A new study of wealthy donors suggests that a key way fundraisers can persuade them to give bigger is to explore how a gift will contribute to the philanthropist’s psychological well-being, rather than focusing so much on the impact the gift could have on a nonprofit or cause.
The Institute for Sustainable Philanthropy, a British research group, interviewed 48 rich donors who made large gifts. A common thread: Making a large gift had an impact on donors themselves, and not just their intended beneficiary.
The research comes at a time when debates have intensified about whether fundraisers should cater more to the needs of the donors or their causes. As the social-justice movement has gained momentum, more and more fundraisers have advocated for what they call a community-centric approach, meaning that they tell donors what would make the most difference to the people a charity serves.
But the new study says it would be a mistake to only emphasize those needs.
“Larger and larger gifts will follow if fundraisers become more cognizant about all the different ways that philanthropy can contribute to a philanthropist’s sense of who they are and the meaningfulness they experience in their own lives,” through giving, says Jen Shang, the institute’s co-director.
All of the participants in the study had more than $1 million in liquid assets. More than half had more than $20 million.
For sure, some donors are concerned about the ability of a charitable gift to make the most impact, Shang says. But “for other people, they just can’t live without ballet,” for instance, Shang says, explaining that if a donor’s sense of self is completely intertwined with an effort to support a community dance class, they are likely to be generous, longtime donors even if supporting dance instruction doesn’t easily translate into the impact that supporting health care in a developing country might achieve.
Researchers have long debated why people give. Some behavioral scientists and researchers have suggested that donors get a “warm glow” from doing good. Others may want to signal to wealthy peers that they have the wherewithal to make a big gift. Others may want to increase their public reputations as do-gooders.
Shang’s take isn’t that people give because it feels good; it’s that through their giving they begin to change their view of themselves and identify as being part of a community.
Understanding donor motivation is difficult because philanthropic giving itself doesn’t follow the traditional rules of economics and rational thinking, says Piyush Tantia, chief innovation officer at Ideas42, a nonprofit that uses behavioral science precepts to boost charitable giving. When people give, they expect no return; they do it because it feels good, says Tantia, who had not seen the institute’s study.
But Tantia suggested that the idea that people give because it feels good isn’t enough when it comes to unlocking larger gifts. Then, he says, they need a special motivation and deeper identification with a project to write a big check of hundreds of thousands or even millions of dollars.
“They will never graduate to those bigger amounts until they feel some sense of connection and a real hunger for solving a social issue that they care about,” he says.
Concern About Backlash
But others warn that placing too much weight on a donor’s desire can backfire. Donors who are out of touch with the expressed needs of a grantee can make gifts that don’t fit the needs of the people they are trying to help, says Cat Slack, managing director at Aperio Philanthropy, a fundraising consulting group.
For instance, she says, insisting on naming rights to a building providing social services can result in shaming aid recipients who are reminded of a wealthy benefactor each time they enter the building. Or gifts of things like teddy bears to families who have lost everything in a disaster might make a donor feel good, Slack says, but are likely to cause resentment among recipients.
A good fundraiser should be both “community centered” and focused on how a gift can provide meaning to a donor, Slack says. Grantees who work on social problems are likely to have a better sense of the most pressing needs, she says.
“It’s the job of the fundraiser to translate that expertise to the donor so that the donor can learn about the real problem on the ground,” she says. “It’s also the job of the fundraiser to really get to know the donor they’re working with and to understand where that sense of meaning comes from.”
The Role of Ego
To help make that connection, and ultimately derive more meaning from the gifts they made, donors in the study reported that they had to rethink the role their egos, sense of self-identity, and ownership of a solution played in making a donation. Sometimes making a gift is transformational for donors, who self-identify differently after being exposed to the people they are trying to help, Shang says.
Shang describes this concept as “identity ceding,” or the psychological process in which people willingly change their sense of who they are to achieve the goals of the community that they work with.
To achieve this sort of connection to a gift, “you have to go in as a servant for the community,” Shang says. “You can’t behave like a king.”
