Where Is The Money?

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Understanding where charitable donations come from can help you target your potential supporters. Likewise, understanding which organizations receive donations—and learning why people give so greatly to these groups—can help you adjust your own strategies for developing donors. Faith-based groups receive the greatest proportion of charitable gifts—largely because people are motivated to give when they have a personal connection to a cause.

A majority of charitable gifts come from individuals.

According to the Giving USA Foundation’s 2009 report, individuals are the top donors of charitable gifts, providing 75 percent of all gifts received in 2008.  Foundations come in second, providing 13 percent of gifts, and charitable bequests come in third at 7 percent.

Not all individuals donate at equal levels.  In fact, 10 percent of an organization’s donors are likely to provide the bulk of its income.  Here’s a general rule of thumb:

  • 50%-70% of an organization’s income comes from 10% of its donors
  • 15%-25% of an organization’s income comes from 20% of its donors
  • The remaining 15%-25% comes from 70% of the organization’s donors

These numbers might look intimidating, as they imply that an organization will need to find a handful of prospects willing to make very significant gifts.  But getting these big-money givers means far fewer donors are needed to meet your fundraising goals.  Instead of paying a little bit of attention to lots of prospective donors, you will need to pay a lot of attention to a few very important prospects.

Faith-based organizations receive the biggest piece of the charitable gifts pie.

Faith-based organizations receive 35 percent of all charitable gifts.  Educational organizations receive 13 percent, and human services and health organizations come in third and fourth, netting 9 percent and 7 percent, respectively.

Getting donations requires that the asker have an established relationship with the giver.  For many people involved in religious communities, this relationship is a stable, significant part of their lives.  Some reasons why people give to religious institutions include:

  • Connection to the cause:  The church provides something back to donors, such as community, spiritual fulfillment, and services.  Donors generally feel the church stands for the same things they do.
  • An expression of gratitude:  Instead of looking at giving as a sacrifice or dues-paying, many churches frame giving as a way to say “thank you” to a higher power.
  • Commitment:  Donors may feel a commitment to spiritual teachings or scripture that promotes giving.
  • To affect change:  People may feel they can positively influence a community to which they are meaningfully tied.  They believe the organization’s ministry can change lives or directly improve society outside the church.
  • Expectation:  Individuals know the church will ask, and they know they are expected to give.  In a small congregation, more responsibility falls on each individual donor; there may be less of a sense of, “Someone else will do it.”

Think about how you can improve your prospects by applying these motivators to your organization and your cause.

Click to open interactivity Who gives the money; who gets the money?

Who gives the money; who gets the money?

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How do you get donations? The basic answer is "ask."

In studies asking why people made their most current donation, 80% answered, "Because someone asked me." Many people want to help but don’t have the time or the resources to go out looking for organizations to give to. In fact, people are more likely to remember something about the person who asked for their donation than the name of the organization to which they actually gave money.