Money For Good: Helping Donors Give More Effectively

This is a guest post from Greg Ulrich, project lead on the Money For Good report from Hope Consulting.

Read Part II.
Read Part III.

By Greg Ulrich

Greg There’s been some terrific discussion here on Tactical Philanthropy in recent weeks about the results of our Money for Good study. Sean and others have been particularly focused on the central question of how, and whether, more giving can be directed to the highest performing nonprofits.

We thought it was appropriate to weigh in directly on the debate and on some other important findings from our study. We thank Sean for giving us the chance to do so. This is the first of three related posts we’ll have on this site in the coming days.

Specifically on the question of improving the quality of giving, the common perception seems to be that donors don’t give to the highest performing organizations because they lack the information that will allow them to do so. While this is certainly a barrier, our research suggests that better information alone isn’t going to move the dial on this issue.

To quickly recap our research (you can find the full Money for Good report, including our methodology and more detail on these findings at, we found that:

  • The vast majority (85%) of donors say that they care about a nonprofit’s performance
  • However, only a third of donors ever do any research before they give. When they do research they don’t spend a lot of time doing so and prefer simple facts and figures
  • Of those that do research, the majority do so only to validate their choice of charity (i.e., to make sure that their nonprofit is “good enough” and not going to “waste” their donation)

All told, only 3-4% of donors do research on nonprofit performance in order to give to the highest performing organization.

While that picture is discouraging to many, it isn’t necessarily new news. For many the more interesting question is why donors don’t research more. Our research points to three key reasons.

First, donors say that the nonprofits to which they donate perform very well. While people may think that nonprofits overall are relatively ineffective, most donors feel that their chosen organizations are doing a great job. (You can think of this as a derivative of the fact that all parents believe that their children are above average.)

This belief means that there is no “burning platform” to motivate people to research. As we heard in our focus groups: “I only give to good organizations. Why would I research?”

Second, maximizing the impact of their donation is not why the majority of donors give. We analyzed how donors make their charitable gifts. Specifically, we looked into the importance of 15 drivers of their giving, including, “This organization is better than others at addressing social issues”. This driver came in 8th of 15 in terms of its importance – in other words, it’s not a significant factor driving donor behavior. Taking this a step further, our research also showed that there are six different behavioral segments of donors, and that giving to the best organization is only somewhat important to one of them (which we termed the “High Impact” segment). Unfortunately, “High Impact” donors make only 12% of total individual donations each year.

Third, donors are loyal. Of all of the donations made each year, only about 15% are available to move from one organization to another. The other 85% will go to the same organization next year. People are more loyal in their giving than they are for most other categories of spending.

The tide is certainly turning, and we believe that more donors care about nonprofit performance today than did 15 years ago. And we think that this trend will continue. But at the same time it’s critical to understand that this growth is coming off of a very small base. The fact that individuals that are focused on high performance may be louder than others does not mean that there are more of them.

Getting donors to change their behavior is an uphill battle. There are few carrots and even fewer sticks that can be used to influence a person’s charitable giving. Given that most people don’t want to research, and those that do spend little time doing it, we worry that elaborate systems to measure nonprofit effectiveness won’t have the impact people desire. Building that system won’t necessarily change the behaviors of most donors.

To be successful, we believe that efforts here will need to accommodate donor needs and behaviors, not try to change them dramatically. Our next post will outline some ideas that we think have the best chance to improve the quality of giving in the United States.


  1. Whether you listen to your best buddy or your Community Foundation, you may find yourself doing research whether you realize it or not and being influenced by the reasons they give. The “carrot” for the donor is that he or she finds new ways to invest their hard-earned charitable dollars in causes they care about through reliable organizations they just haven’t heard about yet.

  2. Helpful thoughtful information. Here’s a link to some additional information about helping donors choose where to place their financial support.

    Earlier in the year a group of fundraising professionals drafted this document with great guidance and input from Laura Deaton, Third Sector Connector:

    • Greg Ulrich says:

      Thanks for the comment Lori, and appreciate the link to that document. I agree with its main thesis that there are opportunities to improve how nonprofits are evaluated. Its difficult to do, especially at scale, and we have been talking with several of the rating agencies about our work and what can be done to provide quality information to donors.

      The recommendations in the linked document are good ones – and it would be great if more and more donors would spend the time to really look into the organizations to which they plan to donate.

  3. Alan Sorkin says:

    I am not sure how many people are represented by the 12% but I know that SVP International has 2000 current and at least that many alumni who do care about results. Partners join to learn how to become an effective philanthropist and they do. Our Investment Working cycle teaches how to really understand and differentiate from a non-profit who really gets results from one that says they do. One partner describes it as an MBA in philanthropy. If you want to learn more, check out for a city near you.

    • Greg Ulrich says:


      Our survey is representative of US individuals with annual household income of over $80,000. That represents the most affluent 30% of US households (over 30 million households).

      So, in that context, the fact that 3-4% of people are actively trying to give to the highest performing nonprofits still implies that there are a lot of very engaged donors. And recall that we found that about a third of donors do some research, so there is a healthy pool of people who would be interested in what SVP has to offer.


  4. Geri Stengel says:

    Maybe it’s a question of which comes first, the chicken or the egg? Do people forego research because there’s been no good source to use, Charity Navigator et al not withstanding?
    Some charities benefit from word-of-mouth and people usually don’t check up on their friends’ recommendations.
    National and international charities are “researched” as much by news accounts as by rating agencies. If I hear good things about an organization, I may not check its books.

    So the question is, if good research tools were available, would people use them? It’s unanswerable now because we don’t have the tools.

    Second question is, how can nonprofits make their worth known, other than word of mouth and news accounts? Well, the new emphasis on impact evaluation by funders (check out the Social Impact Exchange Conferece help donors as well.

    Let’s hope.

    • Greg Ulrich says:

      Thanks for the comment Geri,

      I agree that a barrier to getting people to research more is the lack of evaluation sources today. However, I don’t think that this is the main barrier. Only 10% of people go to third party rating sites (like Charity Navigator) for their primary information on nonprofits, and my belief, based on our research, is that simply improving on how we rate charities today is unlikely to influence the majority of donors. The reasons are explained in my post: giving to high performing nonprofits isn’t what motivates most donors; there is no ‘burning platform’ because donors feel that nonprofits are performing well; and donors are loyal.

      So, while we don’t/can’t have a definitive answer to your question “if good research tools were available, would people use them”, I do think that we can make fact-based hypotheses about this. And my hypothesis is that the majority of people won’t use research, especially if its offered up in a robust, detailed fashion.

      With that said, I do see the opportunity to package up high quality evaluation information for donors in a way that could get more people to research – or at least to get those that do research to look at better information. Here I think we need to provide donors with “do it for me” evaluations. Things like seals of approvals, simple star ratings, and the like (I realize these ideas exist today, but I think that more that can be done here). And we need to push these to donors (rather than try to pull them into sites). The most interested donors will dive deeper behind these ratings, but most people will likely be happy with a first-level rating.

      Don’t misunderstand my desires – I would love it if more people would research nonprofits, talk to friends about organizations, etc before they make a donation. I just don’t think building more detailed evaluation information on nonprofit quality and performance will actually influence many people unless it is done in a way that responds to how donors want to take in information and donate to charities.