Why do people give?
This has been the question at the heart of our work since NextAfter was founded.
Decoding what motivates people to give—and sharing what we learn with as many nonprofits as possible—is the driving force behind the extensive research we’ve conducted over more than a decade of helping nonprofits optimize their fundraising.
In this post, you’ll learn everything our experience has taught us about why people give and ways you can use those lessons in your own work. And it starts with answering fundraising’s most fundamental question …
Why do people decide to give to nonprofits?
Think about it: donating to a nonprofit is an irrational decision someone decides to make every single time they give. People go online to get, not to give, right?
And not only that, but after conducting more than 5,000 online fundraising case studies, spanning 600+ million donor interactions, and analyzing thousands of nonprofits across 12 countries, we’ve also learned that donors behave differently depending on an NPO’s vertical, cause, or mission.
So consequentially, there’s a lot of variance in the ways that nonprofits relate to their financial supporters. Which means that in reality, there is no one right or even best way to answer the question, “Why do people give?”
Giving is a very personal type of experience, and people give for a variety of different reasons. Below are just a handful of reasons people give:
- A sense of duty or responsibility (especially for older generations). They’ve been raised to believe that charitable giving is the right thing to do.
- An extension of their identity. They’re saying to the world, “This is who I am because this is the thing that I’m placing value in through my philanthropic gift.”
- A sense of outrage, frustration, or anger, especially people that give to political organizations or advocacy groups. They see a social injustice in the world that they want to see righted and they believe that this organization can act to make that change happen.
- Because they want to belong. People want to be part of something bigger than themselves. It makes them feel that life is more than just a series of revolutions around the sun. That there’s something deeper and more meaningful to life—an interconnectedness between community, people, and causes.
So we see there’s no one answer to our question, which is unfortunate and of course makes the fundraiser’s job that much more difficult.
So what can you do to find out why your donors choose to give?
I’ve spent time on both sides of the table.
I’ve worked at nonprofit organizations. I’ve worked at agencies. And everywhere I’ve gone, I’ve been the digital fundraising guy.
But what I learned over the years is that I didn’t know everything.
I didn’t have all the answers to people’s questions. People looked at me like I did. I would make recommendations with positivity and conviction and people would get on the bandwagon and say, “You must know what you’re talking about.”
But I knew deep down inside that I didn’t.
So when I discovered A/B testing and experimentation, it made me realize that I don’t have to be an expert anymore. And neither do you.
Instead, you can let the true experts, your donors, teach you exactly why they give.
Testing is like a conversation you’re having with your donors. You pose a question (your hypothesis) and then listen as your donors show you what works and what doesn’t work.
And it actually becomes really cool because now you’re not trying to jockey for position about whose ideas are going to be used and whose ideas will die on the vine. Because every idea is equal, so long as there’s a hypothesis backing it up.
It’s about testing this versus that — what if we did this, what would our donors think of that? And it just creates a completely different kind of culture within the organization.
It’s the ultimate democratization of deciding what initiatives to pursue—which levers to pull. A culture of experimentation begins with the assumption that no one knows with absolute certainty what will work—every idea is testable.
It’s empowering and it’s also a huge relief.
“I’m afraid to test … what if it doesn’t work?”
But what if it does?
Something to consider: in a world that constantly and rapidly changing, is it a bigger risk to do the same thing you’ve always done and expect the same results, or is it better to test something new that may not work—but may also provide you with insights that will lead to a breakthrough in your organization’s fundraising growth?
Or suppose you have a new idea and make a dramatic wholesale change to a fundraising email or a donation page template. Did it work? How do you know?
Did you split-test your idea so that half your donors received the control while half saw the treatment (your new idea)?
Testing eliminates guesswork. It ensures that you only invest time and resources into the ideas that work. Testing is extremely risk averse.
The Power of Emotion
You can’t make a purely logical argument and expect it to be effective when you’re asking people to give, because people first make a decision based on a visceral response that they have.
We make all of our decisions based on emotion first, and then (and only then) we use logic and reason to go and rationalize our decision.
So when you’re writing an appeal or creating a landing page or some sort of fundraising campaign on social media, you can’t just lead with all the data, the facts, the figures.
You need to wrap it inside a cohesive story.
That story needs to connect with the person, because people give to people, not to websites, not to emails, not to landing pages, not to direct mail campaigns.
People give to people first and foremost. So you have to humanize your message first,, and then you can rationalize the reasons why somebody should give with your value proposition.
