Saturday, July 23, 2011

Understanding African-American Donors

Ethnic market analysis is nothing new for most marketers.  Professor David Van Slyke at Syracuse University and researchers at Georgia State University applied this to fundraising by analyzing African-American donors.  African-Americans give well over $7 billion per year.  Historically, African-American philanthropy was centered on churches.  Today that philanthropy extends to every kind of charity.  

This research project used surveys from about 5,000 people in the Atlanta area.  Although African-Americans were less likely to give than whites were, this was simply a consequence of economic circumstances.  At higher levels of education, income, and age, there were no significant differences in charitable giving levels between African-Americans and whites.  Among African-Americans, the likelihood of giving increased with income, education, and frequency of church attendance.  The same was also true for the likelihood of volunteering. 

            Researchers also asked about the potential effectiveness of different donor incentives.  The most influential were, (1) receiving information on how the gift will be used, (2) ability to advance career/profession, (3) organizational membership, (4) discounts at the charity, (5) discounts in the community, and (6) free gifts from the organization.  The ability to advance one’s career was a relatively more influential benefit for African-Americans than whites.

            The survey also asked respondents to rate the effectives of different fundraising methods.  African-Americans rated the most effective techniques as, (1) request of a friend or relative, (2) appeal related to a television or newspaper story, (3) appeal by a community leader or celebrity, (4) mail, (5) telethon, (6) someone at the door, and (7) telephone call.  A request on a website rated as least effective.  The order of these ratings for was the same for whites. 

Although the order was the same, African-Americans rated themselves more likely to respond to each of the techniques than did whites.  Yet, African-Americans did not actually give more.  What causes this discrepancy?  The researchers suggested two possibilities.  African-Americans may have reported themselves to be more receptive than they actually were.  Or, they may just be asked less frequently.  The researchers pointed to evidence of a lack of solicitation from previous findings.  Past research described fundraisers “skipping” black neighborhoods, unwilling to learn of donor interests and preferences in these communities.  This combination of findings suggests that African-Americans may be a relatively untapped market segment.  Although already giving substantially, this group may hold even greater potential for philanthropy.

(Citation: The American Review of Public Administration, Vol. 37, pp. 278-304)

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