#109 Why do People Give, With Sybil & Fred Ackerman-Munson

Dec 26, 2022

Sybil and Fred review the data behind why people give, talk through the research, and add their own special opinions about why people give based on their own over three decades worth of experience working with donors and nonprofits. Fred and Sybil look at the research from studies to answer the question, “Why do people give?” 

 

Episode Highlights:

  • Why knowing our motivation for giving matters
  • Where are people giving?

 

Sybil Ackerman-Munson Bio:

With over 20 years of experience as a nonprofit professional and foundation advisor, I work with philanthropic institutions and foundations interested in successful, high-impact grant making, so you can make a true and lasting positive contribution to the world on your terms.

 

Links: 

Articles: 

As Charitable Giving Rates Sag, Foundations Back Ambitious New Effort to Ignite Generosity by All Americans

How We Give Now: Conversations Across the United States

Ten trends for Philanthropy

Why do people give?

 

Websites:

Chronicle of Philanthropy

Giving USA

Lilly Family School of Philanthropy

Stanford PACS Center on Philanthropy and Civil Society

 

If you enjoyed this episode, listen to these as well:

#71 Sybil Speaks: When and How to Engage Expert Advisors

#66 Sybil Speaks: What to Do When Your Favorite Nonprofit Experiences an Executive Director Transition

#69 Tips to Support a Nonprofit in Pursuit of Best Practices with Patton McDowell, Founder, PMA Consulting

 

Crack the Code: Sybil’s Successful Guide to Philanthropy

Become even better at what you do as Sybil teaches you the strategies as well as the tools, you’ll need to avoid mistakes and make a career out of philanthropy through my new course, Crack the Code!

In this new course, you’ll gain access to beautifully animated and filmed engaging videos, and many more! 

 

 

  • Check out her website with all the latest opportunities to learn from Sybil at www.doyourgood.com. 

 

Connect with Do Your Good

 

Would you like to talk with Sybil directly?

Send in your inquiries through her website www.doyourgood.com, or you can email her directly at [email protected]!

Full Transcript

OK Fred, I'm delighted to be here with you today, and this is the first of our official series of thinking about key topics, doing some research ahead of time and thinking through how to be an effective giver. Here we are in New York City right now, and our listeners might hear a siren or two behind us. We've been visiting family. It's been a rice week everybody, and I'm just excited to be here today. 

What we're going to do for this episode is I'm first going to bring up a bunch of quotes from my research about why people give, because that's what we're going to do. That's our focus today, which is why people care, and what motivates them to give matters because then it helps nonprofits, and other folks in the donor sphere understand why their colleagues may want to give, which allows people to partner more effectively to make a difference in the world. And so that's why we wanted to kick off our conversation around this theme. 

And if my listeners have listened to lots of my other many acts, they’ll know the conversation. This concludes a series of interviews I conducted earlier in December in which I asked people why they gave and what their motivations were for doing so. 

So, let's begin. First, I'm going to go through some really interesting material. I'd like to share some artwork and information that I believe is thought-provoking and will help this conversation progress. 

The first thing I'd like to mention is: What is the Stanford Center on Philanthropy and Civil Society, they are a very interesting research think tank on philanthropy. They've got so much valuable information, and they did a review back in 2019. The generosity commission, along with Lucy Bernholz, initiated the "how we live now conversions across the United States”.  Lucy Bernholz, Ph.D., and Brigitte Pawliw-Fry are the authors cited here, and I just saw this as an interesting study for 2019. They conducted 33 "How We Give Now" conversations with 338 participants, which generated 2277 responses, and what they found was that participant’s% of the participant’s respondents said that to give back to the world, but only 16% of them talked just about giving money, and the research also showed that people want to do that to give in a variety of ways, not just money, but to do thing ground to help the causes they care about. And I think that matters—that it’s about money or the tax deduction. If you're a nonprofit or a donor and you care about an issue, approach other donors and other nonprofits, just to say we require Money that just doesn't exist and that doesn’t work. And me and you Fred, we've had that experience where we've given money and then all we get are envelopes in the mail once a year asking for more money, and it just makes us not that excited. So that makes a lot of sense to me.

