Fund Raisers Rethink Scope of ‘Big’ Contributions

Very large gifts are a lot harder to come by thanks to the troubled economy.

The Nature Conservancy (No. 14), in Arlington, Va., received 53 donations of $1-million or more during its 2009 fiscal year, down from 84 in 2008.

The Dana-Farber Cancer Institute (No. 89), in Boston, met the $1-billion goal of its capital campaign last month, a year ahead of schedule, but donations of $1-million or more are sluggish.

Susan Paresky, a senior vice president at the organization, says that in the next few years, Dana-Farber plans to focus its fund-raising efforts on smaller contributions.

“What might have been just a ho-hum $25,000 or $50,000 or $100,000 gift is now a very special gift,” she says.

Ms. Paresky says that fund raisers at Dana-Farber have had to redo research they had compiled on potential donors before the economy went into a tailspin last fall.

“If someone is rated as having $10-million in assets, and maybe being a $1-million prospect, now all of a sudden, they don’t have $10-million in assets,” says Ms. Paresky. “They might have half of that.”

Making Matches

Charities are learning that some activities are more likely to spur large gifts in the current economic climate than others — and that it helps to have a matching challenge.

Aware that the recession is putting college out of reach for many students, donors who are still able to make large gifts frequently want to endow scholarships, says Robin G. Bellinger, interim vice president for development at Purdue University (No. 116), in West Lafayette, Ind.

In September 2008, just as the economy lost its mooring, the university announced a $5-million fund to match gifts of $25,000 or more to endow a scholarship.

Within five months, Purdue had received 50 such gifts. The big difference compared with previous years was that many of the commitments were multiyear cash pledges rather than lump-sum donations of appreciated stock.

At the beginning of the 2008 fiscal year, the William and Flora Hewlett Foundation pledged $113-million to the University of California at Berkeley (No. 61) to match gifts of $1-million to $1.5-million made to endow professorships.

The pace of donations eligible for the match slowed only slightly in the 2009 fiscal year — 26 gifts came in, compared to 30 in the 2008 fiscal year.

Says David Blinder, an associate vice chancellor at Berkeley: “That’s the power of a major challenge fund,” he says. “It works to make people stretch.”

The Age Factor

In the wake of last fall’s economic tumult, many prospective donors pulled back from conversations with fund raisers about making a large gift to Princeton University (No. 79). Whether — and how — those talks have restarted depends in large part on the donor’s age, says Brian J. McDonald, the university’s vice president for development.

People between the ages of 50 and 65 who are still working have returned to gift discussions, but in many cases, the amount or the terms of the gift under consideration have changed, says Mr. McDonald.

He says retired donors who saw the value of their portfolios fall significantly are re-evaluating whether they have enough money to make large gifts during their lifetime and still live comfortably and provide for their families.

Mr. McDonald expects that many such donors will take a conservative approach and focus on bequests or on planned gifts, such as a charitable remainder trust, that will provide income to them in their later years.

Similarly, the lion’s share of “younger philanthropists” — people in their 30s and 40s, many with young families — with whom Princeton had been discussing large gifts before the market crash have not returned to those talks. Mr. McDonald says that fund raisers are staying in touch with them and hope that they will be willing to consider making a gift two or three years from now.

“Barring a significant market downturn or a very unsettling world event,” Mr. McDonald expects that Princeton will raise more money in its 2010 fiscal year, which began in July, than it did in 2009. Donors, he says, have a better sense of where they stand financially and are buoyed by the rising stock market. Fund raisers plan to make twice as many requests for gifts of $50,000 or more than last year, which Mr. McDonald says is a return to pre-recession solicitation levels.

The challenge that all nonprofit organizations face, he says, is to maximize the amount of money donors give now — and over the course of their lifetime. “That’s easy to say and very hard to do in practice,” he says. “You want to get the balance right between seeking the support that the organization needs now while making sure that the manner in which you do that makes it possible to get even higher levels of support in the future.”

Noelle Barton, Candie Jones, and Caroline Preston contributed to this article.