A nonprofit organization typically relies heavily on its donors to operate on a daily basis. While other revenue sources, such as grant funding, are usually available, it is the contributions received by the public that keep nonprofits afloat. Knowing how important those contributions are, it is important for a nonprofit to have an understanding of why donors give to organizations.

There are a number of reasons donors choose the organizations they give to:

• The mission of the organization – they believe in what the organization is doing.
• The impact the organization makes – they see the impact the organization is making in the community.
• The impact their donation has on the organization – they are told what their support is used for within the organization.
• Trust in the organization – they believe the organization will use their donation to fund the mission.
• A personal connection to the cause – donors give to organizations that have directly impacted them, their families or their friends.
• The organization caught their attention – the organization is active online, on social media and in the community.
• Tax benefit – while not the most common reason for giving, it is the motivation for some donors.

Nonprofits that promote their mission and impact on the community well tend to see more donations for these reasons. Consider how your organization promotes these things and continue to seek out ways to put your organization in front of the public.

It is equally important to understand why donors might stop giving to your organization. Donors tend to stop giving for two main reasons:

• They do not know how their gift is being used and/or
• The organization is soliciting contributions too frequently

Thankfully, these are two relatively easy things to avoid as an organization.

When your organization sends the donor a donation acknowledgement letter, include a couple of sentences to explain what’s happening with your organization in the coming weeks. This will provide the donor with an idea of what their donation is going toward – the more specific, the better!

There is not a “one size fits all” approach to how nonprofits should handle soliciting contributions. However, it seems that less is usually more. One study shows that 41% of donors noted too-frequent solicitations as the reason for no longer giving to a charity. Many nonprofits have a big soliciting push at year-end, as this time appeals to many donors for giving. Consider other ways to solicit contributions, such as by hosting an event or fundraiser, rather than sending another postcard or an email requesting donations.

Contributions are vital for a nonprofit to continue serving its purpose. Understanding why donors give can help an organization to better position itself to appeal to donors. At the same time, understanding why donors stop giving to organizations can help an organization to avoid the things that sometimes drive donors away.

Please contact Gilliam Bell Moser LLP for more information.

Lindsay Lang, CPA