WHY WE NEED PHILANTHROPHY EDUCATION
How did you first learn about giving to charity?
For most people, that’s a tricky question. Learning about philanthropy in any sort of structured way is rare. It’s much more common for people to accumulate bits and pieces of information—or misinformation—over time. The result is usually a haphazard approach to giving which has never been given much thought. The Money for Good Report conducted by Hope Consulting found that only 35% of donors conduct any research before making their gifts! This “thoughtless” manner of donating results in a tremendous cost to the people whose lives could be improved by more effective giving.
PEOPLE SAY THEY CARE ABOUT NONPROFIT PERFORMANCE, BUT FEW LOOK INTO IT
Even more troubling, the same report found that the minority of donors who do perform research don’t do so in a way that’s likely to actually help them give more impactfully. The most sought-after piece of information is the charity’s “overhead ratio”, despite the fact that this metric has been roundly rejected as a measure of charitable effectiveness.
An analysis by US Trust and the Lilly Family School of Philanthropy also found low levels of donor knowledge (only 4% of the high-net-worth donors surveyed categorized themselves as “expert” while nearly half identified as “novice”), but highlighted the enormous opportunity of rectifying that situation. Self-described “expert” donors gave over 4 times as much as their “novice” counterparts!
AVERAGE AMOUNT GIVEN TO CHARITY BY HIGH NET WORTH DONORS'
CHARITABLE GIVING KNOWLEDGE LEVEL
Not only do more-knowledgeable donors give more, they also give smarter. 62% of expert donors reported monitoring or evaluating the impact of their gift, compared to just 10% of novice donors. And experts were more than 2.5 times as likely to report that their giving was having its intended impact!
HIGH NET WORTH DONORS' CHARITABLE GIVING KNOWLEDGE LEVEL BY PERSONAL FULFILLMENT FROM CHARITABLE GIVING, BELIEVING GIVING IS HAVING INTENDED IMPACT, CONSULTING WITH AN ADVISOR, USE OF GIVING VEHICLE, AND MONITORING OR EVALUATING OF CHARITABLE GIVING IMPACT
The benefits of improving donor sophistication are immense. The Life You Can Save’s Giving Game Project has a goal of promoting widespread philanthropy education that will create a culture of informed and impactful giving. If you’d like to find out more about these efforts, we encourage you to learn more about Giving Games, what the Giving Game Project has accomplished, and its plans for the future.