Approaches to Charitable Giving and Perceptions of Organizational Effectiveness Among Midlevel Donors

Abstract

For decades, scholars have devoted attention to identifying the giving habits of charitable donors, yet the behaviors of midlevel donors have not been independently considered. This study examined midlevel donors’ approaches to charitable giving and the extent to which they give to effective organizations. Operationalized as giving between U.S.$2,000 and U.S.$20,000 annually, we analyzed descriptive statistics and multivariate probit models of 1,260 midlevel donors using a novel study. We found that respondents were least likely to engage in ad hoc giving and most likely to give to organizations due to personal connections or prior research. However, while caring about a cause or issue was consistently and positively associated with giving to organizations that respondents viewed as effective, efforts to understand the organization’s work and the broader causes or issues were not. Our results suggest that identifying midlevel donors’ chosen causes is the first of several steps to giving to effective organizations.

Keywords

nonprofit organizations fundraising philanthropy nonprofit development nonprofit effectiveness

Introduction

For nearly half a century, scholars have devoted a considerable amount of attention to identifying, understanding, and shaping the giving habits of charitable donors (e.g., Handy, 2000; Hung et al., 2022; Mark & Shotland, 1983; Shapiro, 1974). Some of these efforts have gone toward differentially describing donors by their giving amounts. For example, experts have increasingly focused on donors who give substantial amounts of money, including gifts of hundreds of thousands to millions of dollars (Alston et al., 2021; Osili, Ackerman, & Li, 2019). Separately, scholars have identified pathways to increase and sustain gifts from small donors, including through matched fundraising and high organizational transparency (Huck & Rasul, 2011; Tian et al., 2020). Taken as a whole, this work has shown the value and power of altruism, warm glow, prestige, and social pressure in charitable giving (DellaVigna et al., 2012; Savikhin Samek & Sheremeta, 2014).

However, the giving behaviors and motivations of donors in the middle of this spectrum—defined in our study as those who give between U.S.$2,000 and U.S.$20,000 per year to nonprofit organizations—have not been clearly examined in scholarly journals. Often called midlevel donors, these charitable givers have been shown to contribute roughly 10%–30% of major charities’ revenues with high multi-year loyalty (Sea Change Strategies, 2021; Wallace, 2018). Yet giving by midlevel donors has been declining in recent years, whether measured by amount donated (Collins & Flannery, 2020) or with income as a proxy (Jones, 2020). This is occurring at a time when nonprofits, philanthropy experts, and academics are increasing their focus on mega donors, despite major concerns from academic and industry experts on the effects that major gifts have on nonprofit missions and stability (Collins & Flannery, 2020; Osili, Clark, & Han, 2019; Rooney, 2018; Sea Change Strategies, 2021). Given the dramatic decrease in U.S. households who donate to charities just in the past two decades, from 66% of households in 2000 to 50% in 2018 (Indiana University Lilly Family School of Philanthropy [IU], 2021), midlevel donors serve as a potential source of nonprofit revenue growth that has largely been untapped.

Thus, the purpose of this article is to examine the giving habits of midlevel donors, including their approaches to charitable giving and the perceived effectiveness of their recipient organizations. Using a novel dataset developed from an academic-practitioner collaboration, this article takes an inductive and applied approach to better describe midlevel donors. As one of the first scholarly articles to focus solely on midlevel donors, our intention is to spur future research and contribute to the development of theories, programs, and policies that specifically focus on midlevel donors (Miller, 2007).

Background and Significance

Defining Midlevel Donors

Before proceeding, it is important to provide a definition for midlevel donors, yet definitions vary dramatically between organizations. Defined by The Chronicle of Philanthropy as donating between U.S.$1,000 and U.S.$10,000 annually (Wallace, 2018), major nonprofit organizations tend to define midlevel donors as giving anywhere between U.S.$1,000 and U.S.$25,000 (Sea Change Strategies, 2021). In other words, they give much more than those who give in the tens- and hundreds-of-dollars range, but generally not enough to pay for the entirety of staff salaries or programs. (To find the middle ground in a research area that still lacks clear definitions, the survey analyzed for this study defined midlevel donors as giving between U.S.$2,000 and U.S.$20,000 per year to charitable organizations.) They are known to be loyal to their recipient organizations and are an important pipeline for future larger gifts (Wallace, 2018). While estimated to make up only about 1% of donors, they generally account for between 10% and 30% of total individual donations at major national nonprofits with high multi-year retention rates that hover around 70% (Sea Change Strategies, 2021).

Personal Approaches to Giving

While the giving behaviors of midlevel donors have not explicitly been examined before in scholarly journals, researchers have described several approaches to giving to nonprofit organizations overall. Ad hoc giving is frequently in response to solicitations by friends and family (e.g., charity auctions or marathon sponsorships) and appeals following disasters or other major events (Herzog, 2018), including increases in donations during the first year of the COVID-19 pandemic (Fundraising Effectiveness Project, 2021). This type of giving, while still helpful to nonprofits, is less likely to lead to sustained giving (O’Donoghue et al., 2006; Radley & Kennedy, 1995). As evidence, the increase in donors in 2020 that was spurred by the pandemic, the ensuing recession, and the movement for racial justice was replaced by a decline in donors in 2021 (Fundraising Effectiveness Project, 2021, 2022).

Giving can also be in response to personal connections that individuals have to organizations or the issues they represent, often producing an enduring relationship between the nonprofit and the donor. These relationships, which can facilitate links between donors and nonprofit staff, volunteers, and beneficiaries, can lead to increased and more sustained giving (Boenigk & Scherhag, 2014; Sargeant & MacQuillin, 2020). Indeed, research has shown that helping donors identify the causes they care most about and, most importantly, the most effective organizations who work on those causes can lead to more donor loyalty through increased engagement, satisfaction, and giving (Johnson, 2020; Sargeant & MacQuillin, 2020).

