Segmentation of individual donors to charitable organizations

Abstract

Our article examines market segments within the broader category of individual donors to charity and cause related organizations. This is an area of research in which considerable conflicting results have been produced. In our study, we find that while similarities between these segments exist along demographic factors and donation behaviour (e.g., frequency of donating), important distinctions exist along motivational factors, thereby suggesting differentiated promotion messaging. Surveys were administered to 680 subjects. Their responses along twenty-seven motivational variables were subjected to factor analysis. Cluster analysis was then applied to the factor scores that yielded three donor segments. We find six key motivating factors influencing the donation decision: organizational criteria, external inducements, intrinsic motivators, charity organization attributes, egocentric rewards and economic considerations. We also find three distinct segments of individual donors: intrinsics, sceptics and impressionable. Donations by the intrinsic group members are more influenced by selfless altruistic reasons for donating. Decisions made by members of the skeptic segment result from the examination of charitable organization along such criteria as the clarity of its mission and the efficiency of its management practice. The impressionable segment members are most likely to be influenced by the impact of external factors in the donation decision such as marketing measures employed by the charity and the encouragement of others.