Tag Archives: Major Gifts

09.28.11
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Early Interventions: An Economic Approach to Charitable Giving

I read the recent Barclays Wealth report with interest. In it the report suggests that philantrhopists should take an alternative view to their giving strategy and start to look at some of the less traditional routes and instead look at more innovative routes to solving issues.

I found this interesting in isolation but then a conversation I had with someone last week about corporate charity giving suggested to me that this approach could move beyond this report into other areas of philanthropy. The conversation I had revolved around a companies charitable activity. It was suggested that companies could be or are already fed up with the traditional routes of supporting causes and in many ways they are just going through the motions. But if they were to stop and think about it they would really like to be making an impact, a real impact (yes Im back to talking impact!). The person I spoke to suggested things that are similar to this report (although on a different scale).

So with that in mind, it is well worth looking at this summary of the report and if you have time to look at the full report (here) do. I think this could really start to penetrate into broader thinking on charitable giving over the coming months and years…so how can you be a leader in this thinking?

 

New report highlights £100bn impact of major social issues and emphasises importance of early intervention

  • New report analyses three of society’s most difficult issues with costs approaching £100bn each year
  • Research shows early interventions can help improve economic well-being of society
  • Private funders are well placed to invest in innovative approaches to help tackle social problems
  • Early-stage preventative approaches can cost a fifth of current social support

A groundbreaking new report, published on Monday, September 19th 2011 by Barclays Wealth, highlights some of the most expensive social issues in the UK – with the combined costs identified in the report approaching £100bn each year. Taking a ‘return-on-investment’ approach to philanthropy and applying economic analysis to UK charitable giving, the report explores how private funders are well placed to help tackle the root causes of these issues. Such efforts can bring significant savings to public finance, as well as improving the lives of individuals and their economic prospects.

The report, entitled Early Interventions: An Economic Approach to Charitable Giving, was developed in association with charity think tank and consultancy New Philanthropy Capital (NPC). Using a prioritisation process to review 30 of the costliest social issues in the UK, researchers further analysed three issues in detail to understand causes and links, before looking at interventions. These three issues and their associated impact on the public purse are:

  • Children with conduct problems (£51bn)1
  • Adults out of work due to mental health problems (£45bn)
  • Chaotic families (£12bn)

Commenting on the research, Emma Turner, Director of Client Philanthropy at Barclays Wealth said: “It is clear that these three issues are proving a significant burden to the welfare state, from an economic as well as a social point of view. However, these issues don’t necessarily elicit the most generous response from private funders. The more light that is shone on these types of social issues and the impact of interventions – such as those highlighted in this research – the more chance there is of private funding being made available to help.”

Early intervention

The report argues that early intervention is vital in tackling those issues which can contribute to entrenched social problems at a later stage. Furthermore, funding early-stage, preventative approaches can bring about significant economic savings for the state.

The report identifies that there are currently 1.3 million young people in the UK with serious behavioural issues. According to one case study, the cost to society of dealing with just one individual with these problems could exceed £148,000 by the time they reach the age of 16. However, over the same time period, supporting an individual, via intensive family support, counselling in schools and Multisystemic Therapy2, could cost £32,000 – equating to nearly a fifth of the cost of current crisis services.

Iona Joy, Head of Charity Effectiveness at New Philanthropy Capital said: “A charity that helps to divert a young person from crime and into a job not only improves the lives of potential victims, members of the community, and indeed the young person in question, it can also reduce the costs of policing, courts and custody. It further helps the young person to earn a wage, pay tax and contribute to the economy. Many charities aim to improve people’s lives regardless of economic benefits, however taking an economic approach to allocating charitable funding helps us to understand the value of tackling some of the toughest social problems faced in the UK.”

Another costly issue examined in the report is adults facing employment challenges due to mental health problems. Mental health problems affect one in six adults at any one time, with costs of £45bn per year due to related unemployment and reduced productivity.

At present, there are 1.3 million people with mental health problems who rely on benefits, yet many of this group would like to return to employment. The report argues that early workplace intervention by employers could reduce this number greatly. Specialist employment support for those out of work with mental health issues, as well as supporting employers to make workplaces more conducive to good mental health, have been shown to deliver savings of up to £2.50 for every £1 invested.

A further key issue analysed in the report is chaotic families. The report estimates that 140,000 families cost society £12bn each year through reliance on public sector services and wider social costs. This figure could be greatly reduced by employing proven methods of intervention, for example, targeted support for families has an estimated cost of £19,500 for each family per year – an average saving of £40,000 annually per family. Moreover, these savings are dramatically increased in the case of the most problematic families, with savings reaching over £130,000 per year in some cases.

A compelling case for private funders

Whilst the report shows that funders can vary greatly in their style of charitable giving – in terms of time, involvement and funds at their disposal – they are now in an increasingly advantageous position to ensure the funds they invest in a philanthropic cause can make a difference. However, there are also many considerations private funders must think about when making decisions about the charitable sectors they want to fund, such as their level of ambition, their willingness to engage with other partners and their attitudes to risk.

