On this episode of Bloomerang TV, Melissa Brown of Melissa S Brown & Associates, LLC joins us to discuss The Philanthropy Panel Study (PPS).
Steven: Hey there, welcome to this week’s episode of Bloomerang TV. Thanks for being here. My name is Steven. I’m the VP of Marketing here at Bloomerang. And if you follow Bloomerang, if you follow my content and Jay Love here, you know that we love data. We love surveys. We love studies and reports. And recently we came across a really cool one from the Lilly School of Philanthropy over at IU. And it was brought to our attention by today’s guest. She is Melissa Brown. Hey, Melissa. How’s it going?
Melissa: I’m fine, Steven. How are you?
Steven: I’m good. Good to have you here. It’s awesome that you took time out to talk to us about this study. But before we get into it, I want to give you a chance to talk about yourself. What are you up to these days? I know you have your own consultancy and you’re doing a lot of cool things.
Melissa: Yeah. I’m having such a great time. I worked at the Lilly Family School of Philanthropy for about 20 years. And about five years ago I started my own business to analyze data for charities. So I work with the panel study data. I run a survey called the Nonprofit Research Collaborative. I’m the staff member for that. Surveys twice a year. And a number of other projects for particular clients. I’m having the time of my life. It’s great.
Steven: Yeah, you get to do really cool things. And one of them is that panel study that you mentioned. And that came across our desk, my desk and Jay’s desk last week. And I just had to have you on. Because there is so much really interesting data that I think can be really helpful to nonprofits. Can you talk about what this panel, philanthropy panel study is, and what it all contains?
Melissa: Sure. It started in 2000 and a couple of scholars at the Lilly, now at the Lilly Family School of Philanthropy and a bunch of other people decided that we needed to study philanthropic giving in the United States. So they attached questions to an existing survey that had started in 1968. So the philanthropy data started in 2000. And they asked the same families the same questions every two years. So now it’s up to almost 10,000 families. And we can really trace changes in giving with the economy, as people age through the life cycle, as people have children or their children grow. It’s a fabulous resource and it tells us so much about charitable giving.
Steven: Yeah, it’s cool how long it is. So they’ve been doing it since the ‘60s. And I think the philanthropy component was added in the early 2000s. So it’s a long timeline but it’s also a huge sample set. It’s almost like 10,000 families. So the data, it seems like it’s really rich. It’s not just like a small survey. Just kind of a small piece of the pie. So what kinds of questions did they ask on the philanthropy side? I know they ask about how many colleges you support, how much money you give. Can you talk about what’s actually in that report?
Melissa. Sure. The actual study, the questions have to do with whether you support different types of charitable giving at all. So do you give to religion? Do you give to education? There’s 11 different categories of causes. And then for each one you say you give, they ask how much. And again they’re asking the same households, the same people over and over. So one year it might be a $1,000, one year it might be $200, whatever. But because it’s also a bigger study with other questions, they’re finding out how much people are working, they’re finding out their health status. They’re finding out a number of things about the same household so they can. So analysts can associate changes in giving with changes in what’s happening in the household and with the wider economy.
Steven: So why should people care? I guess is my main question, you know? There’s all sorts of data out there. Nonprofits could spend their entire lives just looking at data before they even have a chance to act on it. Why does it matter that these certain household sizes give this much, or they give to these causes and not the other ones? If a nonprofit read this panel study, which we’ll link to it and I think they should read it, what should they do after consuming all of that data?
Melissa: Well, most people will consume it in small doses. And I would suggest starting with the material at the philanthropy school. They have reports up for every year that they’ve done the study. And they tell you for each type of cause, all those 11 causes, the percentage of households that give to that cause, and what they give at the average, and what they give at the median. So the median, half the gifts are higher, and half the gifts are lower. That might be a good starting gift if you’re doing an acquisition meeting. The average gift includes the highest gifts in the sample and of course the lowest ones too. So that’s helpful to understand the distribution of giving. If the median and the average are close together, the distribution is fairly narrow. If they are wide apart, then you know there are some really big gifts. And guess what, in education there are some really big gifts.
They’ve also divided the analysis by income level, by age level, and sometimes by region of the country. So you can really see in this data that people who are younger, like under 40, are less likely to give. And they give lower amounts than people who are between 40 and 65. Well, that’s important to know if you’re targeting different age groups for different types of engagement with your charity. We all know it’s niche marketing now. You have to understand each niche.
If I can continue, there are some additional studies that have gone on. The center has the school, now called the School of Philanthropy, has done a lot of research about men and women’s giving. And they’re using the philanthropy panel study as a way to do that. They’ve done differences, giving by different religious groups and a whole bunch of other ways of slicing the data to understand what is really thriving in charitable giving in different households.
Steven: We were talking earlier offline and we had a phone call and we have been emailing each other for a few days now. You said something interesting about the religious causes and the educational causes. That most people give to those. Can you talk a little bit about those two causes specifically and how those kind of shake out?
