Everyday Megadonors: a New Force in Giving
The rise of ultra-wealthy, but often low-profile megadonors has changed the charitable giving landscape. Several fundraising experts joined the Chronicle to discuss how charities of all sizes can navigate the growing wealth gap and capture the attention of major donors.
“The ability for somebody to make an eight-figure gift, and the likelihood of them making it are two very different things,” said Byron Kennedy, vice president for university advancement at Texas Tech University and Michael Schneider, president of McPherson College.
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The rise of ultra-wealthy, but often low-profile, megadonors has changed the charitable-giving landscape. Several fundraising experts joined the Chronicle to discuss how charities of all sizes can navigate the growing wealth gap and capture the attention of major donors.
“The ability for somebody to make an eight-figure gift and the likelihood of them making it are two very different things,” said Byron Kennedy, vice president for university advancement at Texas Tech University
“The traditional wealth markers aren’t the best way” to identify potential donors, said Kennedy, who emphasized that fundraisers should use their organization’s mission to connect with potential major donors.
Kennedy was joined by Natalia Pierson, associate director of prospect management research at Norfolk State University, and Michael Schneider, president of McPherson College. The session, Everyday Megadonors: A New Force in Giving, was hosted by Maria Di Mento, senior reporter at the Chronicle.
Read on for highlights, or watch the video to get all the insights.
Change Your Search Parameters
With one new billionaire minted every 17 hours in 2021, there is no shortage of ultra-wealthy people. Yet identifying potential wealthy supporters can be a challenge, especially if they don’t fit the typical profile of a major donor.
Traditional wealth markers, like an upscale ZIP code, often miss big donors at Norfolk State University, a historically Black college, says Pierson. Instead, she and her team of only two full-time fundraisers rely on highly customizable A.I.-powered fundraising tools to identify potential donors from a large dataset of more than 95,000 donor records.
“The trick is finding the people who either haven’t thought about” making a large donation, she says, or who haven’t been asked — as is often the case with donors without traditional wealth markers.
The panelists agreed that major donations often come from longtime supporters, who may spend years testing the water through smaller contributions to an organization. That consistency can provide clues to fundraisers trying to gauge a donor’s openness to a larger show of support.
A donor’s “potential isn’t always defined by the size of their current gift,” says Schneider, who recommends that fundraisers be consistent and tenacious in following up with supporters of all sizes.
Patience Pays Off
Likewise, at Texas Tech University, Kennedy takes special care to build strong relationships with consistent donors, even if their contributions remain relatively modest.
“Consecutive years of giving is an incredibly simple and an incredibly powerful metric,” says Kennedy, who noted that consistent donors might increase their contributions once their circumstances change or their relationship with the organization grows.
In 2022, Texas Tech University received its largest philanthropic gift — $44 million — from Gordon and Joyce Davis, who had nurtured a strong relationship with the university for decades.
The best way for a fundraiser to know when a donor is ready to make a bigger commitment is to follow the donor’s lead in ongoing conversations about support, says Schneider.
“Be patient, and when they’re ready to go, you get ready to go,” he says. “Big things can happen.”
Persistence and Openness Are Key
One disappointing meeting or request for donations is no reason to give up on a donor or project, the panelists said.
“Persistence is key to fundraising work,” says Schneider, who recommends that fundraisers take disappointments as learning experiences, to better inform future campaigns. “There’s a lot of visits that don’t go our way.”
Part of that persistence includes frank and genuine conversations about how the organization is faring and how a donor’s contribution is being used, said Kennedy.
“Not everything turns out the way a donor needs it to,” says Kennedy. “But, by moving toward that conflict and addressing things with sincerity and persistence, you are deepening a relationship that leads to much bigger investment in the future.”
Prioritize Human Connections Over Efficiency
Building a genuine relationship with major donors needs to involve seeing them as more than just their wealth, the panelists agree.
For example, Schneider says, many ultra-wealthy supporters would “be mortified if they knew we refer to them as megadonors. These folks are no different than anybody else, and they want to know who you really are.”
While raising money is a metrics-heavy enterprise, it’s important that fundraisers don’t lose sight of the humanity of their work, says Kennedy.
“Nobody pushes harder and drives to metrics more than I do with my team,” he says. “But do we really incentivize that relationship building or do we just want to see a dashboard full of visits? That’s a check that I have to put on myself.”
That’s not to say that fundraisers need to have a close personal relationship with all major donors. The panelists agreed that some donors might have strong or demanding personalities that can be taxing for fundraisers. That doesn’t mean they can’t work together, says Schneider.
“The goal is not to agree — the goal is to make an impact together,” he said. “There’s plenty of room for that in the world of philanthropy and nonprofits.”