Also, there's another cool organization I like a lot called Giving USA publishes an annual philanthropy report. And they just released their most recent one in 2022. I'm excited that I've chatted with Laura McDonald, who's the chair of the Giving USA Foundation, and she's going to be on my podcast, and I'm going to be talking to her more about this. 

In this review, they found all these interesting things, and what they found was that Americans' charitable giving remained strong in 2021, with donors contributing an estimated total of $484.85 billion to US charities. And that's cool. But let's break this down a little bit more. What this report said is that 67% of the giving, which is $326 billion in change, is given by individuals, such as individual people saying they want to do good, and that is decreasing. There are now 24 more formal private foundations, private family foundations, or foundations, a 4.9% or 20 percent increase. They gave 19% of the total giving of $90 billion in change, and this is an increase of 3.4% for 2020. And then giving by bequest was only 9% of the giving totaling 46 billion dollars, a 7.3% decrease from 2020 figures. And also, by corporations, which made up only 4% of the pie. We're still talking billions at 21 billion, and the interesting thing about corporations is that this represents an 8-point increase or a 23% increase in 2020.

So, I just think. It's fascinating that people…individuals... People are still giving. They are distributing the majority of the funds, which means that your friends, colleagues, coworkers, and other people you care about are the ones that are giving. The thing that I found interesting in this research is that certain research teams found that people don't want to talk about their giving when they give money, so might not even know if one of their friends is giving to a particular cause unless they ask them. People are giving; they just might not be talking about it quite as much, but it's individuals that are giving. 

And so, I talk more with you, Fred, about the motivations that individuals have behind their giving, why they may want to give effectively over time, and what motivates them for that. 

So, before we get into that, I'd love to hear more from you, Fred, about what you think your interests are as a result of your research and what you found most interesting about it.

Taking off on what you were saying, I think two things interest me. First of all, you were talking about how individuals do a lot of giving, and that's true. Now, this is just my memory from when I ran a nonprofit, but historically, this is the reason the giving figures were so large for individuals in terms of the number of people who gave, and a lot of that had to do with religion. People gave to their church, and many churches ask for donations every week, so that's been a thing for the nonprofit community for a long time. They think, how do we access all those people? There are all these people giving, but many of them have already been taken by an institution they care about, their church.  I just don't want us to overstate the importance of that. 

OK, the second thing that I came across That I thought was really interesting. This was a blog by the Lilly Family School of Philanthropy at Indiana University by Abby Roland, and she was looking at the work of Doctor Sara Konrath from Stanford. She gave six reasons why people give.

Commercial Break 00:07:07.487

And I think this is important both for donors and for nonprofits. 

The first was trust, which was the idea that you notice a company. You see its limits on the ground, and you trust them.  So, you want to help them by giving them money. The second characteristic is altruism. You have concern or compassion for those who are less fortunate, and you want to help them. And that's wonderful. The third consideration is a social benefit. So, this is a non-monetary benefit. But it's a benefit like being part of a group, and it could be a giving club, it could be that you go to an auction, or a dinner and you donate in some way, or your part of your church and you give money that way, but it gives you being part of a social group. The fourth benefit most of us have heard about is tax benefits, and the fifth is egoism, which takes a couple different forms. You can have an enhanced reputation. Maybe you have your name on a plaque in a building or something like that, but it can also be as simple as having a really warm glow and feeling good about yourself. The sixth thing that she identified as a constraint was financial constraints. Financial constraints have a lot to do with preventing people from giving.

And I want to thank all of the amazing researchers that helped inform our thinking. We also have our personal experiences and our own opinions about what people give and why they give. And the reason we care about it is the underlying motivations for giving matter because if you as a donor don’t care enough about your giving strategy, you'll do it for a few years, get frustrated, and then give up. And I've seen and done it before, and there's a lot of need out there. There are many ways we can give, and it's important to keep them in mind and tap into our core motivations, as they are very unique and special to us. 

