Study: Wealthy donors who love the arts but aren't giving money to the arts

Mary Glanville of the Institute for Philanthropy, Stanford Social Innovation blog, 7/19/13

In compiling our new paper, "Giving Behavior of 22 Wealthy Donors," we put a series of questions to donors in our own global network (none are signatories of the Giving Pledge). They average an annual philanthropic spend of $2.1 million, from personal wealth or endowments averaging $79 million. Half of them decided to give away up to 25% of their wealth to charity. Leading causes supported -- both in their own geographies (including the UK, the US, Brazil, Lebanon, Mexico, and Canada) and cross-border -- were unsurprising: education, children and youth, community re-generation, and the environment, plus information and communication technology for development. Four strategic trends among these donors emerged from the report:

1. None gave money to the arts. Instead, these donors give to social issues they view as more pressing, often ones abroad. One donor said, "I generally believe in addressing the needs of the underserved poor in the neediest parts of the world ... not the arts or environmental needs so popular among donors here at home, as much as I love [symphony, opera, and ballet] personally."
2. Proactivity and personal engagement beat bureaucracy. One donor remarked, "I strongly believe that philanthropy can be more effective when driven by the wishes and strategy of a living donor. Long-lasting philanthropic institutions can become sclerotic and bureaucratic -- not always, but often."
3. Empowerment of others through risk-taking. Donors are open to providing seed capital for initiatives, as opposed to waiting for a later, and safer, entry point. Conscious of the multiplier effect, they are keen to support individuals working in non-traditional areas, as well as funding established projects through NGOs.
4. Partnership and collaboration between stakeholders is essential. One donor made this especially clear: "Partnership: The more that we (civil society, philanthropists, NGOs, and activists) can work together toward a cause, the faster we can move the needle.

Arguably the greatest inter-generational wealth transfer is about to take place. In light of this, nonprofits should feel heartened that philanthropists recognize the need for effective investment now. While the focus remains on efficacy and urgency, our research shows that these donors prioritize engagement at a personal level; they aren't adopting a purely technical value-for-money approach to impact. The social sector can gain even more if nonprofits take on a greater role in encouraging and helping donors work together.

Commentary: "Generosity Networks are the next great frontier in philanthropy"

Jeffrey Walker, posted on Linkedin.com, 7/18/13

114 billionaires from around the world who have signed the Giving Pledge meet a couple times a year to find ways to share information and ideas with each other. But several signers I have spoken to are looking for more. They want to know how they can partner with other individuals, foundations, non-profits and government agencies to have the most significant impact. Generosity Networks are the next great frontier in philanthropy. Unfortunately, there are barriers:

• Fear [of being] inundated with solicitations they will have to filter
• A plethora of activist groups, many apparently in conflict with one another
• Lack of consistently reliable tools to find potential partners
• The "quid pro quo" of giving. If I ask someone to give then they will expect me to give when they ask no matter what the cause.

What can we do to help lower those barriers?

• Identify honest brokers who can bring people and organizations together
• Create common measurable goals that unify different groups focused on key causes
• Set up social enterprises that have goals focused not just on their own success but in bringing together others for unified success

Some preliminary steps to create Generosity Networks are already taking place. There are thousands of wealthy individuals from around the globe, who may not be wealthy enough to be among the 114 pledge signers, but who are also very interested in giving back in an impactful way. However, these connections are still in the stage of large groups listening to speakers and moderated panels; candid, open, connective conversations among the donors themselves are only beginning.

Commentary: Are you making the "second ask" of your donors?

Joe Garecht of The Fundraising Authority on npEngage.com, 7/16/13

As nonprofit fundraisers, we like to think of fundraising as a very linear process.  First, we find a new prospect.  Then, we cultivate that prospect.  Finally, we make an ask, either for the annual fund, a campaign we are running, an event sponsorship, or some other opportunity.  Hopefully, if things go well, that donor will donate again next year, perhaps even upgrading their gift level. Then, it's off to find the next prospect and repeat the whole process. If this is the way your nonprofit thinks about fundraising, you probably spend a lot of time wondering why you can never find enough prospects to fill your pipeline.  Your nonprofit, like many others, is missing a key ingredient in the fundraising formula: The Second Ask -- for referrals.  Nonprofits intuitively know the power of referrals.  That's why so many organizations spend so much time asking their board members to set up meetings and provide names for fundraising.  Yet very few non-profits take this knowledge to the next step, by asking donors who are not board members to refer new prospects. Making the second ask need not be stressful or difficult.  Remember, you are speaking with a donor who supports what you are doing so much that he has financially invested in your success.  There is a high likelihood that, if cultivated correctly, he will now be happy to introduce his friends and colleagues to your work. Approach the second ask the same way you approached the first.  In order to be successful, the ask must be direct (no wishy-washy, "we'd love to meet your friends" language), concrete (you have to ask for something specific, such as a phone call introduction or for the donor to invite her friends to an introductory event) and the ask has to be a question, not a statement.

Commentary: To cultivate more major donors, get rid of fundraisers' offices?

Michael Rosen on his blog, 2/1/13

The way to [raise] more funds is not complicated: Get out from behind your desk more often. During a seminar at an Association of Fundraising Professionals chapter conference, the director of development for a regional theater asked: 'Could I have some of our repertory actors cultivate our major donors?' The presenter asked, 'How many major donor prospects do you have?' The answer was 50. The presenter suggested [scheduling] appointments with the donors and plan on bringing one of the actors with her. The director of development exclaimed, 'I don't have time for that! I was hoping that the actors could go out on their own.' The presenter responded, 'If you visit with only two major donors per week, you will have seen them all within six months. And, not only will they have been cultivated by having the chance to interact with one of the actors, you will have developed a relationship and, in the process, learned more about the donor's interests and philanthropic abilities. What could possibly be a better use of time?' At one major university, senior staff thought the major gift professionals were spending too much time in their offices and not enough time meeting with donors and prospects. So the Vice President replaced the individual offices with a bullpen of unassigned desks. Most of the team got the hint and spent more time off campus. Others quit and were replaced with new staff who understood their role. The result: the school raised more money than ever. I'm not suggesting you need to get rid of your desk. I'm just saying you need to get away from it a bit more often. But maybe you're not a major gift person. Maybe you feel comfortable behind your desk because you're responsible for direct mail campaigns. Guess what? You can still benefit by getting out and talking with your donors and prospects. They can give you great stories you can share in your appeals. They'll tell you what they like and don't like about your fundraising letters. They'll tell you why they support your organization. They'll give you useful insights that will allow you to enhance your appeals.