Once you put emotion at the center of your appeal, you can find a balance between qualitative and quantitative storytelling.
Qualitative storytelling appeals to emotion, which is very effective, but pair it with a quantitative story—like impact statistics—and you’re painting a more realistic and impactful picture for your potential donor.
Going all in on qualitative storytelling may leave some donors craving for more validity on the quantitative side.
But if you’re just leading with numbers, people may feel—even subconsciously—disconnected from your message.
Humanity trumps everything in philanthropy
You’ve read it again and again — people give to people.
Sometimes we get so caught up in our marketing strategy or vernacular that we lose our humanity.
The words you use are really important because the people you’re trying to reach are the true heroes!
They’re giving when they could be spending that money on themselves — that’s an incredible act of selflessness.
And the more careful you are about how you think about your donors, the more effective you will be at connecting one human to another human, which leads to greater results. We must remember that our donors are not just a little number inside of an Excel spreadsheet — they’re living, breathing complex human beings.
A status quo in the nonprofit sector that needs to change
People that work in the nonprofit space need to get paid more.
A lot of people believe that, but there’s this idea that nonprofits think that they’re not a business and that’s categorically not true.
Nonprofits are probably some of the most important businesses that exist because they’re trying to solve some of the biggest problems in the world.
But where things go wrong is that they’re capped. They can’t earn over a certain amount or can’t spend a certain amount on advertising because the perception is that too much of a nonprofits revenue is going to “overhead” versus directly to impact.
This is a fallacy because it means we are measuring efficiency not impact. But efficiency is not the right thing to measure. It’s how much better you are at solving these problems that we’re trying to solve.
Let me give you an example:
Let’s pretend that we have two nonprofit organizations that are solving the exact same social problem. The first organization has a $1 million annual budget and a 99% efficiency rating. That means that for every dollar donated, $0.99 is going directly to creating impact. The second organization has a $100 million annual budget and in order to scale the organization to be that large, it had to invest more heavily in advertising, marketing and fundraising and has a 50% efficiency rating.
My question is, which one is doing more to solve the problem? The first organization is creating $990,000 worth of impact, while the second is creating $50,000,000 worth of impact.
Now compare this to big tech companies. Amazon is one of the largest and most impactful companies on the planet.
In their last quarterly earnings report, Amazon posted $127B in revenue, and only $3.2B in profit. That’s a profit margin of 2.49%.
The reason that Amazon’s profit margin is so small is because they are continuing to invest in growth. And despite their lower profit margin, Amazon is one of the most coveted stocks on the the exchange.
So if investing in scale is acceptable for tech companies like Amazon (who on their best day are just making it easier to buy things we really don’t need), why is scale and growth not acceptable for“companies” that are trying to solve some of the world’s biggest problems like cancer, or homelessness, or hunger?
Now that you know more about why people give, let’s put that knowledge into action to grow your giving—starting with the most influential tool in your kit, you value proposition!
Crafting your value proposition
Value proposition is a term that’s thrown around a lot — probably more so in the for-profit space than the nonprofit space. But it’s very misunderstood by many people.
When asking a nonprofit fundraiser, “What is your value proposition?” they’ll usually begin to explain their vision, mission, values, and all the things they do.
And that’s all amazing, but it’s not a value proposition.
The value proposition is the answer to a fundamental question that every single donor has to hear the answer to, but which they’re rarely going to ask.
And that question is this: “If I am your ideal donor, why should I give to you? Rather than some other organization or not at all.”
Now, there’s a lot packed into that question. So let’s break it down.
- If I am your ideal donor … It’s not any donor, but your ideal donor.
- Why should I give to you? There has to be a compelling reason to give—something that proves you are donor-worthy.
- Rather than some other organization? What sets your organization apart—you have to show why you are best positioned to solve the problem
- Or at all. People don’t have to give. They choose to give. But it’s up to you to give them a compelling enough reason to do so!
Because here’s the reality:
People aren’t online Googling, “I’ve got a bunch of money to give away, who should I give it away to today?” That’s not the way that our industry works.
We have to go and create a reason for people to not just give to me, but to give, period.
And by answering this question, you arrive at your value proposition.
So there’s a ton packed into that seemingly simple question. And through our testing, we’ve discovered that there are four key elements of an effective value proposition:
4 key elements of a value proposition
The “appeal” of your value proposition is something that people like, something that they want—a change they want to see in the world.
