Philanthropy Revolution

SECTOR STEREOTYPES AND LADIES WHO LUNCH

For most donors and fundraisers, the tired old ways of doing things are taking a significant toll. But there are donors out there who enjoy the evening-gown dinners and the ‘wink-wink’ lunches (where a pair of fundraisers seek to flatter a donor over a choregraphed meal and a ‘script’). Often, these donors belong to the old school; they enjoy the social cachet. They also like being part of a world that won’t surprise them, and that makes them feel good about the money they give. Who can blame them?

The ‘ladies who lunch’ have been around forever. But consider this: the report ‘Women and Million Dollar Giving: Current Landscape and Trends to Watch’ found that in high-net-worth households, 84% of women are the primary decision-maker or joint decision-maker regarding investments. Women were also identified in the report as being twice as likely to view charitable giving as the most satisfying aspect of wealth, and also more likely to value their wealth as a way to create positive change.

What About Trust?

I’m not advocating for the sort of change whose big goal is to make givers happy. This is about the charitable funding of worthy causes. With breakdowns in communication and trust, such as the ones I’ve described, the entire sector is in trouble.

A recent Better Business Bureau study found that, although 73% of donors consider trust in organizations a prerequisite for giving, only 19% report having high levels of trust in philanthropies. The numbers don’t lie: we have a serious problem.

Then there is the fact that, at last count, we’ve got $121B sitting in Donor Advised Funds. That this money isn’t getting out to nonprofits might actually be a trust thing too. Donor Advised Funds (or DAFs, as they’re known) give people many of the benefits of giving – among them, serious tax savings as well as the fulfillment of a moral imperative (assuming such an imperative exists) regarding personal philanthropy. But DAFs provide a place for donors to put their money; they don’t actually require this money to be distributed onward to charities. So, for donors who distrust philanthropies, or those exhausted by the tactics of fundraising, DAFs are a bit of a ‘hall pass.’

Organizations themselves can’t afford to trust that big donors will always sustain them, although they certainly sustain them now. In 2015, the most recent year for which IRS data is available, 51.6% of charitable donations in the USA came from households with annual incomes of $100,000 and above. This was up a good 20% from the early 2000s, when giving (and, importantly, wealth) spread more equitably across the population.

It’s estimated that, in the next thirty years or so, as much as $68 trillion in wealth will pass from the Baby Boomers to our younger generations – namely, Millennials. This is a mind-boggling scenario that I’ll return to in the coming chapters. Suffice it to say for now that this transfer of wealth represents real opportunity for the sector, as well as significant risk. Most major charitable gifts come from donors with long-standing commitments to the organizations they support, donors who have been cultivated by fundraisers for years. So, if nonprofits don’t connect meaningfully with the next generations now, they might be looking at losing them entirely. By the time they get on the bandwagon and actually speak to these younger people, it will very likely be too late.

The research shows that, no matter your age, giving small is what leads to giving big. If you’re going to be a major donor at some point in your lifetime, you invariably start off with lesser gifts. Shouldn’t that make us wonder how exactly the sector’s old-fashioned tactics – which often focus on big gifts at the expense (or offense) of smaller donors – will attract new supporters? My worry is that they won’t. Nonprofits will continue to rely, in the meantime, on their older, wealthier donors and these donors will, to put it bluntly, eventually die.

Then what happens? You already know the answer.

But there is hope, and that’s why we’re here. Millennials especially have become incredibly engaged in the public sphere, and they’re demonstrating commitment to the causes that matter to them in new and exciting ways. They’re also already giving at impressive rates – and those that will inherit through the generational handover haven’t even done so yet.

THE OVERARCHING IMPACT OF NEXT-GENERATION DONORS

Here’s some food for thought from Generation Impact authors Sharna Goldseker and Michael Moody:

‘America’s next generation of major donors, whether young Gen Xers or rising Millennials, will have an outsized impact on society and the planet we share, as people like Andrew Carnegie and John D. Rockefeller did in years past and as people like Bill and Melinda Gates and Warren Buffett are doing now – likely even more impact. [They] will decide which diseases get the most research funding, which environmental organizations launch the biggest awareness campaigns, which new ideas for incubation reform are incubated around the country. And those decisions will impact, directly and daily, our health, our communities, our economies, our culture, and even our climate.’

Now That’s a Meeting

As something of an alien on planet philanthropy, I’m awed by what I’ve seen: incredible generosity on all sides, as well as a whole lot of stuff that doesn’t work and that definitely doesn’t support our causes. Because I care and because I’ve got chutzpah, I’m going to continue to call this stuff out. But I’ll also propose a solution. In the coming chapters, I’ll lay out a more humane approach to fundraising that’s supported by research (my own, and that of others) and validated by what I’ve learned in business. I’ll be asking nonprofits to be more upfront in their communications, more authentic in their relationships, and more transparent in their practices generally. I’ll also insist that those readers who are already philanthropists work hard to create a sector that’s less stratified and more focused on cause and integrity.

In the process, I hope to convince you that for every disappointing interaction in fundraising, there exists a meaningful alternative that has a bit of a snowball effect: it increases our chances of delivering measurable impact. Not only do I believe this with head and heart, I’ve witnessed it firsthand. And I’ve talked with so many funders and fundraisers whose positive stories are proof. So, as something of an antidote to all the bad news, I’m going to leave you with one last story before we move on to the next chapter. It’s about an experience that keeps Josh and me going, where the sector is concerned, one that occurred very early in our lives as philanthropists.

