All people (and organizations) who exert themselves for the well-being of others; who engage in practical and heartfelt benevolence; who donate money and time to causes they believe in so that the world may become a better place.”
◦ There is no “one size fits all” definition of a philanthropist ◦ Philanthropic impulse is innate and plays out differently over time and within specific cultural context—every engagement with a donor is unique. ◦ Fundraising process is more art than science. ◦ It’s all about people!
The survival and health of most nonprofits and service organizations depends upon finding enough givers (individual and other) who can be motivated and influenced to give, who are capable of giving the requisite funds, and who can be interested in the purposes and needs to be served.
Total giving across the country was up last year by 4.0 percent to $298.42 billion, according to Giving USA 2012.Giving USA 2012 Individuals and families account for 88 percent of all charitable giving, when you combine their gifts and bequests. Corporations account for 5 percent.
Stimulus to give influenced by both internal needs and desires as well as external influences. Key questions for fundraisers: “What can I do to satisfy or enhance these factors within donor prospects? How can these motivations and influences be used to activate volunteers and staff? --Principles of Professional Fundraising, Joseph Mixer (1993)
Internal Motivations ◦ Personal or “I” Factors: Acceptance of self or self-esteem Achievement Cognitive interest Growth Guilt reduction Meaning or purpose in life Personal gain or benefit Spirituality Immorality Survival
Internal Motivations ◦ Social or “We” Factors: Status Affiliation Group Endeavor Interdependence Altruism Family and Progeny Power
Internal Motivations ◦ Negative or “They” Factors: Frustration Unknown Situations Insecurity Fear and Anxiety Complexity
External Influences ◦ Rewards: Recognition Personal Social
External Influences ◦ Stimulations: Human Needs Personal Request Vision Private Initiative Efficiency and Effectiveness Tax Deductions
External Influences ◦ Situations: Personal Involvement Planning and Decision Making Peer Pressure Networks Family Involvement Culture Tradition Role Identity Disposable Income
Determining Why People Do Not Give ◦ Personal Characteristics and Situation Problems ◦ Communication Problems ◦ Reactions to Solicitations ◦ Organizational Image and Shadow Problems
Why People Don’t Give ◦ Personal Characteristics and Situation Problems: Personal preferences Higher Priorities* Not Concerned Not Interested* Not Involved Stinginess *most common
Why People Don’t Give ◦ Personal Characteristics and Situation Problems: Contrary Beliefs Disagree with Mission Don’t Agree on Policies* Don’t Believe in Cause* Don’t Like Programs Different Work Ethic *most common
Why People Don’t Give ◦ Personal Characteristics and Situation Problems: Finances Can’t Afford to give* Fear of Reciprocity Economic Conditions Tax Rates *most common
Why People Don’t Give ◦ Personal Characteristics and Situation Problems: Situations Complexity of Life Competition Changing Environment Outside Local Area
Why People Don’t Give ◦ Communication Problems: Lack of Information Mission Not Known Organization Not Known Others Not Supporting Need Not Shown* No Record of Service No Real Case No Results Seen* *most common
Why People Don’t Give ◦ Communication Problems: Ineffective Communication Negative Publicity Publications Too Slick Unclear Need Promotion Too Costly
Why People Don’t Give ◦ Reactions to Solicitations: Manner of Asking Asked Too Often* Asked Wrong Way* Asked for Too Little Manipulation Too Many Mailings or Contacts* *most common
Why People Don’t Give ◦ Reactions to Solicitations: Solicitor Don’t Like or Connect with Asker* No Obligation to Asker Used Paid Solicitors Wrong Person Asking* *most common
Why People Don’t Give ◦ Reactions to Solicitations: Relationship with Prospect No Personal Contact No Recognition Not Appreciated Not Asked* No Tradition to Give *most common
Why People Don’t Give ◦ Reactions to Solicitations: Timing Already Gave Asked Too Late or Too Early Wrong Time *most common
Why People Don’t Give ◦ Organizational Image or Shadow Problems: Perceptions of Poor Organizational Behavior Active Mistrust High Administrative Costs Agency Too Rich Bad Experience Poor Reputation Services Cost Too Much Duplication of Services Government Involvement Taxes Pay for Services
Why People Don’t Give ◦ Organizational Image or Shadow Problems: Management Misuse of Gifts Poor Policies and Rules High Fundraising Costs Poor or Ineffective Management
“Philanthropy is a social relation of giving and getting between donors and recipients in which donors have needs to be fulfilled as well as resources to grant, and recipients have resources to give as well as needs to be met.” - "Giving and Getting: Philanthropy as Social Relation,” S. Ostrander and P.G. Schervish, in Critical Issues in American Philanthropy, ed. Jon Van Til, Jossey Bass, 1990
Agency Prospect Need Resources : dollars and time Satisfactions Psychological and social: Self- esteem, achievement Purpose, status Group endeavor, power Source: Pacific Bell
Why do people give to your organization? What are your donors getting back in exchange for their involvement with you, for their commitment of time, talent and treasure?
