Recruit Wealthy Donors to Volunteer for Your Nonprofit
The U.S. Trust Study of High Net Worth Philanthropy offered some interesting and surprising insights about the giving habits of wealthy individuals. A key takeaway: wealthy donors who volunteer for a nonprofit will likely give that group more money.
Here’s one essential message that applies to all nonprofits: encourage your wealthiest donors to volunteer for your organization.
Do so right away!
If there’s one takeaway from the most recent biannual U.S. Trust Study of High Net Worth Philanthropy, it is this: wealthy donors are likely to give your organization far more money if they actively volunteer.
Reviewing the results for our team, David Ratcliffe, Managing Director with Philanthropic Solutions at U.S. Trust, advised that nonprofit organizations must “make sure they have a really strong volunteer management and recruitment program.”
Since 2006, U.S. Trust has published this study every two years with the help of Indiana University’s Lilly School of Philanthropy. Next to the annual Giving USA survey of American philanthropy, the U.S. Trust report may be the most informative barometer of American giving. The study specifically focuses on donors whose net worth exceeds $1 million (excluding the value of their primary residence) or have an annual income of $200,000 or more. Not to minimize the importance of small and midlevel donors – especially in an age in which technology has empowered grassroots giving – it is still true that wealthy donors drive philanthropy and the nonprofit agendas. This report is now a few months old and it did receive significant coverage upon its release. But I contend that nonprofit leaders have not absorbed the key findings, and that some of the most important results – such as the statistics on volunteering – were underreported or not covered at all.
Ratcliffe said that the survey is “about more than simply collecting giving data. It’s about exploring the psychographics of high net worth philanthropists – what motivates them, what do they expect from nonprofits, how fulfilling is philanthropic engagement and why do they sometimes change their philanthropic focus.”
More than 600 high net worth individuals were surveyed for the study. The survey found that 75 percent of respondents volunteered with at least one nonprofit organization. Respondents who volunteered in 2013 gave 73 percent more than those who did not. Yes, you read that number right. Staggering, isn’t it?
In actual numbers, the average giving of donors who volunteered was $76,572, as opposed to $44,137 for those who did not. These findings may counter some traditional stereotypes. Many nonprofit leaders have gotten into the habit of turning to their wealthiest donors only for big checks and small to mid-level donors for volunteer manpower, assuming that those who couldn’t give much money are often more willing to give of their time. But we also know that wealthy individuals have become increasingly engaged in their philanthropy and consider their gifts to be investments. What better way to know about how their gifts are being spent than to see how an organization works at the ground-level? Clearly, if donors like what they see, and feel they are part of something larger than themselves, they will give more.
For this strategy to work, nonprofits of all types and sizes must step up their volunteer recruitment efforts. They also must have active donor research programs. It is possible that a wealthy donor has made only nominal gifts to your organization, but you might never know it absent good research. An amazing volunteer experience may turn a minor donor into a major one.
Here are some of the other headline findings:
- Virtually all (98.4 percent) participants reported giving to charity in the past year, the highest percentage since the study began.
- Average total giving over the course of a year grew by 28 percent, from $53,519 in 2012 to $68,580 in 2014.
- Surprisingly, the average largest gift for participants (63 percent) was under $10,000.
- 85 percent of wealthy donors said they planned to give as much or more in the next three to five years, with 35 percent saying they planned to give more.
- Taking a page from the Warren Buffet “giving pledge,” researchers asked participants whether they would be willing to earmark at least 25 percent of their wealth for a testamentary pledge; only 13 percent said yes. I interpret that statement to mean that individuals surveyed should not be taken for granted; rather, they require “salesmanship” to show how their unflagging support will continue to be impactful and invaluable.
- The 14 percent of participants who rated themselves as philanthropy “experts” gave an average of $150,229 to nonprofits last year, more than twice the amount given by the almost three-quarters of other wealthy households that said they are “knowledgeable” about giving.
- 28 percent of the respondents’ donations were made through giving vehicles, as compared to 23 percent in 2012; 16 percent of these dollars were given through a donor advised fund.
- During the last decade, the percentage of wealthy donors who gave online has grown dramatically, from 15 percent to 50 percent.
Here is another key takeaway:
Taxes are Not a Huge Motivating Faction
- Just 34 percent of donors cited tax advantages among their chief motivating factors for giving.
- 96 percent would maintain or increase their giving even if the estate tax were permanently eliminated.
Wealthy donors will still seek out the best tax advice they can get to strategically structure their giving. But don’t base your pitch on something as mundane as tax breaks. Tug at heartstrings, inspire minds, and excite the inner social impact investor in every donor. According to Ratcliffe, this general trend has proven itself across all of the previous studies.
The report suggests that high net worth donors are engaged philanthropists and are looking to become even more involved. Many have the capacity to give more and plan to do so. In seeking to transform the world and create solutions and build bridges to our future, it is of paramount importance to tap into existing wealth. The best way to build relationships with high net worth donors may be to enable them to help pack up boxes for the needy, serve food at a homeless shelter, or set up the race course. Collectively, Jewish nonprofits should be doing all they can to demonstrate their impact. Together, we can create a new class of investors in the Jewish future.
Summing up the report’s findings, Ratcliffe stated that “donors are committed to giving, motivated to give, and are more strategic in their giving. Our numbers continue to show that donors have the greatest degree of confidence in individuals and nonprofits to solve societal problems. Therefore, when nonprofits and high net worth donors successfully align their interests in partnership, the resulting outcomes can make significant impact on those problems”
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