We've all heard the stereotypes about giving and donors: They're wealthy, they're old, and they're white. But what if those stereotypes are wrong? Perhaps it’s time to rethink what you thought about giving and donors, and start to understand who is actually giving and how you can reach out to in order to raise more money for your nonprofit.
In today’s episode, we are going to debunk some of the myths that you know about giving and donors with Tim Sarrantonio, Director of Corporate Brand, NeonOne. NeonOne provides nonprofits and social good organizations with unified tools and services they need to help fulfill their mission. The team works hard to help social good organizations raise more money and build sustainable, long-term growth with software, services, and resources.
Myths that Tim wants us to walk away from:
People with higher income are more generously. Regardless of your income level, most people on average give between 1.5% to 2% of their income. People who earn more are NOT more generous!
Philanthropy is for white people. The Urban Institute has done some multi-year analyses and the Federal Reserve in the US has done this too, where black families in the United States are more likely to give higher percentages of their annual income to charity versus other demographics.
Giving makes people uncomfortable. When somebody gives, the brain's dopamine centers activate at a higher rate than either receiving or entering into a more transactional relationship. It’s important to understand that people actually WANT to give.
Tim’s highlights on individual giving
Showing gratitude: When creating a thank you note for your donors or designing an appeal, always focus on the person and not the transaction. You can highlight the generosity of the person instead of the amount of donation they gave. For example, instead of saying thank you for your generous gift - try thank you for being generous.
When do people give: Neon One found that Thursday is the day of the week that donors are most likely to give online and during the early afternoon around 11:30.
Geographic analysis: Neon One also reports that donors are more likely to give to organizations that serve their local community. Small shops should look into the geography and demographics of the people who live in their community.
Favourite Quotes from Today’s Episode
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“And the best piece of actionable advice I can give a small shop is when you're designing something like an appeal, for instance, when you're writing your thank you notes or the emails that go out or thinking about when you are talking to somebody, ask yourself, am I looking at the person or am I looking at the transaction?”
“But ultimately, all people are generous. There are just different ways that they're showing their generosity. ”
Resources from this Episode
Cindy W.: So every time I speak to individuals that organizations or boards, or really anyone at small nonprofits, the number one thing they say, when we talk about fundraising is I don't know anyone who can give, and this drives me crazy because, that's just not true, but where that comes from is we have this sort of picture of what a donor is or looks like in our brains and that's controlling how we approach fundraising.
And so today we're really gonna dive into everything you thought about giving and donors is wrong, and there's a lot of academic evidence to support this. And, yeah, so buckle your seat belts. We're going to really bust some big myths about who donors are, and I guarantee you, by the end, you will be able to think about, oh I know this person who can give and that person who can give.
You are listening to The Small Nonprofit podcast, where we bring you practical down to earth advice on how to get more done for your small nonprofit. You are going to change the world and we're here to help.
So I'm your host, Cindy Wagman. And today I'm joined by Tim, Sarrantonio, who is the Director of Corporate Brand at Neon One. He has 20 years experience of fundraising, calls himself a failed academic. But honestly, when you look at this report, it is just a really academic and rigorous approach to looking at our donors. And so with that, I'm so excited to welcome Tim, who is the author of Donors Understanding the Future of Individual Giving which I believe is spearheaded by neon one, but really involved a lot of different players in our sector and outside of our sector to get a realistic, live perspective of who our donors are. Tim, welcome to the podcast.
Tim S.: Thank you so much for having me, Cindy. I am so excited to be here. I hope we didn't lose everybody by calling it an academic paper, by the way. There's a lot of fun in here, folks. It was fun.
Cindy W.:: If Tim has anything, he has fun. I read, totally. I feel like we could talk for hours about everything and anything. And but what I mean by academic is that. Rigor behind the research.
Tim S.: That, and that was intentional. And I think you hit on the reasons why we spearheaded this report. So we serve tens of thousands of organizations in the nonprofit space, primarily in the US and Canada, and small to mid-sized organizations in particular.