If it’s not attractive to a large enough audience of people, you don’t have any market for your cause.
So the greater the appeal, the greater the market.
For example, saying something like, “Our organization is going to make hunger irrelevant,” is very appealing and difficult to argue with — of course you don’t want people to go hungry!
And so there’s probably a large audience of people that would be really attracted to wanting to get behind that, which represents appeal.
Exclusivity is how you establish what makes your organization different from similar organizations. What’s your unique approach?
So if you have something that has high appeal and high exclusivity, that’s great. That means that you are the only (or one of the only) organization that is doing this thing.
But if you have low exclusivity, that means that there are probably a lot of competing options and you need to differentiate yourself in some way.
The third element is credibility. Do your donors believe your claim? Do they trust it? Do they trust you?
Are you the right organization to be able to go and deliver the social impact your donor wants to see?
Here you need to consider how to go and answer those questions. One way to do so is bolstering some of the various different claims you make with data, facts, figures, endorsements, testimonials, etc.
Clarity is the absolute bedrock of any effective value proposition, and it’s probably the thing that most nonprofits struggle with.
Clarity means your ideal donors clearly understand what you do, the problem you’re trying to solve, and the outcome you’re trying to achieve—all the reasons someone should want to support your cause, from the donor’s perspective.
That last part is key. And it represents a classic problem between the marketer and the customer, or in this case, the fundraiser and the donor.
The problem is that as fundraisers, we tend to view the world completely differently than our donors. We view the world from an organization-centric point of view. And we view our value proposition that way too.
But our donors see the world from a donor-centric point of view, which is very different.
And so what we need to do is find a way to begin to see through the eyes of the donor, to frame our messaging through their lens, to use their language.
That’s where A/B testing and experimentation really come into play.
You have to be able to take your ideas, your concepts, and what you think your donor wants to hear and then go test it in the marketplace and measure what the output is in terms of one option versus an alternative.
How to put the value proposition into practice
Get together a group of your leadership team or your board of directors or a group of donors, or even your staff. The key is to assemble a group of people that are stakeholders who are familiar with the organization and with a vested interest in its success.
Then write the value proposition question on a whiteboard:
“If I am the ideal donor, why should I give to our organization rather than some other organization or not at all?”
And then host a brainstorming session where everyone has a chance to contribute what they believe to be the different reasons why someone should want to support your cause—your claims—and write each up on the board.
Next (and most importantly), you’ll assess each of these claims:
Give everyone a piece of paper. Number each of the claims that you put on the whiteboard and then have everyone write those numbers on their piece of paper and score each claim based on their perceived appeal.
Score each claim from one to five for appeal. Then do the same for exclusivity.
For example, if something’s very appealing, it’s a five. If it’s not really appealing, it’s a one.
If something’s highly unique to your organization, it’s a five. If there are a lot of organizations that do what you do, how you do it, then it’s a one
Each person should rank the claims independently. Then go around the room and ask everyone to share their scores.
Through this process, you’re trying to identify your top-performing claims. And you’re looking for a tight grouping of scores—which will give you an idea about clarity.
For instance, if I say that a claim’s appeal is a five and someone else says that the appeal is a one, something is unclear.
If there are big differences in scores, discuss how each person perceived the claim then figure out how you can revise that claim so that it’s more clear to the people who perceived it differently. Once the claim has been revised, go back and rescore.
Take the top claims and collect the facts and figures that back them up and make sure all of those things are true and verifiable.
Try to get as many third-party credibility indicators as you possibly can and once you have all that, you have the basics for what we call the “value proposition argument.”
Now you just need to go put it into action.
And one way to do so is to write a paragraph or two on your donation page based on what you just created with your value proposition—running an a/b test between your existing donation page copy and your new value proposition.
Having performed hundreds of similar experiments, the data shows that just adding value proposition copy to a donation page can result in a huge increase in donation conversion—even if nothing else is changed!
If you don’t want to make this change on your website, test it in an email. If you don’t want to test it in an email, go test it on social media or even in your conversations with donors.
You could also do a survey to your donors and have them answer these various different questions and score the appeal and exclusivity of each of these claims and see how closely it matches to your team’s assessment.
And remember, it can be an iterative process. It doesn’t have to be this perfect thing before you put it to market. It’s better to get something out there, let people react and adjust, and fine-tune based on the feedback that you’re getting.
What more than 5,000 A/B Tests have taught us about inspiring people to give
Video vs. Text-based Donation Page
Everyone knows that video is apparently the future of the internet.
Everything needs to be video, video, video, video, video. And video has been a high-performing medium when it comes to increasing engagement.
For example, if I post a video on LinkedIn or Facebook, I’m going to get so much higher engagement with that than just a static image.
However, the one place we have found video to be ineffective is on the donation page itself.
We’ve run dozens of experiments that replace a donation page’s video with a text transcript of that same video to make a text-only version of the donation page.
It’s the same message, and the same content, but a different delivery method.
In one experiment simply swapping video with text on the donation page increased donations by 560%.
Designed vs. plain-text emails
Most nonprofit fundraising emails are highly designed HTML with graphics, images, and big clickable buttons. The copy sounds like marketing copy because big organizations will hire a copywriter to do that.
So we’ve tested just getting rid of all of that marketing veneer—the images, the graphics, the HTML, and even rewriting the email copy so it sounds like it’s coming from a friend–like it’s coming from another human rather than a marketing machine.
And this has resulted in some gains as high as 500% increases in donations—not opens, not clicks, but donations.
Here’s an example:
In this case, a basic text-based email resulted in a 28% increase in donations.
Now beyond being more personable, more human, and more persuasive, there’s a technical reason why taking the plain text approach works so well.
When you send an email, it goes to Gmail or Yahoo or whatever email service provider your donor happens to use. And those email providers want to protect their customers and provide them with quality service.
So if the user is receiving tons of what they deem to be marketing or spam, the email provider is going to take that stuff and put it in the promotions tab, at best. At worst, your emails will begin landing in the dreaded junk folder.
And this is really serious because it isn’t just one email recipient, or even one email service provider, who will begin treating your email as spam. Once your IP is associated with sending spam, all email service providers will restrict your ability to inbox.
And guess what? The more HTML that service providers see in your email, the more likely they are to assume it’s a promotion.
So when you strip out all the unnecessary design, you get better inboxing and better response rates.
But the second reason the plain text approach works so well goes back to the principle that we touched on earlier: people give to people—not to email machines, not to donation pages, not to direct mail campaigns—people give to people.
So the more that you can humanize your communications, your fundraising, and your messaging, the more effective it’s likely to be.
Plain text emails look more like something you’d receive from a friend. And this shifts your nonprofit fundraising from this transactional, impersonal solicitation to something that appears more personal and connected.
Adding value proposition to your donation page
When you look at most nonprofit donation pages, one of the things you notice right away is that there’s not a lot of text on that page.
And conventional wisdom says that once a potential donor gets to the donation page, they have made up their mind that they’re going to go give so you need to stay out of their way.
But it turns out that couldn’t be further from the truth.
There are tons of benchmarks out there, but the most recent one from M+R says that only 17% of people that click on the donation button actually complete the transaction.
This means that 83% of the people that get to your donation page aren’t giving.
Why is that?
Well, if you get to a page and all you see is a form, then that page is all costs and no value—and the momentum that brought them to the page in the first place is lost.
The cost is not just the material cost of the money that the person is giving, but it’s the mental cost of having to go fill out the form, figure out the page, and answer your questions, etc.
Then what if they hit submit and then it doesn’t work?
We call that friction and all of this together just means more work.
What’s missing from that page is value, and one of the simplest ways you can add value to your donation page is by adding copy. And not just any copy will do. The copy you put on your donation page must lay out the reasons why people should give—you must present to the donor a value proposition.
That’s the simplest and most impactful test that you can run. And it’s almost always a guaranteed winner.
In our own work with NPOs, sometimes we’ll create 16 paragraphs of text, and then the client will push back and say “Nobody’s ever gonna read that” or “Oh my gosh, you buried the donation form at the bottom of the page. They’re never gonna see it.”
But what happens in reality, once you shift your mindset from making assumptions to challenging those assumptions, is an increase in donations.
Take a look at this example:
In this case, the addition of copy that explains the value of giving to the donation page resulted in a 146.5% increase in donations.
So who reads that “long” copy? The right people, that’s who. The people that actually see value in that copy are the ones that are going to give. Why?
Because you’ve formed an emotional connection between your donor’s values and your work. And while people might use logic to justify a decision after the fact, it is by tapping into their values, beliefs, and aspirations that you inspire them to act!
Donor Retention: Why do people choose to keep giving over time?
In fact, most nonprofit organizations are going to lose between 60% and 75% of their donors every single year.
