                                   to high performing nonprofits by helping them
                                                                   to develop superior fundraising capabilities


M AY 2 0 1 0   H O P E C O NS U L TI NG                                                                              36
0
                                                                                                                                                                 1
                                                                                                                                                                     2
                                                                                                                                                                         3
                                                                                                                                                                             4
                                                                                                                                                                                 5
                                                                                                                                                                                                        6
                                                                                                                                       The organization's




M AY 2 0 1 0
                                                                                                                                           effectiveness

                                                                                                                            How the organization will use
                                                                                                                                           my donation

                                                                                                                                    Percentage of costs
                                                                                                                                 dedicated to overhead
                                                                                                                                                                                                                                                                                                     is important…



                                                                                                                             Quality of the organization's




H O P E C O NS U L TI NG
                                                                                                                                               leadership

                                                                                                                                  How easy it is for me to
                                                                                                                                                   donate

                                                                                                                             Does not ask me for money
                                                                                                                                              too often

                                                                                                                           Allows me to direct where my
                                                                                                                                            money goes

                                                                                                                             Provides progress reports on
                                                                                                                                                their work

                                                                                                                              Highlight endorsements by
                                                                                                                                  trustworty people/orgs


                                                                                                                               Allows me to get involved




                           Average score from respondents on a 1-6 scale, where 6 = “I pay extremely close attention to”
                                                                                                                                                                                                                                                                                                                                                             A. DEMAND TO DONATE TO HI GH PERFORMING NONPROFITS




                                                                                                                                Thanks me promptly and
                                                                                                                                              sincerely

                                                                                                                            Offers a novel or innovative
                                                                                                                                               approach

                                                                                                                                     Provides contact or
                                                                                                                                      engagement with
                                                                                                                                           beneficiaries

                                                                                                                           Hosts worthwhile social events
                                                                                                                                                                                                                                                                                                     The majority of people say that nonprofit performance




                                                                                                                            Provides a worthwhile gift for
                                                                                                                                           my donation

                                                                                                                                  Publicly recognizes my
                                                                                                                                                                                 one of the three highlighted responses
                                                                                                                                                                                 85% of respondents answered 5 or 6 to




                                                                                                                                               donation
                                                                                                                                                                                                                          “How much do you pay attention to the following when giving to charity?”




37
A. DEMAND TO DONATE TO HI GH PERFORMING NONPROFITS


 … However, very few people spend any time looking
 into it…


People say they care about nonprofit
  performance, but few look into it                                                       Comments from Focus Groups
   % of all
 Respondents                                                                            “Giving to charity should be the easy
   100%
                                                                                        thing in my life”
                        85%
     80%                                                                                “I don‟t want to spend the time to do
                                                                                        research”
     60%
                                                                                        “With known nonprofits, unless there is
     40%                                            35%                                 a scandal, you assume they are
                                                                                        doing well with your money”
     20%
                                                                                        “[Third party validation]…would be
      0%                                                                                another layer of effort for me. I would
                    State that              Do research on any
               performance is "very                gift
                                                                                        have to figure out whether the rating
                  important" (1)                                                        company is reputable or trustworthy”

1. % responding 5 or 6 on a 1-6 scale, where 6 = “I pay extremely close attention to”
M AY 2 0 1 0     H O P E C O NS U L TI NG                                                                                         38
A. DEMAND TO DONATE TO HI GH PERFORMING NONPROFITS


 … When they do research only a quarter are interested
 in the level of social impact an organization is having…

“Select the most important piece of information
         you sought out before giving”                                      Comments from Focus Groups
                                            0%        10%   20%     30%
                                                                          “I look at what percentage of
   Amount to "doing good" (vs. OH)                                 25%    dollars actually goes to those
      The amount of good the org is                                       being helped. I will look that up if it
                                                                   24%
                    accomplishing                                         is easy to find”
  How the org will use the donation                          18%
                                                                          “I look for 25% or lower admin
  Approach to solving the problem                      8%                 costs”
 Endorsement by trustworthy org or
                           person
                                                       7%
                                                                          “It‟s too hard to measure social
       Quality of organization's team                 5%                  impact”
     What the donation will provide               4%
  Size of the challenge org trying to
                                                                          “I‟m not a mini-foundation; don‟t
                            address
                                                  4%                      treat me like one”
Negative information (scandal, etc)              2%

                                    Other        1%

M AY 2 0 1 0   H O P E C O NS U L TI NG                                                                         39
A. DEMAND TO DONATE TO HI GH PERFORMING NONPROFITS


 … and they use that information to validate their
 donation, not to choose between organizations

    For the 35% that do research, it is
    often to “validate” their choice of
                  charity                                        Comments from Focus Groups
% of the 35% that
    research                                                   “I just want to make sure my charities
   100%                                                        „hurdle the bar‟, I don‟t care by how
                                                               much”
    80%
                    63%                                        “I just want to ensure that I‟m not
    60%                                                        throwing my money away.”

    40%                                                        “I can‟t determine which is the „best‟
                                         24%                   nonprofit, but I can find out if a
    20%                                           13%          nonprofit is bad”
     0%
                                                               “We give to faith based organizations if
                 To determine    To help me    To help me
               whether I would decide how        choose        they are accredited by our church”
                make a gift to much to give     between
               this organization               multiple orgs


M AY 2 0 1 0      H O P E C O NS U L TI NG                                                                40
A. DEMAND TO DONATE TO HI GH PERFORMING NONPROFITS


 So, overall, only 3% of people donate based on the
 relative performance of a nonprofit organization



                                                                                                                Gives based
     Total                       Cares About                      Does Any                     Researches
   Population                    Performance             +        Research              +     Performance   +    on relative
                                                                                                                performance




                                                                                                                    3%
       100%                                85%                        32%                            21%




Note: %‟s represent total people. So, while 35% research, only 32% care about performance AND research
M AY 2 0 1 0    H O P E C O NS U L TI NG                                                                                   41
B. BARRIERS TO CHANGI NG BEHAVI OR



Changing donor behavior is an uphill battle



              Sadly, the reality is that very few donors actively try to give to high
               performing nonprofits when they make their charitable contributions

              Changing these donors‟ behaviors will be challenging, in large part
               due to three critical barriers:

               1. Donors don‟t give to „maximize impact‟
                   “I give because it makes me feel good”

               2. There is no „burning platform‟ to motivate change
                    “I don‟t research, but I am sure that the nonprofits to which I donate are
                    doing a great job”

               3. Donors are loyal
                   “I give to the same organizations each year. Some metric won‟t change
                   that”


M AY 2 0 1 0    H O P E C O NS U L TI NG                                                         42
B. BARRIERS TO CHANGI NG BEHAVI OR


Donor‟s don‟t give to maximize their social impact.
Only the “High impact” segment cares about this at all

   Importance of Key Drivers of Donation                                Importance of “Organization is Better
          (for population overall)                                    Than Others at Addressing Social Issues”

                                                                                               0%        5%        10%    15%
           Care deeply about the cause                          33%
       Cause impacted me / loved one                      12%
                                                                                   Repayer          1%
                       Fit with religious beliefs         11%
          Org established and respected                  9%
                 Org works in my community               7%
                                                                              Casual Giver                    5%
                 Familiar with org/leadership            7%
       Focus on underserved social issue             5%                        High Impact                               12%
  Org better at addressing social issues             4%
   Org is small - gift makes a difference            4%                        Faith Based          1%
          Friend/Family asked me to give            2%
    I will be recognized or appreciated             1%
                                                                               Personal Ties             3%
         In social or professional network          1%
                   Easy to give through work        1%
    Enjoy benefits (social events, gifts…)          1%
                                                                         See the Difference          2%
               Try to support friend's charities    1%

