Study: Giving As Diverse As Donors

February 26, 2015       Paul Clolery      

Giving at a place of worship is the top venue for donors who are white, African-American and Hispanic. Asian donors, however, are more likely to give to health charities. Local social service and children’s charities are also priorities for Asian donors.

There is quite a disparity in how donors prioritize giving when analyzed by ethnicity. A new study by technology firm Blackbaud in Charleston, S.C., “Diversity in Giving, The Changing Landscape of American Philanthropy,” shows various significant differences.

White Americans make up the majority of donors. “Nearly three-fourths of donors today are non-Hispanic whites, despite the fact that whites make up only 64 percent of the population,” according to authors of the report. “Conversely the study finds that both African-Americans and Hispanics are under-represented in the donor universe. Asian donor participation appears congruent with the Asian population size.”

The report’s author is Mark Rovner of Sea Change Strategies with research by Pam Loeb of Edge Research. Contributors to the documents are Emmett Carson, Ph.D., president and chief executive officer of the Silicon Valley Community Foundation and Dennis McCarthy of Blackbaud. The results are based on a survey of 1,096 U.S. adults who said they have donated to a nonprofit during the past 12 months. The survey was conducted in October 2014 and was offered in English and Spanish. It over-sampled African-American, Asian, and Hispanic respondents to facilitate meaningful comparisons among the groups.

“Fundraising in the 21st century will require a differentiated approach tailored to the interests, values, and traditions of the many rather than a one-size-fits-all approach based on the interests, values, and traditions of white Americans,” according to Carson. “As people of color become majorities in communities across America, successful nonprofit organizations will need to have a diverse donor base to sustain and grow their operations.”

According to Carson, the most successful nonprofits “will realize that to attract and maintain a diversified funding base will require that their boards, staff, and programming also be diverse. Nothing less than a complete transformation in this regard will be sufficient.”

As the U.S. population shifts away from many areas being white majorities, so to are donor priorities shifting. The report shows donor priorities, values, and habits differ somewhat within specific ethnic or racial donor sub-groups. In most cases the differences are subtle. In a few cases they are significant. In all cases, they are useful pointers toward a more inclusive approach to fundraising, according to the findings.

Donors might have different funding priorities but there are areas of substantive agreement. Three core values of civic engagement and giving cross all lines, according to the results:

  • The impulse to help those in need is universal. Majorities across all sub-groups believe it is important to support nonprofits. Roughly one in three donate time volunteering, as well as money.
  • Religion and faith are drivers and indicators of giving. Religious organizations capture a significant proportion of all money donated. Moreover, donors who report being actively engaged in a faith community are more likely to give – and to give more – to the full spectrum of nonprofits and causes.
  • Wealthier individuals donate more in absolute terms than those with mid-level or lower incomes. Analysis suggests that household income is a primary predictor of how much individuals give regardless of race or ethnicity. This is based on total amount donated, as opposed to percentage of income donated. Other studies suggest that middle and lower income donors generally donate a higher percentage of their income than wealthier individuals.

The findings do not show white donors to be “more generous” than other racial and ethnic groups. Factors such as income and religious engagement are far more significant predictors of giving behavior than race or ethnicity. The under-representation of African-Americans and Hispanics suggests that organized philanthropy is not doing an adequate job of engaging non-white communities, according to the authors.

For example, African-American and Hispanic donors say they are solicited less frequently. They suggested they would give more if they were asked more often.

Religion dominates African-American donors’ giving priorities. Half of this group said they donate to their place of worship more than any other nonprofit category. In addition, 75 percent of these donors say giving to their place of worship is important, far more than other donor groups. African-American donors say they give an average of 13 percent of their income to their place of worship, compared with 9 percent of donors overall.

Other categories favored by African-American donors include local social service organizations (mentioned by 40 percent), children’s welfare organizations (37 percent) and health organizations (37 percent).

One in five support youth development organizations, significantly more than the overall donor population. Similarly, African-American donors are nearly twice as likely to say they support anti-racism or anti-hate groups (12 percent compared with 7 percent overall).