Commercial Break 00:09:43.570

OK, Fred, this is my favorite time of day. That is, you and I get to talk about the research we did and consider why people give, and the reason I believe we care so much about this is twofold. The first is something you and I have witnessed when donors give but haven't done the work to think about their motivations and why they want to give, they can end up making terrible mistakes. 

So, for example, let's say there's a donor who really, we do trust-based philanthropy, and they care so much. They talk a lot about what they call general support grants, and they say they want to give just to the nonprofit without asking any questions, except that a month later they go in and start meddling in the nonprofit's business, and they could end up derailing entire projects without even realizing it. 

And so, when we talk about motivations for people to give, we want to talk to you the donor who is listening to our conversation, the donor will discuss with you how you can ensure you're giving in the best way possible and showing up for nonprofits in the best way possible and it all comes down to your giving, so let's talk about that today. 

And then the second thing we're going to talk about is the research we just read an article about what issues people are concerned about today and how much attention they pay to the environment. Are they giving education? What's up? What's down? 

I think that's important because there are a lot of donors who care about a lot of issues, and they might want to invest more in an area that's maybe underinvested. Or they might want to invest in something that they see a lot of other donors investing in, but they have a particular issue that they care about. So, this is to you, the donor, who may already be doing a great job at the kind of issue you're working on, but you might want to hone your strategy and think through your options. OK, what's everybody else doing, and how can I make sure that I'm showing up as my best self? 

So, I'm really going to talk about this more with you, Fred, and please tell me. First, some thoughts: What are your thoughts on the motivations that drive people to give?

I'll start with the story and then bring it back to the present day. So back when I ran a nonprofit in the 90s, and that was like the first tech boom, we had this wonderful donor. He made a lot of money in technology, and he wanted to help us. We were working on purchasing forests to protect animals, and the issue was that.

The thing was the way he wanted to give other than giving us money, he wanted to essentially experiment with his theories on how we could raise money through websites. This was the 1990s, and nobody was raising money through websites. But he ran us around and around and around and honestly wasted a lot of our time because he thought he knew best. That, to me, speaks to one of the reasons that people give; it's called egoism. 

Now that can just be a really warm glow like I feel good helping out people. But sometimes people go a little too far with that, and I want to bring that back to today. There's a movement called effective altruism. They are run by a lot of people who have a lot of money and are extremely intelligent, so they try to pick the most important issues facing humanity. Then fund work on those issues, and I do that. And at the same time, that was because I've seen that when people have a lot of money or a donor has a lot of money, it can skew what people work on, whether it's a good idea or not. 

So, I'm all for effective altruism as an example, and I applaud those people for giving their fortunes away at the same time I think to consider how they give, keeping in mind that the ego plays or can play a role in giving.

I couldn't agree more, and I think that the sites that we just read and that blog post that you cited, talked about ego being one of the real things. I believe what we're saying here is that if you're a donor listening to us and thinking, "OK, ego is one of the reasons I get engaged," Then hats off to you because that's a great start. After all, if you're realizing that, then what can you do if that's a major motivation for you to give? You can maybe dial that down a little bit, but instead, it's more about the outcome of helping the community based on what the nonprofits you're talking to are telling you is needed. And that means having to dial down that ego as a reason for giving. But these studies that we just looked at show that ego is a major factor in giving. 

However, let me ask you a question, Fred. If you're somebody who just sort of acknowledges no, it's because I want to give, but it's all about my ego. I want to leave a legacy. I want people to remember who I am. Maybe, if you're honest with yourself about that, the things that you give to are things like major educational institutions, and you pay for putting your name on a building that you built, which could be very helpful for the institution, a building they need, and then you will have your name on here forever. If you're honest with yourself, that might be the route you take. That ego is the main thing. 

