One of the biggest issues in fundraising today is nonprofits’ growing reliance on wealthy philanthropists — and those donors using their power to try to control how organizations operate. Fundraisers tackled the problem head on in many sessions at the Association of Fundraising Professionals ICON conference, held April 7 to 9 in Toronto.
Nikole Hannah-Jones set the tone in her opening keynote session. The Pulitzer-prize winner, now a professor at Howard University, discussed how a wealthy donor derailed her offer of a tenured position at the University of North Carolina at Chapel Hill.
“What philanthropy does is it allows very wealthy people … to determine what will be funded, what won’t, and how,” Hannah-Jones said. “That’s a problem.”
Hannah-Jones said wealthy donors “who have never lived in your community, never known your struggles” often fund ill-advised projects that don’t work because the funder decided on solutions rather than listening to the people in the trenches doing the work.
“There are more ethical ways of meaningful philanthropy,” Hannah-Jones contended, citing MacKenzie Scott’s giving. She said it’s important for donors to give to communities and trust the experts in those communities to create solutions.
Wealthy donors’ outsize impact on philanthropy emerged in multiple sessions throughout the event. Fundraisers discussed ways to ways to expand the donor base so nonprofits can reduce the risks of being overly dependent on a few wealthy donors. Other hot topics at the meeting were the ways that artificial intelligence will impact fundraising and the importance of building stronger relationships with donors.
How to Broaden Your Donor Base
Organizations have to expand their focus as they seek support, said Erik Daubert, a faculty member at the Lilly Family School of Philanthropy, who recently completed research on the massive impact major donors have on nonprofit budgets.
“If you want your nonprofit to go out of business in the next five years, just do major gifts,” he said. He argued organizations that focus mainly on big gifts can run into problems like the donor revolts that hit college campuses last year: One donor walks away and there is no pipeline of new donors to tap.
Throughout the conference, panelists stressed that organizations need to expand their donor pools so they can build a steady stream of funding. Fundraisers who work with different religious groups offered advice on being inclusive of those donors’ traditions in appeals.
For example, in the Jewish faith, it’s not uncommon for people to send contributions in memory of a recently deceased person, and the anniversaries of deaths are extremely important, said Ann Rosenfield, chief development officer of the Temple Sinai Congregation of Toronto. To marry these points, she suggests tallying the information about all the gifts received in honor of the deceased person and sending the family a note on the first anniversary.
“It would be reasonable,” she said, “to go to a family and say, ‘We received $2,948 in memory of your loved one. Would you like to top it up and make it $5,000?’”
Understanding the faith can help fundraisers make better connections. Similarly, in a session on how to reach donors of color, three Black fundraisers said it’s important to have staff and leaders who look like the donors you’re pursuing. It’s a challenge to get donors to feel invested if they don’t see anything “that represents them in that organization,” said Anna Barber, who runs her own fundraising firm and previously worked as a fundraiser for the Smithsonian.
A.I.’s Impact on Fundraisers and Donors
With ChatGPT and other generative artificial-intelligence tools storming into the market, there was lots of talk about how fundraisers can use the tools in their work.
One organization uploaded donor data to A.I. that had been stripped of personally identifiable information and instead used the organization’s internal control numbers to score donors based on past gifts to see who would be most likely to give in an upcoming direct-mail campaign, said Charly Jarrett, a digital-giving specialist at the technology company Fundraise Up. “They mailed to way less people by just targeting the people that had the higher score,” she said. “They had a 26 percent uplift in income and 35 percent increase in campaign ROI.”
While many fundraisers are thinking about how they can use A.I., it’s also important to consider the ways A.I. could change how donors interact with nonprofits. Charles LeHosit, director of solution engineering at Fundraise Up, said some email programs are integrating A.I. that summarize emails for people. If the feature becomes popular, that means the well-crafted appeal emails fundraisers send might be reduced to a one-sentence summary saying a charity wants you to give money, LeHosit said.
“Over the next year, two years, five years, technology might be developing so quickly that we don’t know how to reach people like we used to,” Jarrett said. She encouraged nonprofits to be on the lookout for changes in responses that might be caused by donors using technology in a different way.
For example, Jarrett said some people use ChatGPT instead of Google to find answers to their questions. She’s done sample queries, asking A.I. tools to tell her a good local animal shelter she can donate to. “We’ve noticed that they are generally recommending things that are on Charity Navigator, CharityWatch, or Charity Intelligence Canada,” Jarrett says. While she only did a few sample queries, she recommended charities use some of these A.I. tools like donors might to ask similar questions and see what results pop up. If your charity isn’t among the A.I.'s response, try to figure out what the charities the tools recommend have in common.
Building Stronger Ties With Donors
While expanding the donor base is important, so is holding on to donors, and that is done by helping them feel connected to the charity through thoughtful communication and building authentic relationships, said Mallory Erickson, a fundraising consultant.
“Sustainable fundraising practices are really different than quick money in the door,” she said. Many nonprofits say they don’t want to be transactional, but the only metrics they keep are those related to how much money a fundraiser brought in. “We say, ‘Don’t be transactional,’ but we’re only watching the money. We need to think about how we can demonstrate ROI in terms of other metrics beyond the money.”
Similarly, organizations care too much about the donor’s last gift rather than keeping that person invested in the organization, said Cherian Koshy, a member of AFP’s board and vice president at the tech company Kindsight. Most organizations, he said, stop communicating with donors who haven’t given in 24 months, but that’s shortsighted because those donors still want to hear from the organization and feel connected to it.
“The data is really, really clear,” Koshy said. “You are losing an inordinate amount of money, a gigantic amount of money, because you stopped communicating with them.”
True communication that keeps donors in the loop can keep them invested in the organization and perhaps lead to larger donations. And if donors who give large gifts have bad ideas — as Hannah-Jones alluded to in her keynote session — good communication will help fundraisers get donors on the right path.
“What our donors are looking for is connection, which involves allowing ourselves to be vulnerable and honest and having hard conversations, like the moment somebody says, ‘Oh, I want to give you a donation for this thing that is not actually valuable,’” Erickson said. In an inauthentic relationship, a fundraiser would simply accept the donation.
However, the conversation would go differently in an authentic relationship. “You can say to them, ‘Hey, that’s not what moves the needle here. I know you care so deeply about our work, and I love that. And I know that your intention around this is to make that impact. But I think our relationship is deeper than that, where I can tell you the truth,’” she said. “Those are the conversations that build trust. That’s what builds partnership.”
