Nonprofit leaders are placing a much greater focus on building stronger relationships with wealthy individual donors than in previous years, and they expect that trend to continue, according to a new report by the Center for Effective Philanthropy released Tuesday.
The heads of charities have good reason for the shift: Donations from modest and midlevel donors have dropped recently, according to Giving USA’s most recent “Annual Report on Philanthropy,” and nonprofits have been relying on big donors to pick up the slack.
Other findings:
- 92 percent of nonprofit leaders said it is very or extremely important for wealthy philanthropists to give unrestricted donations, but only 54 percent said most or all of their organization’s major donors do so.
- 92 percent of charity leaders said it is very or extremely important for wealthy donors to give repeated support, while only 59 percent said most or all of their major donors do.
- 88 percent of nonprofit leaders said it is very or extremely important that major donors make clear whether they plan to give in the future, but only 25 percent said most or all of their donors are transparent about their giving intentions.
- 54 percent of charity directors said that most or all of their group’s major donors provide unrestricted support, while only 27 percent said most or all of the foundations that support them do so.
- 61 percent of nonprofit leaders said they’d prefer to receive contributions from big donors than from staffed foundations because it is easier to manage relationships with rich donors, who also are more likely to pledge multiyear gifts and unrestricted donations.
Donors’ Perspectives
While the report surveyed nonprofit leaders, its authors also spoke to a small group of major donors for their perspectives on the charities they support. The Chronicle interviewed two of them.
Lauren Glant is a consultant who lives in New York and gives primarily to arts and culture organizations in Brooklyn, including the Brooklyn Historical Society, the Weeksville Heritage Center, and the Wyckoff House Museum. She also participates in a women’s philanthropy collective that supports youth development programs and education.
She said it’s important for major donors to have an in-depth, nuanced understanding of a charity’s work to help keep them on the right track as supporters.
“If you’re saying that you’re going to support an organization, you really need to understand the goal and the issues in order to be an effective supporter,” said Glant. “I think we can do the most good when we listen to what the program’s real needs are.”
A donor who learns more about a charity also becomes a “much more successful ambassador” for the nonprofit, Glant said.
She said the best way charities can help big donors learn more about them is to get them “in the door” to visit the places where the program is carried out, talking to the people the nonprofit serves and to lower-level staff who are closer to the work.
“Talking to a development person or a leader is a good starting point, but it’s not the end point,” said Glant. “If you want to get a better sense of the real driving passion, you need to go to the staff level.”
Building Relationships
A donor who is an investment portfolio manager, who asked to remain anonymous, also weighed in, saying he and his wife back a variety of causes both in their hometown of New York and internationally, and they usually try to get a deeper sense of how a charity operates. They’ve made large contributions to the Against Malaria Foundation, Freedom of the Press Foundation, the Bail Project, and the Coalition for Rainforest Nations, among others.
He said having a good relationship with a charity is important when he wonders why the group is taking an approach to an issue that doesn’t make sense to him.
“Usually there’s a good reason why they’re doing it the way they’re doing it, in which case I learn something,” he said.
He said leaders should take the time to build that relationship so he and his wife can get a better sense of whether it’s a good fit with their giving priorities. It is especially important when they are considering giving to a small nonprofit or a new or exploratory program.
“You want to be able to really talk to them and see what’s going on; we often ask a lot of questions on the charity’s practices,” he said.
Maria Di Mento directs the annual Philanthropy 50 , a comprehensive report on America’s top donors. She writes about wealthy philanthropists, arts organizations, key trends, and insights related to ultra-high-net-worth donors, among other topics.