However, if EGO is the main thing and you want to make a difference in climate change, for example, you are also interested in climate change policy. You're going to have to dial down your ego a lot because you, as a donor, will never know as much as the nonprofits about climate change policy issues. 

And so, anyway, we've hovered over this. You're smiling, Fred, and you want to say a few words about the ego piece, and then we can move on to some other topics, but that is why this is so significant. A word of warning: I like that you brought that up.

Yeah, oh my God, so just think about who it is we're talking about. We're talking about really successful people, people who have the kind of money to make a difference in the world; most of them, anyway, didn't just have that money given to them. They, in some fashion or another, earned it or participated in earning it in some really interesting new way. Tech is a great example.

So, they tend to think, "Hey, I've already figured this out." I can figure that other thing out. Going requires a certain amount of humility. Oh, some people have been working on this for 30 years. Maybe I can add something. But I should not be directing their efforts.

OK, I love that. 

So many of the donors, any people who have given money, and you're listening to this is just a warning, and as you know, I see plenty of people who do it exceptionally well, you know, who have some ego wrapped up in their giving strategy. But they are humble and listen to the nonprofits and the experts in the field in the world around the issue, and that's actually why I created my mini-course series, and all those things are to help people think through that stuff. 

All right, so we talked about ego and why people give, but the other things I thought were interesting in terms of motivations were that it seemed like, at least from what I was reading, that not that many people give money away because of the tax deduction. That surprised me because I thought in a variety of ways. It was motivation, and I'm changing my thinking here based on the readings, and I think that's probably what it is. From my perspective, this is what a tax-deductible donation is. Its purpose is to start a conversation and get people talking and motivated to give, but once they get into that space, they realize there's so much more out there than the tax deduction. 

They realize, "Oh my gosh, I can volunteer." I can help. I can maybe give more money than what I need to do? I can do it in other ways. I can give money in ways that aren't tax-deductible but still make a difference. So, I still believe that this is not scientifically driven because it's not what any of the studies said, but I still think that there's some real merit to having the tax deduction. I think it's a motivating factor. I did find it interesting from the studies that we read that sort of emphasize that there are a whole lot of other things in addition to that, and that's in the United States. Honestly, not all countries have that kind of tax deduction.

So, I just wanted to talk to you about that a little bit more, Fred, it's not just about making money and giving it away. I know that sounds ridiculous because I have no idea how to give money away. You're not making money anyway, but the whole idea behind the tax deduction is interesting. You might save some money because you don't have to pay as many taxes. Look at the financial incentives. And so, if you're a donor that just cares about giving and has a multifaceted strategy, I think that's a really good thing, and I think policymakers should think about that too when they're thinking about the tax deduction if you want to incentivize giving in your community as a policymaker. And as a person who is a donor, you should think beyond just the tax deduction. 

What are your thoughts? Think about that, Fred.

I think that is such an interesting point because, well, the figure that you cited earlier—only 16% or something—mentioned tax deduction as a reason to give when we talked about the motives for giving. I believe there was trust because the groups saw the benefits firsthand. There's altruism. There's compassion for less fortunate people. Most people give because they feel a moral obligation to do so or because they genuinely want to help others. If you were thinking about the average American, the way to have the most effective tax deduction might not be a tax deduction on how much money you make. Give it instead; it may be acceptable if you donate five hours per week. Your tax deduction is based on $15.00 an hour for those five hours a week, and you keep track of the hours. You donate, and you take a tax deduction on that. More people donate hours than they do dollars.

Yeah, this is sparking some thoughts for me that I want to talk more about with you offline, which could be the United States, is designed to incentivize giving a little off track. Based on what the studies are saying about the motivations behind why people give. I still believe that you should have the tax deduction, but if you want to incentivize giving in our society, maybe we should think bigger. So that's just my little challenge to us. 

Now let's think a little bit. Where are people giving? What are they focusing on in their giving strategy? The reason I think this conversation is important is that I've talked with and worked with my clients, and they've talked to me a lot about their motivations for giving. They say things like, "Well, we're giving to the environment, for example, because we have seen the statistics. And we've seen that not that many people are giving in that area”. 

