Nonprofits Struggle to Understand Trends in Individual Giving

December 14, 2016

In a world where an online Google search leads to a tailored ad within minutes, it’s hard to believe that a meaningful information gap exists around charitable giving. But it’s true. If nonprofits want to better understand what factors impact giving and why, they must make do with old data and big-picture totals.

The problem is not a lack of data about donors, say experts. Rather, the problem is a lack of real-time, nuanced data.

“We can’t create estimates in real-time to understand how individuals are giving now and how that may evolve throughout the year,” said Shena Ashley, director of the Center on Nonprofits and Philanthropy at the Urban Institute. “We haven’t kept pace with changes in the way people are giving.”

Online giving is another mystery. “We can’t discern what percent are giving online,” said Ashley. “We know it is increasing, but is more going online and less by check or other forms? We just don’t know.”

Researchers study trends in charitable giving using large datasets like those based on IRS information. Organizations analyze their own data—if they have staff capacity. What they lack, however, is a way to both break down the data simply so they can analyze it easily and the ability to clearly compare (or benchmark) their version of “success” against the larger nonprofit sector.

Having better information is important, said Brandi N. Yee, chief program officer at ACT for Alexandria, a community foundation in Alexandria, Va., because with it, charities can become better fundraisers and more effective organizations.

Understanding patterns of giving—“how donors spread out their donations, how micro-donations work, whether people give to the same organization continually”—gives organizations real insight into when and where to focus a fundraising campaign, said Yee.

Demographic data, for example, could help nonprofits better target their campaigns to the right age group.

A richer understanding of charitable giving is also important to policymakers, Ashley said. They may want to know how the trends in charitable giving correspond to government spending on social programs. Charitable giving is part of the American fabric, she said, and policymakers want to understand what drives such commitment. “Giving is kind of like voting — expressing what you want to see happen through giving. It’s a real material expression of your values.”

The Mastercard Center for Inclusive Growth is working to help organizations reliant on individual giving with Donation Insights. This new offering tracks trends in US donations over more than five years using Mastercard anonymized and aggregated transaction data. Now charities and nonprofits have similar tools and insights available to the private sector.

“With Donation Insights, we’re able to shed new light on which types of causes are gaining popularity, when and how giving occurs and the underlying factors that impact giving,” said Melinda Rolfs, senior director of Data and Analytics at the Center. “The goal is to equip organizations focused on social good with the information they need to reach more people and better serve their communities.”

The prospect of better, more timely data, is tantalizing, said Ashley. “My eyes get big when thinking about the potential of this data.”

Please join the Center in the effort to help close this information gap by reviewing our new Donation Insights report, analyzing our dataset, and sharing your insights and questions with us at donationinsights@mastercard.com.

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