However, donors rarely appear to make research-based giving decisions through researching the specific issues they care about or seeking evidence of nonprofits’ track records. A study of 3,000 donors found that a majority conducted zero research before making their gifts, with only 38% researching at least one donation in the previous year and 9% comparing the work of nonprofit organizations (Camber Collective, 2015). Despite this low-level of research, respondents were also loyal donors, with only 13% intending to give to different organizations the following year. Although the link between donor loyalty and efforts involved in researching have been studied extensively in high- and ultra-high-net-worth individuals (e.g., Andrews et al., 2020; McConnaughey & Shtylla, 2020), it remains an underexplored area of enquiry regarding midlevel donors.

Perceived Qualities of Effective Organizations

A related matter to personal approaches to giving is to what extent donors believe that the organizations to which they are giving are effective. Experts have suggested that qualities of effective organizations include giving to organizations that exhibit good leadership, engage with the individuals and communities they serve, and identify real opportunities for change (Brown, 2021; Crutchfield & Grant, 2012; Liket & Maas, 2015; Smith & Shen, 1996). While nonprofits themselves are often the focal point of effectiveness research (e.g., Crutchfield & Grant, 2012), experts have also examined when and how donors overall (Berman et al., 2018; Burum et al., 2020) and major-gift donors specifically consider organizational effectiveness (Andrews et al., 2020; McConnaughey & Shtylla, 2020), but not midlevel donors.

However, organizational effectiveness has been described as an “elusive concept” (Liket & Maas, 2015, p. 271) and it is, indeed, subjective. Experts have presented several models to assess effectiveness, including such financial metrics as the percent of an organization’s budget spent on overhead or fundraising. While such metrics can be helpful, they are not a measure of how well an organization is solving a social or environmental issue (Caviola et al., 2020; Tian et al., 2020). Yet the extent to which an organization is solving an issue can itself be a subjective concept. Considering homelessness, for example, is a shelter that provides beds to sleep in at night more or less effective at solving homelessness than an organization working to ameliorate poverty? Therefore, the perceived effectiveness of nonprofits, while subjective, enable donors to consider a variety of sources of information to make their judgments, such as by conducting their own research and contacting the organizations for more information.

Yet to the best of our knowledge, the link between approaches to giving and the perceived effectiveness of recipient organizations has not been explicated. In a practical sense, this information could have real value for program developers who might benefit from knowledge on the links between approaches to giving and perceived effectiveness of recipient organizations, as well as scholars who wish to develop models of the giving behaviors of midlevel donors.

Research Questions

Few scholars have focused specifically on midlevel donors, instead concentrating on small or major donors as well as donors regardless of gift size. We argue that scholars must focus on midlevel donors, as they provide considerable portions of nonprofit revenues (Sea Change Strategies, 2021) yet their numbers have declined in recent years (Collins & Flannery, 2020), echoing trends in the declining percentage of households who give to charity over time (IU, 2021). As such, we ask the following questions:

Q1. How do midlevel donors approach their charitable giving?

Q2. What are the perceived qualities of midlevel donors’ recipient charitable organizations?

Q3. How do approaches to charitable giving relate to the perceived qualities of midlevel donors’ recipient charitable organizations?

The remainder of the article is outlined as follows: First, we introduce a novel survey of U.S.-based midlevel donors while describing our descriptive and multivariate methodological approaches. Second, we outline our results from the three research questions. And third, we discuss our results, linking them to the literature and discussing important program and policy implications.

Methods

Survey Development and Data

The dataset used for this study is the Boston College Survey of Midlevel Donors, an online survey of 1,260 people that was fielded in April 2020 through an academic-practitioner collaboration (Brown, 2021; Brown & Halvorsen, 2020). To meet the need for more applied research for practitioners—which can sometimes be at odds with positivistic approaches to academic research (Bartunek & Rynes, 2014)—the survey instrument is intentionally applied with a focus on single-item measures.

To be eligible, respondents were required to live in the United States, be age 35 years or older, and have given between U.S.$2,000 and U.S.$20,000 to charitable organizations in 2019. We instituted minimum quotas for age and amount donated to assess a wide range of midlevel donors. Specifically, at least 200 people were required to be in each of four age categories (35-44, 45-54, 55-64, and 65+ years) and in each of three total 2019 donation categories (U.S.$2,000-U.S.$4,999, U.S.$5,000-U.S.$9,999, and U.S.$10,000-U.S.$20,000). The survey asked midlevel donors about a variety of topics related to their giving habits, including their major reasons for giving to charities, experiences of the donation process, types of charities supported, interactions with charities, and satisfaction levels with their giving. The Boston College Institutional Review Board determined that this survey posed minimal risk to human subjects and granted an exemption from review, and all respondents provided consent before beginning the survey.

Qualtrics, the survey vendor, sources its participants from a variety of online sources (e.g., customer loyalty programs, social media, etc.). Qualtrics included several checks to promote the most accurate data. Observations with total response times of less than half the median time were screened out of the final sample, as well as straight-lined responses (e.g., choosing all left-hand answer options on the survey), observations with IP addresses based outside the United States, and open-ended answers with nonsensical responses. (Questions with open-ended answers in the larger survey were not relevant to this study.) As all questions required answers, there were no missing data.