We’d just moved into the house I described in my introduction, and I extended an invitation to visit to David Levinson. David is the founder and director of Big Sunday, an amazing nonprofit that connects people who want to volunteer or donate with other organizations that need help. We wanted to explore how Josh and I could make a significant impact in supporting our city’s most needy.

Although it was our first meeting with David, it felt like the second or third. Granted, we went into it with huge admiration for Big Sunday’s mission, that of harnessing absolutely everyone’s instinct to give. But David also came informed. This enabled us to zoom through all the stages involved in the getting-to-know-you portion of meetings.

We knew we were aligned. We didn’t need to conform to the metrics that so many organizations require (those six or seven touchpoints of cultivation, for example, which often feel to donors like ‘prescribed’ communications and outreach – snail mail, email, phone call, event – all designed to get us to give).

The three of us just put it all out there. ‘What do you care about?’ David asked.

I loved the directness of his question, and in response we discussed some of the most pressing needs in Los Angeles, where we live. These were many, what with the country still being in the fog at that time of the 2008 recession. Throughout the conversation, David was engaged, informed, and utterly reciprocal. He didn’t pander, and not once did he pretend that we weren’t talking about a gift.

As we were wrapping up, I put forward what I thought was a great idea. ‘David,’ I said, ‘What if Josh and I were to feed every hungry person in Los Angeles for three months? What would it cost?’

He paused. ‘Let me work on that and get back to you.’

A few weeks later he returned to our home for a follow-up meeting. Again, I asked: ‘What would it cost to feed every hungry person in our city for three months?’ I was convinced at that point that my idea was brilliant.

And David’s response? He said, ‘I’m not going to tell you.’

Then he went on. ‘Lisa, it’s irrelevant. It’s a bad idea because it’s not sustainable. You feed everyone for three months and then what? What happens in month four?’

Okay. I was listening.

David sent us a proposal after that, which included a number of workable options. Among them was something we called the ‘End of the Month Club,’ an initiative so named for the way it would address the high demand experienced at the end of each month by food banks, whose clients have used up all their money at that point, and need help to feed their families. The idea was to engage corporations and institutions, as well as volunteers, to ensure that the pantries would be stocked at exactly the point that the food-insecure need them.

We told David we loved the idea. At which point he gave us a number for what it would cost, assured us we could fund the requisite staffing, and we were sold.

What I appreciated about the interaction, and all the more in retrospect, is that David didn’t come with prepackaged ideas, nor did he present a number that he’d determined in advance. We had a real conversation of substance. He took the time to research my idea but also came up with something better. He gave me a figure based on cost, and not our perceived ‘capacity.’ And, because we’d established a real connection, he was able to tell me my idea was lousy. Not only that, I was able to hear him!

And the result? The End of the Month Club, which we continue to fund, has leveraged our initial donation to the extent that it now collects and distributes many hundreds, often thousands, of food items every month. In addition to the food banks of the original proposal, these items go to nonprofits, schools, afterschool programs, senior centers, vets’ centers, and any place else where people are hungry.

Also, the End of the Month Club has kickstarted multiple initiatives for Big Sunday relating to food insecurity, which together have attracted attention from supermarkets, food manufacturers, and other corporations with a desire to help. Every November, as just one example, the organization gives away more than 30,000 items as part of its popular annual Thanksgiving Stuffing Event.

That’s a lot of goodness, and all of it stemming from a single, straightforward, and humane interaction between two rookie donors and a fundraiser.

Putting the Humanity Back into Fundraising

Something special happened when David engaged Josh and me as thinking, feeling people whose reasons for having the conversation in the first place were not all that different from his own. For me, it’s an ideal model.

It also makes certain things clear. If organizations want to stay relevant, they’re going to have to realize that what’s personal in our relationships – it can’t be faked. Donors see through it. And nor can the ‘professional’ be faked. Donors of all ages want more information about the nonprofits they support than they ever have in the past, and with good reason. We’ll delve into nonprofit governance issues in Chapter Five. In the meantime, I suspect nothing I’ve said in this chapter is particularly earth-shattering. Our best philanthropic educators understand that change is necessary, and they’ve got some great advice about how to embrace it. But the clock is ticking, and while some organizations are ready or maybe even living this change already, many others are nowhere near.

In the most cynical recesses of my heart, I wonder if it’s because the sector’s old guard is getting ready to comfortably retire – at just about the same time as our old donors will pass. After all, if these institutional bigwigs can manage to maintain the status quo, at least for now, they won’t have to deal with the hassle (as well as the enormous complexity) of guiding their organizations into the future.

Yes, innovation and change are inherently uncertain. But it’s high time we did this differently, and started teaching it differently, too. There are so many development professionals out there who can’t wait to deliver substantial change to the sector, but who are also very reasonably afraid that, if they don’t make their targets … well, programs get cut, employees get fired; at worse, beneficiaries suffer.

It doesn’t have to be that way. In the coming chapters, I’ll share more of my story, and integrate the wisdom and experiences of my peers: donors, volunteers, nonprofit professionals, and academics from the Lilly Family School of Philanthropy, the College of Civic Life at Tufts University, and elsewhere. I’ll also offer actionable advice that will help chart the way forward for all of us.

Wouldn’t it be great to get to a place where organizations trust donors enough to be transparent, and donors trust organizations enough to let them lead? That place is where we realize that we want the same thing: organizations that are as effective as they are visionary, and outcomes that change the world.

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