In the minds of Major Donors……

I am always intrigued about what goes on in the minds of Major Donors and what makes them tick, and ticked off! This is a great piece from Third Sector that talks to 3 well known major givers, interestingly they all prefer to work through their own foundations (what does that say about what we do and how we are set up?). Reading the article I was struck with how a like they really are to every other donor we have, and why wouldn’t they be, just because they have a few extra 000’s in the bank! They like to know whats happening their money and they really like to be thanked.

James Caan, Sara Davenport and Alec Reed: Inside the minds of major givers

By Kaye Wiggins, Third Sector, 22 February 2010

They like to know how their money is being spent, they like to be thanked and they don’t like waste. Kaye Wiggins interviews three leading philanthropists and compares and contrasts how they do things

Charities and philanthropists should be the perfect partners: philanthropists have the cash and the desire to change the world; charities have the tools with which to do it.

In reality, however, relations between the two are rarely so straightforward. Wealthy people have often made their fortunes by keeping a close eye on how their money is spent and are reluctant to give it away with no control over what happens to it.

For their part, charities are often nervous about approaching major givers, many of whom choose to keep a low profile because they’re uncomfortable with publicity or worried about getting inundated with requests.

The three philanthropists interviewed below have a lot in common. All have set up their own charities and none is a regular giver to charitable organisations other than their own. They also share an interest in making sure donations are spent effectively and have an impact at the grass roots. Although they are not necessarily against charities spending a lot on fundraising and administration, they share the sentiment that donors’ money shouldn’t be wasted on spending that isn’t vital.

They also have bugbears about how charities work. Whether it’s being stopped by chuggers, overcharged for black-tie events or not properly thanked, they are sometimes annoyed by the way charities approach them.

But they are broadly sympathetic to the work of charities and, although they aren’t regular givers, they offer time, expertise and, where possible, publicity to the charities that grab their attention.

The philanthropists also share with other donors a desire to be thanked – and even flattered – by the charities they support. Reed says he gets excited when he is asked to become patron of a charity he has supported, acknowledging that it’s a clever move by the charity because it doesn’t cost a penny.

But there are also big differences between the philanthropists. Caan and Davenport are motivated to support charities by a personal connection to the cause area: Caan chose The Big Issue because of a belief in self-help and entrepreneurism, and Davenport focused on cancer because of the illness of her children’s nanny. But Reed’s approach is much broader: if a charity is smart, efficient and businesslike, it wins his approval – as long as it’s not a religious charity.

Charities hoping to get a philanthropist on board would do well, it seems, to start by understanding what that person values, in both business and personal life. And once you do understand them, says Reed, you should be “intelligently close” to them. “Treat major givers as you’d treat a friend,” he says. “It’s fine to contact them regularly, as long as they’ve got time for it. But if they go quiet for a while, don’t forget about them – you should still find a way to show them they’re appreciated.”

“I’M NOT IMPULSIVE” – JAMES CAAN

Caan became famous as one of the ‘dragons’ in the BBC series Dragons’ Den. He founded the private equity firm Hamilton Bradshaw, the recruitment company Alexander Mann and the headhunting firm Humana International. He runs his own charity, the James Caan Foundation, which operates in the UK and Pakistan. He was appointed chair of The Big Issue in December last year.

I give my money away through my own foundation, so I don’t tend to donate money to other charities. Like my businesses, my foundation has a very focused approach: it concentrates on education and it funds the running of a school in Pakistan. So the support I give to other charities is expertise rather than money. I’m on the NSPCC’s fundraising committee and I’ve got some big ideas for expanding The Big Issue internationally. Usually, I choose to support charities because of their cause. With The Big Issue, it’s about entrepreneurship. With the NSPCC, it’s because I have children, so the cause resonates with my own life. I’ve also supported Marie Curie Cancer Care because I’ve seen how much the charity has helped people close to me who have suffered from cancer.

Professionalism also has a big influence on me when I decide which charities to support: I think charities should be run like businesses, and I’d be more likely to get involved with a charity that was professionally run. But that doesn’t mean wasting money on running its own organisation at the expense of the cause. It means finding innovative ways to cover costs, such as investing in property and using the rental income to fund the organisation.

I’m not an impulsive donor. I don’t give money to charities whose campaigns catch my eye: my giving is part of an overall strategy. If you do it any other way, you end up giving lots of money to lots of people and you don’t know whether it makes any difference. I like to be closer to the cause than that. Philanthropy is an important part of my life, and I’m spending more time on it now than I ever have before.