M AY 2 0 1 0       H O P E C O NS U L TI NG                                                                                     43
B. BARRIERS TO CHANGI NG BEHAVI OR


                       Donors feel that nonprofits perform well – there is no
                       „burning platform‟ for them to change

                               Importance vs. Performance1

                                                                      • Ease of
                                                • How org will          donating
                                                                                                   For the most part, we see a high
                         • Too frequent                                                             correlation between what
                                                  use donation        • Leadership
                           solicitations
                                                • % of $ to OH          quality                     donors say is important and how
                                                                      • Effectiveness
                                                                                                    well they feel nonprofits perform
Importance to Donors




                                                •   Direct use
                                                •   Regular reports   • Prompt and                 This correlation is more stark than
                                                •   Endorsements        sincere
                                                •   Can get             thanks
                                                                                                    one would see in most other
                                                    involved                                        industries
                         • Innovative
                           Approach                                                                This creates a big challenge to
                         • Contact w/                                                               getting people to do more
                           beneficiaries
                         • Social events
                                                                                                    research -- they see no need to
                         • Gifts                                                                    do so
                         • Recognition
                                         Performance of Nonprofits

          1. Donors were asked to rate the importance of various elements of giving, and the performance of the nonprofits to which they donated, on 1-6 scale

              M AY 2 0 1 0        H O P E C O NS U L TI NG                                                                                                       44
I NCREASING DONATIONS TO HI GH PERFORMING NONPROFITS


Recommendations on how to increase funding to
high performing nonprofits



          A. There are three primary opportunities to improve the quality of giving:
               1.    Closing the “care vs. act” gap
               2.    Closing the “quality information” gap
               3.    Closing the “good vs. best” gap

          A. The “Care vs. Act” and “Quality Information” gaps are the top priorities
             and can be addressed concurrently by
               1.    Providing simple information donors will use
               2.    Pushing information to the donors
               3.    Building broad awareness around some select key messages

          B. The opportunity to close the “Good vs. Best” gap lies with the High
             Impact segment

          C. Foundations can also help direct more capital to high performing
             nonprofits by helping them to develop superior fundraising capabilities


M AY 2 0 1 0   H O P E C O NS U L TI NG                                                 45
RECOMMENDATIONS TO I NCREASE DONATIONS TO HI GH PERFORMING ORGS


A. There are three opportunities to improve the quality
of giving



         While this is an uphill battle, we do see hope
               •       85% people say they do care about nonprofit performance
               •       60% of people say they will change their giving if nonprofits do a better job on
                       areas that are important to them
               •       We know that people do research for other decisions in life when they have
                       ready access to quality information



         Overall, we see three key opportunities to improve the quality of giving
               1.      Getting people that care about performance to do some research
               2.      When people research, getting them to care about the „right things‟
               3.      Getting people to care about making the „best‟ gift, just a „good‟ gift




M AY 2 0 1 0       H O P E C O NS U L TI NG                                                               46
RECOMMENDATIONS TO I NCREASE DONATIONS TO HI GH PERFORMING ORGS


A. The three opportunities to improve the quality of
giving


                                                                                             Gives Based
 Cares About                                Does Any              Researches
 Performance                     +          Research      +      Performance         +        on Relative
                                                                                             Performance


       85%                                   32%                         21%                         3%


                  Opportunity 1:                     Opportunity 2:          Opportunity 3:
                The “Care vs. Act”                    The “Quality         The “Good vs. Best”
                      Gap                          Information” Gap               Gap

                Get people to act on              Get people to care        Get people to give to
               their interest in nonprofit        about social impact      the top nonprofits, not
                performance by doing             and other measures of       just those that are
                    some research                    performance               „good enough‟



M AY 2 0 1 0     H O P E C O NS U L TI NG                                                                 47
RECOMMENDATIONS TO I NCREASE DONATIONS TO HI GH PERFORMING ORGS


B. We believe that the “Care vs. Act” and “Quality
Information” gaps are the first priorities to address

   These gaps address ~2/3 of all donors, representing $110B of annual donations

   Making a small change on these donations will have more impact than even a doubling of
    the donors that try to give to the highest performing nonprofits (which currently represent just
    $5B of annual charitable gifts)

   Changing individuals‟ behavior is very difficult, especially given the barriers in the charitable
    giving space. Given that donors state time and again that nonprofit performance is
    important to them, we feel that getting them to look at research isn‟t a significant change to
    their core behaviors
     • The core behavior that can be maintained is using information to validate gifts, not
        choose amongst different nonprofits, which will be harder to influence
     • Addressing the “Quality Information” gap requires no behavioral changes

   Addressing these opportunities will disseminate performance information broadly, which will,
    in turn, motivate nonprofits to perform better and be the tide that lifts all ships

   Getting simple information on nonprofit performance out to donors will help break down the
    belief that donors think that all nonprofits are strong performers

   When getting donors to look at information, it is possible to simplify the information they
    receive and in doing so, improve the quality of information
M AY 2 0 1 0   H O P E C O NS U L TI NG                                                                 48
RECOMMENDATIONS TO I NCREASE DONATIONS TO HI GH PERFORMING ORGS


B. The “Care vs. Act” and “Quality Information” gaps
can be addressed concurrently


                                                                                  Gives Based
   Cares About                             Does Any              Researches
   Performance                   +         Research       +     Performance   +    on Relative
                                                                                  Performance

           85%                               32%                      21%             3%

                Care vs. Act Gap                   Quality Info Gap

          Many initiatives will address both of these opportunities simultaneously
          Three ways to address these gaps:
           1. Providing simple information donors will use
           2.    Pushing information to the donors
           3. Building broad awareness around some select key messages



M AY 2 0 1 0    H O P E C O NS U L TI NG                                                         49
RECOMMENDATIONS TO I NCREASE DONATIONS TO HI GH PERFORMING ORGS



B1. Provide Simple Information – What is Needed


                        Why Do This                            What Is Needed
  When we look at the 35% of people                 Donors who care about performance
   that do any research, we see that:                 but DON‟T research today will be
      • Donors do not spend a lot of time doing       interested in information that is:
        research (75% spend < 2 hours)                • Simple and digestible
                                                      • Validates performance
      • Donors are looking for simple information
        (62% want facts and figures vs. more         Further, to create change across
        elaborate info)                               many donors, information must be:
      • Donors are looking simply to validate         • Easy for sector to market and message
        nonprofits (ensure they aren‟t making a       • Consistent with how donors absorb
        bad donation), which has a lower bar            information today
        for information and negates the need
        for comparative metrics                      However, what is not required/desired
                                                      (from a donor‟s perspective):
      • Donors look to the organization – and to
                                                      • Consistent information across nonprofits
        people close to it – to provide
                                                      • Information that compares nonprofits to
        information                                     each other
                                                      • Detailing methodologies/scoring systems

M AY 2 0 1 0   H O P E C O NS U L TI NG                                                         50
RECOMMENDATIONS TO I NCREASE DONATIONS TO HI GH PERFORMING ORGS



B1. Provide Simple Information – Some Potential Ideas


                                                           Example                                 Rationale
                                                                                             • Simple
                                                           We are a ―Best Buy                • Validating
         Seal of Approval                                  Charity‖                          • Bar can be set as high
                                                                                               as one wants

                                                           Before you donate, ask            • Simple
          3 Key Questions                                  your nonprofit these              • Marketable
                                                           three questions …                 • Help move from OH


