As Wealth Grows Around the World, Charities Focus on Donors Abroad

When Scott Nichols, Boston University’s top fundraiser, called Rajen Kilachand, an alumnus who heads a multibillion-dollar company in Dubai, the business leader was pleasantly surprised.

“The words ‘Where have you been for 30 years?’ actually came out of his mouth,” Mr. Nichols says.

After Mr. Kilachand graduated in 1974, he returned to his home country of India, where he began transforming his family’s business into a global conglomerate with holdings in engineering, mining, and other industries. Two of his sons also went to Boston University, but the family had not been contacted by the university because it only recently began to focus on seeking large donations from those living abroad.

Now, with the expected announcement next month of a $1-billion capital campaign, Boston has nearly a dozen fundraisers circling the globe, and they have brought in substantial sums. Roughly 20 percent of the early gifts to the campaign have come from overseas, including a $25-million donation from Mr. Kilachand to support and rename the honors college.

Farther Afield

As the American economy continues to sputter, Boston University is among a fast-growing number of American nonprofit organizations that are undertaking ambitious efforts to seek out donors overseas. Even though international prospecting can at times be uneven, expensive, or culturally tricky, the opportunities, fundraisers say, cannot be ignored.

“The silver lining behind the tough economy here in the U.S. is that it challenged us and opened our eyes to move more strongly where the markets are stronger,” says John Cerniglia, Habitat for Humanity’s senior director of international resource development.

In those new markets, he and other fundraisers say, American charities are finding not only deep pockets but also willing donors who are more sanguine than their American counterparts about their financial prospects and those of their countries.

“Fundraising here is so highly correlated to the S&P Index and how people feel about their money and the economy,” says Angela Sosdian, the Nature Conservancy’s chief philanthropy officer. “While we still have plenty of opportunity in the U.S., the real growth opportunity is internationally, where the economic growth is happening and there’s not the same level of worry.”

New Opportunities

Like American and international companies and investors, charities are moving into countries where economies are expanding, the middle class is growing, and wealth is rising.

Fundraisers are looking at donors in countries where new business growth is surging, such as Brazil, China, India, Mexico, Russia, and South Africa. And they are paying close attention to areas in the Middle East and Asia that are home to a rising number of millionaires and billionaires.

An annual survey of global wealth issued in June by Capgemini and RBC Wealth Management found that last year, the number of high-net-worth individuals (defined as those with at least $1-million in investable assets, not including their primary residence and other goods) in the Asia-Pacific region surpassed the number in North America for the first time.

The Middle East, the report said, was the only region where total wealth among the richest grew last year, and of the top 12 countries by population, Brazil saw the biggest percentage increase in the number of high-net-worth residents.

Such trends explain the following developments:

• The Nature Conservancy plans to expand the six-person fundraising office it opened in Brazil a few years ago, and it recently added a philanthropy subcommittee to its volunteer board of conservationists there.
• United Way Worldwide has made a special effort to honor donors of $100,000 or more in South Korea and India and is now looking to open a corporate office in Johannesburg.
• Habitat for Humanity is mounting a $150-million campaign in India, Indonesia and the Philippines, among other Asian countries, and has stationed a fundraiser in Jordan to seek out potential big donors in the Middle East.

The Rotary Foundation of Rotary International, a membership organization for business leaders in 200 countries, has been raising money overseas for decades, but only in recent years has it focused on soliciting major gifts in India.

Whereas India was long considered a country to which contributions were more often sent, it is now seen as fertile ground for making big-gift appeals, says Eric Schmelling, a Rotary Foundation fundraiser.

Setting the stage, he says, is a well-known philanthropist, Rajashree Birla, whose late husband started one of India’s biggest companies.

Since 2007, the Birlas have donated about $1-million a year to Rotary’s polio-eradication efforts, and they increased their contribution this year to $2-million.

“People in India who are accumulating wealth can look at Mrs. Birla, and we can build momentum for our cause and for philanthropy overall,” Mr. Schmelling says.

Tapping into that philanthropic spirit among rich people around the world can be complicated for American charities. Fundraisers may face language or cultural barriers that can trip up communication with potential donors or stand in the way of reaching their inner circles.