Measures

Approaches to Giving

The focal variables for Q1 (approaches to charitable giving) and the independent variables for Q3 (relationship between approaches to giving and qualities of recipient organizations) include seven non-exclusive approaches to giving that can be broadly organized into three categories: Ad hoc approaches, personal connections, and research-based approaches.

Two of the variables captured ad hoc approaches to giving and were measured on a 5-point Likert-type scale (1 = None; 2 = A little; 3 = A moderate amount; 4 = A lot; 5 = All). The questions were: “How much of your charitable giving is in response to fundraising appeals (e.g., letters, emails, cold calls, or social media appeals)?” and “. . . is in response to disasters or other events that move you?”

Another two variables captured personal connections to the issue or organization. Using the same response categories as the aforementioned items, the questions were: “How much of your charitable giving goes to organizations that work on causes or issues you care most about?” and “. . . goes to organizations with which you have a personal relationship?”

Finally, three variables captured respondents’ research-based approaches to charitable giving. The first, using the same answer options as before, asked, “How much of your charitable giving goes to organizations that you have researched to ensure they are the ‘best in class’?” The second and third asked specifically about respondents’ most significant donation of 2019. The second asked, “About how much time did you spend researching this charitable organization before making your most significant donation of 2019?” with four answer options (no time, less than 15 minutes, 15 minutes-1 hour, and more than an hour). The third asked, “Did you contact this charitable organization for more information to help with your decision?” with yes and no answer options.

Qualities of Effective Organizations

The focal variables for Q2 (qualities of recipient organizations) and the dependent variables for Q3 (relationship between approaches to giving and qualities of recipient organizations) include qualities of organizational effectiveness identified in prior research (Brown, 2021; Crutchfield & Grant, 2012; Liket & Maas, 2015; Smith & Shen, 1996). Asking respondents to consider their most significant donation of 2019 and to reflect on the qualities of the recipient organizations, the questions included the following: “Would you say the charitable organization does a good job demonstrating its effectiveness?” “. . . has good leadership?” “. . . meaningfully engages with the individuals and communities it serves?” and “. . . has identified a real opportunity to effect change?” All questions had the same three-category answer options: yes, no, and don’t know. Because our focus was on the perceived effectiveness of charitable organizations that relate the “yes” answers to these four questions, we condensed the “no” and “don’t know” categories together to form four binary variables. These concepts can be interpreted by donors in a variety of ways—for example, leadership has been defined in many ways in the business and nonprofit literature (e.g., Eva et al., 2019; Routhieaux, 2015), with one study identifying more than 90 variables that may make up the concept of leadership (Winston & Patterson, 2006)—yet we chose not to include definitions or examples to allow respondents to interpret and apply them to their own giving behaviors.

Control Variables

To answer Q3 (relationship between approaches to giving and qualities of recipient organizations), we included a set of 11 control variables in our analysis. The six sociodemographic variables included age (continuous), gender (binary), Hispanic ethnicity (binary), being married or partnered (binary), employment status (categorical: working for pay, retired, and otherwise not working), and race (categorical: White/Caucasian only, Black/African American only, and more than one race/another race). Although we had additional categories for race in the survey and display them in the descriptive statistics in Table 1, we condensed the smaller categories into one during the multivariable analysis.

Table 1.

Descriptive Statistics: Control Variables.

Variable	% or M (SD)
Age	56.42 (13.74)
Gender
Female	41.03%
Male	58.97%
Race
White/Caucasian only	87.14%
Black/African American only	5.24%
Asian only	3.97%
American Indian or Alaskan Native only	1.11%
More than one race/another race	2.54%
Ethnicity
Hispanic	5.95%
Not Hispanic	94.05%
Married or partnered
Yes	81.59%
No	18.41%
Education
High school or less	5.63%
Some college	8.73%
Associate’s degree	6.59%
Bachelor’s degree	35.40%
Master’s degree	31.35%
Professional or doctorate degree	12.30%
Employment status
Working for pay	55.71%
Retired	32.30%
Otherwise not working	11.98%
Total household income
Less than U.S.$25,000	1.98%
U.S.$25,000–U.S.$49,999	9.76%
U.S.$50,000–U.S.$99,999	29.44%
U.S.$100,000–U.S.$149,999	27.94%
U.S.$150,000–U.S.$199,999	15.56%
U.S.$200,000–U.S.$249,000	6.83%
U.S.$250,000–U.S.$349,999	4.13%
U.S.$350,000 or more	4.37%
Total household assets
Less than U.S.$50,000	11.83%
U.S.$50,000–U.S.$99,999	8.73%
U.S.$100,000–U.S.$149,999	9.13%
U.S.$150,000–U.S.$249,999	11.90%
U.S.$250,000–U.S.$499,999	19.52%
U.S.$500,000–U.S.$999,999	19.37%
U.S.$1,000,000 or more	19.52%
Total amount donated in 2019
U.S.$2,000–U.S.$4,999	42.62%
U.S.$5,000–U.S.$9,999	28.17%
U.S.$10,000–U.S.$14,999	18.33%
U.S.$15,000–U.S.$20,000	10.87%
Length of time donating to the organization
2019 was first year	7.30%
1–5 years	24.37%
More than 5 years	68.33%

Note. N = 1,260 for all variables.

We also included five ordinal variables that were treated as continuous variables in this analysis. Education included six categories, from high school or less to a professional or doctorate degree. Financial capital was assessed by total household income (an eight-category variable ranging from less than U.S.$25,000-U.S.$350,000 or more) and total household assets (a seven-category variable ranging from less than U.S.$50,000-U.S.$1,000,000 or more, not including physical assets, such as real estate or automobiles). We also controlled for the total amount donated to charitable organizations in 2019 (a four-category variable ranging from U.S.$2,000 to U.S.$4,999 and from U.S.$15,000 to U.S.$20,000) and, as an indicator of loyalty, how long respondents had been donating to the charitable organization to which they gave their most significant donation in the 2019 (three categories: 2019 was first year, 1-5 years, and more than 5 years).

