Do Donors Care Whether Nonprofits Are Any Good?

Early this month, the British research and consulting firm YouGov released the results of a study on whether donors are interested in charity ratings.The report was headlined, ““Mixed response towards grading system for charities.”

UK based New Philanthropy Capital, a nonprofit rating and philanthropy consulting organization, reflected on the results in a recent blog post:

“The results are confusing to say the least, and not particularly encouraging.

According to the survey, 68% of people would switch their donations to another charity if they found the one they were supporting was performing badly. So far, so logical. But only 40%—a substantial minority, but still a minority—are interested in a charity rating scheme to provide independent assessments of organisations.

Given this, it is hardly surprising to find that 68% of people think that an independent rating system would not affect their giving decisions… There is something strange in these figures. In particular, the fact that 68% say they would change the pattern of donations if they were given evidence of poor performance, and the same percentage saying they would not respond to independent evidence. Reconciling these is tricky.”

NPC goes on to speculate why donors might be indicating they are not interested in charity ratings, despite their insistence that they would stop giving if they found out an organization was performing badly. They suggest that it might be because donors think they already have the right information to determine how nonprofits are performing or it may be that donors are doing a poor job of predicting their own behavior and will in fact use charity rating systems as they become more prevalent.

I think the results of the survey show how critical it is for people who care about improving philanthropy to understand how ideas spread.

At Tactical Philanthropy Advisors, we know that donors are simply not interested in hiring someone to tell them where to give. That’s why we explicitly state in our marketing material that, “It is not our job to tell you where to give. Instead, we act as your personal philanthropic concierge, connecting you to the people, organizations, tools, and research that can help you achieve your philanthropic goals.” Yet, the #1 assumption people make about our services (and those of “philanthropy advisors” more generally) is that it is our job to tell people where to give.

What this means is that if you ask people if they are interested in hiring a philanthropy advisor, you’ll likely get a very low positive response. But if you ask people if they are interested in achieving their personal philanthropic goals, you’ll get a very high positive response.

I think a similar mismatch is going on in the YouGov data.

What this means is that the effective philanthropy movement needs to get much, much better at communicating what our efforts are all about. We need to get better at spreading the idea of effective philanthropy.

That’s why I so regularly point to books by Seth Godin, who literally focuses on “spreading ideas”, those of Chip & Dan Heath, which look at how to make ideas “sticky” and how to get people to change behaviors, the field of behavioral finance with books like Nudge that look at how people make decisions, the power of video and other visual media to affect social change, and the role of “storytelling” in the social sector.

It isn’t good enough to assume that if we build it, donors will come. As a movement, the effective philanthropy crowd needs to get much, much better at talking about what we do. If you care about a better philanthropy, it is just as important to spread the idea of better philanthropy as it is to build the tools to make it happen.


  1. Jacob Harold says:

    You are right that we need to get much better (and clearer) about how we’re going to actually shift donor behavior. But I think that we can resolve some of these challenges if we focus on a targeted part of the donor market. The inconsistency of the majority need not be a barrier if we can activate the minority who authentically want to maximize the impact of their giving.

    First, let me offer two different models of the diffusion of behavioral change: prioritization and possibility.

    (1) One way to change behavior is to get people think that something is more important than they used to think it was–that is, to push it up their hierarchy of prioritization. This often requires breaking through the countless distractions of everyday life.

    (2) Another way to change behavior is to offer new people an appealing possibility they didn’t know existed. No one knew they wanted an iPad until there were iPads to want. But interest in iPads multiplies as excitement grows, people talk about them, and they begin to see them in their daily lives.

    Both strategies offer some hope for us as we try to enable smarter, more effective philanthropy. But they both have their weaknesses: changing prioritization can require expensive, brute-force interventions like paid advertising; introducing a new possibility requires a really good idea and a whole lot of luck. Ultimately, I think we can’t afford the first approach and have to figure out how to use the second.

    If we’re humble in our ambition and simply try to get to the fraction (~15%, see reference below) of donors who are particularly concerned with impact we can still have an immense influence on the sector. Reaching half of them for 20% of their giving is still >$3.5 billion a year in the US alone.

    Every year there are millions of visits to websites with information about nonprofit performance–even though not much good information is available. There is in fact latent demand; and it’s barely activated. There is not yet that sense of possibility that can feed on itself. If we build it, most will never come–but if we build it well, enough will come to influence billions of dollars.



  2. Tim Ogden says:


    Jacob has already pointed to the Hope Consulting study that Hewlett partly-funded. I encourage everyone to read it (it’s available at because it offers another important piece of the puzzle in this regard (note that, like Jacob, I have a connection to Hope Consulting–they are a client of my firm).

    The Hope data shows that while 85% of donors say they care about nonprofit performance only 35% ever do any research. Another set of questions hints at why. Donors say they are actually quite satisfied with the performance of the charities they give to, and think those charities have excellent leadership.

    When you combine this finding with the fact that overall confidence in the nonprofit sector has been steadily falling, it becomes clear (to me at least) that we are confronting the Lake Wobegon problem.

    Donors believe that all the charities that they support are above average. While there are problems in the charitable sector and ineffective charities–those are the charities that other people give to. Why would a donor convinced that their charities are effective have need of a rating system or external validation? Why should they waste any time on researching performance even though they care about performance? These donors already know the answer to the question. Similarly few parents spend much time doing independent research about whether their child is lovable and cute or above average.

    So a big portion of the challenge is one of helping more donors understand that not all charities are above average. And some of the ones below average may in fact be charities that they give to. But right now not very many donors are willing to give up their a priori beliefs that their charities are good charities (cognitive dissonance is a powerful force). And often when they come across a rating system that grades their charities poorly they conclude the fault is with the rating system not the charity.

    I would add to Jacob’s list (perhaps a sub-point) that another piece of the puzzle to changing behavior is convincing people that the outcomes directly related to their actions are suboptimal. I suspect that to do this we need to engage the elephant more than the rider in the Heath’s rubric.

  3. Mazarine says:

    Dear Sean,

    Tim raises a good point and I’d like to take it meta.
    There are donors that care about how a charity is doing, but statistics only speak to a small segment of the charity’s donors.

    As shown in the 7 faces of philanthropy book, donors give for a multitude of reasons. Communitarians, Feel-goods, Give-Backs, Dynasts, and Business-minded donors are all in the mix. Business minded donors might respond to statistics and the business case for giving, but this wouldn’t speak to the other faces as much. They have emotional reasons for giving which go beyond statistics.

    When you tell people about what a nonprofit isn’t accomplishing, you have to speak people’s language. Maybe they need a story. maybe they need a direct quote from a client. Maybe they need something other than pure data. Or maybe you have to show them how another nonprofit is doing more.

    People give to nonprofits for irrational reasons, even though we want to believe that we’re all rational.

    Thanks for pointing this out.