In order to help funders decide how they are best suited to approach issues and interventions and what level of risk – or return – they are looking to take, the report outlines a framework to help donors make these decisions, based on their own ambitions and risk appetite. In addition, the report refers to distinct funder profiles, which range from the time-poor “Gift Givers” to the “Change Makers” – committed philanthropists willing to take risks on new initiatives.

Emma Turner commented: “Private funders have an unrivalled capacity to fund initiatives that the government cannot. It is now clear that there is a growing group of enlightened funders, defined as Change Makers, who understand that the current method of responding to social problems only once they reach crisis point has limited success. This group of funders is willing to take risks on new philanthropic initiatives that address the root cause of problems, rather than just the visible symptoms.

“In bringing these difficult issues, which are often neglected, to the attention of funders – we need to provide powerful reasons for why they should invest in these interventions and what they can achieve by doing so.” Emma Turner continued, “If we want to tackle some of society’s biggest problems, and persuade funders to choose routes such as early intervention funding, we have to find new and better ways of making the argument more compelling.”

1 £51bn relates to the cost of crime committed by adults who are estimated to have had conduct disorder in childhood. 80% of crime is committed by adults who had conduct problems as children, equating to around £51bn a year.
2 Multisystemic Therapy involves intensive whole-family support by a dedicated worker who visits several times a week for several months. The worker also liaises with schools and other agencies (youth offending teams, mental health services) to help solve problems in a holistic way.

Source: Barclays Wealth

10.25.10
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World’s Richest Man Says: “Charity Doesn’t Solve Anything”

Source: Good: Business, Oct 17th 2010

Carlos Slim is the Mexican billionaire listed by Forbes as the world’s richest man. Although he has contributed hundreds of millions of dollars to his own charities and the Bill and Melinda Gates Foundation, his signature has not appeared on Gates and Warren Buffett’s  “Giving Pledge,” in which billionaires promise to donate half their fortunes to charity.

As the Wall Street Journalreports, while Slim was speaking at a conference in Sydney last month, he offered the following sentiment:

The only way to fight poverty is with employment. Trillions of dollars have been given to charity in the last 50 years, and they don’t solve anything. … To give 50 percent, 40 percent, that does nothing. There is a saying that we should leave a better country to our children. But it’s more important to leave better children to our country.Slim’s sentiments echo those of the Dead Aid author and economist Dambisa Moyo, who argues that the half century or so of foreign aid to African nations has failed to address root problems. Although neither Moyo nor Slim believe aid should be eliminated altogether, they both suggest prioritizing job creation over throwing money at problems.

 

05.20.10
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Australian Major Donors Tell Why They Give

I have just read this report from Relate Partners and it provides a useful (if not earth-shatteringly new) insight into the motivations of Major Donors. Relate have spoken to 14 major donors in Australia and offer a summary of what motivates them to give, and some things that frustrate them about their work with non profits. This report, as is to be expected, aims to promote the work of Relate Partners (testimonials on the back page), but still it’s not a bad read . If you dont have time (it is quite short) Pro Bono Australia offers this overview

Australia’s major donors give because they believe they have vital contribution to make, but feel underutilised by charities who only want their money, according to a new report. The report found that the most inspiring environment for giving by major donors is with charities who engage them in a well contextualised relationship, shaped by candid conversation.

From the face to face discussions, the group of major donors say they give most to causes that impact people in need, to charities that can leverage their giving, and when personally asked by a well informed representative in an appropriate way.

Director of Relate Partners, Steve Gleeson, says major donors typically ask the very basic question, “How can I best contribute to help address this need?”.

Major donors say they are sceptical and tired of direct mail and do not respond with their biggest gifts to this solicitation method. Whilst they all prefer to be asked clearly, directly and personally for their major gifts, they don’t expect it to be the CEO. These high capacity donors say they generally need contact with someone who knows the work, can inform them well, be clear about what they want and is prepared to ask for it.

Allowing major donors to inform the method of engagement and communication, by hearing directly from them, is a real positive towards expectations being met, and their giving being maximised.

Nic Capp, founder and director of Relate Partners, says as they spoke one-on-one with these major donors, it was clear that they were buoyed by talking about how to improve their giving experience.  Capp says they want to be better engaged because they want to help as best they can.

Major donors acknowledge they have disproportionate capacity to resource charities and they often want to give more than money. Typically highly skilled, vastly experienced and well networked, major donors say they feel underutilised by charities who only want their money.

The report says when these high calibre people ‘buy in’ to a purposeful endeavour, they want to contribute well and often are willing to contribute beyond financial donations. Their life and business skills and experience can not only be invaluable to a NFP in an advisory or board function, but when utilised they can be extremely motivating to the major donors in their resourcing capacity.

Relate Partners specialise in major donor personal engagement and had conversations with 14 major donors who agreed to respond to a range of questions, in order to help inform the fundraising practice of Australian Not for Profit organisations.

