We All Lose When Charities Compete. They Should Join Forces

David Walle and Phillip Morgan - The Chronicle of Philanthropy
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May 20, 2022

You want to help Ukrainians in need. Should you donate to Unicef, UNHCR, Red Cross, World Vision, Caritas, Save the Children, or some other charitable organization?

There are so many charities, and charitable causes, to choose from.

Australia, for example, has more than 57,500 registered charities (for a population of 25 million). The UK (population 67 million) has more than 200,000. The United States (population 350 million) has close to 1.5 million.

They’re vying against direct competitors as well as every other charity and cause. Suicide prevention is up against wilderness conservation. Cancer research against climate change activism. Refugee aid against the arts.

Not all actively raise money — in Australia only about 40 percent do — but that still leaves thousands competing for your money.

And that competition is hurting them.

The Downsides of Competition

Research by University of Washington economist Bijetri Bose suggests greater competition among nonprofits marginally increases aggregate donations but reduces average donations per organization. Fundraising costs also escalate with greater competition.

There are concerns that aggressive marketing, from phone calls to junk mail to “edgy” advertising, is turning people off donating to any charity.

A classic example is the UK Pancreatic Cancer Action’s “I wish I had” campaign. It compared the 3 percent survival rate for pancreatic cancer to 97 percent for testicular cancer and 85 percent for breast cancer. The campaign attracted attention, but not in the way the organization had hoped.

Though there’s no hard data proving competition is contributing to donor fatigue, there is strong anecdotal evidence.

The UK’s Fundraising Regulator has been cracking down on aggressive fundraising since a 2015 case in which a 92-year-old woman committed suicide after receiving 466 mailings from 99 charities in a year. Last month it updated its service to stop direct-marketing communications from charities, allowing people to block 10 charities at a time.

In the United States, the Indiana University Lilly Family School of Philanthropy has found that even though total donations have been increasing, the share of Americans donating has declined — from two-thirds in 2000 to half in 2018.

The report doesn’t speculate on the causes, but given the well-established phenomenon of choice overload, it’s reasonable to assume too much competition plays a part.

Read the rest at The Chronicle of Philanthropy

Related: Giving Cash Directly to People in Need Is a Growing Trend, as Evidence Shows It Works (The Chronicle of Philanthropy)

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