Melissa: Sure. Yeah, more than 40% of the households give to some kind of religious purpose in the United States.
Melissa: And they tend to give about 2% of their income. When a household gives to a religious cause, it’s tending to give around, the average is around 2%. There are also religious donors who give to secular causes. Most of it in fact. And they tend to give around 1% of their income for secular causes in addition to their religious ones. Now 15% of households have been giving for education. They’re not giving anywhere near 1% of their income all for education, but they might be spreading out 1% of their income across all the different secular causes that they support.
The number of causes that you support is related to how much income you have. If you have relatively low income, you might support one or two causes, maybe your church and maybe one other thing. If you have high income, $100,000 or more, you might support three or four causes. Probably three or four different organizations. So it might be your church, it might be your alma mater, and then two or three others that might relate to what your family is doing, your kids, or your health, or whatever.
Steven: So thinking about that, and I want to phrase this next question delicately, because I don’t want to say the word “compete.” Because I know you know, nonprofits don’t really compete with each other. And people have strong feelings about that. But when you’re looking at maybe that lower third of that pyramid, those folks, if they’re only supporting three organizations, one of them is probably going to be a church. And one of them is going to be a school. So that really only kind of leaves one open spot for you. Is that kind of a fair description of the situation that some nonprofits face?
Melissa: It might be how people behave.
Melissa: But we all know that when people understand the impact of their giving, they will dig a little deeper. I would argue that one of the things that is imperative for charities to understand is that people tend to approach their philanthropy with a budget. In most cases, it’s around 1% of household giving for secular causes. But there are people who give up to 10%. And we don’t know this for sure from the panel study, but from other research we know that people are persuaded to dig more deeply into their pockets when the cause really matters to them.
Melissa: And this is demonstrated over and over. And one way that you get the cause to matter to people is to do what Bloomerang does, and help people feel connected to the individuals. Help people feel connected to the work that the organization is doing by sharing information with them. Making sure they get feedback about what kinds of difference their gifts make.
Steven: Yeah, it really helps.
Melissa: Yeah. That’s demonstrated over and over. Not necessarily in the panel study because we don’t know what the specific organization. But in lots of other research in the field, we see that.
Steven: So I know the study is going to be ongoing. And you’re still crunching I think the 2010 numbers. And there’s so much data that it kind of takes a while. That’s okay. The studies are really great. If you could kind of get out your crystal ball, what do you expect to happen in forthcoming surveys? Do you think things will change drastically? Do you think things will continue to increase? What do you expect to see out of future reports?
Melissa: Sure. The 2012 data should be released sometime this summer. So the, we’ll start getting those clean and ready for analysis. Now 2012 was a better economic year than 2010 or 2008. So my guess is that we’ll see some changes in giving just because the economy improved a little bit. Just a little, not huge gains by 2012. We’re still seeing gains as the economy grows. So we will see some uptick in giving that’s associated with the economy.
But at the same time, we are already seeing and organizations are reporting a generational shift. My mother’s generation, she’s in her early 80s. Controlling their own assets so much. They’re saving for eventual health care costs, whatever. So they’re not giving as much. And my youngest brother’s generation is not picking up quote the slack end quote. Their motives for giving are reportedly different and the amounts that they give appear to be different. Based on this panel study from what their parents and grandparents were giving.
So it’s going to be fascinating to tease out some of what’s driving that generational change. Is it age? Is it point in life cycle? Is it economic status because during the recession so many people had mortgages under water and that sort of thing? There are all these factors that could play into it. And we don’t know yet. So I’m dying for the data so I can figure it.
Steven: Yeah. I’m excited to see more of these. This is a new study for me but I’m really excited to see the next one because they’re so interesting and chock full of really good stuff. Melissa, where can people find this stuff? Where can they download the study?
Melissa: Sure. The basic reports for the 11 different causes and the percentages of households that give, and the averages and the median, are available at the School of Philanthropy website. So I’m going to kind of spell it out. It’s philanthropy. Philanthropy dot I-U-P like Purdue. U-I dot edu. So it’s Indiana University, Purdue University, Indianapolis. Iupui.edu.
Steven: Cool. We’ll link all that. We’ll make sure everyone finds it. Melissa, where can they find you? Where can they find Melissa S. Brown & Associates?
Melissa: Well my website is msbrownllc.com and it’s in the process of changing. But I think it should be there even over the weekend while I do some twit, twit, what do I want to say? Revisions to it. I was trying to come up with the slang word but I’ll go with the big one. Revisions to make it a little more user friendly in the mobile environment.
Steven: Okay. Well, these are usually about a week, so by the time this airs it should be ready.
Melissa: I hope so.
Steven: Melissa, this was awesome. Thanks for hanging out with us. Thanks for all your good work, and keep it up. We love these studies.
Melissa: Yeah, as long as data are produced, I’ll be there to analyze it. Thanks, Steven.
Steven: Right on. Well, thank you all for watching. We’ll catch you next week with another great episode. We’ll talk to you then.