To Give…And Receive
Post by James V. Toscano
When I was a young…and presumptuous….development officer, I remember saying such smart alec, cynical things about donors as“They say they don’t want to be thanked for their donation, but just forget to send them a letter.”Or “Just leave their name off the annual report, or misspell it, and you’ll see!”
I was really on to something, only backwards!
Development is not a one-way relationship. It is an exchange. An exchange of values. It is always two-way.
Marketing expert, Armand Lauffer says, “Exchange is a process whereby individuals and/or organizations associate in order to achieve shared or complementary objectives.” In development, exchange is a process where donors give to nonprofit organizations to achieve shared or complementary values.
The nonprofit receives resources of various kinds; the donor receives a number of different elements that reinforce their values, from achievement of higher purpose to ego-satisfaction.
If we do not understand that donors get something from their gift, well beyond a tax deduction, we are seriously remiss, derelict in our professional duties.
Donor Expectations
Donors have expectations emanating from their gift. It is the job of the development officer to understand this complex expectation pattern of the major donor.As indicated in the previous article, these exchange center on values, not money.
The exchange relationship must be seen as the norm, as functional, if we are to maintain a long-term relationship with our donors. The relationship must also be defined in terms of benefit, where mutual benefit outweighs “costs.” There needs to be anticipation of reward by both parties to the exchange, with one of the parties expecting mostly nonfinancial reward.
When we examine the natural history of donor loyalty, exchange has high explanatory power. Gerald Panas’ investigation of the motivations and relationships in the hundred largest gifts in one calendar year clearly demonstrates the importance of exchange in what Panas describes as a lifetime relationship, a long history of mutually rewarding exchange.
Donations of resources in exchange for intangible benefit rank among the highest forms of charitable giving. All donations involve some mix of tangible and intangible rewards. A marketing concept, exchange has remarkable explanatory power in understanding charitable intent. Moreover, I would maintain that charitable response from donors for intangible benefit is the ultimate in “marketing” and that we development people serve one of society’s highest callings.
Exchange as a Mindset
The marketing concept of exchange as a mindset is an invaluable way of understanding the essential act of resource development: the donation.
In an increasingly competitive era among charities for resources, understanding thecomplex reasons why donors give, and then employing response strategies based on this understanding, may very well be the difference between long-term significance and stagnation.
Donors may be attracted to a charity by an initial promise, with both extrinsic andintrinsic rewards. Extrinsically, a donor may be attracted by a the prospect of achieving some desirable outcome, or being numbered among the movers and shakers in the community, or pleasing a spouse or friend, or paying back, or pleasing God, and/or any combination of “rational” motives.
Intrinsically, the donor may experience waves of good feeling, a sense of well-being,rectitude, and/or inner peace to name but a few of the many inner motives which lead to donations and relationships over time.
What Motivates a Donor to Give?
What then motivates donors to give? A myriad of reasons are always given, withanecdotal examples and myths that often cover up facts.
Some attribute donations to guilt as the motivating factor in many gifts. Guilt may work once or twice, is then satisfied and becomes insufficient. Long term relationships need more.
Another explanatory factor is that a donor gets a tax deduction. We all know that it’smore prudent for most taxpayers to keep the money and pay the taxes, that they are ahead financially by not giving money away.
The best way to actually know is to ask donors. There are many ways to do this. Given the fact that the best way to do research on an individual donor is to talk to them, that might be the place to start in specific situations. There are also other, more sophisticated, representative ways to get at larger cohorts.
Gerald Panas’ work cited above is an interesting way to get at a specific, perhaps nonrepresentative, but highly influential and important group of people.
Similar work by Terry Odendahl, an anthropologist, covered donors of wealth giving to “their own” institutions regardless of the needs of these organizations. Paralleling Veblen’s concept of “conspicuous consumption,” Odendahl discovered a pattern of “conspicuous contributions.”
More systematic ways to ask donors are through overall population surveys, thensurveys of members of a group, and surveys of donors to an organization.
The Seven Faces of Philanthropy
The groundbreaking work of Prince and File in The Seven Faces of Philanthropy gave donors the opportunity in a representative national survey to express the extrinsic motivations deciding where their gifts go.
Prince and File developed seven general categories from their data to characterize donors:
- Communitarians: Give to improve local conditions.
- Devouts: Motivated by religious and spiritual factors.
- Investors: Financially motivated and concerned with tax andestate considerations.
- Socialites: Group and social basis of motives.
- Repayers: Obligated sense of giving back.
- Altruists: Higher sense of purpose, achievement of values.
- Dynasts: Inherited wealth following family values, traditions.
The “nametags” are useful in sorting out the appeals that work with groups and inunderstanding why certain donors are attracted by specific charities. Because there is great variability in areas of choice for donations in the various categories of donors, the insights gained here are enormously helpful to development officers.
Deeper Understanding
At an even deeper, intrinsic level, Roy Menninger MD, who followed his fabled father as head of the Clinic of that name, discovered his training as a psychiatrist helped him understand the motivations of donors when he become, in effect, the Clinic’s chief fundraiser.
In a paper, “The Psychology of Giving and Receiving,” Menninger states the mosteloquent argument for the concept of exchange. He discerns three layers of motives in giving, with donors’ decisions to contribute related to one, two, or three of the layers simultaneously.
The first layer, narcissistic motivation, “involves donors giving for self-centered reasons, seeking honor or prestige or glory or personal recognition.”
The second is conscience-driven, with obligations and guilt motivating the donor. It may also reflect a religious or moral view for giving as a duty, an expectation, a “should.”
A third level is altruistic giving, what Menninger calls the most mature form of giving, a way to participate “in the lives and work of others as well as a way to express gratitude.” The donor becomes a “genuine participant who shares in an achievement by facilitating it, but the focus is on the recipient, not the giver.”
Menninger goes on to explore exchange, “ the best outcome for both giver and receiver is the development of a mutually satisfying relationship, one that has a reality and valueapart from the act of giving… Such relationships are mutually enhancing: they provide the donor with a renewed sense of significance and a means of transcending the self. They provide the recipient with a renewed sense of mission and purpose, a reinforcement of the basic values which have guided the work of the organization. Such reciprocity is a worthy end in itself.”
I quote at length because Menninger eloquently “nails” the idea of the exchange of values and the importance of the exchange itself!
In understanding the profound nature of exchange relationships in charitable donations, the development profession serves its highest calling, and it is to this end of understanding that all of us should aspire and work to achieve.
Copyright 2011, The Good Counsel, division of Toscano Advisors, LLC. May be duplicated with citation.