What do we know about major donors at the start of the 21st century?

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1 What do we know about major donors at the start of the 21st century? Dr. Beth Breeze Centre for Philanthropy University of Kent What are major donors and major gifts? Major donors are individuals who make sizeable personal contributions. Major gifts are those that are large relative to the majority of the gifts the organisation receives, therefore the exact definition varies from one charity to another. Donors will have their own perspective on what constitutes a sizeable/significant gift for them personally at any time. (Sargeant & Jay 2004, p.158)

2 Why are major donors important? Freedom to give as they choose Unlike corporate and foundation giving, major donors are free to give as much as they want, to whatever they choose, whenever it suits them. They are not restricted by giving policies, time-frames or committee judgements. Surplus wealth makes giving decisions easier Unlike non-wealthy individuals, they give out of surplus wealth, rather than sacrificially. They may already have earmarked money for donations (e.g. in a personal foundation) so only need to make a 1-step decision about what to support, rather than a 2-step decision about whether and what to support. They can offer more than money Major donors usually have extensive useful contacts in their professional and personal lives, so they have additional value in introducing new prospects and acting as ambassadors for the charity. Drawbacks of major donors Large investment of time and resources in cultivation with uncertain outcome. Ongoing investment in stewarding the relationship. Potentially excessive influence on the charity s mission and programming. Crowding-out of other donors who assume the charity does not need further support. Yet Major donors have the potential to transform a charity and remain the holy grail of fundraising.

3 Who are the major givers? The research identifies various socio-demographic characteristics (older, male, conservative, religious etc) but difficult to isolate these factors from the being asked factor. However, three factors are essential: 1.Ability sufficient liquid wealth. 2.Linkage sufficient connection to the cause or charity, usually through personal experiences. 3.Interest sufficient passion about the cause or charity. US studies of major donors 1. Study of Wealth & Philanthropy (Schervish & Havens) Interviews with 130 millionaires in 10 metropolitan areas Philanthropists are Hyperagents = the enhanced capacity of the wealthy to establish and substantially control the conditions under which they and others live (2000, p.20) Philanthropy is part of the effort undertaken by rich people to write their biographies, which are the, narrative procedures they [use to] explain possible for them to be rich and good at the same time (1994, p.167) moral how it is

4 US studies (continued) 2. Theresa Odendahl and Francie Ostrower Odendahl interviews with 140 millionaire philanthropists Ostrower interviews with 99 wealthy donors in New York city Both conclude that the prime purpose of philanthropy is to support elite culture: Philanthropy is essential to the maintenance and perpetuation of the upper class in the United States non-profit activities are the nexus of a modern power elite (Odendahl 1990, p.4) Donors derive personal prestige from association with institutions that are prestigious in the eyes of their peers (Ostrower 1995, p.90) US studies (continued) st Century studies Philanthropy carries with it the idiosyncratic stamp of that donor s intent [because they] give from a spirit of passionate concern about something meaningful to them Philanthropy has both public and private functions, enabling communities to solve problems and allowing individuals to express and enact their values (Damon 2006, p. 3) (Frumkin 2006, p.21) Reasons for making large donations vary from the purely altruistic to the self-serving, and include a large grey area where the two blend [But] one over-arching motivation remains paramount for most donors, the desire to create a vehicle for promoting largescale, lasting social change (Fleishman 2007, p.35 & p.39)

5 UK research into major givers 1. Belief in the cause 2. Being a catalyst for change 3. Self-actualisation 4. Duty and Responsibility 5. Relationships (Theresa Lloyd 2004 Why Rich People Give. London: Philanthropy UK [New philanthropists] are individuals, still in the prime of life, who have been successful in their chosen careers, made money, sometimes a lot of it, either in business or in their profession. Having made enough for their own needs they now want to use their money, their skills and their abilities to get things done to create something transparently useful in society. They talk of making a difference, of giving something back, but they aren t satisfied by writing cheques to worthy causes, valuable though such charity can be. These people want to be in the driving seat because that s where they belong (Charles Handy 2006, p.8-9) A new age of philanthropy is revealed (Sunday Times Rich List 2008) Year Total Donations Percentage of wealth given by donor ranked 30 th most generous million 0.59% million 0.68% million 0.89% billion 1.36% billion 3.00% billion 4.5%