                                                                                             • Get info from people
               Peer Reviews                                                                  • Can get heavy traffic



                                                                     Last Year   This Year
                                                                                             • Achievable by most
                                                                                             • Shows progress
    Year-on-Year Metrics                   Entrepreneurs Assisted      300         450
                                                                                             • Comparable info w/o
                                           Income from Enterprises    $1.3M       $3.2M
                                                                                               comparing nonprofits


M AY 2 0 1 0    H O P E C O NS U L TI NG                                                                            51
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
Money for good - A research in Donors - Hope Consulting
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Money for good - A research in Donors - Hope Consulting

  • 1. HOPE CONSULTING Money for Good The US Market for Impact Investments and Charitable Gifts from Individual Donors and Investors MAY 2010 M AY 2 0 1 0 H O P E C O NS U L TI NG
  • 2. I NTRODUCTION AND CONTEXT The Motivation for the Money for Good Project It is our nature to see the world based on our own context, experiences, and points of view. People in all walks of life struggle with this bias every day. How can a new product fail when you and your cohort believed that it was a great idea? The need to understand the world as it is – not as we wish it were – has caused primary market research to become a multi-billion dollar industry. The motivation behind the Money for Good project was to seek the „voice of the customer‟ for charitable giving and impact investing. This perspective has been lacking in these sectors to date. As the Hewlett Foundation and McKinsey & Company noted in their recent report “The Nonprofit Marketplace,” there is a need to “invest in research that clarifies donors‟ motivations, needs, and decision-making criteria.”1 With this report we have attempted to address that need, and to build a thorough understanding of the behaviors and motivations of Americans with respect to charitable giving and impact investing. 1. “The Nonprofit Marketplace: Bridging the Information Gap in Philanthropy”, The Hewlett Foundation and McKinsey & Company, 2008 M AY 2 0 1 0 H O P E C O NS U L TI NG 1
  • 3. I NTRODUCTION AND CONTEXT The Goal and Structure of the Money for Good Project The goal of this project was to understand US consumer preferences, behaviors, and demand for impact investment products and charitable giving opportunities (together, these make up the “money for good” market), and then to generate ideas for how for- and nonprofit organizations can use this information to drive more dollars to organizations generating social good. We structured the project around three key questions related to this overall goal: 1. How can nonprofits more effectively obtain donations from individuals? 2. How can a greater share of donations go to the highest performing nonprofits? 3. What is the market potential for impact investing and how can it be realized? Note: We also looked at how these findings relate to people who donate or invest in developing countries, with a particular focus on support to international entrepreneurship. Those findings can be found in ―Money for Good: Special Report on Donor and Investor Preferences for Supporting Organizations Working Outside the US‖ M AY 2 0 1 0 H O P E C O NS U L TI NG 2
  • 4. I NTRODUCTION AND CONTEXT Our Approach to the Money for Good Project WHO WE TARGETED HOW WE RESEARCHED WHY SURVEY IS UNIQUE Individuals with household Used 3 sources of information: Breadth and Depth: survey is (HH) incomes over $80K. unique both in the number of These individuals represent External research, to learn respondents and the amount the top 30% of US HHs in terms from previous work in the field of information it covered of income, and make 75% of charitable donations from Qualitative research, High Net Worth1: half (2,000) individuals consisting of focus groups and of the respondents had HH interviews with over 30 incomes >$300k, making this We oversampled people with individuals, to test survey one of the most robust household incomes over language and inform surveys of wealthy individuals $300K, due to these hypotheses individuals‟ disproportionate Behavioral Focus: survey share of charitable Quantitative research, looked at actions, not simply contributions and investments consisting of an online survey stated preferences. It also of 4,000 individuals. This was forced individuals to make the main focus of our trade-offs to mirror real life research decision-making and 1. We refer to high net worth individuals throughout this report as individuals with HH incomes of minimize pro social responses greater than $300,000, as this is one of the criteria to be an accredited investor M AY 2 0 1 0 H O P E C O NS U L TI NG 3
  • 5. I NTRODUCTION AND CONTEXT Key Definitions Donations: Charitable donations by individuals to nonprofit organizations Impact Investments that have an active social and/or environmental Investments: objective in addition to a financial objective Money for Good: Charitable donations + impact investments Retail Donor or People with HH income between $80k and $300k. $80k is the Investor: cutoff for the top three deciles of US HHs in terms of income High Net Worth People with HH income over $300k, an income threshold for Donor or Investor:1 accredited investors. This represents the top 1.3% of US HHs Affluent Donor or Anyone with HH income over $80k (retail + high net worth). Investor: This was the full scope of our research 1. Technically these are high income, not high net worth individuals. However, given the high correlation between income and assets and the fact that income is a more stringent measure of being an accredited investor, we have used the more common term “High Net Worth” in this report M AY 2 0 1 0 H O P E C O NS U L TI NG 4
  • 6. I NTRODUCTION AND CONTEXT Project Team  The Money for Good project has been generously funded by the Metanoia Fund, the Aspen Institute of Development Entrepreneurs (ANDE), the Rockefeller Foundation, and the William and Flora Hewlett Foundation  The project was led by Hope Consulting (www.hopeconsulting.us), with additional advice and services provided by Clavis Partners, Engage123, Compass(x) Strategy, and e-rewards  The project ran from December 2009 – May 2010  For more information on these results, please contact: Hope Neighbor – Founder, Hope Consulting – hope@hopeconsulting.us Greg Ulrich – Project Manager, Money for Good – greg@hopeconsulting.us Julian Millikan – Survey Design, Money for Good – julian@hopeconsulting.us  The appendix contains additional information on the funders, partners and team M AY 2 0 1 0 H O P E C O NS U L TI NG 5
  • 7. I NTRODUCTION AND CONTEXT A Final Note on This Report  This report summarizes the most important findings from our research  In addition, we have developed recommendations for how various actors can use these findings to drive more dollars to organizations generating social good  These recommendations are supported by the fact-base we have developed regarding the behaviors and preferences of donors and investors, but in some cases require additional research to properly vet the ideas • E.g., we found a demand for impact investment products with small minimum investments, and recommend that the sector look for ways to provide those cost-effectively. However, we can not state that it is in the best interests of any specific organization to develop these products without a thorough understanding of the costs and benefits associated with them  We have noted areas where additional research is required throughout M AY 2 0 1 0 H O P E C O NS U L TI NG 6
