The tag line for both Gifthub and Inspired Legacies might be, "Getting Donors, Advisors, and Nonprofits on the same page." In this post let me address fundraisers, speaking from my situation in the advisory world. Let me give you three ways to increase gifts by making better use of advisors.
I. Increase share of donor's philanthropic budget
Tracy Gary in her book, Inspired Philanthropy, provides numerous worksheets to guide a donor in doing what she calls a "giving plan." The plan looks at the donor's current philanthropic budget and how it is allocated among nonprofits. The plan then looks at the donor's key goals as to what the donor wants to preserve or change in the world. The plan also looks at results - what gifts have given the donor greatest satisfaction, and which have created the best results? From this analysis, the donor decides whether his or her top goals and his or her current gifts are aligned. Typically, donors conclude that there giving is reactive - they are giving when asked, and to many organizations, in what amounts to an unthinking, scatter-shot pattern. The donor then generally decides to make fewer, larger, more targeted gifts with a greater amounts of thought as to potential impact and satisfaction.
S0 - Idea #1: Work with your donors on a giving plan with an eye to presenting your gift opportunities in the light of their deeply held goals. Aim, thereby, to win a bigger share of the donor's current philanthropic budget.
II. Increase donor's annual philanthropic budget
Donors believe and advisors believe that "charity starts at home." Donors need to take care of themselves and their families before giving sacrificially. How much a donor can afford to give before he or she begins to shortchange other desires and other responsibilities is a matter that can be determined by an advisor through what is called a "Cash Flow Study," or a "Giving Capacity Study," or through a comprehensive financial plan. Doing such plans with wealthy clients often reveals that they can afford to be more generous that they currently are. If the motivation is there, the desire, they can increase their total annual charitable budget.
S0 - Idea #2: Work with advisors to encourage donors to do a Cash Flow Study, or Giving Capacity Study. Aim, thereby, to gain a constant percentage or a larger percentage of a larger total philanthropic budget.
III. Gain or Accelerate Expectancies
At the end of life a donor's wealth may go to a spouse, but when both spouses are gone, wealth that has not been consumed or given away during a lifetime can go only to three places: Taxes, Charity, and Heirs. Donors generally want government to get little. As to heirs, many are ambivalent about leaving children too wealthy. Hence, in estate planning it is increasingly common to see clients deciding that they will give "what would have gone in taxes to charity instead." This can mean that charity is slated to get 30-50% of very large estates at the second death. Often this entails a family foundation. The sad thing is that for a charity the money will not come to hand for many years. It may be 20 years or 30 years before the foundation is funded, and even then the money will trickle out at 5% a year, among perhaps many grantee organizations.
In working with such clients I will say, "Mr. and Mrs. Donor, it is wonderful you will be so generous at death. But if you are going to leave so much to charity, wouldn't you enjoy it more if you were still alive to see the gift and the good it does? Wouldn't it be more fun to engage your children now with you in making the gift? Wouldn't the gift do more good if you started it now, rather than waiting 30 years to help the cause that is so pressing?" Clients are almost unanimous in wanting to accelerate those gifts from "at death" to "during my life." Thus, with the help of advisors, you can convert what would have been a bequest in 30 years, or a foundation set up in the far future, to a strategic current gift, or a pattern of funding starting now. You can lock such a gift down by providing to the donor and the advisor a "funding plan" showing 3-5 ways a key project of value to the donor can be funded with a one time up front cost, or a series of gifts. The advisor can then "back the numbers into the plan" and show the donor how it might work, and how it could be afforded, and how the chips fall now, later and at death. This kind of planning is the state of the art. It is what I mean by saying that we as advisors, donors, and nonprofits need to partner for inspired outcomes.
So - Idea #3: Work with donor and advisors to do a legacy plan at death. But also ask the donor to go back to the advisors and see if it makes more sense to accelerate the death-time gift into a life time series of gifts. That way the donor can see the good it does, involve kids, and experience the joy of giving, seeing results, and receiving recognition. In this way, you can not only increase the total dollars your organization receives, but you can also accelerate the receipt of those dollars. In this kind of planning it is not unusual to see 30-50% of the donor's net worth be allocated now, later or at death to charity. Your being in the middle of the process augurs well for your organization garnering a goodly share.
IV. Side Benefit: Increase number of active donors
By putting the donor's best interests and vision at the center of fundraising, and encouraging the donor to create an overall plan (gift plan, financial plan, legacy plan) an organization will gain word of mouth among donors. You can leverage that good will through events, testimonials, and donor to donor referrals. As to advisors, the law of reciprocity holds good: If you encourage your donors to seek out qualified advisors, then qualified advisors will seek you out, and bring clients with them.