And agencies like ours tend to focus on helping our clients acquire new donors each year because we know they will lose a sizable portion of their current donors. This means that most larger nonprofits find themselves perpetually on the hamster wheel of constantly acquiring and churning donors.
But nobody has really cracked the code on how to retain more donors.
And so at NextAfter, we’re launching a series of research projects trying to map out how nonprofits can reduce attrition and increase donor retention.
One particular research project in the works is a mystery donor study we’re conducting in partnership with a data company to look at 200 nonprofit organizations and identify how specific marketing and fundraising initiatives measurably impact donor retention.
Something else we’re doing is a 14-month longitudinal experiment where we’re using programmatic advertising, and connected television (CTV) to deliver brand advertising to existing donors to determine how that ultimately impacts donor retention.
For example, you give to this nonprofit organization and then later that week you go check the scores on ESPN and you’re seeing a brand ad for that organization.
And then you’re at home watching Hulu or Netflix or something, and you see another brand ad for that nonprofit organization.
Just a few years ago, many of these channels weren’t accessible to nonprofits because linear television is so expensive. But with the latest advancements in programmatic and CTV, it’s much easier to buy TV space because you’re targeting individuals as opposed to targeting dayparts and demographics.
It’s a whole new way to add additional channels that will increase brand recall and reinforce the fact that the person made a really good decision by supporting your organization. Our hypothesis is that by increasing brand familiarity we will increase the renewal rates of donors who give again the following year.
We’re talking about a whole new playbook. And if these efforts bear fruit, it could be a play that any nonprofit could run.
Moving donors from one-time to monthly giving
One of the most effective ways to increase donor retention is by focusing on recurring donors—moving someone from a one-time donation to a monthly donation.
In our Recurring Giving Benchmark (in partnership with Salesforce.org), we observed that most nonprofits ask donors to upgrade a one-time gift to a monthly gift directly after they give.
But it’s just a question. One-time or recurring. Check the box. There’s no value proposition that conveys WHY someone should give each month, so why would someone choose to do so?
So we tested what would happen if we did communicate the value of giving monthly—the impact achieved by a donor’s ongoing support.
And in the test, we added one single line of text.
“Did you know that when you make a recurring gift, you’re able to have a sustaining impact month after month?”
And that simple change, that single line, increased recurring giving by 65%.
We’ve also tested showing a pop-up on the submission click when somebody’s going through and completing a one-time transaction.
It says something to the effect of “Hey before you complete your gift, what if you give less but do it on a regular basis to sustain this long term impact that matters to you.”
And what we found was that doing so can actually move the needle and increase the number of recurring donors.
It’s a more risky test because you typically don’t want to disrupt somebody when they’re completing a transaction.
But we’ve also found that this approach doesn’t negatively impact the overall conversion rate—it just increases the number of people that are giving recurring gifts by making that option more visible and valuable to the donor.
We’ve also introduced the concept of automated recurring giving campaigns.
And what we’ve found is that these campaigns work best when you present a clear and attainable goal by saying something like, “We’re looking for just 10 donors who are willing to give $20 a month to sustain this work.”
Conversely, if you present a large target like 10,000 donors, our research has shown that people are less likely to engage—probably because they don’t feel like they will do much to move the needle anyway and just tune you out instead.
But if it’s something attainable like 10 and then a second message where you just need 8 more, and then just 2, it creates this bandwagon effect and people always want to be the one to close those kinds of campaigns out.
And the beauty of automating such a campaign is that rather than making it a one-and-done initiative, automation means that every year, as new donors come into the organization, a new crop of people receive that campaign asking them to upgrade to a recurring donor, which is incredibly effective.
So if you want to increase your retention rate, recurring giving is your best bet.
If you’ve made it this far, it’s probably become clear that getting someone to give is not easy! But it is a very noble and worthy cause. And the people (like you) that make generosity happen everyday– the fundraisers– they are our heroes.
But like all heroes you need a utility belt. And although it’s not all you will need in your quest, we hope that you can add these three critical tools to yours:
- The human touch. An ability and desire to connect with your donors on a human level so that you can understand what motivates them to act
- A reason that’s worthy. A value proposition that is appealing, clear, exclusive, and credible so that you can make the best possible case for why donors should give to you
- A curious mind. A culture of testing that foregoes assumptions and lets your donors report back to you what works so that you can strategically optimize your assets
Now go forth brave fundraiser!