And what frustrated me in the wake of the pandemic were a few key things. Number one, all the research that ended up getting cited was from 2019 or before. So I saw all this glut of stuff. Number two, anything new that I saw was from firms and vendors that obviously had a marketing agenda without that rigor, can't say that something had 77% year over year growth when you're starting from zero. Okay, so great. You grew $0 to $77. Okay. So then finally, I also hated the fact that whenever you read the research, you always had to have this lens. Like I would always talk to people and they would say, oh, but you're like from a vendor. And so that would automatically have an element of distrust in it.
And so what I wanted to do is look at everything. I've read, like everything that came out in the pandemic in terms of art, the nonprofit, social good sector. And I said, okay, what's good. Yeah, what's good. I don't care if it's from Bloomerang or Blackbaud or whoever if it's good, let's cite it.
Cindy W.: And just to be for some of our listeners who might not know what those what those companies are, they are. There's Blooomerang, Blackbaud, Neon One, there's so many more. These are all databases, really that, that have access to a lot of donor around data, around donor behavior from their constituents. And I think what I love about this approach, as you said, it's not just our data. It's not just their data, forget the idea of competition. We're going to just look at the broader sector and whoever is willing to share, reliable information. We'll look at that. We'll include that.
Tim S.: One and I had the view for the Lord of the Rings fans out there. One report to rule them all when it came to individual giving. So we answered the questions. Who, what, when, where, why, how donors give basically. So we try to get that holistic understanding, each chapter is broken out like that. If you're looking for a good foundation, this is it.
Cindy W.:Yeah. And I love that, that I think you hit the nail on the head when you said a lot of times we don't trust, if it's just a one vendor, who's this is all our data. But that, this really is, as you said, the one reports ruled them all.
Tim S.: Now we've got a lot of data like we were able to draw on $2.2 billion in 2021. 2021 analysis alone. So that's the thing like I also hate surveys. So a lot of times like X, Y like X, percentage of donors hate this, and it's like from 300 people and that drives me crazy.
Cindy W.: Or it's what they believe, like how they answer. Information, and how they answer surveys is not always reflective of how they behave.
Tim S.: Donors lie all the time. And it's not because they're intentionally lying it's that they misremember things. And that we'll get into that. I imagine in the podcast today.
Cindy W.: Awesome. So the part there's so much in this report it is not small. But I, as I said in the introduction, like my interest is really around who gives, because I think that there's, especially with smaller organizations, this idea that it's not an idea it's articulated to me all the time where people say, I don't know anyone who can give and that really, really bothers me for a lot of reasons. I'm sorry, if you said that to me, I'm going to tell you right now, it bothers me because really we all give, right. Most of us, especially if we work in the sector we give and chances are what we imagine when we say that is like the big local philanthropist who happens to be, 65 year old, white man.
Tim S.: Close your eyes. Let's be real. Close your eyes, everyone listening and picture donor, picture, when I say the word philanthropist, what does that person look like? If your gut what's your immediate gut reaction and more often than not even, unless you are intentionally cultivating with underrepresented communities then, you know what's up.
Cindy W.: And even like the idea of representation is a fallacy because as your report shows, when we actually looked at who's giving. Okay. Let's get into it because this is something I'm so passionate about and you have the data to back it up. So very often one of the things we, that I hear that people picture when we think, who do I know who can give is, who do I know who can give like upwards of 10,000? And that's just most people don't give that much money. So when we think about the income of individual donors, what did you learn?
Tim S.: So what we learned and we relied on a US data set from the University of Michigan for this that's a free panel than anybody can access and it cross-referenced a bunch of different stuff. And they've been, speaking, this is one of the one instances where panel data is good because it's very rigorously maintained and so they found that around, I think it was between, 1.7 to 2.0, 1%, something like that. Forgive me, folks, if I'm misquoting my own data reference but around a little one and a half to 2% regardless of your income, that's what you're going to be set aside for charity, right? Like not just rich folks, but folks of any size. And this is too formal for non-profits we're not talking mutual aid, we're not talking other ways of generosity. This is like formal donations to charity and this could be religious giving, the cots.