Analysis

We ran descriptive statistics for all variables in the study, answering Q1 (approaches to charitable giving) and Q2 (qualities of recipient organizations). To answer Q3 (relationship between approaches to giving and qualities of recipient organizations), we ran multivariate probit models that jointly considered each of the four binary-dependent-giving variables on the same set of independent and control variables. Using simulated maximum likelihood, this strategy runs a single model for multiple equations with binary-dependent variables and correlated error terms, similar to seemingly unrelated regression for continuous dependent variables (Cappellari & Jenkins, 2003). To conduct this analysis, we used the user-created mvprobit program in Stata 17 (Cappellari & Jenkins, 2003). We used antithetic acceleration to reduce the variance of simulation error, thereby increasing the accuracy of results (Geweke, 1988; Stern & Zhou, 2018), and used 50 draws in the simulated maximum likelihood estimation, conservatively rounding up from the square root of the sample size (√1,260 = 35.50; Cappellari & Jenkins, 2003). Given the relatively large sample size and the number of equations jointly tested, we chose a more conservative alpha level of p < .01 to identify significant relationships. With an average variance inflation factor score of 1.39 and a maximum score of 2.46, multicollinearity was not a concern.

Results

As shown in Table 1, the sample had an average age of 56, with nearly three in five respondents (58.97%) identifying as male. The sample was predominantly White (87.14%), non-Hispanic (94.05%), and married or partnered (81.59%). Nearly four in five respondents (79.05%) had at least a bachelor’s degree, and the majority (55.71%) were working for pay with nearly a third (32.30%) in retirement. Nearly three in five respondents (57.38%) noted that their total annual household incomes were between U.S.$50,000 and U.S.$150,000, and respondents indicated a broad range of total household assets. The largest charitable giving category was between U.S.$2,000 and U.S.$4,999 (42.62%), and more than two-thirds of respondents (68.33%) had been giving to the same organization for more than 5 years.

Table 2 shows the results for Q1 (approaches to charitable giving). Among the two questions related to ad hoc giving, respondents were least likely to give in response to fundraising appeals (M = 2.60, SD = 1.12) and most likely to give in response to disasters or other events that moved them (M = 3.02, SD = 1.08). Among the two questions related to personal connections to the issue or organization, respondents were least likely to give to organizations with which they had a personal relationship (M = 3.34, SD = 1.08) and most likely to give to organizations that work on causes or issues they cared most about (M = 3.87, SD = 0.95). Considering efforts to understand the work of the charitable organizations, more than two-thirds (67.14%) spent 1 hour or less researching their most significant charitable gift of 2019, including just more than one in five (21.11%) who spent no time at all on research before making a gift. Almost two-thirds (63.57%) did not contact the organization to which they gave their most significant gift to help them in their decision.

Table 2.

Descriptive Statistics: Approaches to Giving and Qualities of Effective Organizations.

Approaches to giving
	Is in response to fundraising appeals?^a	Is in response to disasters or other events that move you?^a	Goes to organizations with which you have a personal relationship?^b	Goes to organizations that work on causes or issues you care most about?^b	Goes to organizations that you have researched to ensure they are the “best in class”?^c
How much of your charitable giving . . .^d
None	15.95%	8.10%	6.43%	1.90%	9.29%
A little	36.35%	25.40%	16.35%	7.30%	11.35%
A moderate amount	26.27%	30.87%	25.87%	19.37%	27.62%
A lot	14.76%	27.86%	39.92%	44.68%	32.86%
All	6.67%	7.78%	11.43%	26.75%	18.89%
M (SD)	2.60 (1.12)	3.02 (1.08)	3.34 (1.08)	3.87 (0.95)	3.41 (1.19)
Time researching most significant donation of 2019^c
No time	21.11%
Less than 15 minutes	13.97%
15 minutes to 1 hour	32.06%
More than 1 hour	32.86%
Contacted organization for more information^c
Yes	36.43%
No	63.57%
Qualities of effective organizations
	Demonstrates its effectiveness	Has good leadership	Meaningfully engages with those it serves	Identified a real opportunity to effect change
The charitable organization . . .^e
Yes	93.25%	88.65%	89.68%	88.73%
No	3.81%	5.79%	5.56%	6.51%
Don’t know	2.94%	5.56%	4.76%	4.76%

Note. N = 1,260 for all variables.

Approaches to giving conceptualized as: ^aad hoc, ^bpersonal connections, and ^cresearch-based. ^dOn a 5-point Likert-type scale, from 1 = None to 5 = All. ^e“No” and “Don’t know” categories combined in the multivariable analyses (see Table 3).

Table 3.

Multivariate Probit Models on Qualities of Effective Organizations.

