May 2, 2019 | Read Time: 2 minutes
The quest for big gifts at many nonprofits plays out like this: They search for big donors, try to discover their interests, and then create projects or ideas to match those interests. While valid, this approach is not the most efficient way to approach the donor market, to put it in business terms.
The best and most efficient approach is for charities to conceptualize meaningful “philanthropic products” that people throughout the organization enthusiastically support. These products — which could be provided at a broad range of costs, from thousands to hundreds of millions — have the potential to capture a donor’s heart.
As David Dunlop, Cornell University’s legendary principal gifts officer, has pointed out, transformational gifts are motivated by the donor’s hopes and dreams, not the institution’s.
People Give to People
An essential element of a strong charitable product is leaders who have passion for the institution’s mission and an ability to implement it.
A savvy major-gift operation gives donors great pleasure and leaves them with the feeling that they are supporting passionate friends who share their hopes and dreams. (Nonprofits should think broadly about who should be included in the pool of donors.)
In a real-world example, MIT recently created a well-conceived giving opportunity. Its new billion-dollar college of computing will educate a new generation of experts on artificial intelligence. The college will be named for Stephen Schwarzman, who made a $350 million gift.
Schwarzman is a Yale graduate who attended Harvard Business School. So, what inspired his magnificent gift to MIT, or as David Dunlop puts it, what was his hope or dream?
Schwarzman was concerned about China’s intensive focus on artificial intelligence and wanted to make sure that the United States would also stay at the leading edge.
Creative Products Can Overcome Challenges
Most organizations struggle to raise endowments. In a typical campaign, about 30 to 35 percent of the money raised goes to an endowment. And yet, in the most recent campaign at Caltech, endowment contributions are running at about twice that rate. Why? The development office created many new endowment-gift opportunities.
Donors to the Caltech endowment could create discovery funds and name research institutes after themselves by making large endowment gifts. The key takeaway: It is more efficient and often leads to greater donor satisfaction when a donor can be matched to a fully developed opportunity. Once the product captures the donor’s imagination and her desires are well understood, the product can be tailored to meet her needs and the organization’s.
Bill Davidow, a former corporate marketing executive, serves on several nonprofit boards, and his new book, “The Autonomous Civilization: Reclaiming the Future We’ve Sold to Machines” will be published in 2020.
