Big Gifts Go to Charities With Big Ideas — and Patience

By NICOLE LEWIS

On a visit to Israel two decades ago, Louis Edelstein, a wealthy investor,

received a personal tour of a hospital that Hadassah, the Women’s Zionist Organization of America, runs in Jerusalem and an introduction to the charity’s medical director. The meetings were arranged by Mr. Edelstein’s old college friend Lewis Heicklen. In the years after the trip, over lunches at an Atlantic City casino with Mr. Edelstein, Mr. Heicklen often lauded the commitment that his wife and daughters had made to Hadassah.

The connections that Mr. Heicklen helped his friend forge with Hadassah paid off big for the charity. While he was alive, Mr. Edelstein donated more than $2-million to the organization, and last year he left a $10-million bequest, Hadassah’s largest ever. The bequest, along with two others to Jewish causes, put Mr. Edelstein on The Chronicle‘s list of the most-generous donors in 2000.

Trusting Relationships

Mr. Edelstein’s gifts to Hadassah were shaped by an unusual set of circumstances, including his long friendship with Mr. Heicklen, but his philanthropy followed a path that fund-raising experts say is common to many big-dollar donors.

Benefactors like Mr. Edelstein, they say, often require a highly trustworthy source of information on a charity’s operations before they consider a gift. Often, their philanthropic decisions depend on whether they are able to form a close personal relationship with a key leader of the organization. And when they do give, they seek to put a lasting mark on the organization, not only through the size of their donations, but sometimes by promoting or shaping projects that a charity might otherwise not undertake.

To win the kind of outsized gifts that Mr. Edelstein made, experts say, fund raisers must tread a narrow path between persistence and patience, aggressively promoting their organizations, but also giving potential donors ample time to decide where to give their money, and for what.

Big donors “tend to give money away on their time line,” says Bruce Flessner, a fund-raising consultant in Minneapolis. “You have to be there when they are ready and when they have the right idea.”

In addition, charities need to think big if they want to attract multimillion-dollar donations, experts say. A recent survey of people’s philanthropic habits by HNW Digital found that many wealthy people don’t donate to charity partly because they have not found a compelling reason to give.

“The biggest factor that I hear from people is that most charities don’t give them an idea that is big enough for the gift,” Mr. Flessner says.

It was a big idea that led John W. Kluge, a Virginia telecommunications executive who is also on The Chronicle‘s list, to give $60-million last year to the Library of Congress to establish the John W. Kluge Center, which will encourage scholarship in the humanities. Prosser Gifford, director of scholarly programs at the Library of Congress, thinks that Mr. Kluge made his gift because James H. Billington, the Librarian of Congress, successfully communicated his vision of the center as the premier place for international scholarship.

“Nobody is going to give this sort of gift for humdrum purposes,” Mr. Gifford says. Adds Ted Peck, vice chancellor for development at the University of California at San Diego: “It’s big ideas that attract big contributions.”

A growing number of nonprofit organizations are actively searching for new ways to promote their big ideas. One increasingly popular method, especially among colleges and universities, is to hire specialized fund raisers, typically called principal-gifts officers, who are adept at cultivating ultra-wealthy donors.

While many nonprofit groups have long hired fund raisers to specialize in attracting large donations by providing a special level of attention, information, and other perks, principal-gifts fund raisers seek an even closer relationship with donors. They often visit donors in person to talk in-depth about philanthropic goals, offer detailed information and advice, and arrange meetings with the charity’s head official.

At Amherst College, in Massachusetts, John Pistel, the principal-gifts fund raiser, helped to obtain more than 45 gifts of $1-million or more, including one $25-million gift, for a capital campaign that ends in June.

Institutions hire such fund raisers, says Charles W. Collier, one of three principal-gifts officers at Harvard University, for “the same reason why Goldman Sachs and Citigroup have a private-banking division: to provide an extra-special service.”

Because principal-gifts officers handle a small pool of donors, Mr. Collier says, they spend substantial time visiting each donor and developing a relationship over many years.

Sometimes a principal-gifts officer will meet with donors and their financial advisers, helping them choose among various giving methods, such as family foundations and planned gifts.

Besides employing specialized fund raisers, charity officials also are paying close attention to the importance of building close personal relationships with the donors they hope to attract.

Robert C. Dynes, chancellor of the University of California at San Diego, formed a trusted relationship with John Moores that helped to seal a $20-million contribution from Mr. Moores, a computer-software executive, and his wife, Rebecca. The money will be used to help build a cancer center at the university.

The Moores’s gift helped to place them on The Chronicle‘s list of big givers.

Mr. Peck of the University of California at San Diego says it is unlikely that a university official with less stature than Mr. Dynes could have won the Moores’s loyalty and largess. “Major gifts don’t happen without the involvement of the chancellor,” he says. “A dean can deliver a message, but the dean can’t pledge the support of an entire institution for making the program a go.”

Intimate Sessions

Some nonprofit officials cultivate relationships with big donors not only by forming friendships with them, but also by bringing them into intimate contact with the very programs that could benefit from their gifts.

During his decade-long association with the Zoological Society of San Diego, John Moores took several behind-the-scenes tours with top researchers and saw first-hand the zoo’s needs, including an expanded area for the giant pandas. Last year he gave the zoo $6.6-million, the bulk of which will be used to enlarge the pandas’ enclosure. The rest will help to pay for a new research building for the zoo.

Like the zoological society, Amherst also has made efforts to engage wealthy donors in its institutional life. Each year, it invites small groups of past and potential top donors to a weekend discussion hosted by the college president and led by notable faculty members or alumni. Last year, David A. Kessler, an Amherst alumnus and former commissioner of the U.S. Food and Drug Administration, spoke on regulation of the tobacco industry.

Such events help to keep the college in the front of donors’ minds and encourage them to become “re-engaged with the life of the mind back on campus,” says Michael Kiefer, who oversees the Amherst development, alumni, and public-affairs offices.

While institutions like Amherst and the Zoological Society of San Diego often take the lead in reaching out to major donors, sometimes events work in reverse: Donors bring an unsolicited idea — and the money to pay for it — to a charity’s door.

Jon M. Huntsman, a billionaire chemical-company founder who survived prostate and mouth cancer, approached the University of Utah about financing a cancer-research facility. Mr. Huntsman was “a man on a mission” who was “driving” the vision of the center, says Don Olsen, his spokesman.

Mr. Huntsman gave $100-million to establish the Huntsman Cancer Institute, which opened in 1999. In 2000, he gave another $125-million to the center, a gift that placed him on The Chronicle‘s list.

Multimillion-dollar donors like Mr. Huntsman do their research on a charity before they approach the institution with a gift, and they seek a return on their commitment. Dealing with those donors is “more like investor relations than it is sales,” says Robert F. Sharpe Jr., a Memphis fund-raising consultant. Charities, he adds, need to treat big donors the way a corporation would treat its biggest shareholders — by demonstrating accountability and producing measurable results.

Charities also must be ready to deal with donors who initiate projects, or their gifts might be lost to better-prepared institutions, fund-raising experts note.

More and more charities are encountering “donors with good ideas in search of organizations, instead of organizations with good ideas in search of donors,” says Eugene R. Tempel, head of the Indiana University Center on Philanthropy, in Indianapolis.

“Today you see more of what you saw with Rockefeller and Carnegie: that kind of active giving, donors designing their own programs, setting out priorities ahead of time, and challenging others to give. You didn’t see so much of that in the previous generation. They gave money to institutions and let institutions take the gift forward.”