	A. Demonstrates effectiveness					B. Has good leadership					C. Engages with beneficiaries					D. Identified opportunity to effect change
	β	SE	z	p	CI	β	SE	z	p	CI	β	SE	z	p	CI	β	SE	z	p	CI
Approaches
Fundraising appeals^a	−0.07	(0.06)	−1.04	.297	[−0.19, 0.06]	0.01	(0.05)	0.20	.842	[−0.10, 0.12	0.04	(0.06)	0.62	.537	[−0.08, 0.15]	−0.09	(0.05)	−1.57	.117	[−0.19, 0.02]
Disasters or other events^a	0.08	(0.07)	1.26	.208	[−0.05, 0.21]	0.07	(0.06)	1.28	.200	[−0.04, 0.18]	−0.00	(0.06)	−0.05	.959	[−0.12, 0.12]	0.01	(0.06)	0.12	.906	[−0.11, 0.12]
Personal relationship^b	0.03	(0.06)	0.44	.662	[−0.09, 0.15]	0.00	(0.05)	0.09	.926	[−0.09, 0.10]	−0.05	(0.06)	−0.87	.385	[−0.16, 0.06]	0.01	(0.05)	0.24	.810	[−0.09, 0.11]
Care most about^b	0.23	(0.06)	3.69	.000	[0.11, 0.35]	0.20	(0.05)	3.67	.000	[0.09, 0.31]	0.22	(0.06)	3.87	.000	[0.11, 0.34]	0.26	(0.05)	4.76	.000	[0.15, 0.36]
Best in class^c	0.07	(0.06)	1.19	.234	[−0.04, 0.18]	0.04	(0.05)	0.86	.389	[−0.05, 0.14]	0.21	(0.05)	4.02	.000	[0.11, 0.32]	0.10	(0.05)	2.04	.042	[0.00, 0.20]
Contacted organization^c	0.09	(0.14)	0.61	.539	[−0.19, 0.37]	0.07	(0.12)	0.60	.547	[−0.17, 0.31]	0.01	(0.13)	0.04	.965	[−0.25, 0.26]	0.20	(0.13)	1.61	.108	[−0.04, 0.45]
Time researching^c	0.18	(0.06)	2.76	.006	[0.05, 0.30]	0.08	(0.05)	1.55	.120	[−0.02, 0.18	0.03	(0.06)	0.59	.553	[−0.08, 0.14]	0.12	(0.05)	2.21	.027	[0.01, 0.22]
Loyalty	0.24	(0.09)	2.54	.011	[0.06, 0.43]	0.31	(0.08)	3.80	.000	[0.15, 0.48]	0.43	(0.09)	5.04	.000	[0.26, 0.60]	0.32	(0.08)	3.83	.000	[0.15, 0.48]
Amount donated	0.01	(0.06)	0.10	.922	[−0.12, 0.13]	−0.09	(0.05)	−1.72	.085	[−0.19, 0.01]	−0.09	(0.06)	−1.65	.099	[−0.20, 0.02	-0.07	(0.05)	−1.28	.201	[−0.17, 0.04]
Age	0.02	(0.01)	3.22	.001	[0.01, 0.04]	0.01	(0.01)	2.56	.011	[0.00, 0.03]	0.02	(0.01)	2.62	.009	[0.00, 0.03]	0.02	(0.01)	3.14	.002	[0.01, 0.03]
Female (ref: male)	−0.02	(0.13)	−0.15	.878	[−0.28, 0.24]	−0.08	(0.11)	−0.74	.457	[−0.30, 0.13]	0.18	(0.12)	1.45	.148	[−0.06, 0.41]	0.15	(0.11)	1.33	.183	[−0.07, 0.37]
Education	−0.00	(0.05)	−0.05	.961	[−0.10, 0.10]	−0.04	(0.04)	−0.87	.386	[−0.12, 0.05]	−0.00	(0.05)	−0.06	.954	[−0.09, 0.09]	0.02	(0.04)	0.44	.661	[−0.07, 0.11]
Race (ref: White only)
Black only	−0.21	(0.21)	−0.97	.330	[−0.63, 0.21]	−0.34	(0.19)	−1.77	.077	[−0.73, 0.04	−0.69	(0.19)	−3.67	.000	[−1.06, −0.32]	−0.11	(0.20)	−0.56	.577	[−0.51, 0.28]
All other races	−0.22	(0.19)	−1.16	.247	[−0.59, 0.15]	−0.19	(0.17)	−1.11	.267	[−0.53, 0.15]	−0.16	(0.18)	−0.87	.385	[−0.52, 0.20]	−0.10	(0.18)	−0.54	.589	[−0.44, 0.25]
Hispanic (ref: not)	0.18	(0.22)	0.83	.409	[−0.25, 0.62]	0.06	(0.20)	0.32	.746	[−0.32, 0.45]	0.19	(0.20)	0.96	.337	[−0.20, 0.59]	0.04	(0.19)	0.22	.825	[−0.34, 0.42]
Married or partnered	−0.21	(0.16)	−1.32	.186	[−0.52, 0.10]	−0.19	(0.13)	−1.45	.147	[−0.45, 0.07]	−0.07	(0.15)	−0.47	.639	[−0.36, 0.22]	−0.07	(0.14)	−0.47	.636	[−0.34, 0.21]
Income	0.02	(0.05)	0.34	.736	[−0.08, 0.12]	0.01	(0.04)	0.20	.838	[−0.07, 0.09]	0.01	(0.05)	0.24	.810	[−0.08, 0.10]	0.04	(0.04)	1.01	.311	[−0.04, 0.13]
Assets	0.02	(0.04)	0.59	.558	[−0.05, 0.10]	0.03	(0.03)	0.98	.327	[−0.03, 0.09]	−0.02	(0.03)	−0.63	.530	[−0.09, 0.05]	−0.00	(0.03)	−0.05	.961	[−0.06, 0.06]
Work status (ref: working)
Retired	0.13	(0.19)	0.70	.487	[−0.24, 0.51]	0.11	(0.16)	0.68	.495	[−0.20, 0.41]	0.12	(0.17)	0.69	.492	[−0.22, 0.46]	−0.08	(0.16)	−0.50	.620	[−0.39, 0.23]
Otherwise not working	0.16	(0.19)	0.85	.393	[−0.21, 0.53]	0.10	(0.16)	0.61	.540	[−0.22, 0.41]	−0.04	(0.17)	−0.22	.829	[−0.36, 0.29]	0.06	(0.17)	0.39	.696	[−0.26, 0.39]
Constant	−1.92	(0.60)	−3.21	.001	[−3.09, −0.75]	−1.30	(0.51)	−2.57	.010	[−2.30, −0.31]	−1.84	(0.54)	−3.41	.001	[−2.90, −0.78]	−2.12	(0.53)	−4.04	.000	[−3.15, −1.09]