“IF IT TOUCHES ME, I DONATE” – SARA DAVENPORT

Davenport, who used to own an art gallery, set up the charity Breast Cancer Haven in 2000. It provides support, information and complementary therapies to breast cancer sufferers and runs centres in London, Hereford and Leeds.

I never intended to set up my own charity; I would have been happy to give my money to the ones that were already there. But the terrible experience my children’s nanny had when she suffered from breast cancer convinced me that a new solution was needed.

She wasn’t given proper information about treatments and the services charities offered her were scattered and tiny. I decided there needed to be one centre in which a range of services for breast cancer sufferers were available under one roof.

I contacted all the breast cancer charities, thinking that if I offered to give them the money, they’d set up a centre. But they weren’t interested. I knew nothing about charities or breast cancer. But I knew that I’d be deeply distressed if a member of my family had a similar experience to that of my nanny. And I knew that I had to do something. I sold my paintings at auctions and I launched a fundraising campaign that raised £1m in a year.

Since I opened the charity, it’s grown quickly. If someone approached me now, offering to give us money for a specific project in the same way that I did years ago, I’d listen.

I give to other charities quite randomly. If a particular appeal touches me, I donate. I like Zane, the Zimbabwe crisis charity, because it’s small so the money goes directly to the cause.

The thing that annoys me the most about charities is chuggers. Getting accosted in the street upsets me because it’s so invasive. When it happens to me, I tell myself I’ll never support that charity again. Cold calling is the same. The way to get me on board is with good literature; direct mail that is emotive and tells me a story will catch my eye. If it doesn’t, I’ll just throw it out.

“I MAKE SURE THEY SPEND THE MONEY WELL” – ALEC REED

Reed set up the recruitment firm Reed in 1960, when he was 26 years old, and later established the firms Inter-Company Comparisons and Medicare. He founded poverty charity Ethiopiaid and Women at Risk, which helps vulnerable women. He also set up the Reed Foundation and the donor information website The Big Give.

When I sold the medical firm Medicare for £20m in 1986, I got £5m of it personally, so I set up the charity Ethiopiaid and invested £1m in it. I like to make the pound work. I gave £1m to Ethiopiaid 20 years ago, and it’s sent £25m to Ethiopia since then. That’s why I set up The Big Give’s match-funding challenge, which gives match funding to charities that meet targets they set. It makes charities work for their money and it rewards fundraising departments that are on their toes. It’s democratic and it lets people decide where our money goes. The only exception is that religious organisations such as churches and synagogues can’t be part of The Big Give. I’m not religious, so I don’t include them.

Fundraisers are the nicest people on earth, but they do things that annoy me. When a charity to which I’ve donated large sums calls me and tries to sell me a ticket to a fancy event for a few thousand pounds, I think it’s rude. They should use those events to thank big donors, not to get more money out of them. It also annoys me when charities drop you from their major donor list if you haven’t given for a year, because this ruptures the relationship with you unnecessarily. Good major fundraisers are intelligently close to you. They’re looking for a long-term relationship and they treat you as a best friend. You wouldn’t strike an old friend off if you hadn’t seen them for a year, so why do it to a donor?

I’m not prescriptive about the causes I will fund – The Big Give proves that – but I am careful about making sure charities spent the money well. I once gave £250,000 to one of Ethiopiaid’s charity partners and they spent it on a posh office. That was the last money they got from me

One thought on “In the minds of Major Donors……

  1. Thank you for giving us a perspective from major donors.

    I think that one thing that got left out is the “programs that work” element. Major donors don’t just want to see lack of waste, or be touched by a cause. They want to make sure they are getting the most bang out of their charitable giving that they can. I think this is why LEAN fundraising is so important. What is that? I talk more about it on my blog, wildwomanfundraising.com

    A best practices wiki for nonprofits in various programmatic areas would be useful for this purpose. People could come together and discover, programmatically, what it had taken years of testing and failing for other charities to discover. Meyer Memorial Trust (mmt.org) is trying to do this with their “Connectipedia” project in the Northwest USA. I would like to see more of a global wiki taking place for all charities to come together and contribute their learning, to have an organizational/institutional memory that it seems most nonprofits/charities lack.

    What do you think?

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