Money for Good: The Big Money Opportunity for Effective Philanthropy

This is a guest post from Hope Neighbor, founder of Hope Consulting which recently released the report Money For Good.

Read Part I.
Read Part III.

By Hope Neighbor

Hope Greg wrapped up yesterday’s post with the assertion that we should work with donor behaviors before we work against them. That’s easy to say, but harder to do. It begs the questions: What does working with donor behaviors look like? I do think the Money for Good research points to some principles and ideas that can guide any effort to improve the quality of giving.

To start off, take a look at the donor information use funnel:


At the risk of beating a dead (but in our view very important) horse, the funnel shows that there are many more people who care about performance than there are who do research. What’s more, although this graphic represents share of donors, it’s also a fairly close representation of dollars. That means that not only do few donors engage in extensive research, but the dollars those donors give are also a small part of the overall pie.

In other posts, we’ve described opportunities to get more money to higher performing nonprofits, by addressing three critical opportunities: the “care vs. act” gap, the “quality information” gap, and the “good vs. best” gap.

Today, I’d like to step back to offer some general principles that we believe can be helpful in making decisions about which gap to focus on, and what to do to close it. They include:

Principle 1: Focus where the dollars are. This may seem like it goes without saying, but it’s a principle many efforts seem to ignore. Closing the ‘care vs. act’ gap by 10% will move far more dollars to better nonprofits than will closing the ‘good vs. best’ gap by 90%

Principle 2: Focus where the behavioral and attitudinal changes required are the smallest. As Greg wrote in his post yesterday, changing donor behavior is hard. Accommodating donor behavior is more likely to have impact, dollar for dollar, than asking donors to change their way of thinking and giving. We should aim to improve the quality of giving in ways that are consistent with how donors think and act today

Principle 3: If you do seek major change, be very selective what you’re trying to achieve and how you’re trying to achieve it. Whenever I read something like this, I think, “Captain of the obvious.” However, I’ve seen many projects struggle because they haven’t thought through why they’re focused on a given behavior change, nor what the best approach for achieving change is. To have a shot at success, both of these elements are very important

Like you, we have lots of specific ideas about how we can put these principles to work. We can shift focus from the 3% of donors who compare between organizations today (not a lot of dollars) to the 32% who already do research (that’s many more dollars – and that’s Principle 1 at work). We can offer donors simple information that will allow them to quickly validate their choice of gift, which is what most donors who do research are trying to do today (that’s Principle 2 at work). Or we can carefully choose the messages and channels that are most likely to motivate the 85% of donors who say they care about nonprofit performance to do some research when they give (that’s Principle 3 at work).

But whatever our ideas (or yours), we believe that the three principles above can help to ensure that we’re focused where we’re likely to have the most impact, as organizations and as a sector.

Why should we care? Our analysis shows that Americans are willing to put an additional $45B in charitable dollars at play, if the giving experience better meets their needs. By using the principles above, we can make sure that the effective philanthropy community doesn’t leave those dollars hiding in plain sight.

To hear about more money “hiding in plain sight,” check in here tomorrow – when we’ll discuss the US market opportunity for impact investments for individuals.


  1. Interesting three principals, but I guess what bothers me about this is that there does not seem to be a line that someone trying to attract money should hold.

    1. focus where the dollars are.
    Recently, the dollars for many environmental NGOs were in “climate change” and “carbon”, and many chased those dollars very successfully. Now that the bubble has popped on many of the investments though, there is now a hug issue of credibility for those groups, and after having left their core, there is a period of retooling.

    2. Focus where the behavioral and attitudinal changes required are the smallest.
    What if the donors are wrong? What if they are passionate about helping, have the money, and trust you as a person/ organization… but force you into #1. Is that the basis for a partnership organizations should be starting off with?

    Or should these organizations work with potential donors/ investors to education them on the need to invest in their issue, their program, and in their people in a way that no one else is… because everyone else is chasing “carbon”

    3. If you do seek major change, be very selective what you’re trying to achieve and how you’re trying to achieve it.

    This one I would agree on, but I would add to that, that if the change required is too great perhaps it is better to part ways as friends.

    Again, it is an interesting post, but my fear is that we are diluting the impact as part of creating an “experience” for donors. there has to be a line that is maintained in order to effectively channel these dollars into good use, and creating organizations that cater to the average donors level of interest, understanding, channel surfing, and attention span may not be the best way.

    Open to any thoughts either way on my comments as I too agree that this is hugely important.

  2. Great piece / series, Hope. You guys have framed things well. SVP is all about the “care vs. act” gap (or at least I hope we are). Engagement, connection, capacity building, etc are all “strategies: that close that gap. Keep up the great work

  3. Rich, Paul,

    Thanks for your comments (and apologies for the delay in my reply…I’ve literally been off the grid, and will be for another few days after this post!)

    Rich, I believe your points are getting at good questions around whether nonprofits that are advantaged at fund-raising but, potentially, less good at impact. There is a section on fund-raising in the Money for Good report. You, like, others, are raising good questions about how we think about those findings. And please clarify if that’s not what you were aiming towards.

    However, the principles that I outlined weren’t for nonprofits in general: they were for those organizations who are working to help donors make better giving decisions. The range of organizations I’m thinking of here stretches from the Hewlett Foundation to GuideStar, from GiveWell to Philanthropedia. Let’s call these ‘smart giving’ organizations.

    Both principles one and two basically boil down to the same core lesson for these ‘smart giving’ organizations: go where your potential to get more dollars to high performing nonprofits is the greatest.

    In most cases, the best ways to get more dollars to higher performing nonprofits will be to reinforce good (not poor) giving behaviors. Smart giving organizations will ask donors who say they care about performance to do something about it; they’ll give donors who do research better quality data, so that their research has an impact; etc.

    But, provocatively, I’d like to suggest that accommodating what we’d call poor donor giving behaviors might, sometimes, be the best strategy. Let’s imagine that there are donors that are huddled today in our ‘care vs act’ gap who refuse to act. They don’t want to do any research. They’re impervious to our impassioned pleas to care more about their charitable giving. Etc.

    We can either continue to invest enormous time and resources in changing these donors’ behavior, to little result. Or we can develop a very attractive, interactive, user-loved internet portal that gets these donors to increase their giving, and funnel these dollars to higher performing nonprofits on the back end. Worst case: good nonprofits get more dollars than they would have, had we tried to change these donors’ behaviors directly.

    Thank you for the good debate, and continuing to push our collective thinking.