Now we're even getting some of the solicitations for that. We have Jewish holidays that are happening, these count right? Like these are things that drive people and it doesn't matter, your income, you're going to give. It's not in the report, but I saw this afterward cited by Mark Phillips over at Blue Frog consulting was similar to UK data that has come out too. So this is international when it comes to its consistency here.
Cindy W.:: Yeah. So I'm just going to repeat that, that regardless of your income level, most people on average give between one and a half to 2%, of their income, which means if you have more money, it doesn't mean you're, the sum is bigger, but it doesn't mean you're more.
Tim S.: You're not a more per capita generous person. And actually, there were some studies a few years ago that showed that some folks at the lower income levels were actually more prone to give higher amounts as a percentage. And I feel like some of the things that came out of the pandemic around the digitization of giving, the ability to give recurring donations more spread out that has helped open things. There's still a lot of money given by traditional, direct mail checks, but it's gotten accelerated in its opportunity for people to give.
Cindy W.: Yeah, absolutely. All right. I love that. The other, there's a few, off very often as we said, we picture philanthropy is white people. How I love this one, how does race come into play when we think about who is giving.
Tim S.: And I'm actually, this one is an important one that I want to make sure that I'm saying the right data to. So what was fascinating is that the Urban Institute has done some analysis multi-year analysis on this. And also the Federal Reserve in the US has done this too, where black families in the United States, are going to more likely give higher percentages of their annual income to charity versus other demographics. Sothere are, we talk about this in the report. There are a lot of socioeconomic institutional factors that we have to keep in mind here in terms of who has access to wealth, but there's some really amazing research that we cite.
And there's about over 50 different resources in the appendix. And they're written out to, what's the context, why you find this interesting, and the stuff about race and ethnicity really fascinating. And it's much more nuanced, especially some of the analysis that's been done even further than that, diving into the nuances in Asian communities, for instance, and what might drive them because that is not monolithic, right?
Like one has to see the movie Turning Red, for instance, to know. Toronto fan over here in the Sarrantonio household, by the way, my four-year-olds there are just randomly singing the song. So all you have to do is know as a movie like that is telling a story that you typically don't hear. And so there are different nuances in communities too when it comes to giving. But ultimately though all people are generous. They're just different ways that they're showing their generosity.
Cindy W.:Absolutely. And you have in the report, you have what you call guest insight by my friend, Sabrina Walker Hernandez, who will have just been on the podcast by the time this airs, what was her take on this analysis?
Tim S.: She did a deep dive and we thought it was important to hear directly from somebody who comes from a community that is underrepresented in the narrative. So she talks specifically about black philanthropy and really goes on to say there's a lot of unconscious bias that, that even black fundraisers might have in terms of the communities that they're reaching out to.
Think about if you're doing a wealth screening in your database, or maybe you don't have a database and you're like what neighborhood am I going to, maybe hold an event, right? Like, how does this influence your planning and your decisions? These are actionable things that if you take a breath before you go too hard into your planning process, you might be able to actually open up a bigger opportunity there.
Cindy W.: Yeah. Yeah. And listeners, if you haven't heard that podcast episode, it's well with Sabrina it's well worth listening to it's about capital campaigns, but also part of her experience in doing a really big capital campaign in a very impoverished neighborhood, was that the community campaign committee. Definitely worth listening to.
Another big myth that comes up for people I hear from all the time is this idea that like, when we're asking people to give, we're making them uncomfortable. We're twisting their arm. We're asking for a personal favor and it's not, it could damage our friendships. Layer upon layer of this, excuse that people don't actually want to do this. So tell me a little bit about what you found in this or in your research that's reflected in the report about people's motivation or how they feel when they give.