  • 8. Agenda 1. Executive Summary 1. Executive Summary p 8 – 10 p 8 – 10 2. Increasing charitable donations from individuals p 12 – 34 3. Increasing donations to the highest performing nonprofits p 36 – 57 4. Realizing the potential of the impact investing market p 59 – 88 5. Final thoughts and next steps p 90 – 92 6. Appendix p 94 – 106 M AY 2 0 1 0 H O P E C O NS U L TI NG 7
  • 9. EXECUTIVE SUMMARY Increasing Charitable Donations From Individuals Recommendations – For Nonprofits to Key Findings Improve Fundraising Capabilities A. There is $45B of market opportunity, limited in part A. Segment on behaviors, not demographics by high levels of loyalty in charitable giving B. Tag and track your donors by segment B. Donors are generally satisfied with nonprofits, but cite being solicited too often as their key area of C. Determine what segments are best for your frustration organization, given your strengths C. Few donors do research before they give, and D. Develop consistent outbound marketing that those that do look to the nonprofit itself to appeals to target segments provide simple information about efficiency and effectiveness E. Prioritize investments based on what will drive donor behavior D. Behaviors matter: there are six discrete segments of donors with different primary reasons for giving F. Capture donors early E. Demographics don‟t matter: HNW donors behave similarly to others G. Understand how to manage different segments when approached M AY 2 0 1 0 H O P E C O NS U L TI NG 8
  • 10. EXECUTIVE SUMMARY Increasing Donations to the Highest Performing Nonprofits Recommendations – To Increase Funding Key Findings to High Performing Nonprofits A. While donors say they care about nonprofit A. There are three primary opportunities to performance, very few actively donate to the improve the quality of giving: highest performing nonprofits 1. Closing the “care vs. act” gap 2. Closing the “quality information” gap B. Changing this behavior will be difficult given 3. Closing the “good vs. best” gap donors‟ varied motivations for giving, their loyalty B. The “Care vs. Act” and “Quality Information” to the nonprofits to which they give, and the fact gaps are the top priorities and can be that they believe that nonprofits perform well addressed concurrently by 1. Providing simple information donors will use 2. Pushing information to the donors 3. Building broad awareness around some select key messages C. The opportunity to close the “Good vs. Best” gap lies with the High Impact segment D. Foundations can also help direct more capital to high performing nonprofits by helping them to develop superior fundraising capabilities M AY 2 0 1 0 H O P E C O NS U L TI NG 9
  • 11. EXECUTIVE SUMMARY Realizing the Potential of the Impact Investing Market Recommendations – To Unlock the Key Findings Impact Investing Market A. Most individuals are open to impact investing, but For organizations trying to unlock this market: need to know more A. Clarify what impact investing means B. There is $120B of market opportunity, half of which is for smaller (<$25k) investments; even the B. Build awareness of impact investing and the wealthy want small investments opportunities available for investors C. The opportunity is greater when positioned as C. Develop and disseminate information on impact investments, not alternatives to charity investing to financial advisors D. Once people get involved, their willingness to For all organizations involved in impact investing: invest increases (ramp in effect) D. Structure products with small initial investments E. People discover & transact through their advisor (<$25,000) F. The key barriers investors see relate to the E. Tailor products and messages by segment, to immaturity of the market, not the social or appeal to different motivations financial qualities of the investment opportunities F. Make opportunities accessible to investors G. Overall, downside risk is more important than upside financial returns G. Position these as investments, not as alternatives to charity H. However, those general preferences don‟t apply to each investor. We found six discrete segments H. Address barriers related to the markets‟ that have different priorities and motivations immaturity, which are consistent across segments M AY 2 0 1 0 H O P E C O NS U L TI NG 10
  • 12. Agenda 1. Executive Summary p 8 – 10 2. Increasing charitable donations from individuals charitable donations individuals p 12 – 34 3. Increasing donations to the highest performing nonprofits p 36 – 57 4. Realizing the potential of the impact investing market p 59 – 88 5. Final thoughts and next steps p 90 – 92 6. Appendix p 94 – 106 M AY 2 0 1 0 H O P E C O NS U L TI NG 11
  • 13. I NCREASING CHARI TABLE DONATI ONS FROM I NDI VI DUALS Executive Summary Recommendations – For Nonprofits to Key Findings Improve Fundraising Capabilities A. There is $45B of market opportunity, limited in part A. Segment on behaviors, not demographics by high levels of loyalty in charitable giving B. Tag and track your donors by segment B. Donors are generally satisfied with nonprofits, but cite being solicited too often as their key area of C. Determine what segments are best for your frustration organization, given your strengths C. Few donors do research before they give, and D. Develop consistent outbound marketing that those that do look to the nonprofit itself to appeals to target segments provide simple information about efficiency and effectiveness E. Prioritize investments based on what will drive donor behavior D. Behaviors matter: there are six discrete segments of donors with different primary reasons for giving F. Capture donors early E. Demographics don‟t matter: HNW donors behave similarly to others G. Understand how to manage different segments when approached M AY 2 0 1 0 H O P E C O NS U L TI NG 12
  • 14. A. MARKET OPPORTUNITY Nonprofit organizations receive a majority of their donations – $172B – from affluent individuals 75% of all charitable donations – The wealthiest 30% contribute ~$230B – come from individuals 75% of all individual donations 2008 2008 Donations Donations ($B) ($B) Top 30% HH = $172B $300 $150 $250 $229 $115 $120 $200 $90 $150 $57 $57 $60 $100 $41 $30 $50 $23 $15 $0 $0 Individual Foundation Charitable Corporate Wealthiest ~1% of Next 29% (HH Final 70% (HH Donations Grantmaking Bequests giving Households (HH Income >$80k) Income <$80k) Income >$300k) This research only looks at the most affluent 30% of households (>$80K in income) Source: Giving USA, 2008 M AY 2 0 1 0 H O P E C O NS U L TI NG 13
  • 15. A. MARKET OPPORTUNITY There is $45B of charitable donations available for nonprofits from affluent individuals Donations by top 30% of HHs ($B) $250 New Donations Market A minority of donors are willing to consider donating an additional Opportunity $192 $20B over what they give today $200 The market $172 $20 opportunity is the $25 Switchable Donations sum of new and $150 $25B of donors’ current donations switchable are not loyal to an organization, donations: and are therefore available to $100 be switched to new charities $45B $147 Loyal Donations $50 The majority of donations are given to the same organizations every year $0 2009 Donations 2010 Potential Donations Loyalty and switching determined based on donors‟ certainty around future gifts, and their historical giving patterns. Details in appendix M AY 2 0 1 0 H O P E C O NS U L TI NG 14
  • 16. A. MARKET OPPORTUNITY The $20B of opportunity for “new donations” is concentrated in a third of donors Only 1/3 of donors were willing to donate more than they do today  Question asked “if nonprofits Willing only to Not Willing improved on the areas you pay Reallocate to Change attention to, would you change 25% 41% your giving?”  Only 34% of respondents said they would donate more  Those 34% would donate $20B more (after adjustments to reduce overstatements1) Willing to  The 34% skew younger Donate More • 38% of respondents under 50 willing 34% to donate more vs. 32% over 50 1. See appendix for details M AY 2 0 1 0 H O P E C O NS U L TI NG 15