Multi-generational family philanthropists give differently than first-generation philanthropists. Religious motivations for giving can be hugely important for some donors. Culture, age, and gender can play a significant role in determining if, how, and why someone might give to a particular cause. More often than not, donor involvement trumps nearly all other explanatory factors.
Opinions diverge on how and to whom women give: ◦ Women want emotional ties to the charities they support ◦ Many women cite a charity's mission and efficiency as key factors in their giving decisions ◦ Women demand to be involved in the institutions they support There is nearly universal agreement on one point: women play an increasingly significant role in philanthropy
Philanthropic landscape in transition Recent economic downturn has jarred confidence of many nonprofits and service organizations Donor confidence at all-time low And yet, people continue to give!
Recent Large Gifts by Source of Wealth: ◦ Media (6) ◦ Investments (5) ◦ Finance (5) ◦ Retail (5) ◦ Energy/oil (5) ◦ Software/technology (4) ◦ Financial services (3) ◦ Healthcare/;medical devices (3) ◦ Industrial/manufacturing (3) ◦ Real estate (3) ◦ Inheritance (3) ◦ Hedge fund (2) ◦ Horse racing (1) ◦ Hotels/casinos (1) ◦ Parking lots (1) ◦ Legal (1) Source: Chronicle of Philanthropy (gifts reported since October, 2008)
Top 10 Recession Proof Businesses: ◦ Non-cyclical businesses (funeral homes, public utilities, energy) ◦ Health care ◦ Information technology ◦ Discount retail ◦ Vices ◦ Education ◦ The government ◦ Repossessions and bankruptcy law ◦ Luxury retail ◦ Candy, Cosmetics and Contraceptives
Corporate giving is most immediately affected in economic downturn: corporate foundations are funded with annual profits. Foundation giving. Tougher to get new foundation grants during economic downturn. Family foundations have greater resiliency and flexibility. Individual giving has greatest resiliency and donors do respond in difficult times. 41
In a difficult financial climate, donors do respond to new approaches: ◦ A Jupiter Research survey showed 2/3rds of online donors plan to increase giving online ◦ Online fundraising continues to grow, attracting newer, younger donors and increasing gifts through other channels
In a difficult financial climate, donors do respond to persuasive causes: ◦ Program support to meet a need that is highly compelling ◦ Building projects that are dependent on financing ◦ Shovel-ready projects that are good for economic recovery ◦ Availability of challenge and matching gifts
Tremendous Wealth and Competition for Resources Competition for Funding Available Resources
Technology has revolutionized the philanthropic process and context ◦ 24/7 expectations ◦ Access to new donors in far away places
Corporate and Foundation Philanthropy Multi-year grants are out Single-year grants are in—with tighter restrictions, evaluation requirements Less allowance for renewal or non-project operation support More emphasis on pilot projects with emphasis on replicability and scalability Global shift in giving emphases
New Giving Vehicles: Giving Circles Professional Philanthropic Advisors Donor Advised Funds
Today’s Donor Sophisticated and Savvy Less likely to give us the benefit of the doubt Motivations are more complex and needs are greater Giving While Living Social entrepreneurs and investors
Fundraising is not about the money; it is about relationships People give because we MEET needs; not because we HAVE needs A gift to your organization is really a gift through your organization into the community All donors are really donor-investors Your cause and your case for giving is the same— in good times and in bad
Tell stories Communicate promise and impact—not panic Let donors know you're using their dollars wisely Publicize new gifts and good news Answer the 4Ws: Why me? Why now? What for? Who says?
Make the case for giving ◦ Remind them of the consequences of not meeting your mission ◦ Who will suffer, go without, be worse off than they are today? Top Reasons People Give: Because they were asked To give back to community Compassion for those in need Personally believe in cause Affected by cause
Show the impact of your work on the life of an individual Show the impact of your work on the community Find a way to connect donors with mission in up close and personal way People who really care about your work and mission will try to find a way to help
Significantly increase activity: ◦ Visits and briefings with donors and friends ◦ Communication Don't stop asking!