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4 Reasons Nonprofit Donors Stop Donating
Why nonprofit donors stop donating: 1) Insufficient funds 2) Competing nonprofits 3) Inadequate nonprofit communications 4) Lack of Transparency
In a study conducted by Adrian Sergeant, Director of the Centre for Sustainable Philanthropy, nonprofit donors who stopped donating to an organization (during the preceding eighteen-months) explained why they stopped giving. The study found the following top 3 reasons for the discontinuation of financial support:
Reasons nonprofit donors stop donating:
1) Insufficient funds
Non-giving can be fueled by insufficient funds on the part of the potential donor.
2) Competing nonprofit organizations
Donors are more likely to give to a competing nonprofit if their initial donation was small. That being the case, nonprofits should secure a larger initial monetary sum from donors to transcend this barrier.
3) Inadequate communications
Nonprofits should offer donors more choice by asking them how often they would like to be contacted. To further address these concerns, nonprofits should ask donors to indicate how much they want to donate and whether they would like to receive guidance in this regard. You can read more about membership retention here.
4) Lack of Transparency
Recently, the New York City-based Wealth Institute surveyed over 900 affluent consumers. Approximately, half (56%) of respondents reporting non-giving behaviors indicated that their attitudes towards philanthropy were influenced by an overwhelming sense of distrust in nonprofits’ financial decisions. Nonprofits can alleviate this concern via transparency; organizations should make both their financial statements and a record of how donations are used public.
With this in mind, nonprofits should:
- Request reasonable donations and promote donors’ input. Nonprofits must express their gratitude to their donors, strengthening their relationship.
- Transparency will increase donors’ feelings of trust and improve the relationship dynamic as well.
- Competing nonprofits are but a minor concern when a nonprofit acquires a substantive initial donation, implying donor loyalty. All things considered, a nonprofit must illustrate that the probability of their success outweighs the risk incurred by a donor, in the interest of counteracting donors’ reasons for discontinuing their donations.
- Association of fundraising professionals. (2000). Association of fundraising professionals. (2000). Accountability, Impact Build Trust in Nonprofits for Wealthy Donors. Arlington, VA <http://www.afpnet.org/Audiences/ReportsResearchDetail.cfm?ItemNumber=1922>
- Sargeant, A. (2001). Managing donor defection: Why should donors stop giving? New Directions for Philanthropic Fundraising, 2001(32), 59-74. <http://www.campbellrinker.com/Managing_donor_defection.pdf>