Bank of America Corp. has done just that – and is sharing their results with us all.
Their Study of High Net Worth Philanthropy, which comes out every two years, is a treasure trove of clues to major donors.
This study gives us unique look into the motivations, inclinations and attitudes of your most important donors.
Here’s the thinking of 800 wealthy donors from around the US.
Their average wealth is about $10.7 million, and they gave over $50k in 2009. What a gold mine!
These donors are becoming more sophisticated and strategic. They are checking you out carefully.
Here are the lessons we can find in this study:
LESSON 1: Continue to Focus on High Net Worth Prospects
High-net-worth households account for about 2/3 of all individual giving in the US, according to the Center on Philanthropy at Indiana University, which co-wrote the report.
These individuals think that nonprofits can better solve local and global issues than business or government. They have confidence in our expertise and good works.
This is a huge deal. Play it up. Tell your story of why you can do such a terrific job.
Lesson 2: Show your high dollar donors how their gift will make a difference.
Your wealthy donors really, really want to be sure you will make an impact with their gift.
They are more risk adverse in their philanthropic investments than they are with their personal investments.
Can they trust you? Yes, they can!
Set up a web page or send them a letter that says “Your Gifts At Work.” They will love it!
Send them a note that says, “Here’s the story of Betty Smith and how your contribution changed her life.”
Send a newsletter that tells the story, in pictures more than words, of the difference your organization makes in the world.
Lesson 3: Show them that their money will be spent effectively.
Wealthy donors are adamant that nonprofits demonstrate sound business practices and offer full financial transparency.
Give the data to them that they want!
Include pie charts on sources of funds and another chart on uses of funds. Talk about your administrative overhead numbers openly, and say what you are spending money on.
Talk about your financial decisions and why you make them.
Find out their individual motivations, preferred ways to give, volunteering interests, involvement interests. This can be the key to their gifts.
The wealthy are educating themselves more; so you better research them.
They are seeking to understand nonprofits’ needs. Be sure you understand theirs.
Lesson 5: Ask them for operating support – but do it carefully.
A full half of wealthy donors said their largest gift last year was for general operating support.
So ask. But be sure you talk about why this money is needed and how it sets up the rest of the organization for success. Be sure you make a clear case.
Donors in this study said they want their organizations to spend appropriately on overhead costs.
Be sure you justify yours. Don’t gloss over them.
LESSON 6. Communicate to wealth advisers, lawyers, and CPA’s.
The very wealthy said that they are referring to wealth advisers now more than ever.
Studies show that donations have increased dramatically to private foundations, trusts and donor advised funds.
These donors are planning their giving. They are making major gifts part of their financial planning.
If the money is going there, follow it! Make friends there!
LESSON 7: Get your wealthy donors to volunteer.
The wealthy said they are volunteering more (39%).
And, studies show that the wealthy who volunteer gave more money than those who did not.
Across the board, donors are getting more involved in the causes and organizations they support.
If they volunteer, you’ll win!
The wealthy are involving their spouses and their children in their philanthropic decisions, including their grown children.
Since you’ll be dealing with the younger generation too, be sure you’re prepared for the types of much more specific questions younger donors might ask.
LESSON 9: Don’t over solicit.
The #1 reason the wealthy stopped giving was because of over solicitation or inappropriate amounts requested.
Be SURE you don’t ask too often or for inappropriate amounts.
Just because they CAN give it doesn’t mean they are cultivated and prepared to give.
Tread lightly and you’ll be glad.
All in all, treat your major donor prospects like family.
Treat them with respect.
Answer their questions openly. State your case clearly.
You’ll be rewarded.
Do you agree? Or not?
Leave a comment and tell me why!