Note. Significant relationships at the pre-determined p < .01 level are indicated in bold. Point-estimates at the p < .05 level are italicized. N = 1,260 for all variables. The likelihood ratio test of all models’ equation error terms being equal to 0 was significant: χ²(6) = 365.87, p < .001. Correlations between each models’ error terms were all significant and as follows: ρ_AB = .56, p < .001; ρ_AC = .67, p < .001; ρ_AD = .73, p < .001; ρ_BC = .63, p < .001; ρ_BD = .63, p < .001; ρ_CD = .61, p < .001. These results indicate that modeling the four equations jointly is more appropriate than modeling them in a series of separate probit models. CI = confidence interval.

Approaches to giving conceptualized as: ^aad hoc, ^bpersonal connections, and ^cresearch-based.

Table 2 also shows the results for Q2 (qualities of recipient organizations). Overall, respondents gave high ratings to the organizations to which they gave their most significant gifts of 2019. Respondents were most likely to agree that they donated to organizations that did a good job demonstrating their effectiveness (93.25%), with the other three indicators of organizational effectiveness ranking almost as high.

Table 3 shows the results from the multivariate probit models to answer Q3 (relationship between approaches to giving and qualities of recipient organizations). Among the seven personal approaches to giving variables, three had significant associations with at least one quality of organizational effectiveness. Giving to organizations that worked on causes or issues respondents cared most about was associated with a higher probability of giving to organizations they perceived as demonstrating their effectiveness (β = 0.23), having good leadership (β = 0.20), engaging with the individuals and communities they serve (“beneficiaries”; β = 0.22), and having identified a real opportunity to effect change (β = 0.26, all p < .001). Giving to organizations that respondents researched to ensure they were the “best in class” was associated with an increased probability of giving to organizations they perceived as engaging with beneficiaries (β = 0.21, p < .001). Finally, higher levels of time spent researching was associated with a higher probability of donating to organizations that were perceived as demonstrating their effectiveness (β = 0.18, p = .006). Ad hoc approaches to giving (responding to fundraising appeals and giving in response to disasters or other events), giving to organizations with which respondents had a personal relationship, and contacting the organization had no significant relationships with the four indicators of organizational effectiveness.

Most control variables were nonsignificant in our model. However, the time when respondents first donated to the organization (identified as “loyalty” in Table 3) was positively associated with three of the four evidence-based giving variables: has good leadership (β = 0.31), engages with beneficiaries (β = 0.43), and identified opportunities to effect change (β = 0.32, all p < .001). Furthermore, respondents’ age was positively associated with three of the evidence-based giving variables (for each model: β = 0.02, p < .01). Finally, and when considering their most significant donation of 2019, Black respondents were less likely to identify their recipient organization as making an effort to engage with beneficiaries than White respondents (β = −0.69, p < .001).

Overall, the predicted joint probability of a respondent answering “yes” to all four of the indicators of evidence-based giving was high, at .78 (SD = .16); conversely, the predicted joint probability of a respondent answering “no” to all four questions was low, at .02 (SD = .04). Given the consistent significant contribution across the four equations of the variables for giving to organizations that work on causes or issues respondents cared most about, time when respondents first donated to the organization, and respondent age, we next display the predicted probabilities of answering “yes” to each of the dependent variables by each of these variables. As Figure 1 illustrates, those who gave higher proportions of their donations to organizations that work on causes they cared about, those who have been giving to the organizations for a longer period of time, and older respondents were all more likely to answer “yes” to all four qualities of organizational effectiveness.

Figure 1.

Predicted Joint Probabilities of All “Yes” Answers to the Dependent Variables

Supplemental Analysis

The primary analyses focused on predictors of individual and joint “yes” responses to the four outcome variables. However, it may also be interesting to consider if and how respondents who replied “yes” on at least one and “no” or “I don’t know” on at least one dependent variable for Q3 (relationship between approaches to giving and qualities of recipient organizations) are different from the group who replied “yes” on all four outcome variables. In a series of bivariate tests, we compared the latter group (78.4% of respondents, n = 988) to the former group (21.6% of respondents, n = 272; see Supplemental Table 1) on all seven independent variables. The “all yes” group was less likely to give in response to fundraising appeals and more likely to give to organizations that work on causes or issues they cared most about and to organizations they had researched to ensure they are “best in class.” Furthermore, those who answered “yes” to all dependent variables spent more time researching their most significant donation and were less likely to contact the organization for more information. They did not differ by giving to organizations with which they had a personal relationship or giving in response to disasters or other events.

Separately, we conducted two sets of sensitivity analysis to test the durability of the multivariate results with reduced samples. Supplemental Table 2 shows results for Q3 (relationship between approaches to giving and qualities of recipient organizations) that removed respondents who indicated that they contacted the organization for more information to help with their donation decisions and did not spend any time researching the organization (n = 19 removed, about 1.5% of the sample). While this is possible depending on how respondents view the nature of “research,” we nevertheless reran the multivariable analysis without these respondents as sensitivity analysis. The point estimates were nearly the same, with the reduced sample revealing two additional significant relationships at the a priori alpha level of p < .01 that were not significant in the main model. Furthermore, Supplemental Table 3 shows results that removed respondents who answered “I don’t know” to any one of the four dependent variables (n = 154 removed, about 12.2% of the sample). Again, the point estimates were similar on most variables that were significant in the main model, although some variables became marginally significant (i.e., p < .05) from their prior significance at the a priori alpha level of p < .01, possibly due to the reduced sample size. These results add confidence in our general findings.

Discussion

In answer to Q1 (approaches to charitable giving), our study’s results suggest that among the seven non-exclusive approaches to charitable giving tested, midlevel donors were most likely to give to organizations that worked on causes or issues they cared most about, followed by giving to organizations with which they had a personal relationship and to organizations they had researched to ensure they were “best in class.” In answer to Q2 (qualities of recipient organizations), respondents overwhelmingly stated that they gave to nonprofits that demonstrated their effectiveness, identified real opportunities to effect change, engaged with the individuals and communities they served, and had good leadership. Viewing these results alone, it would appear that midlevel donors give to effective organizations that they know well and work on causes important to them.

In answer to Q3 (relationship between approaches to giving and qualities of recipient organizations) and using the multivariable results, only donating to a cause that respondents cared most about was consistently and positively related to each of the four indicators of organizational effectiveness. In addition, donating to organizations that respondents saw as “best in class” was significantly and positively associated with stating that their most significant donations went to organizations that engage with beneficiaries. Furthermore, time spent researching donations was positively associated with donating to organizations that respondents believed demonstrate their effectiveness. Respondents who completed research on their donations were likely to find evidence of organizational impact in their searches, which may explain this finding; however, the lack of a significant relationship between time spent researching and the remaining three indicators of evidence-based giving is puzzling and warranting of future research. Ad hoc approaches to giving—responding to fundraising appeals and donating in response to disasters or other events—had no association with our indicators of evidence-based giving.

Respondents’ perceptions that they gave to effective organizations appear to be increasingly present among midlevel donors who donate higher portions of their total giving to causes they most care about. Indeed, Figure 1A shows that nearly nine in 10 of those who stated that all of their charitable giving went to organizations that work on causes or issues they cared most about answered “yes” to all four of the qualities of organizational effectiveness variables. Just as Burum et al. (2020) found that donors pay more attention to the effectiveness of charitable organizations when helping themselves or their families, our study found that donors who gave to causes they cared most about were more likely to give to effective organizations. It is possible that donors who give to causes they care deeply about may also perceive the work of the recipient organizations as more proximal or salient and, therefore, focus more on their effectiveness.

Separate research illustrates how caring about a cause and a focus on charitable effectiveness are linked. Berman et al. (2018) found that donors are more likely to give to causes that they subjectively prefer over organizations that are objectively shown to be more effective, yet they are also more likely to give to the most effective organizations when choosing from within a specific cause. In other words, making apples to apples comparisons (within a cause) elicits more impactful decisions than apples to oranges comparisons (separate causes). A separate study complemented these findings, showing that potential donors first prioritize their personal preferences, followed by focusing on evidence of an organization’s effectiveness (Caviola et al., 2020). Our study’s results suggest that an important key to helping donors identify the most effective nonprofits is to first help them identify the causes or issues they care most about.

Given how much time individuals generally spend researching big-ticket purchases like electronics and vacations, we could assume that midlevel donors would spend equivalent amounts of time learning more about the organizations they are supporting with gifts of similar value. Yet because donors focus more on effectiveness when helping themselves or their family (Burum et al., 2020)—which consumer products ostensibly do—this equivalency in time spent researching may not exist. While our study does not have data related to donors’ consumer product purchases, studies have estimated that buyers spend an average of 79 days gathering information before making a major purchase of U.S.$500 or more (General Electric [GE] Capital, 2013) and more than four in five consumers conduct research online before making major purchases (Anderson, 2018; GE Capital, 2013). Because our survey’s respondents gave between U.S.$2,000 and U.S.$20,000 to charity in the year prior to our survey, their most significant gifts of that year were likely sizable. Yet efforts to understand the work of the nonprofits appear to be limited, with about two-thirds of respondents reporting that they did not contact the organizations for more information. Furthermore, about one-fifth of respondents spent no time conducting research for that donation and only one-third of respondents spent more than 1 hour conducting this research. These results suggest that helping donors to identify the causes they care most about may be an important first step toward researching and identifying the most effective organizations.

Respondents’ relative lack of research prior to their donations and their simultaneous assuredness in the effectiveness of the receiving organizations appear to be paradoxical. Yet, our findings support results from prior research on major donors that found that they often rely on their own experiences and recommendations from family and friends rather than other forms of research (Andrews et al., 2020). Given that donors often prioritize their own preferences over evidence of effectiveness (Berman et al., 2018), the warm glow of focusing on their chosen cause or issue may overshadow a lack of evidence. Doing so, though, may not lead to long-term satisfaction, as a separate qualitative study of midlevel donors found that many feel their giving is ineffective and would like more help understanding how to research the impact of nonprofit organizations (Halvorsen & Brown, 2021). It is possible, then, that donors ultimately hold positive views of their own giving behavior while simultaneously holding negative or neutral views related to the impact of their giving or the work of the organizations.

Donors also tend to view their charitable gifts as more personal and subjective decisions compared with other expenses. For example, only art was seen as more subjective than charitable donations in a study by Berman et al. (2018); expense categories that respondents noted as requiring more objective measures upon which to base spending decisions included cell phones, investments, and medical treatments. It is possible that respondents in our study viewed the effectiveness of the nonprofits to which they donated within this personal and subjective lens and, through that, saw the organizations as performing well. Second, market researchers have found that over time after purchasing a product, a sense of attachment to it increases (Ball & Tasaki, 1992). One explanation for the increase in the perceived effectiveness of the recipient nonprofits by number of years spent giving to the same organization (Figure 1B) is that once participants identified an effective organization, they became loyal. However, and using the Ball and Tasaki (1992) attachment example, it is also possible that respondents’ loyalty to the organizations grew over time because of their donations. And third, people have a tendency to misremember information related to their choices (Lind et al., 2017) or adjust their values or preferences to be more consistent with a decision after it has been made (Hornsby & Love, 2020). Therefore, it is possible that respondents, in a post hoc manner, rated their organizations highly to be consistent with the fact that they had already donated to them.

A donor’s age also plays a role, with older respondents most likely to answer “yes” to each of the four organizational effectiveness variables (Figure 1C). This might be explained simply by experience, in that older respondents have had more time to understand the issues at play and identify or have been exposed to nonprofits that are effective through their civic, family, and work lives. Another explanation may be what is called positivity bias or positivity effect, in that older adults are more likely to look back on decisions with a positive viewpoint in comparison to the same decisions made by younger people (Reed & Carstensen, 2012). Indeed, age-related positivity bias has been established in charitable giving, in that, older donors experience more positive emotions from charitable giving than younger people (Bjälkebring et al., 2016). Given that the average age of donors in the United States is 65 years (MacLaughlin et al., 2022), the link between age and giving warrants further examination.

Limitations

Although we developed our survey in late 2019, our survey was fielded in April 2020—the second month of the COVID-19 pandemic disruptions throughout the United States that included stay-at-home orders and advisories. While the pandemic may have affected how respondents answered the survey questions, we feel confident in our results for two key reasons: First, our four organizational effectiveness variables asked respondents about their most significant donations in 2019 (pre-pandemic); and second, middle- and high-income workers have had more flexibility to work from home during the pandemic (Parker et al., 2022) and, as a result, may have been more likely to answer the survey, resulting in a more reflective sample of midlevel donors than we may have had before the pandemic. In addition, and while the survey was cross-sectional without the possibility of causal inference, our associational findings do suggest the importance of some approaches to giving in donating to effective nonprofits. Furthermore, key concepts, such as a charity demonstrating effectiveness, having good leadership, meaningfully engaging with individuals and communities, and identifying a real opportunity to effect change were interpreted by respondents with no definitions or examples provided. Our study also does not include the investigation of possible interaction effects, which warrants further research; instead, we prioritized investigating the main effects of approaches to giving that have not yet been explicated in the literature. Our study is also U.S.-centric in both data and literature; future research can assess if similar relationships are found in other countries and regions. Finally, we were not able to compare our findings on midlevel donors to those of small and major donors because similar studies on other samples, to our knowledge, do not exist.

Implications

Nonprofit and fundraising professionals, as well as donors themselves, have had a sustained focus on increasing the effectiveness of nonprofit organizations over the past few decades (Crutchfield & Grant, 2012; Liket & Maas, 2015; Smith & Shen, 1996). Coinciding with these efforts, philanthropy-focused professionals and organizations as well as financial services companies have begun offering educational programming for charitable donors to become more effective donors; however, these efforts are most commonly developed for high-wealth individuals. This study’s results highlight the value of including midlevel donors as important stakeholders within nonprofits’ fundraising strategies, as well as the benefit of helping midlevel donors to identify the causes or issues they care most about and the importance of researching the most effective nonprofits within those areas. Further research and market testing is needed on the best ways to achieve this goal, including on how to tailor educational resources to the needs and interests of midlevel donors (Brown, 2021).

The future health of the nonprofit sector is at stake. There are more than 1.5 million nonprofits in the United States (National Center for Charitable Statistics, 2020) that employ approximately 12.5 million people (Salamon & Newhouse, 2020). While some of the largest charities bring in billions of dollars each year in private support (Stiffman & Haynes, 2019), most—97%—have annual budgets of less than U.S.$5 million annually and 88% have budgets less than U.S.$500,000 (National Council of Nonprofits, 2019). While large portions of the nonprofit sector are experiencing declines in donors (Lindsay, 2018), midlevel donors could play a growing and important role in reducing or reversing this trend.

Supplemental Material

sj-docx-1-nvs-10.1177_08997640231196888 – Supplemental material for Approaches to Charitable Giving and Perceptions of Organizational Effectiveness Among Midlevel Donors

Supplemental material, sj-docx-1-nvs-10.1177_08997640231196888 for Approaches to Charitable Giving and Perceptions of Organizational Effectiveness Among Midlevel Donors by Cal J. Halvorsen, Johanna Lynch, Sylvia Brown and Melissa L. McTernan in Nonprofit and Voluntary Sector Quarterly

Footnotes

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: Sylvia Brown’s family foundation, the Hope Foundation, funded the costs for the survey analyzed in this manuscript.

ORCID iD

Cal J. Halvorsen

Supplemental Material

Supplemental material for this article is available online.

Author Biographies

Cal J. Halvorsen is an Assistant Professor at the Boston College School of Social Work. His research focuses on the aging workforce as well as charitable giving.

Johanna Lynch was a master of social work student at the Boston College School of Social Work during the study period.

Sylvia Brown is the Founder and President of SylviaBrownSmartDonors, L3C, which provides educational resources to individuals—particularly mid-size donors—seeking to make more thoughtful and effective charitable giving decisions.

Melissa L. McTernan is a quantitative psychologist and a Senior Research Statistician at Boston College.

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