(Original Content Credit: Pro Bono Australia)

The full report can be viewed at www.relatepartners.com.au

I came across all of this information via Jay Frost

08.27.09
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Inherited Wealth

I hope the Major Gifts Guru doesnt mind me sharing these great tips on approaching heirs of  inherited wealth:

Here are 3 points from the article about listening to inherited wealth’s attitudes toward their money:

  • What is the heir’s role when it comes to the inheritance? Does he/she want to guard it, share it, or grow it?
  • Is the heir the first person in the family to potentially guide family philanthropy, or does a legacy of giving already exist? Is a family foundation in place? Who are the trustees?
  • What are the heir’s interests? Where do his/her passions lie? How are heir’s intentions for wealth similar to or different from whom he/she inherited it?
    • 05.07.09
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    Major Gifts and the Internet – An Untapped Opportunity?

    On Tuesday I posted an interview with Vinay Bhagat of Convio USA (you can read it here). In it he mentions an article he wrote about Major Gifts and the Internet. With his kind permission I am re-posting this, very interesting, piece….

     

    Although many organizations have successfully used the Internet for direct response and special events fundraising, few have tapped its potential for major giving. The question nonprofit professionals should ask is not whether donors will give a major gift online, but whether online marketing and constituent relationship management (eCRM) can support major donor identification and cultivation.

    Historically, major gift efforts have primarily sourced donors through two avenues: 1) referrals from other key donors and board members; and 2) direct mail programs. In the referral model, development officers target high net worth individuals and find ways to speak to them via existing relationships. In the direct mail model, donors who give large gifts – by direct mail standards – or who fit certain predictive model factors – such as giving tenure and frequency – are commonly screened and targeted for a major gift.

    For example, in a recent article in Fundraising Success ADVISOR, “A Wealth of Opportunity,” a representative from the Heritage Foundation was quoted as saying that direct mail was its “largest source of future major donors,” specifically that “sixty percent of $10,000+ donors started out as regular direct-mail donors.” When a mail donor gives a single gift of $1,000 or more to the Heritage Foundation, the organization contacts the individual to begin building a stronger relationship and evaluating his or her potential for making a larger gift.

     

    Just as with postal mail, a well-executed online marketing program can be a “feeder channel” for major gift efforts. Online marketing allows an organization to cast a wide net to entice potential supporters to learn more and become engaged. Online marketing also represents a very low cost donor education and cultivation channel that can supplement traditional in-person major donor cultivation activities. Similar to postal mail, when an online constituent demonstrates support by making a meaningful gift online, it is an indicator that he or she is worth cultivating for a major gift.

    Consider the experience of The American Red Cross Mile High Chapter in Denver, Colorado. In response to Hurricane Katrina appeals in September and October 2005, this Convio client raised $1.5 million online. Two hundred and twelve new contributors gave online gifts of $1,000 or more. The organization segmented this constituency and sent a series of cultivation emails to keep them apprised of how their contributions were being spent. They also sent emails and hand written invitations encouraging these donors to participate in events. Six of these major donor “prospects” decided to participate in events; four actually attended personal tours of the chapter. In this case, online fundraising and eCRM sourced more than 200 strong prospects for major gifts and strengthened the cultivation process by enabling the organization to identify six previously unknown near-term prospects for major gifts.

    Beyond sourcing potential major donor targets, eCRM also is an effective method for supporting cultivation of relationships with existing constituents. Many major gift-centric fundraising organizations arrange regular fundraising events such as galas attended by hundreds of people. Often, attendees fit the profile of good major gift prospects, but it is rare for an organization to systematically follow-up with all of them. Major gift officers generally only have the capacity to develop about 50 relationships at a time, so naturally they focus on the most easily identifiable targets.

    An organization with hundreds of potential major gift prospects can use an eCRM approach to cultivate people en masse and “bubble up” the best targets for attention by major gift officers. Through a combination of personalized email marketing and Web site communications, a nonprofit can engage prospects, learn about their interests and use that information to entice them to learn more about and get involved with the organization. A nonprofit also can use this approach to stewardrelationships with existing donors – to sustain contact with them on a regular basis after a large contribution has been made so that their interest remains strong and grows. Through eCRM, it is possible to track a constituent’s activities and interests – which emails he or she opens, articles read, fundraising appeals prompting responses and survey answers. This information is valuable because an organization can both use it to personalize online communications as well as provide talking points for major gift officers as they make personal contact.

     

    In summary, while online marketing and CRM will never replace the need for person-to- person contact, it can augment and support an organization’s efforts to help source new major gift prospects and cultivate constituents in a scalable fashion. Nonprofits that rely on or want to develop strong major giving programs would be wise to make eCRM an important part of their overall marketing mix.

    Vinay will speak at the IFC Online Conference next week

    02.03.09
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    Money is still out there

    I came across this on Charity Navigator:, its all US based but still worth looking at (original post by Sandra Miniutti)

    Last week, the Chronicle of Philanthropy released a report on the top 50 donors of 2008. Together, these donors pledge or gave $15.5 billion, which is more than twice what the most generous donors gave in 2007.

    Although many of these donors gave substantial gifts to their own foundations, below is a sampling of gifts made to charities rated by Charity Navigator: