Last week, The Chronicle of Philanthropy highlighted a new report entitled ‘The Effect of Effectiveness,’ which demonstrated that despite all the current emphasis on data, it doesn’t always have the desired impact. Donors simply aren’t giving more based on better data – but is this true across the whole donor spectrum? We examined both the report and the article to explore this issue further.
The example highlighted in the article focuses on small gift giving and direct mail. The conclusion, based on a test done with Freedom from Hunger, was ‘donors who had given $100 or more in the past were more likely to give again when they encountered the data on the charity’s impact. But donors who had given less than $100 were actually less likely to donate when the appeal included the data.’ The averaging out of this leads to no change in the total amount raised, so quite clearly, data doesn’t always lead to more gifts.
However, this is a very specific case. Many of us with a background in direct and small gifts giving, would suggest from experience that small gift donors give based on the heart. They are satisfied by knowing they are giving money to a worthy cause. As the writer of the report, Dean Karlan notes, ‘what this [example] highlights to us is when someone is giving $10, $20 to a charity, this is not a very intense deliberative process.’ As such, data is not overly important, and indeed, could harm the amount you receive.
By contrast, in major gifts giving, or impact investment, there is a far greater emphasis on a charity’s USP and the specifics of what they do and how they do it in comparison to their competitors. Given the research points to the findings that people giving over $100 are influenced by data, I imagine you, our readers, would be highly interested to see the equivalent research on even larger donations, and quite what the impact of data could be.
The conclusion of the article is that “no one consciously would say, ‘I don’t care about the impact of my money,’ but data has to be best used in the right manner, with the right audience. ‘So the question is, how do you get donors that [relevant] information in the easiest possible way so that they can act on it?’
As always, be sure to stay up to date with the The Chronicle of Philanthropy and follow them on Twitter. If you have any questions or comments, please direct them to our Markets For Good team @MarketsForGood, or alternatively, straight at Dean Karlan.