Tim S.: We also site in chapter five on the why people give, we take a pause as well on the transaction and say, let's look at the biological and the psychological here. And there's been some really amazing work done by the Institute for Sustainable Philanthropy and Philanthropic Psychology. I was lucky enough to take a course during the writing of this report to obtain a certificate in said things.
I'm not an expert by any means, of course. But we did find and site things that show that look when somebody gives the brain's dopamine centers basically activate at a higher rate than either receiving or entering into a more transactional item here. And so the trick is to understand that, and I think one of the best practical pieces of advice that I can give, is one, people do want to give them, I was actually even writing something up yesterday on thank you notes and gratitude.
And there was some psychological journal research done on it's undervalued about the exchange of something like writing a thank you note, right? Both, I had my kids, we got like our Easter, this is when it we're recording, this Easter is coming up and we got some money from the aunts. And so I was like, write your thank you notes. And they had such a blast actually like designing the card and all this type of stuff. And my daughter put a dollar in the thank you card, which I thought was hilarious.
My wife's like why? And I'm like, just let it roll because I knew about that research. So what's fascinating though, is just in general, people are going to enjoy this. They're going to activate it. And the best piece of actionable advice I can give a small shop is when you're designing something like an appeal, for instance, when you're writing your thank you notes or the emails that go out or thinking about when you are talking to somebody, ask yourself, am I looking at the person or am I looking at the transaction?
Good example here real quick. Okay. Your thank you note. Typical. Thank you. Thank you for your generous gift of X, Y, and Z. I'm not talking about CRA receipts or anything like this. I'm talking about the stewardship piece. Thank you for your gift, your generous gift on this date, in this amount. That's looking at the money.
The switch is you are a generous person. Because you gave on this. So notice that the, all it is a little bit of her perspective change. And so that what you'd want to do is validate the person because of the gift, and they're going to love it. They're going to love you for it.
Cindy W.: Such a good insight. I hope all of you right now are going to rewrite your thank you notes But let's talk a little bit about there, this is full of actionable insights. But the one that, again, like I think most of our listeners need to hear is that individual giving is big and you have donors all around you.
So talk to me a little bit about like the future of individual giving and why organizations might need to double down on the strategy instead of, very often I hear we, you, we need to do corporate fundraising. We need to write grants. And I, I talk about, and lots of different places about the mindset around that and why it is we think that way. But talk to me about the evidence around why individual giving is well worth your while?
Tim S.: Yeah. Look the data's very clear here that in the spectrum of types of engagement, individual giving is by and far away the largest driver of generosity when people are opening their wallet, I'm not talking about government grants. That's a completely different realm here, different type of expertise, but even something like a foundation grant from your local community foundation. that's different types of work, right? That's more strategic in terms of like, when you're activating that and going for that, you don't want to change your programming versus individual giving is telling a story and inviting the person along for that.
Yeah. And so you could do that without sacrificing anything other than, a few pieces of paper and some email time, right? Like that's the beauty of it that it's very cost-effective to do this, but it's also cost-effective to focus on making sure these people come back because retention is one of the biggest things that people say I have to get donors.
And then what do I do of them? And you have to think of this as a full funnel engagement the entire way, but we're talking like out of the entire $477 billion that, that gave in the United States alone, and we're doing our Canadian research folks by the way too, but 477 billion in 2020, the 2021 research will be out later this year.
So 2020, 477 billion, 69% was individual giving 69%. Corporate giving went down during the pandemic. Okay. So if you think you're going to get a lot of stuff from your local corporation do it as a match grant for your local individual giving campaign, basically. So a lot of amazing reasons to do it, but we saw some really encouraging increases in the number of people came back, who wanted to give, went up during the pandemic.
The people who are giving smaller amounts are more, more energized now, if we continue to cultivate them, pandemic givers stuck around in general, we brought people back. It's not all sunshine. We talk about that in the report. Retention still continuing to be a major issue, but there's a lot of bright spots here.
