Abstract
You would think that the Great Wealth Transfer (GWT) would be causing a serious rethinking, if not a jettisoning, of traditional fundraising assumptions, emphases, and practices. After all, the GWT constitutes a singular philanthropic “moment,” a 10- to 15-year period in which the largest, wealthiest generation, the one that holds half of the nation’s wealth, will pass on its assets, mostly to designated heirs. While only one-seventh is estimated to be bequeathed to nonprofits, it’s a huge sum, $13.8 trillion.
Philanthropy-seeking organizations will never see a larger tranche of philanthropic dollars or a generation as loyal to nonprofits organizations.
James M. Langley
Further, when baby boomers pass on, there will be nothing like them to follow, not in terms of assets or inclinations. The most generous of them have been giving larger and larger gifts that have masked a larger, ongoing loss of donors.
According to the Lilly Family School of Philanthropy, “A two-decade-long drop in Americans’ participation in charitable giving accelerated during the first year of the COVID-19 pandemic, even as the average amount given by donors increased.” The most recent report by the Fundraising Effectiveness Project shows that decline continuing in 2025.
You would think responsible powers-that-be would know these facts and conclude, “We’d better make hay while the sun shines, and we’d better lay a lot of that hay in store to get us through the lean years that will follow the GWT.”
Yet, it appears that too few know of these facts and even fewer are mobilizing in response to them. Too many organizational nonprofit leaders look at one metric: Did we raise more dollars this year than last? If so, all must be OK, even if more is coming from fewer people with fewer years left on this planet. In addition, more and more is coming from “realized bequests” or, as they say in Plainville, dead donors. And that will be increasingly true with every passing year.
The most likely source of estate gifts is those who have given to your organization for 20 years or more. Therefore, it behooves organizations to pay much more attention to loyalists with decades of giving under their belt, irrespective of the amount they have given in any particular year. A case in point: One of our clients, Northwest Oklahoma State University, recently reported receiving a $1 million bequest from a donor who had given only a few thousand dollars over the course of his lifetime but gave for 40 years. Similar examples are popping up all over the country.
Here’s how nonprofits should respond:
In determining prospect viability and priority, nonprofits should place greater emphasis on the number of years of giving than on the amount contributed in any given year. Put another way, the donor who has given modestly for 30 years should be considered a more viable prospect than one who has given more generously but only for a few years.
Nonprofits should give loyal donors much more attention.
Nonprofits should place much less emphasis on the technicalities of estate giving, including various trust instruments and their benefits to the donor.
Loyal donors, therefore, should be spread across all fundraising portfolios and not just assigned to planned giving specialists. All fundraisers should be trained in the basics of estate giving.
All human resources within a nonprofit should be mobilized to engage loyal donors. These human resources include board members, volunteers, and other individuals within the organization who are natural listeners.
Nonprofits must better understand:
The GWT is not a tide that will wash evenly across all of our organizational shores. It will seek out selective coves and inlets and favor those places that have sustained the largest cohorts of loyal donors of 20+ years and/or those places that most clearly demonstrate agency, i.e., the ability to convert contributions to society’s most vexing problems and most tantalizing opportunities.
It will be about a transfer of values. Those values will include:
◆ What donors believe to be the most important lessons taught to them by their life and/or their career
◆ Where they found their greatest joy, peace, and meaning in their inner spiritual life
◆ What they want to preserve or make possible for their children and grandchildren
◆ Social mores and principles that they think are most important to preserve and perpetuate
The way donors made their money will greatly influence the way they give their money. Scions of family wealth may favor institutions that have been part of their family for generations, while entrepreneurs may favor upstart start-up organizations that embrace innovative and disruptive practices. Those who made their wealth in the corporate world may give to organizations that approach their work in much the same way, while small business owners may gravitate toward organizations that build the communities that their companies depend on.
If more organizations are to make more of the GWT, they’ll need to shift their lens from:
◆ Dollars raised annually to donors retained year over year
◆ Asking donors to give to an organization to demonstrating that donors can give through an organization to effect social change
◆ Relegating fundraising to a small advancement arm to delegating more constituency-building responsibilities to the whole organization
◆ An emphasis on pitching and promoting organizational virtues to celebrating the virtues of their most loyal donors and exploring ways they might be passed forward to coming generations
Now is the time for more organizations to think in terms of grand listening exercises, including:
◆ Instituting annual stewardship interviews for their most loyal donors
◆ Conducting donor satisfaction surveys for those with whom they have inadequate resources with which to interact personally
◆ Inviting loyal donors to review sessions or focus groups during which important pending plans can be vetted before they are deemed ready to implement
◆ Making all events more intimate and conversational and establishing a simple goal of making sure every donor in attendance is heard
Along the way, nonprofits will learn some important lessons that will strengthen the viability and perceived relevance of nonprofits, including:
◆ Fundraising is only as effective as the community is receptive to it.
◆ Community, and the shared purposes it represents, is built with dialogue, not promotions and pitches.
◆ Listening reveals where donor receptivity is weakening and how it can be strengthened.
◆ To feel in community with a nonprofit organization, donors want to believe that the nonprofit and its leaders have great integrity. They also want to feel as if they belong and benefit from interactions with likeminded fellow supporters, and that through the giving of their time, talent, and treasure, they are bettering themselves and their community. (Increasingly, donors are saying if it isn’t clear how an organization is bettering or improving the community, they won’t believe in its claims or want to belong to it).
◆ That fundraising results have much, much less to do with what fundraisers do in any given year and much more to do with the relationships an organization builds and deepens over decades.
The Great Wealth Transfer will demonstrate the power of lasting donor relations, even for nonprofits that under-invested in them. Surprising estate gifts will come from quiet, unassuming donors who ask for little attention. But much more is possible if more nonprofits invest more. More resources should be allocated to listening to those who hold half the nation’s wealth. We must show them how the meaning of their lives can be extended long after their passing.
Know Someone Interested in Planned Giving Today?
Call for prices on institutional and multi-year subscriptions.
Planned Giving Today®
Mary Ann Liebert (NY), LLC
140 Huguenot Street, 3rd Floor
New Rochelle, NY 10801-5215
Phone: 800.654.3237
Email:
Web: