Economic Uncertainty Creates Savvier Donors

Economic Uncertainty Creates Savvier Donors

October 05, 2011 by jga_admin

by Ted Grossnickle


Since 2008 we have all noted quantitative answers to what the impact of the economy has been on gifting.

What is talked about less is what individuals tell us. We know there is more uncertainty and we know that uncertainty, not bad news, is not good for philanthropy.

But what else do we hear from donors and prospective donors? What trends are emerging? Are there lessons to be learned as we navigate these new waters?

Our clients tell us --- and we hear for ourselves during feasibility study interviews- the following key themes:

"I’m going to think about a gift more carefully - especially one from assets rather than cash flow.” Donors seem to be taking a longer time to decide and are definitely seeking advice from advisors more frequently.

“I used to support 6 or 8 organizations; I’m cutting that down.” Again, this is anecdotal but it seems donors have decided they wish to continue to be generous but they are giving to fewer organizations. Is this because they have less to give? Perhaps. Is it because some organizations have not done as good a job of staying in touch with donors? Perhaps. Is it because some organizations have not responded well during these times and donors don’t think they are as meritorious a cause? Perhaps. It may be a combination of these factors – or others.

“I’d like to see a clearer, more precise picture of what the organization will be like as a result of my gift. Is there a sound and strategic fiscal model?” We hear this more and more. And believe it ties closely to some of the points mentioned just above.

If one result of the current era is for donors and prospective donors to be savvier and more thoughtful about their philanthropy, then that is good. Everyone wins. Not only those that receive the gifts, but even the organizations that learn the lesson that they must change how they articulate what they do --- and be very sure they are effective and efficient in their missions.

As some have called it, this period is the “new normal.” Things will not go back to the way they were and all nonprofits must work harder to help donors see the value they can create with their gifts.