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Sunday, Oct. 26, 2014

3 factors that make donors give to charity

Compiled by Amy McDonald, Deseret News National Edition

Published: Thu, July 24 4:30 a.m. MDT

 Senior person hands begging for food or help

Senior person hands begging for food or help

(ia_64, Getty Images/iStockphoto)

Americans were more generous in 2013 than they were in 2012, and charitable giving is only expected to increase, according to the Giving USA report released in June. So what is it that makes donors want to pull out their wallets? Here's a few factors research has shown to impact people's hearts and checkbooks.

1. A sense of belonging

In one study out of Texas A&M University, researchers divided prospective donors into two groups — a control and an experimental group. The difference was that those in the control group could donate to a general college fund, while those in the experimental group could donate to a specific university. Both chose to donate, but those in the experimental group gave much more.

That's why an economist at Yale, Robert Shiller, has proposed "participation nonprofit" organizations — in which instead of making a donation, donors buy a share of the organization. "The share sales would really be donations, but would be framed differently and come with rights that would change the whole giving experience," Shiller writes in The New York Times.

"Shareholders could vote their shares at stockholder meetings, as they would in a traditional corporation. The organization would pay some kind of dividend, too, though this would go into a restricted account, to be used only for a charitable purpose of the owner’s choosing," he writes.

2. Charity and empathy

Prospective donors like to feel their money will benefit people who really need it. Forbes reports on a study of 600 people and four charitable scenarios. In one study, "participants were asked to choose 'between donating to medical patients described alternately as having a low level of responsibility for their situations and those having a high level of responsibility.' Recipients of donations in the group were described either as unable to pay for medical treatment because of 'low-wage jobs with poor benefits due to economic conditions' or unable to pay for treatment because of inability 'to hold a steady job due to their drug and alcohol abuse or gambling addiction' — in shorter terms, not their fault and their fault.

The results? "The 'worthiness' of the recipients of charity seems to matter," Forbes reports. The study found that charitably giving is sometimes conditional upon the responsibility of the recipient. In other words, organizations "need to be cautious when describing the beneficiaries that they support, particularly if the recipient could be perceived as responsible for their plight and, by extension, undeserving," the report says.

3. Knowing a good story

That's why storytelling is key. Even though some call it a cliché, storytelling has proven to be a powerful motivation for donors. A study by the Rockefeller Foundation recently found that in storytelling, "The closer to the ground you get, the better," and "It's not to say that the community tells the story best, but I believe strongly that the stories should be coming from as close as possible to the people who are being impacted by your programs," one nonprofit leader told Forbes writer Tom Watson.

amcdonald@deseretnews.com, Twitter | @amymcdonald89

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1. JoeBlow
Far East USA, SC,
July 24, 2014

Think you missed the "elephant in the room" on this one.

Based on all the carping when someone suggests removing the tax deduction for charitable giving, one would have to conclude THAT is the number one reason for giving.

Personally, I think that we should lose ALL deductions, including mortgage interest.

Think how much simpler our tax filing would be.

2. gmlewis
Houston, TX,
July 24, 2014

I suspect that during the Millennium, we will still need to have government and taxes. Would living the law of consecration will qualify us for a major tax deduction at that time?

3. JoeCapitalist2
Orem, UT,
July 24, 2014

JoeBlow: So if we got a tax deduction for flushing our money down the toilet, do you think lots of people would do that? A deduction is not the same as a tax credit.

People give because they want to help. If donors are smart, they will research out which organizations are most effective in using the money they receive to help those in need. When 80% or more of your donation goes to fund raising or high executive salaries or is otherwise wasted (you know, kind of like what happens to our tax dollars), then find a different way to give.

BTW: I agree with you that it would be good to get rid of deductions - in exchanged for lower tax rates. Unfortunately, most of the tax and spend big government liberals out there just want to eliminate deductions and keep the same high tax rates.