V. Getting Started
As a simple action step, you might recommend Charles Collier's Wealth in Families to your wealthy donors. You might engage advisors in the community around a conversation about that book. From there you could suggest to donors that they work with advisors to partner with them for inspired outcomes, along the lines above. Tracy Gary's Inspired Philanthropy: Your Step by Step Guide to Creating a Giving Plan is another good book for that purpose, as is Jay Hughes's, Family Wealth: Keeping it in the Family.
VI. In the Spirit of Inspired Partnership
To get an inspired outcome requires an inspired donor, nonprofits who have at heart the donor's overall best interest, as well as the needs of their cause, and advisors who help that donor accomplish her highest ends in view by the most effective and efficient means, while respecting her other needs, wants, and obligations. That is the highest possible planning, a great service to donors, and the process that is most fruitful for all concerned. Who gets the spirit of common purpose going? Well, why not you?
VII. Feedback Requested
I work in the advisory community, not as a fundraiser. If you as a fundraiser find these ideas to be impossibly idealistic or unrealistic, or if you attempt them with limited success, please let me know, so we can learn together. Likewise, please share your successes as you build your inspired legacy partnerships. Donor, advisor, nonprofit - we need each other. Let's practice the steps.
I appreciate these ideas. I'd like to find ways to make them come to life.
I feel that the current way many non profits work, is that they are single agents, competing with everyone else for those enlightend donors. If you can picture a million marbles in a huge bowl, with 1,000 different colors, representing the different causes that donors, non profits, and advisors identfy with, it's pretty difficult for most non profits to connect with the donors and advisors that are interested in the same cause.
However, in the spirit of Getting Donors, Advisors, and Nonprofits on the same page." , what would it take to organize each of these 1000 colored marbles into groups, or smaller circles, where the donors, non profits and advisors are all talking to each other, or at least have a better chance of meeting others who share a similar interest?
Posted by: Dan Bassill | June 06, 2007 at 10:16 PM
Begin by thinking of how you might serve the enlightened donor? Engage with them, but cut them enough slack so that your network and events are a good place for them to hang out and get involved even if their current giving mostly goes elsewhere? Think about each nonprofit making an effort to uplift giving, so that each benefits directly or indirectly. Leave a Legacy takes this philosophy.
Posted by: Phil | June 06, 2007 at 10:44 PM
The idea is noble and timely, and my hope is that the current trend for "giving now" moves beyond the famously wealthy (Warren Buffett, Boone Pickens, etc.) and down to the less famously, but still extravangently, wealthy people of our world.
My concern with implementation is single: we non-profits rarely are in a position to focus on the long-term cultivation of donors necessary for such a quest. It is one thing for Charles Collier to adopt such a stance, as he sits atop one of the world's largest piles of gold (Harvard's endowment). For him, there is no desperation to pay his own salary or keep the lights on in the library.
That being said, I think that the first step is to get non-profits' boards involved in this process. Anyone willing to step up to the plate to serve as a trustee should be willing to spend a few hours additional time pondering the impact of their life's philanthropy.
Of course, every board is different. I currently work for an organization that struggles to get a quorum at our quarterly meetings (that's right, not monthly but quarterly). I am afraid that we would struggle to get anyone to attend an event like this... even though our intent would be pure, the perception would be that we want them to write us even more heavily into their will (i.e. we are thinking of killing them off to get the big bucks).
I think that what is required is first getting one person on the board to buy in: a champion who can rally the troops to get involved in this. I have serious doubts that staff, particularly non-CEO staff like development officers, would have any success at such a venture.
So, Phil.... you looking for a board to serve on? :)
Posted by: Jeremy Gregg | June 06, 2007 at 11:05 PM
Good input, Jeremy. Where is the best place in Dallas for social justice funders to come together to talk about money, family, race, poverty, and what we owe one another as human beings? A bookstore in Highland Park, the all white bubble? Communities Foundation of TX? Dallas Foundation? How about the conference room at CDM over the community food pantry on Thursday nights from 7 - 9 pm? Would anyone show up? If not what have we lost? But if we did this for awhile and a few do show up and go on to make positive changes in their plans, that would be a good thing for Dallas, and for the donors too. The venue would be CDM; the topic would wealth, family, and community.
Posted by: Phil | June 06, 2007 at 11:41 PM