Tuesday, May 20

Let's face it - most of your donors have credit card debt

I wrote last week about the ethical dilemma facing fundraisers who see their donors making gifts on credit cards. As usually happens when I'm too far out in front of the accepted debate - many have been skeptical.

My favorite response was from a reader who told me, "I doubt that my donors who are making donations are the type of people who have big credit card debts." Seriously? I'm think that's pretty naive.

Your donors are not millionaires. Let's face it - most Americans carry credit card debt they can't afford to pay off all once. In fact, just today TransUnion released a survey conducted by Zogby that found 61% of Americans said they will spend less or not go on vacation this summer. When asked why, "Thirty-five percent cite concern about credit card debt, and nearly half (47 percent) cite concern about other debt or financial obligations."

Let me do one better:

A 2007 survey by CardTrak.com found that American households with credit card debt owed a median of $6,600, and that less than one-third of households pay of their balances monthly. The survey also found that 13 percent of those who carry credit card debt have balances in excess of $25,000.
I think it is foolish to assume your donors don't have credit card debt. For many people, making a donation is an emotional reaction to a well reasoned understanding of the problems facing our world... donors don't check their debt balances first before responding to a nonprofit's call for help.

I'm sure that Liz Pulliam Weston disagrees with me, but let me ask these two questions to get the debate started. Do you personally have credit card debt? Have you made a donation in the past 12 months?


Anonymous said...

Yes, I have debt, and yes, I continue to give to charities.

As a development staffer, I may not be reflective of the total population, but my giving has not been altogether affected by my own personal credit card debt.

As a younger professional, I'm drawn to automatic deductions that allow me to give more over the year than writing a few checks. I currently have 4 automatic monthly contributions set up -- my employer, my church, my high school, and the AFP foundation. In total it's only about $75 per month but it's something I continue to give despite owing several thousand on my credit cards.

As you said, giving is emotional. Adding to that, I also have faith that my debt is under control and that the organizations I support need the money now. It's not their fault I'm in debt, so why should I delay my gifts in order to pay off my debt.

Debt is something many of us are just used to carrying, so I'm not going to let it affect my giving patterns.

MIke H. said...

Yes. and Yes.

nancy said...

totally agreed. i've never been able to figure it out, but in my experience donors who can least afford it after often among the most generous. at the same time, those who are in a position to share seem to be more restrictive in their charitable giving.

Corey said...

Proud to say, no debt (except for my house) and yes I donate.

I find your post very intriguing though. I was recently reading that Americans give 2% of the GDP. I've also read that the national savings rate is now -1% in the US. I'm not sure the relationship between the two but I'm sure something will have to shift.

dmjaeger said...

I think that the only way this is going to get anyone's attention is if the money stops flowing from donors, through the credit card companies, into our bank accounts.

I see the value in "understanding" the issue, but I do not see any alternatives. Credit cards are so integrated into the financial infrastructure of our economy and culture, there is no way to separate ourselves from them. Personally or fundraisingly. It is corporate, convenient, legal tender, and until donors are kicked off the habit, they will continue to use it.

Are YOU going to take the high ground? What form will that take? I'm curious to know what the practical solutions will be to this moral problem.