  • 17. A. MARKET OPPORTUNITY Donors are very loyal, leading to only $25B of “switchable donations” (14% of total donations) The Majority of Donations are Loyal  Loyalty was measured based on % of $ Donated % Total Gifts Loyal: donors‟ certainty around future gifts, 100% 86% and their historical giving patterns1 78%  Almost 80% of all gifts made are “100% 80% loyal,” meaning that there is a virtual certainty that these gifts will be 60% repeated next year • More loyal than typical industries 40%  Overall, on a weighted basis, 14% of gifts are available, or “switchable” • Varies by income: 19% of donations by 20% 10% retail individuals are available, but only 7% 11% of HNW donors‟ donations 2% 3% 0% 100% Loyal 99-67% 66-33% 32-1% 0% Loyal  This leads to $25B in “switchable” Loyal Loyal Loyal opportunity ($172B * 14% = $25B) 1. See appendix for details M AY 2 0 1 0 H O P E C O NS U L TI NG 16
  • 18. B. DONOR SATI SFACTION A key area of donor dissatisfaction is that donors feel that nonprofits solicit them too frequently Importance vs. Performance1  For the most part, there is a high • Ease of correlation between what donors say • How org will donating • Too frequent is important and how well they feel use donation • Leadership solicitations nonprofits perform • % of $ to OH quality • Effectiveness • Ultimately a barrier to getting people to Importance to Donors change behavior • Direct use • Regular reports • Prompt and  Donors are not happy with how often • Endorsements sincere they are solicited • Can get thanks • 60% said this was very important to them, involved but only 40% said they thought nonprofits did a good job • Innovative • Consistent with external findings2 Approach • Contact w/ beneficiaries  This analysis is for donor views of • Social events nonprofits overall; it is useful for • Gifts nonprofits to ask their donors how • Recognition they perform specifically Performance of Nonprofits 1. Donors were asked to rate the importance of various elements of giving, and the performance of the nonprofits to which they donated, on 1-6 scale 2. “2008 Study of High Net Worth Philanthropy,” March 2009. Said #3 reason people stop donating to an organization is “Too Frequent Solicitation” (42%) M AY 2 0 1 0 H O P E C O NS U L TI NG 17
  • 19. B. DONOR SATI SFACTION With a few exceptions, donors believe nonprofits perform well on the important elements of giving (Note: this is additional detail on previous page‟s chart) Donors‟ View of How Important Various Donors‟ View of the Performance of the Attributes Are When Giving to a Nonprofit Nonprofits to Which They Give 0% 20% 40% 60% 80%100% 100% 80% 60% 40% 20% 0% Org's Effectiveness 90% 87% Ease of Donation How the Org will Use my Donation 87% 75% Quality of Leadership Quality of Leadership 78% 72% Org's Effectiveness Percent of Costs to Overhead 76% 69% Prompt and Sincere Thank You Ease of Donation 62% 68% How the Org will Use my… Not Being Asked for Money Too Often 59% 60% Regular Progress Reports Ability to Direct Donation's Use 46% 59% Percent of Costs to Overhead Regular Progress Reports 41% 59% Ability to Get Involved Endorsements by Person I Trust 34% 52% Endorsements by Person I Trust Prompt and Sincere Thank You 31% Ability to Direct Donation's Use 48% Ability to Get Involved 30% 40% Social Events Hosted by Charity Org Approach - Novel / Innovative 28% 40% Not Being Asked for Money Too… Contact with the End Beneficiaries 24% 39% Org Approach - Novel /… Social Events Hosted by Charity 16% 38% Public Recognition of Donation Worthwhile Gift 11% 36% Contact with the End… Public Recognition of Donation 9% 25% Worthwhile Gift M AY 2 0 1 0 H O P E C O NS U L TI NG 18
  • 20. C. DONORS‟ I NFORMATION NEEDS Most donors don‟t spend a lot of time researching, and those that do look for simple, digestible info Of those, ~75% spend …and they are looking for Only 35% ever do research <2 hours researching… simple facts and figures 0% 10% 20% 30% 40% Did Research on Any Donation in Quotes / 2009 <15 Min 14% Testimonials Stories 10% 15-60 Min 34% 35% 13% 65% 1-2 Hours 26% 15% 62% Detailed 2-6 Hours 16% Reports Never Researched Facts and Before Making a >6 Hours 10% Figures Donation M AY 2 0 1 0 H O P E C O NS U L TI NG 19
  • 21. C. DONORS‟ I NFORMATION NEEDS Donors are looking for information on the efficiency and effectiveness of an organization… “Select the most important piece of information you sought out before giving” 0% 5% 10% 15% 20% 25% 30%  For better or for worse, Amount to "doing good" (vs. OH) 25% Overhead Ratio is the #1 The amount of good the org is accomplishing 24% piece of information donors are looking for How the org will use the donation 18% Approach to solving the problem 8%  In general, people are Endorsement by trustworthy org or person 7% looking for comfort that their money will not be Quality of organization's team 5% “wasted” (top 3 answers) What the donation will provide 4% Size of the challenge org trying to address 4%  People care about information on the Negative information (scandal, etc) 2% organization more than Other 1% information on the size of the problem (4%) M AY 2 0 1 0 H O P E C O NS U L TI NG 20
  • 22. C. DONORS‟ I NFORMATION NEEDS …and donors typically look to the organization itself to collect information “Please select the single most valuable source of information you used” 0% 5% 10% 15% 20%  Many donors go directly The organization’ s web-site 16% to the organization Employee/Volunteer at the NP 14% (3 of top 4 responses) A friend or family member 14%  Only 10% use Beneficiary 11% intermediaries that Internet search (e.g., Google) 10% evaluate a wide range of Website that has info on many NPs 10% nonprofits as their primary Presentation at an event I attended 8% source of information E-mails or mailings from the NP 4% Other 4%  If there was a strong demand for information, Grant proposal or annual report 4% there would likely be more TV news report or media article/video 3% activity with internet Advisor (e.g., lawyer, financial advisor) 2% searches and advisors M AY 2 0 1 0 H O P E C O NS U L TI NG 21
  • 23. D. DONOR SEGMENTS Donors are not alike. We found that, statistically, donors break out into six behavioral segments Repayer Casual Giver High Impact ―I give to my alma mater‖ ―I primarily give to well ―I give to the nonprofits known nonprofits through a that I feel are generating ―I support organizations payroll deduction at work‖ the greatest social good― that have had an impact on me or a loved one‖ ―I donated $1,000 so I ―I support causes that could host a table at the seem overlooked by event‖ others‖ Faith Based See the Difference Personal Ties ―We give to our church‖ ―I think it’s important to ―I only give when I am support local charities‖ familiar with the people ―We only give to who run an organization‖ organizations that fit with ―I only give to small our religious beliefs‖ organizations where I feel I ―A lot of my giving is in can make a difference‖ response to friends who ask me to support their causes” Note: Segments based on statistical analysis. See appendix for details M AY 2 0 1 0 H O P E C O NS U L TI NG 22
  • 24. D. DONOR SEGMENTS Each segment has different motivations for giving Casual High Faith See the Personal Core Drivers of Giving1 Repayer Giver Impact Based Difference Ties Cause impacted me or a loved one 38% 4% 2% 2% 6% 7% Org is established and respected 4% 27% 7% 3% 7% 8% I will be recognized or appreciated 1% 4% 0% 0% 1% 1% Easy to give through work 0% 3% 0% 0% 1% 1% Good social events or gifts 0% 3% 0% 0% 0% 1% Focused on underserved social issue 2% 4% 18% 1% 4% 2% Org better at addressing social issues 1% 5% 12% 1% 3% 2% Fit with religious beliefs 1% 2% 2% 65% 3% 2% Org works in my local community 3% 4% 3% 3% 30% 5% Org is small - gift makes a difference 2% 2% 2% 1% 16% 3% Familiar with org/leadership 3% 4% 2% 3% 5% 26% Friend/Family asked me 2% 1% 1% 0% 1% 10% In social or professional network 1% 1% 0% 0% 1% 5% Try to support friends' charities 0% 0% 0% 0% 0% 3% 1. The segments were derived by grouping individuals who had similar priorities across these “Core Drivers” of giving. We tested for multiple segmentations (from 3-9 groupings) and found this breakout of six segments to be the most robust. The %‟s represent the relative importance of each variable to each segment‟s decision making for charitable giving. “I care deeply about the cause” was important to all segments so was removed from the analysis (it‟s more of a table stake than a driver of segment-specific decision making). See appendix for further details on the methodology M AY 2 0 1 0 H O P E C O NS U L TI NG 23
