Sunday, September 21, 2008

You, Too, Can Raise Major Donations And Here's Some Help...

In order to raise single large amount donations at one time you will need to develop relationships with the potential major donors who already do, or would buy into your organization. In order to do this, it is helpful to know what inspires wealthy donors to give in large amounts.

In the September 11, 2008 "News Updates" post on The Chronicle of Philanthropy's site, in her article, New Study Sheds Light on What Wealthy Donors Care About; Many Say They Will Support Operating Costs, Holly Hall summarizes "I'm Not Rockefeller" a survey conducted by the University of Pennsylvania’s Center for High Impact Philanthropy. The Center interviewed 33 donors who, donated an average of 1.5million each year. Click the study's name (in this paragraph, above) to access the study findings report.

To quote Hall, the survey " was aimed at providing insight into how the nation’s wealthiest donors choose the charities they support, how they obtain information on those organizations, how they assess the impact of their gifts, and the roles they see themselves playing in nonprofit organizations."

To quote the Executive Summary of the findings, "What we found were a set of diverse and evolving practices, a predominant reliance on peers for information, a narrow and negative view of evaluation (despite a strong desire to make a difference), and difficulty with exiting established relationships with nonprofits, perhaps because the transaction costs of “breaking up” seem too high. To our surprise, we also found that nearly a third of the study participants do not think of themselves as “philanthropists,” despite giving an average of nearly $1 million annually." [Page i]

The Executive Summary wraps up by commenting on the reason for the study; the Center for High Impact Philanthropy wants to understand what today's major donors needs are, in order to determine how the Center can gather, package, and disseminate the information that donors need. To again quote the Executive Summary, "Many [donors] expressed a reluctance to investigate the effectiveness of potential recipients for fear of inviting unwanted solicitations or appearing distrustful or overly demanding of the nonprofits with which they already had relationships. Most did not know about or refer to the myriad academic and nonprofit resources in their areas of interest." [Page i] So, the study was fruitful and the Center now has its work cut out for itself. We, who work for nonprofits, can consider the same task before each of us. We need to make it easy for the wealthy, who would potentially give in larger amounts, to give to the nonprofits we work for. The way to do this is to listen to the donors and also learn.

I know that you know this; you've heard it over and over. Relationships are REALLY how to raise larger donation amounts. To quote the study, "HNWP participants indicated that their criteria for philanthropic giving were deeply informed by their social capital. The criteria they most frequently cited – apart from an interest in or passion for a subject – were personal involvement with an organization (or the involvement of someone known to them) and the ability to influence a tangible program or project related to a passion or interest. These factors were especially important at the time of an initial gift. Some HNWPs told us that their involvement in an organization was an absolute precondition to donating what they considered larger gifts. Others were comfortable giving a larger amount if someone they knew well was personally involved in an organization. Few HNWP participants made a practice of giving large gifts in situations where they had simply heard of and/or read about an organization." [Section 1:9, Page 13]

What nonprofit does not need money to fund its overhead, or operating costs today? It is so often thought (or assumed) that donors (grant donors, major donors, etc.) won't or don't fund operating or overhead costs. This is simply not true. The study even found that major donors expect to help pay for these costs. To quote one of the surveyed participants "“ [S]omebody needs to pay for the overhead in order for them to provide their services, so why shouldn’t it be us? And if we believe in the organization, why shouldn’t we pay for their overhead?”" [Section 1:10, Page 14] Talk with your major donors or develop your more wealthy regular donors; they are not necessarily adverse at all to assisting the organization with its operating costs. Many participants in the study understood that these costs exist as much as programmatic costs.

As I've said repeatedly in this blog, "The most common trajectory is a transition from early hands-off donations to more focused giving.5 Increased focus is most typically associated with greater involvement in an organization." [Section 1;19, Page 23 of 32] Nonprofits who do not think they have access to wealthy donors or potential major donors; or who do not choose to develop their wealthier donors are simply leaving money on the table, and which nonprofit can afford to do that? We, especially as fundraisers, need to listen to our donors (and potential donors and volunteers); and learn. Studies like these are a wealth of information. I have definitely learned new information from this study, as I know that you will, as well.

The URL for the study's findings (report) is:

1 comment: said...

Cultivating major donors is an area in which I could definitely use more expertise. Thanks for providing links to these resources!