Compared with the overall donor universe, African-American donors are more likely to agree with the following statements:

  • “I would support more nonprofits if I was asked more often.” (20 percent compared with 9 percent of all donors);
  • “I like when nonprofits offer their supporters promotional giveaways (i.e. T-shirts, coffee mugs, etc.).” (46 percent versus 28 percent);
  • “I like supporting nonprofits by participating in social events (i.e., parties, dinners, walks, runs, etc.).” (45 percent versus 32 percent);
  • “I feel it is my responsibility to support nonprofits which positively impact people in the African-American community” (57 percent versus 43 percent); and,
  • “I tend to give to nonprofits in small ways, like toy or food drives, donations at the grocery store register, etc.” (66 percent versus 58 percent).

Compared with the overall donor universe, African-American donors are less likely to agree with:

  • “I have an idea of how much I will budget for nonprofits each year.” (47 percent versus 56 percent);
  • “I have an idea of which nonprofits I will give to each year.” (65 percent versus 79 percent); and,
  • “I am concerned about what portion of the dollars I give to a nonprofit goes to overhead versus the cause.” (60 percent versus 80 percent).

African-American donors say they receive fewer requests to donate: an average of 6.2 asks per month compared with 7.3 asks per month for donors overall. This is a troubling number to McCarthy. “Over the course of a year or years, that is significant. Also 20 percent of African-Americans reported they would give more if asked as opposed to only 9 percent of Caucasians,” said McCarthy. “African-Americans also donate 13 percent of their income to their church so we know there is potential for meaningful engagement through the channels most relevant to them.”

So, if donors said they would give more, the question is why they are not asked? “This is one of the largest challenges for the nonprofit sector and those who serve the sector,” said McCarthy. “As we allude in the conclusion, fundraising professionals have tested and built a ritualized process of accuracy, especially direct response and online that has yielded prospects similar to our existing donors and staff. The result is an older, Caucasian donor base that is fed with more prospects similar to each other.”

The danger is that the donor pool is aging and the percentage of Caucasians in America is declining. Nonprofits are “simply over-indexing our older and Caucasian donors. Why? Because we know how to find them and ask for money. Some charities and foundations understand this and are assertively fundraising across demographics,” said McCarthy.

Compared with the overall donor universe, Asian donors are more likely to agree with the following statements:

  • “I always visit a nonprofit’s website before I become a supporter.” (40 percent versus 27 percent of all donors);
  • “I like when nonprofits offer their supporters promotional giveaways (i.e. T-shirts, coffee mugs, etc.).” (36 percent versus 28 percent);
  • “I am more likely to support a nonprofit when my friends and family ask me to, than if the request comes directly from the organization itself.” (49 percent versus 45 percent); and,
  • “I prefer to give to organizations that make a difference by changing policies or laws.” (39 percent versus 45 percent).

Compared with the overall donor universe, Asian donors are less likely to say they agree with the following statements:

  • “I prefer to give to organizations that make a difference by providing direct services.” (69 percent versus 76 percent of all donors); and,
  • “I feel it is my responsibility to support nonprofits because of my faith or religion.” (27 percent versus 40 percent).

The study did not probe why religion is less popular with Asian donors. “That’s a great question that needs further study and is beyond the bounds of our modest study. The Pew Research Study, Asian Americans: A Mosaic of Faith, however, notes the complexity of the Asian-American religious experience,” said McCarthy. “They show that non-affiliated Asian-Americans state that religion is not an important part of their life. We do know, however, that Asians are a rapidly growing and very generous cohort in this country with distinct channel preferences.”

Hispanic donors are most likely to cite their place of worship first among nonprofit categories they support (45 percent). Compared with the overall donor universe, Hispanic donors are more likely to agree with the following statements:

  • “Most of the giving I do is spontaneous and based on who asks me and/or what pulls at my heartstrings.” (52 percent versus 36 percent);
  • “I would support more nonprofits if I was asked more often.” (18 percent versus 9 percent); and,
  • “I would like to support more nonprofits I care about, but I don’t know how.” (21 percent versus 10 percent).

Hispanic donors were asked whether they would prefer receiving fundraising appeals in English or Spanish. A majority – 55 percent – said they prefer English with 17 percent saying they prefer Spanish and 17 percent being fine with both.

A copy of the 16-page report is at www.blackbaud.com/givingdiversity

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