  • 25. D. DONOR SEGMENTS Repayer has the largest number of donors; Personal Ties has the largest amount of donations % % MEAN MEDIAN POPULATION DONATIONS DONATION1 DONATION2 Repayer 23% 17% $11,000 $1,800 Casual Giver 18% 18% $15,000 $2,500 High Impact 16% 12% $11,000 $3,500 Faith Based 16% 18% $18,000 $7,700 See the Difference 14% 10% $10,000 $2,500 Personal Ties3 13% 25% $27,000 $3,700 1. Refers to all donations. 2. Refers to all donations. Estimated as people entered their giving in ranges (e.g., $1,000 - $2,499) vs. directly inputting the amount. 3. The reason that Personal Ties has such a large % of donations is because, in our survey, a disproportionate # of people who gave >$1M / year fell into this category. This may be unsurprising, as many other reports discuss the importance of personal connections for very high net worth donors M AY 2 0 1 0 H O P E C O NS U L TI NG 24
  • 26. D. DONOR SEGMENTS There is at least $5B of market opportunity in each segment Market Opportunity by Segment ($B) New Donations Switchable Donations  Sufficient market opportunity Repayer $3.4 $2.2 exists in each segment Casual $4.0 $5.9  Faith Based and Repayer are Giver the most loyal segments (93% vs. 86% overall) High Impact $3.0 $3.0  The least loyal segments are Faith Based $4.0 $2.6 Casual Givers & See the Difference (80%) See the Difference $1.6 $3.5  The Personal Ties switching opportunity is driven by the Personal Ties $3.3 $8.4 high current donation per person M AY 2 0 1 0 H O P E C O NS U L TI NG 25
  • 27. E. DEMOGRAPHICS Segments don‟t vary significantly by demographics; demographics are not critical predictors of behavior Segment mix is similar across gender… …age… …and income 100% 100% 100% Personal Ties 80% 80% 80% See the Difference 60% 60% Faith Based 60% High Impact 40% 40% 40% Casual Giver 20% 20% 20% Repayer 0% 0% 0% $80- $150- $300- $750K+ Male Female 18-39 40-49 50-59 60+ $149K $299K $749K Responses to other questions in the survey did not vary much by demographics – most importantly, high net worth individuals responded similarly to everyone else Note: breakouts on this page are for the raw data in from the survey, before adjustments were made to rebalance for population demographics M AY 2 0 1 0 H O P E C O NS U L TI NG 26
  • 28. I NCREASING CHARI TABLE DONATI ONS FROM I NDI VI DUALS Recommendations for obtaining more donations from individuals by improving the donor experience A. Segment on behaviors, not demographics B. Tag and track your donors by segment C. Determine what segments are best for your organization, given your strengths D. Develop consistent outbound marketing that appeals to target segments E. Prioritize investments based on what will drive donor behavior F. Capture donors early G. Understand how to manage different segments when approached M AY 2 0 1 0 H O P E C O NS U L TI NG 27
  • 29. RECOMMENDATIONS FOR NONPROFIT ORGANIZATIONS A. Segment on behaviors, not demographics Why Do This How to Segment  Nonprofits segmentations are often Repayer Casual Giver based on demographics, especially ―I support organizations ―I give to well known age and income that have had an nonprofits because it impact on me or a isn’t very complicated‖ loved one‖  However, differences in age and income do not point to differences in High Impact Faith Based how donors give, or what they want • While it may be useful to spend more ―I give to the nonprofits ―We give to that I feel are organizations that fit time with affluent donors because they generating the greatest with our religious beliefs‖ are often willing to donate more, they social good‖ should not be targeted differently Personal Ties See the Difference  It is more useful to segment based on what drives donor behavior, and ―I give when I am ―I only give to small familiar with the people organizations where I would thus influence the message and who run an feel I can make a approach for that type of donor organization‖ difference‖ M AY 2 0 1 0 H O P E C O NS U L TI NG 28
  • 30. RECOMMENDATIONS FOR NONPROFIT ORGANIZATIONS B. Tag and track your donors by segment Why Do This How to Tag and Track (Illustrative Ex’s)  Because different donor segments Please answer the following three questions: respond to different hooks, it is 1. Why do you donate to our organization? important to know into which segment A. A loved one was afflicted by the disease a current or prospective donor falls B. A friend asked me to C. Donated at 25th anniversary event D. …  Segment tags can (and should) be 2. What do you like most about our organization? tracked in an organization‟s donor A. Strong religious principles database B. More effective than similar nonprofits C. …  Determining which segment a donor is 3. How… in is very doable; it can be as easy as asking a few behavioral questions for Name Address Donation When Segment each donor (again, this can‟t be done John Doe 142 Oak St… $500 12/5/09 High Impact based simply on demographics) Sue Kim 88 Chestnut… $250 9/15/09 Repayer Jim Smith 42 Pine St… $75 1/1/10 Casual Giver … M AY 2 0 1 0 H O P E C O NS U L TI NG 29
  • 31. RECOMMENDATIONS FOR NONPROFIT ORGANIZATIONS C. Determine which segments are best for your organization, given your strengths Why Do This How to Pick Target Segments  Nonprofits can‟t be all things to all 1. Define what you stand for people, and certainly can‟t effectively market themselves as such 2. Assess what you do best, and what makes you distinct  The best way to set your organization apart from others is to be clear on 3. Look at your current donors – why do they donate to your organization, and your strengths, and market yourself into which segment do they fall? accordingly 4. Now, look at the six donor segments –  There is sufficient headroom in each select those that are the best fit for your segment, so the available dollars organization should not dictate where a nonprofit focuses Some potential examples: • Susan G. Komen: Repayer, Personal Ties • A Local Shelter: See the Difference, Faith Based • TechnoServe: Repayer, Personal Ties, High Impact M AY 2 0 1 0 H O P E C O NS U L TI NG 30
  • 32. RECOMMENDATIONS FOR NONPROFIT ORGANIZATIONS D. Develop simple, consistent outbound marketing that appeals to target segments Why Do This Some Ideas…  Donors give for different reasons, and  Create outbound marketing approach thus respond to different appeals that appeals to target segments, i.e., • Channels for communication and asks  Donors want simple information, and • Look and feel of website and images are not willing to do a lot of research • Consistency in all messages  Communicate a few, simple messages  While many donors want general • Simple story that appeals to 1-2 segments performance information, and want to • Supported by a few key metrics know how their gift will be used, different segments have different  Create brief summaries / asks for “hooks” that will inspire them to give donors, nuanced by target segment • E.g., a hospital could focus on: a) appealing to the families of current When you donate to [org name], 99 cents out of and past patients; every dollar go to help the end beneficiaries… b) how they benefit the local community Do you remember the great times you had at ___ c) their quality vs. other hospitals University? Well, now we need your help… M AY 2 0 1 0 H O P E C O NS U L TI NG 31
  • 33. RECOMMENDATIONS FOR NONPROFIT ORGANIZATIONS E. Prioritize investments based on what will drive donor behavior Why Do This How to Prioritize Investments We measured the importance of various traits  Nonprofits should only invest where it for the sector as a whole (see pages 17 - 18); will change behavior – and should not nonprofits could survey their donors to see how invest where it won‟t they perform on each of those dimensions 1.0  Nonprofits need to understand what Unsatisfied needs 0.9 donors want and how donors feel that 0.8 the nonprofit performs on those criteria • Nonprofits can attract more donors by 0.7 Importance improving on „unsatisfied needs‟ 0.6 • Nonprofits can save time and money by 0.5 cutting back on areas of over-investment 0.4 0.3  Requires being strict – “Will changing 0.2 what we do here really cause donors to 0.1 Areas of potential over-investment [no longer] give to us?” 0.0 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 Performance M AY 2 0 1 0 H O P E C O NS U L TI NG 32