On the one hand, I've worked with clients who give because of deeply held religious beliefs, and they tell me, "Well, you know, there might be quite a lot of giving in the religious sector. But our particular area of interest in this sector is things like survivor-driven change or other issues we're worried about in this area. We want to work with other people of faith on those issues.”

So, there are different things like that, but let's talk a little bit about what Giving USA found because I found it. It was interesting what they did. There are numerous polls available to help determine this. You know where people are giving, but this is the one that I want to pull out. 

What I noticed was that just like Fred said earlier, giving to religious institutions is a person's religious institution. The highest percentage was 27%, so 135 billion dollars plus change were given to religious institutions. And the next highest was 70 billion given to education. So, it's like half. So, you know, religious institutions are very significant. But 70 billion dollars are given to education. And then the next one, at 13 percent, is 65 billion, given to Human Services. 

So, you have 27% for religion, 14% for education, and 13% for overall giving in 2022 for human services, and it gets much smaller after that. So, for example, 8% of total giving goes to health. 5% to international affairs. 5% to arts, culture, and the humanities. 3% to the environment and animals. 

So, it's really interesting I think that way, whereas a donor, most donors—I shouldn't say "most," actually, because it's all in smaller percentages. However, religion, education, and human services are now top priorities. 

One thing that gives the USA notice is that the amount given to education has gone down, but only by 2.8%. So, it's not that much, but anyway, let's talk a little bit more about that because that links to motivations for giving education, human services, and religion the top spots and then health, international affairs, arts and culture, and the environment the bottom spots. 

What do you think that means, Fred?

Let us return to the original five reasons (from the Chronicle of Philanthropy study) why people give: altruism, trust, social benefits (like being part of a community), tax benefits, and egoism. I believe the problem is that Sybil according to the statistics, you just read, is for their church and their immunity. They also trust them. So right there, you got two of the top five reasons people give for giving money to churches right there. 

Same with social services. Human Services. People see people suffering, they have compassion for them. Same with education, the majority of people in this country are educated. Of course, most people will donate; it's just a matter of determining what people spend their time doing and what they care about. The donors I work with, especially in my current position, have spent their entire lives caring about the environment. That is their church.

Two, I think environmental giving is increasing. Unfortunately, that might be because of climate change. Is this such a major threat and people are starting to notice that, but so for me, the motivation and then where people are coming from are really about what it is that impacts them. What do they see? In their daily lives in what areas do they hope to make a difference?

So true. 

But I love that Fred said that, and you know, I think we should just summarize now some of the reasons that we're thinking about this issue. 

First, why does it matter? Why are you even listening to this? Why do you care? And it matters because if you're connected with the reason why you give, and it could be one of the six reasons Fred mentioned in the study we cited or it could be something else, you might be thinking about it, but get really in tune with the reason why you give. Because that then links to how you give, and if you're not in tune with why you give, then how you give will be out of sync and could do more harm than good. 

And we used a few examples of that in our conversation. 

The second thing you do is carefully consider where the people are. The trends are, where are people funding, and what are they doing? And we listed some of those, and you might want to do some of your research to look at this, because you might be super in tune with wanting to give to education, for example. But you might also really care about the environment. So, if you notice in the statistics that there aren't many donors funding the environment, but a lot more donors funding education, you might be able to combine those two interests and fund things like outdoor education. 

So, then you could, like, bring in those two issues and be extra influential in an area that's funded less and less, and maybe bring more of the donors that care about education into the environment. Vice versa. These are the kinds of cool conversations you can have when you're really in tune with what you want to fund, and you know the stats about where people are funding and what the trends are. 

So, I hope this conversation helps you all sort of think through and hone your strategy a little bit more. And I want to thank you so much for listening. And it's just such a delight to talk to you, Fred, about all these things. Thanks for taking the time, Hon.

Thanks, Sybil; it's a pleasure.

All right, everybody, have a great rest of your day.