Many wealthy donors rely on family and peers when making decisions about giving, not necessarily on professional staff or evaluations, according to a new survey of 219 people, most of whom donated at least $100,000 in 2015.
Some 57 percent of the donors said they lean on peers in the industries where they work when deciding where to give or what impact investment to make. Another 56 percent said they tap family and friends for input on such decisions. (Donors could choose more than one option.)
About 72 percent said they participate in “philanthropy networks” — collections of donors who receive education on charitable giving and causes, according to the electronic survey conducted in late 2016 by the Philanthropy Workshop. The workshop provides education, training, and networking opportunities for philanthropists.
Family, peers, and donor groups probably offer comfort for today’s large donors — who are navigating a complex world in which myriad nonprofits are seeking gifts but reliable data on their results is lacking, said Rachel Cardone, co-author of the report and founder of the consultancy RedThread Advisors.
Some 60 percent of respondents said they had no staff members to assist with their philanthropy, which Ms. Cardone found surprising. There’s much discussion today about strategic planning in philanthropy and, in recent years, a cottage industry of giving advisers and educators has grown — some of whom would probably make qualified staff members for individual donors.
Many donors appear to believe they can handle decisions about their philanthropy on their own, said Kimberly Dasher Tripp, co-author of the study and the founder of Strategy for Scale, a consulting group.
In interviews with 20 donors conducted after the electronic survey, some questioned the need for advisers or professional staff members, she said. The survey showed that many donors were confident in their giving and had never paused to reassess their strategies, she added. “If you don’t feel stuck, you might not think you need help,” Ms. Dasher Tripp said.
An eye-opener for Ms. Cardone: While more than 70 percent of wealthy donors said they have strategic plans for giving, only 55 percent said they require nonprofits to submit reports on how their donations have made an impact. And only 9 percent receive outside assessments of their donations.
Confidence Too High?
Still, most donors reported that they think they have a good understanding of how their philanthropy makes a difference.
It’s hard to assess those perceptions, Ms. Cardone said, because few donors receive evaluations to determine whether their support made a difference.
She noted that many nonprofits probably think it’s wise to share only positive news with donors, and philanthropy networks are often boosterish. As a result, the assessments donors have of their own giving might be overly rosy. “A lot more work is needed to really improve those feedback loops so we can validate that confidence,” Ms. Cardone said.
Many Causes Supported
Wealthy donors said they supported a wide variety of causes. Twenty percent said they made contributions to colleges or other education-related organizations, followed by 17 percent who said they gave to health-care efforts.
Donors also support groups that work in human rights and social justice, the environment, the arts, and women’s issues.
Nearly a quarter of donors said they prefer to give unrestricted dollars that aren’t tied to any specific projects.
Taking on Risk
Only 19 percent of big donors said they prefer to support promising but unproven projects.
Ms. Dasher Tripp said she expected more of an appetite for innovative ideas among big donors, as she senses that a “start-up” mentality is gaining ground. About 38 percent of donors said they prefer to support projects that they know have a decent chance of succeeding but have some risk attached, and 19 percent said they favored ideas that are well-tested and likely to work.
Only 17 percent said they preferred giving to new organizations, while 58 percent said they preferred growing nonprofits and 25 percent favored established groups.
To Ms. Cardone, the relatively small number of donors who showed an interest in supporting new ideas and organizations raises an important question: “If we’re only supporting mature organizations, where’s that funding for innovation?”
