Focus More Attention on Affluent Donors Instead of on the Mega-Wealthy

By NICOLE LEWIS

Over the past few years, Judith E. Nichols, a fund-raising consultant in Portland,

Ore., saw many midsize and small charities frustrated by their failure to snare multimillion-dollar gifts.

Her response was to write a book that advises charities to focus on people with annual household incomes of $75,000 to $250,000, instead of the very wealthiest people in the country. “A lot of charities have become very unrealistic in looking at what they can’t get, so they get nothing,” says Ms. Nichols.

In her book, Pinpointing Affluence in the 21st Century: Increasing Your Share of Major Donor Dollars, to be published in May by Bonus Books, Ms. Nichols writes that charities, particularly smaller ones, should concentrate on building relationships with the growing number of people who have the potential to make gifts of $1,000 to $100,000 on a regular basis. Many of those donors probably already give to charities, but have never been asked to contribute larger gifts because nonprofit groups do not view the donors as large givers, she says.

“We spend a lot of time and effort trying to convince people who don’t want to be convinced that they should give money they don’t want to give,” says Ms. Nichols. “If instead we look at the people who have already indicated that we interest them, we could do a better job.”

However, Ms. Nichols says she knows that most charities don’t have the staff members to focus on every donor. Her book marshals a variety of sources, including magazine articles and statistical data, to offer charities help in discovering which people deserve the most attention. For example, she notes that manufacturers of meat products and of optical goods rarely attract attention, compared to other business owners, but they tend to be well-to-do.

Based on her analyses of wealth and hobbies, she says charities would do better to go after gardeners and classical-music lovers, because they tend to be affluent, rather than to pursue hunters and country-music fans.

Instead of chasing the same wealthy people every other charity is eyeing, Ms. Nichols says, charities should learn more about current donors — where they live, what they do for a living or in their leisure activities, how old they are, what ethnic groups they come from — and use that information to determine which contributors have the potential to make a significant, but not necessarily huge, donation.

The most important thing to remember, says Ms. Nichols, is that potential donors are very different from one another and require individualized attention. “A lot of times as fund raisers we seem to think of wealth and money as if it’s this big block that is identical for all people, and it isn’t,” she says. “I really don’t think there are any organizations around that don’t have some major-donor prospects. They just don’t understand that they have them.”

Excerpt from Pinpointing Affluence in the 21st Century

Think affluence rather than wealth. Don’t automatically focus all your major-gift fund-raising efforts on the very small pool of easily identified persons at the pinnacle of wealth in your community. Instead, concentrate on the more logical, broader base of affluent donors — individuals with a household income of $75,000 or greater.

Stop thinking of major donors only in terms of gifts of assets. The average millionaire only has a yearly income of $120,000. And, 80 percent of the wealthy are first-generation millionaires, understandably cautious in making sacrificial gifts. Neither they nor the majority of our affluent prospects are able — or willing — to strip themselves of assets to make gifts of five figures.

It used to be that the affluent and generous givers had a number of socio-economic and demographic characteristics in common. Both were white, male, between ages 55 and 64, Protestant, highly educated, married (or widowed), and professionals. At the start of the twenty-first century, however, we find a diversity in our society that goes well beyond anything we once imagined. As a result, the affluent have diversified as well and so should your major gift prospects. Today, education is the common thread.

Large numbers of Americans could be more major donors. By fund raising to “those in the middle” rather than at the top — affluent, rather than wealthy — your organization will gain. More of your fund raising income will be less restricted. The higher the gift, the more control donors want to exert. It is easier to encourage donors who give from $l,000 to $25,000 to designate rather than restrict their gift giving or to leave its use fully to the judgment of the organization.

— From Pinpointing Affluence in the 21st Century: Increasing Your Share of Major Donor Dollars, by Judith E. Nichols (to be published in May by Bonus Books).