  • 34. RECOMMENDATIONS FOR NONPROFIT ORGANIZATIONS F. Capture donors early Why Do This Some Ideas…  Most elements of donor behavior  Engage young people who don‟t vary with age or income correspond with your target segments and have strong  Further, donors are rather loyal, so: earning potential • Once they donate, they are yours to lose • Young donors program (e.g., Bravo Club) • If you don‟t have them once they‟ve • Bring young, connected professionals to started to give, they are hard to convert the Board (e.g., Young Associates Board)  So, while many nonprofits target  Because an organization‟s volunteers wealthy, older donors, it may be are disproportionately likely to give to better to target younger, less affluent that organization, create opportunities donors that have earning potential for young people to volunteer • Partner with firms with young professionals (banks, consultancies, technology, etc)  Invest in the lifetime potential of donors, not just this year‟s potential M AY 2 0 1 0 H O P E C O NS U L TI NG 33
  • 35. RECOMMENDATIONS FOR NONPROFIT ORGANIZATIONS G. Understand how to manage different segments when approached Why Do This How to Manage Different Segments  Targeting and messaging to chosen 1. Develop 3 reasons why each segment donor segments is for outbound should donate to your nonprofit, and marketing communicate to all fundraisers  However, when donors from „non 2. Create a simple set of questions that you target‟ segments come to you, they ask each prospective donor when you meet him/her should not be turned away • Can be standard questions with responses that will assign each donor to a segment, e.g., “Why are you interested in our  As a result, it is important to have a organization”? (See Rec #2) clear set of talking points to use with each donor segment, not just your 3. Emphasize the messages appropriate for target segments, to maximize your that segment ability to appeal to them 4. Tag and track the donor over time M AY 2 0 1 0 H O P E C O NS U L TI NG 34
  • 36. Agenda 1. Executive Summary p 8 – 10 2. Increasing charitable donations from individuals p 12 – 34 3. Increasing donations to the highest performing nonprofits donations p 36 – 57 4. Realizing the potential of the impact investing market p 59 – 88 5. Final thoughts and next steps p 90 – 92 6. Appendix p 94 – 106 M AY 2 0 1 0 H O P E C O NS U L TI NG 35
  • 37. I NCREASING DONATIONS TO HI GH PERFORMING NONPROFITS Executive Summary Recommendations – To Increase Funding Key Findings to High Performing Nonprofits A. While donors say they care about nonprofit A. There are three primary opportunities to performance, very few actively donate to the improve the quality of giving: highest performing nonprofits 1. Closing the “care vs. act” gap 2. Closing the “quality information” gap B. Changing this behavior will be difficult given 3. Closing the “good vs. best” gap donors‟ varied motivations for giving, their loyalty A. The “Care vs. Act” and “Quality Information” to the nonprofits to which they give, and the fact gaps are the top priorities and can be that they believe that nonprofits perform well addressed concurrently by 1. Providing simple information donors will use 2. Pushing information to the donors 3. Building broad awareness around some select key messages B. The opportunity to close the “Good vs. Best” gap lies with the High Impact segment C. Foundations can also help direct more capital to high performing nonprofits by helping them to develop superior fundraising capabilities M AY 2 0 1 0 H O P E C O NS U L TI NG 36
  • 38. 0 1 2 3 4 5 6 The organization's M AY 2 0 1 0 effectiveness How the organization will use my donation Percentage of costs dedicated to overhead is important… Quality of the organization's H O P E C O NS U L TI NG leadership How easy it is for me to donate Does not ask me for money too often Allows me to direct where my money goes Provides progress reports on their work Highlight endorsements by trustworty people/orgs Allows me to get involved Average score from respondents on a 1-6 scale, where 6 = “I pay extremely close attention to” A. DEMAND TO DONATE TO HI GH PERFORMING NONPROFITS Thanks me promptly and sincerely Offers a novel or innovative approach Provides contact or engagement with beneficiaries Hosts worthwhile social events The majority of people say that nonprofit performance Provides a worthwhile gift for my donation Publicly recognizes my one of the three highlighted responses 85% of respondents answered 5 or 6 to donation “How much do you pay attention to the following when giving to charity?” 37
  • 39. A. DEMAND TO DONATE TO HI GH PERFORMING NONPROFITS … However, very few people spend any time looking into it… People say they care about nonprofit performance, but few look into it Comments from Focus Groups % of all Respondents “Giving to charity should be the easy 100% thing in my life” 85% 80% “I don‟t want to spend the time to do research” 60% “With known nonprofits, unless there is 40% 35% a scandal, you assume they are doing well with your money” 20% “[Third party validation]…would be 0% another layer of effort for me. I would State that Do research on any performance is "very gift have to figure out whether the rating important" (1) company is reputable or trustworthy” 1. % responding 5 or 6 on a 1-6 scale, where 6 = “I pay extremely close attention to” M AY 2 0 1 0 H O P E C O NS U L TI NG 38
  • 40. A. DEMAND TO DONATE TO HI GH PERFORMING NONPROFITS … When they do research only a quarter are interested in the level of social impact an organization is having… “Select the most important piece of information you sought out before giving” Comments from Focus Groups 0% 10% 20% 30% “I look at what percentage of Amount to "doing good" (vs. OH) 25% dollars actually goes to those The amount of good the org is being helped. I will look that up if it 24% accomplishing is easy to find” How the org will use the donation 18% “I look for 25% or lower admin Approach to solving the problem 8% costs” Endorsement by trustworthy org or person 7% “It‟s too hard to measure social Quality of organization's team 5% impact” What the donation will provide 4% Size of the challenge org trying to “I‟m not a mini-foundation; don‟t address 4% treat me like one” Negative information (scandal, etc) 2% Other 1% M AY 2 0 1 0 H O P E C O NS U L TI NG 39
  • 41. A. DEMAND TO DONATE TO HI GH PERFORMING NONPROFITS … and they use that information to validate their donation, not to choose between organizations For the 35% that do research, it is often to “validate” their choice of charity Comments from Focus Groups % of the 35% that research “I just want to make sure my charities 100% „hurdle the bar‟, I don‟t care by how much” 80% 63% “I just want to ensure that I‟m not 60% throwing my money away.” 40% “I can‟t determine which is the „best‟ 24% nonprofit, but I can find out if a 20% 13% nonprofit is bad” 0% “We give to faith based organizations if To determine To help me To help me whether I would decide how choose they are accredited by our church” make a gift to much to give between this organization multiple orgs M AY 2 0 1 0 H O P E C O NS U L TI NG 40
  • 42. A. DEMAND TO DONATE TO HI GH PERFORMING NONPROFITS So, overall, only 3% of people donate based on the relative performance of a nonprofit organization Gives based Total Cares About Does Any Researches Population Performance + Research + Performance + on relative performance 3% 100% 85% 32% 21% Note: %‟s represent total people. So, while 35% research, only 32% care about performance AND research M AY 2 0 1 0 H O P E C O NS U L TI NG 41
  • 43. B. BARRIERS TO CHANGI NG BEHAVI OR Changing donor behavior is an uphill battle  Sadly, the reality is that very few donors actively try to give to high performing nonprofits when they make their charitable contributions  Changing these donors‟ behaviors will be challenging, in large part due to three critical barriers: 1. Donors don‟t give to „maximize impact‟ “I give because it makes me feel good” 2. There is no „burning platform‟ to motivate change “I don‟t research, but I am sure that the nonprofits to which I donate are doing a great job” 3. Donors are loyal “I give to the same organizations each year. Some metric won‟t change that” M AY 2 0 1 0 H O P E C O NS U L TI NG 42