In some countries, for example, connections with the wealthiest people have to be made through religious leaders or government officials. Female fundraisers may face additional challenges in countries where men, by tradition, continue to dominate the highest levels of business and society. And all fundraisers need to heed the varying customs and cultural norms that govern discussions about money, displays of wealth, and public thank-yous for contributions.

Building Trust

Despite all the differences worldwide, charity leaders say that the basics of major-gift appeals are universal: Show up, spend time, build a relationship, foster passion for the charity’s mission, and ask for a gift.

Daryl Upsall, an international fundraising consultant based in Spain, agrees, but he warns that American charities should not be overly dazzled by the growing riches in other countries.

Building trust and support in regions with emerging economies and patchy philanthropic traditions may take a long-term commitment of time and money, he says. In Brazil, for instance, he believes high-net-worth people are still too distracted with money-making to engage in meaningful charity.

“It’s just not delivering on the promise yet,” Mr. Upsall says, “so the question is for how long can fundraisers stick it out, hoping that the business community and the wealthy class turn their attention to philanthropy.”

Tighter Purse Strings

Fundraisers are sticking it out in Europe, which is experiencing an almost continentwide economic slowdown and credit crisis.

Just as in the United States, there’s still plenty of wealth and generosity, but donors are holding their purse strings tighter these days. For that reason, American fundraisers say they are putting more focus on retaining and growing relationships with their existing major supporters in Europe, not necessarily on finding new ones.

An exception may be the United Way, which has France on its short list of prospective new markets. United Way officials note that the tough economy has led to government cutbacks in money for education and social services, which has prompted a surge in nonprofits to make up for programs that have been eliminated.

Another potentially lucrative donor pool in Europe may soon be found in Poland, says Mr. Upsall, the consultant. He says the country has a comparatively strong economy for the region—and, with a decline in restrictions on free enterprise, a growing business class.

Across the globe, Australia is emerging as a popular spot for American fundraisers to go calling, too. The number of high-net-worth people is on the rise there, a result of the country’s fast-growing economy, extensive natural resources, and surging trade with China. A three-year-old tax law meant to encourage the richest Australians to put money into funds set up like family foundations has fueled interest in philanthropy, fundraisers say.

‘Borderless’ Donors

But even as American charities watch the world’s markets looking for the next wealth trend and fundraising hot spot, donors with the deepest pockets might be found almost anywhere in the world. More and more, family and business fortunes are not tied as closely to the fortunes of a particular region as they used to be.

Experts in international fundraising say wealthy people can often be described best as “global citizens,” whose investment portfolios, if not also their thinking and way of life, are borderless.

Boston University received a $15-million gift for its capital campaign from Bahaa Hariri, son of the late prime minister of Lebanon.

After graduating from the university, Mr. Hariri worked at his family’s company in Saudi Arabia and then started his own ventures, an operation in the Middle East and an investment firm in Switzerland, where his wife and children spend most of their time.

“He bounces all over the world,” Mr. Nichols says of Mr. Hariri.

And so, too, should more fundraisers, he says. “It’s a new world. Get out your passports.”

The Global Shift in Where Wealthy People Live

North America is the only region where the number of people with at least $1-million in investable assets dropped last year. Following are the percentage changes around the world.

Source: Capgemini and RBC Wealth Management

Raising Money Overseas: Advice From the Experts

• Think of donors as global citizens. The fortunes of the wealthy are not tied as closely to certain regions as they once were, and their attitudes about giving are less likely to be bound by country borders.

• Seek out supporters in regions with the fastest-growing economies. Brazil, China, and India are among the countries producing a growing number of people with great wealth.

• Be aware of language and cultural pitfalls. Female fundraisers, for example, may face challenges working in countries where men dominate because of cultural or religious traditions. In general, pay attention to customs about money and displays of wealth.

• Don’t get bogged down learning the minutiae about every culture. Spend time instead keeping up to date on local and global current events and other issues that might resonate with donors.

• Stick to the basics. Don’t ask for money right away. Getting big gifts in any country requires building relationships and getting potential donors excited about the nonprofit’s mission.

• Expect to deal with multiple people. A donor is likely to include other people in making a decision about a gift, because many global fortunes are spread among large families and a network of businesses.