Cindy W.: I love that. Anything that we haven't had a chance to talk about that you were just like, want to stand on a rooftop and shout that everyone needs to hear a no.
Tim S.: Okay. I'll do a tactical one and then I'll do like my favorite tactical item. And then I'll do one of my more larger strategies that I think is one of the next waves of analysis as well as what, especially small shops can really rock.
Okay. First is tactical, we actually did a fun review of online giving when people give what day of the week and what time of the day that people give. And we found that it's more often than not going to be an early afternoon, like an 11:30 during the week Thursday being a really high point there.
And I actually just published a blog that, that also in looked at this with commerce and the spikes are the same, actually what independent e-commerce research show during the pandemic, the spikes are the same two periods. So 11 around 11 o'clock and then another spike at 8:00 PM. Think about when you're that's, when donors want to give, that's not, when you're sending your appeal to, you might be sending your appeal then, but that's when people are on their computer and they're doing it.
That's not me telling you, tactically send all your emails out at 11 3:00 AM on a Thursday, but just know that's when people are doing prone to be active to open their wallet or use their digital wallet now the other one that I'm just in love with is geographic analysis. So looking at where people live and how they give and small organizations, especially like I've seen some really effective like a local food bank in Massachusetts. Started using us during the pandemic. And they actually shifted a lot of their traditional donors into monthly donors online. And it was as simple as they never had that online option before, and so just go to the page, use QR code, drive somebody to that and people are more prone to be like, Hey, I live here. Like I want to give to this type of organization, that's serving my community, think about your community and the geography and the demographics of the people that make up into it. And that directly connects to the very first thing that we were talking about.
Cindy W.: Absolutely. I think that. Oh, I could literally get off, get on a soap box and talk about that one. I'm not going to do right now, but I certainly have a series. Tim, I really appreciate having this conversation and I'd love for you to share with our listeners where they can get their hands on this report and how to follow because I think as you mentioned, you're doing some more research,
Tim S.: Yeah. If you got it in the show notes, we'll put the URL there but typically, shorthand, Neonone.com under our resources slash resources, you can find it there. But we actually have built out a pretty extensive, supporting look nerds like me and Cindy are gonna read 87 pages of analysis, but one of the other cool things that we created is an interactive data hub. So people can do filters for mission, online giving offline, giving that I'm actually working on geography right now. I just locked in the design scope for the geography data.
So you can like click on where you live and it'll show you a profile of giving there. So that's all free online, right? Like you can go that none of this costs, anything, just go check it out and neon one.com, but we've also done supporting webinars too. So Sabrina Walker Hernandez actually was our first person to do a webinar. And she did the deep dive, similar to her analysis on like, how do I know who somebody is? And she talked about bias. Like she did this like awesome switch halfway through to be like, Hey, remember your traditional webinar that you always see about this topic yeah we're going to append that right now.
Cindy W.: So go and watch it
Tim S.: On our website yeah everything's recorded and we do closed captions for everything, for accessibility transcript, all of it.
Cindy W.: Yeah. And you mentioned something that I'm going to really encourage people to check out as part of that, when you said you could filter by, cause because again, working with small organizations. A lot of them are not the quote unquote bigger, sexy causes. And they always think no one supports what we do, go check that out because you're wrong about that too. Tim, thank you so much for being my guest today was a great conversation as always.
Tim S.: Absolutely always, but now we get to record it, so yeah.
Cindy W.: Exactly. And of course you, our listeners, thank you so much for tuning in. I can't wait to see what you do with this information and we'll see you next week. Well, folks, that's it for today's episode of the small nonprofit. I'm your host, Cindy Wagman, and this show is brought to you by The Good Partnership. As a reminder, if you want more resources around raising more money for your small nonprofit, visit thegoodpartnership.com and download our free fundraising strategy guide. I'll see you next week.