  • 44. B. BARRIERS TO CHANGI NG BEHAVI OR Donor‟s don‟t give to maximize their social impact. Only the “High impact” segment cares about this at all Importance of Key Drivers of Donation Importance of “Organization is Better (for population overall) Than Others at Addressing Social Issues” 0% 5% 10% 15% Care deeply about the cause 33% Cause impacted me / loved one 12% Repayer 1% Fit with religious beliefs 11% Org established and respected 9% Org works in my community 7% Casual Giver 5% Familiar with org/leadership 7% Focus on underserved social issue 5% High Impact 12% Org better at addressing social issues 4% Org is small - gift makes a difference 4% Faith Based 1% Friend/Family asked me to give 2% I will be recognized or appreciated 1% Personal Ties 3% In social or professional network 1% Easy to give through work 1% Enjoy benefits (social events, gifts…) 1% See the Difference 2% Try to support friend's charities 1% M AY 2 0 1 0 H O P E C O NS U L TI NG 43
  • 45. B. BARRIERS TO CHANGI NG BEHAVI OR Donors feel that nonprofits perform well – there is no „burning platform‟ for them to change Importance vs. Performance1 • Ease of • How org will donating  For the most part, we see a high • Too frequent correlation between what use donation • Leadership solicitations • % of $ to OH quality donors say is important and how • Effectiveness well they feel nonprofits perform Importance to Donors • Direct use • Regular reports • Prompt and  This correlation is more stark than • Endorsements sincere • Can get thanks one would see in most other involved industries • Innovative Approach  This creates a big challenge to • Contact w/ getting people to do more beneficiaries • Social events research -- they see no need to • Gifts do so • Recognition Performance of Nonprofits 1. Donors were asked to rate the importance of various elements of giving, and the performance of the nonprofits to which they donated, on 1-6 scale M AY 2 0 1 0 H O P E C O NS U L TI NG 44
  • 46. I NCREASING DONATIONS TO HI GH PERFORMING NONPROFITS Recommendations on how to increase funding to high performing nonprofits A. There are three primary opportunities to improve the quality of giving: 1. Closing the “care vs. act” gap 2. Closing the “quality information” gap 3. Closing the “good vs. best” gap A. The “Care vs. Act” and “Quality Information” gaps are the top priorities and can be addressed concurrently by 1. Providing simple information donors will use 2. Pushing information to the donors 3. Building broad awareness around some select key messages B. The opportunity to close the “Good vs. Best” gap lies with the High Impact segment C. Foundations can also help direct more capital to high performing nonprofits by helping them to develop superior fundraising capabilities M AY 2 0 1 0 H O P E C O NS U L TI NG 45
  • 47. RECOMMENDATIONS TO I NCREASE DONATIONS TO HI GH PERFORMING ORGS A. There are three opportunities to improve the quality of giving  While this is an uphill battle, we do see hope • 85% people say they do care about nonprofit performance • 60% of people say they will change their giving if nonprofits do a better job on areas that are important to them • We know that people do research for other decisions in life when they have ready access to quality information  Overall, we see three key opportunities to improve the quality of giving 1. Getting people that care about performance to do some research 2. When people research, getting them to care about the „right things‟ 3. Getting people to care about making the „best‟ gift, just a „good‟ gift M AY 2 0 1 0 H O P E C O NS U L TI NG 46
  • 48. RECOMMENDATIONS TO I NCREASE DONATIONS TO HI GH PERFORMING ORGS A. The three opportunities to improve the quality of giving Gives Based Cares About Does Any Researches Performance + Research + Performance + on Relative Performance 85% 32% 21% 3% Opportunity 1: Opportunity 2: Opportunity 3: The “Care vs. Act” The “Quality The “Good vs. Best” Gap Information” Gap Gap Get people to act on Get people to care Get people to give to their interest in nonprofit about social impact the top nonprofits, not performance by doing and other measures of just those that are some research performance „good enough‟ M AY 2 0 1 0 H O P E C O NS U L TI NG 47
  • 49. RECOMMENDATIONS TO I NCREASE DONATIONS TO HI GH PERFORMING ORGS B. We believe that the “Care vs. Act” and “Quality Information” gaps are the first priorities to address  These gaps address ~2/3 of all donors, representing $110B of annual donations  Making a small change on these donations will have more impact than even a doubling of the donors that try to give to the highest performing nonprofits (which currently represent just $5B of annual charitable gifts)  Changing individuals‟ behavior is very difficult, especially given the barriers in the charitable giving space. Given that donors state time and again that nonprofit performance is important to them, we feel that getting them to look at research isn‟t a significant change to their core behaviors • The core behavior that can be maintained is using information to validate gifts, not choose amongst different nonprofits, which will be harder to influence • Addressing the “Quality Information” gap requires no behavioral changes  Addressing these opportunities will disseminate performance information broadly, which will, in turn, motivate nonprofits to perform better and be the tide that lifts all ships  Getting simple information on nonprofit performance out to donors will help break down the belief that donors think that all nonprofits are strong performers  When getting donors to look at information, it is possible to simplify the information they receive and in doing so, improve the quality of information M AY 2 0 1 0 H O P E C O NS U L TI NG 48
  • 50. RECOMMENDATIONS TO I NCREASE DONATIONS TO HI GH PERFORMING ORGS B. The “Care vs. Act” and “Quality Information” gaps can be addressed concurrently Gives Based Cares About Does Any Researches Performance + Research + Performance + on Relative Performance 85% 32% 21% 3% Care vs. Act Gap Quality Info Gap  Many initiatives will address both of these opportunities simultaneously  Three ways to address these gaps: 1. Providing simple information donors will use 2. Pushing information to the donors 3. Building broad awareness around some select key messages M AY 2 0 1 0 H O P E C O NS U L TI NG 49
  • 51. RECOMMENDATIONS TO I NCREASE DONATIONS TO HI GH PERFORMING ORGS B1. Provide Simple Information – What is Needed Why Do This What Is Needed  When we look at the 35% of people  Donors who care about performance that do any research, we see that: but DON‟T research today will be • Donors do not spend a lot of time doing interested in information that is: research (75% spend < 2 hours) • Simple and digestible • Validates performance • Donors are looking for simple information (62% want facts and figures vs. more  Further, to create change across elaborate info) many donors, information must be: • Donors are looking simply to validate • Easy for sector to market and message nonprofits (ensure they aren‟t making a • Consistent with how donors absorb bad donation), which has a lower bar information today for information and negates the need for comparative metrics  However, what is not required/desired (from a donor‟s perspective): • Donors look to the organization – and to • Consistent information across nonprofits people close to it – to provide • Information that compares nonprofits to information each other • Detailing methodologies/scoring systems M AY 2 0 1 0 H O P E C O NS U L TI NG 50
  • 52. RECOMMENDATIONS TO I NCREASE DONATIONS TO HI GH PERFORMING ORGS B1. Provide Simple Information – Some Potential Ideas Example Rationale • Simple We are a ―Best Buy • Validating Seal of Approval Charity‖ • Bar can be set as high as one wants Before you donate, ask • Simple 3 Key Questions your nonprofit these • Marketable three questions … • Help move from OH • Get info from people Peer Reviews • Can get heavy traffic Last Year This Year • Achievable by most • Shows progress Year-on-Year Metrics Entrepreneurs Assisted 300 450 • Comparable info w/o Income from Enterprises $1.3M $3.2M comparing nonprofits M AY 2 0 1 0 H O P E C O NS U L TI NG 51