6 Who are the New Philanthropists? New types of donors younger, richer, self-made, cosmopolitan lifestyle. New types of causes emerging issues such as global health problems and climate change. New ways of giving strategic philanthropy, venture philanthropy, high-engagement philanthropy, demanding targets, leverage, performance indicators and measurable outcomes. The 8 Logics: a typology of UK philanthropists Salvation Seekers (17%) Give to projects that benefit members of their own religion. Agenda Setters (17%) Predominantly fund projects abroad, usually humanitarian, human rights and the environment. Big Fish (17%) Strong local dimension to giving, support causes & people where they live or have business. Kindred Spirits (16%) Support projects that benefit people like me, similar class background, life experience or trade. Patriots and Players (14%) Give to establishment institutions, especially historic organisations and causes favoured by royalty Culture Vultures (10%) Major focus of grants is the cultural sector - visual arts, performing arts, museums, galleries etc. Big Brands (5%) No pattern discernible beyond recipients being primarily well known or big brand charities Secret Operators (4%) Provide absolute minimum legally required information about their giving.

7 Million Pound Donor study 1. Major giving is Transformative for donors and charities We want to know what the organisation will do in a really big and meaningful way that it wouldn t have done otherwise Jamie Cooper-Hohn, 2008 report These donors make it possible for us to do things that we wouldn t otherwise have considered Red Cross, 2009 report Receiving a million pound donation has taken us to the next level TreeHouse charity, 2009 report Million Pound Donor findings (cont.) 2. Desire for personal engagement I ve had an entrepreneurial career and I m used to getting involved in projects by investing time and effort as well as money. In all these cases it wasn t just a case of signing a cheque but of being personally involved as a family, because we prefer to make a contribution that s about more than just money. Martin Smith, 2009 report We work shoulder-to-shoulder The ongoing, close, strategic engagement has provided opportunities for learning and and lifting our sights to achieve ambitious aspirations International development charity, 2009 report

8 Million Pound Donor findings (cont.) 3. The enjoyment of giving and getting major gifts A Community Foundation s first Million Pound Donation Being on the receiving end of a multi-million pound donation gave an enormous boost to everyone involved in the appeal, especially our volunteers. It was overwhelming and lifted our spirits to see that many noughts Canterbury Cathedral, 2008 report How are major donors viewed? I am afraid of the media, it s always negative They have great power and there s no right of reply Journalist decry giving. They enjoy digging the dirt. The press can be very hurtful Why are the media nasty?... They are snide and they pander to jealousy (all quotes from Theresa Lloyd 2004 Why Rich People Give ) Adjectival analysis of all 2006 UK print media coverage of philanthropy Positive Great, Renowned, Eminent, Legendary, Remarkable Neutral Rich, Well-known, Scottish, Catholic, Industrial Negative Ruthless, Philandering, Dickensian, Tax-ruse, Coutoure-clad

9 Money-making isn t meaning-making Philanthropy grows out of the donor s sense of identity [Philanthropists wish to leave] footprints in the sand of time Francie Ostrower (1995) Why the Wealthy Give People are engaged in a search for meaning, and giving, over time or in significant amounts, occurs when it helps people achieve one or more of their needs for meaning Donald Ritzenhein (2000) How Do You Motivate Donors? With financial freedom, individuals no longer need to focus on wealth-building. Rather they move to a higher level of personal introspection, which relates to their life s purpose and calling. Randy Ottinger (2008) Beyond Success Concluding thought Mega givers are captivated by the opportunity, the challenge, the magic of being able to do something special There is no such thing as a shortage of major donors. There is only a shortage of great ideas to raise money. A desperate need for visions and dreams Jerold Panas (1984) Mega Gifts: Who gives them, who gets them?

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