Donor Perceptions: Larger Charities More Effective, Smaller Charities More Efficient With Funds

The size of a charity does influence perceptions for most donors, according to the latest survey in the Donor Mindset Study, a series of research reports about American donors conducted by consumer insights company Grey Matter Research and research panel Opinions4Good.

In the mind of the typical American donor, larger charitable organizations are more effective in their work than smaller ones.  They’re also better at communicating with donors and have greater dollar-for-dollar impact.

At the same time, smaller charities are perceived as spending a lower proportion on overhead and administration, as well as needing donations more than larger organizations.

Just 12 percent of respondents saw no differences between smaller and larger charities on any of the seven attributes tested in the study.

Larger charities have the perceptual advantage in three areas:

• Which tend to be better at communicating with you as a donor? (Larger charities, 38% to 25%)
• Which tend to be more effective in their work? (Larger charities, 37% to 25%)
• Which tend to have more impact dollar-for-dollar? (Larger charities, 37% to 29%)

Smaller charities have the edge in two of the seven areas:

• Which tend to spend a lower proportion of donations on administration, fundraising, and overhead? (Smaller charities, 43% to 29%)
• Which tend to need your donations more? (Smaller charities, 46% to 24%)

And in the last two areas, neither type has an advantage:

• Which tend to be more trustworthy? (No difference, 29% to 29%)
• Which tend to be the type you prefer to support? (No difference, 27% to 27%)

Differences Among Donors

While the numbers above reflect donors overall, the study indicates that there are substantial differences among different types of donors. Men consistently give a stronger advantage to larger charities. Women, on the other hand, are less likely than men to see size-based differences. When they do, they tend to see more advantages to smaller organizations.

There is also a substantial size bias by age.  Donors under age 35 consistently are almost twice as likely to give the advantage to larger charities over smaller ones. This gradually changes as age increases, until the oldest donors (65 and over) average nearly two-to-one on the side of smaller organizations on these seven attributes.

Further, there is consistent variation by race/ethnicity and religion.  Non-Hispanic Caucasian donors tend to give a slim advantage to smaller organizations over larger ones, while all other racial and ethnic groups combined see strong advantages to larger organizations, averaging more than two-to-one in favor of larger charities on the seven tested attributes.

Finally, while there is little difference between self-identified Christians and donors from other faith traditions, those who have no faith preference (atheists, agnostics, and “nones”) consistently see smaller organizations as having advantages over larger ones. Within the Christian tradition, Protestants tend to give an edge to smaller organizations, while Catholics regularly see advantages to larger charities.

Using the Data

Ron Sellers, president of Grey Matter Research, notes that charitable organizations need to take these biases into consideration in their marketing, branding, and communications. “Some might figure they can’t do anything about their size, so this factor can be ignored. That’s a mistake,” Sellers explains. “Organizations need to understand how they are likely to be viewed, so they can play to their strengths and adjust for their perceived weaknesses.”

Sellers offers a few examples of this. “We know that donors tend to see smaller organizations as having lower overhead ratios. If you’re a large organization with low overhead, you may need to emphasize this fact a little more. On the other hand, donors believe larger organizations are better at communicating with them. Smaller organizations need to evaluate their donor communications and see what they can learn from what larger organizations are doing right. Of course, if your organization targets donors who tend to have a significant bias toward one size or the other, such as Catholics or younger people, you need to understand their biases in order to communicate more effectively with them.”

The study also notes that there is substantial evidence that these donor perceptions play out in how people actually give. Those who state a preference for larger organizations name a favorite charity that is nearly five times larger on average than those who prefer supporting a smaller organization.

The full report examines these donor perceptions in-depth, including breakouts by demographics, religion, and amount given. It is available by contacting either Grey Matter Research (ron@greymatterresearch.com) or Op4G (support@Op4G.com).