Donor Driven Philanthropy
“He who pays the piper gets to call the tune.” This old proverb has nearly always been true, except of course, when it has not. Sometimes, the piper just goes ahead and plays what he thinks people want or need to hear.
In so many fields – journalism, advertising, politics, medicine, art, literature – there has been a long-standing tension between what the professionals view is for the best and what funders and consumers want. The realm of philanthropy has been no different. The relationship between donors and the institutions and projects they support has always come with some inherent tension. Just who is calling the tune?
In past decades, if the balance of power favored anyone – especially in the Jewish world – it has swung toward the professional or the institution they represented. Traditionally, donors placed a high degree of trust in the “institution:” synagogues, federations, schools and other Jewish nonprofits. There was a sense that the professionals who ran those agencies knew where the needs were and how best to spend available dollars. But today, as anyone in the Jewish nonprofit realm knows, this attitude is about as current as the idea of waiting for the morning paper to find out who won the Super Bowl. These days many donors – especially those writing the biggest checks – think of themselves as investors who expect to have some voice and perhaps be more involved in the spending of their dollars than in the past.
Perhaps more than ever, donors are narrowing or re-evaluating their area of priorities. In an era of declining loyalties and short attention spans, donors are apt to abandon long-supported charities if the organization does not focus on a donor’s particular interest. Shifting giving patterns have impacted on Jewish federations, which for decades have raised dollars to spend on the full range of communal needs. Those federations which have maintained their campaign numbers have done so by targeting restricted gifts – donations earmarked for particular projects.
A conference held last month in New York sponsored by the Center for Entrepreneurial Jewish Philanthropy, perfectly illustrated the contemporary relationship between donors and nonprofits. A host of invited groups, most with pro-Israel orientations, were asked to make venture capital style pitches to gathered potential donors. Groups had to provide a summary of their requests, complete with a breakdown on how any large gifts would be utilized. If the exercise wasn’t unique, the tone was striking in echoing the corporate investor model.
With donors increasingly driving the philanthropic process, it is clearly in the best interest of all nonprofits to “get into the heads” of their key supporters and understand what their donors want. Perhaps unfortunately, perhaps not, there is no available “app” for getting inside someone’s head. But there are plenty of tools available to render the desires of donors less opaque.
Nonprofits should undertake frequent conversations with donors and oversee electronic surveys. For major fundraising drives, the pre-campaign assessment offers a perfect opportunity to measure the image and perception of the organization in the mind of supporters, find out what motivates donors and to have candid conversations about your organization’s mission and focus.
In the end, is catering to donors always a good thing? Are there potential downsides? After all, aren’t an organization’s professional and lay leaders the ones most likely to fully grasp the big picture, where dollars are most needed?
On one level, asking this question is like asking whether the decline of print circulation and the rise of news on the Web is a bad thing. Maybe it is, but it is a fact of life that everyone who is either in the business or is a consumer of news must adapt to.
But on another level, the question has merit and a healthy one to have. Let’s be honest, there is always the potential that an elite pool of donors with narrow, particular priorities can alter the mission or priorities of any nonprofit organization. If donors say they only want to give to a federation to significantly change its mission, it is entirely possible that programs to help the Jewish poor could suffer as a result. But the reality is that the divergence from core mission is probably minimal; it is often execution that is in question.
What can organizations do to make sure that, in trying to accommodate and to continually engage donors, they don’t lose sight of their missions? For starters, most organizations should be clear about their mission and purpose and pursue funding for projects that are consistent with those goals and mission. Sometimes it is easy to tell when this is the case, sometimes it is more difficult. To do that, and remain consistent with the donor-centric approach, organizations must communicate more often with their donors, not just when it comes time for gift renewal or the major “ask.”
To ensure that the big picture is not being lost, nonprofit leaders must communicate their visions to donors and demonstrate where the needs are and how gifts can help. Philanthropy works best when donors and nonprofits engage in honest conversations and perhaps meet somewhere in the middle. Organizations must know what donors want in order to get the dollars that they need. After all, as the great philanthropist Mick Jagger once crooned, “You can’t always get what you want, but if you try sometimes, you just might find, you get what you need.”
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