The Scarcity of Money from Nonprofit Major Donors

Many nonprofit boards and executive directors want fundraisers to find shortcuts to getting major gifts. With the uncertainty in the economy now focused on the nonprofit sector, finding new major donors has become a top priority for organizations. And, of course, since artificial intelligence (AI) is a big deal, nonprofits are also debating if an investment in AI tools to uncover prospects is worthwhile.

Unfortunately, no shortcuts exist to finding and creating meaningful relationships with major donors. Further, if organizations don't take a long-term view of at least five to 10 years and ensure sustainability with other fundraising streams, they will be hurting their missions. The fact is that wealthy donors are no longer walking among the rest of us, and during economic and social uncertainty, they're pulling back from giving.

The Uber-Wealthy Aren’t Among Us Anymore

There was a time when wealthy people and regular people were in the same spaces to a much greater degree. When Michael Bloomberg was mayor of New York City, he took the train to work, and other celebrities and wealthy people did as well. However, those days are long gone. Many New Yorkers might not realize that, in that glistening city, there are private elevators that take property owners in their cars from the street to their apartments.

There's no walking from the sidewalk to the building, stopping to say hello to a concierge. And there’s no shared elevator with other people. In short, there's no interaction with anyone else that the wealthy don't invite into their personal spaces. The uber-wealthy aren't living in the same spaces or realities as most of us. They're not attending galas where regular people can rub shoulders, and they're distancing themselves from nonprofits they don’t know well. 

Major Donor Programs Take Time — Years, Not Months

Nonprofit boards and executive directors who think it’s wise to pay a tech data company to get AI to create a list of rich people to fund their missions are wasting their time. If they expect their major gift fundraisers to magically attract many new wealthy donors to the organization, they'll be disappointed. The hard truth is that unless nonprofits are prepared to commit up to 10 years to a major gift pipeline, they’re better off focusing elsewhere.

Major donor work isn’t a quick fix. It’s more like a slow burn. As wealthy donors reconsider the organizations in which they feel safe socially and economically supporting, the best approach for nonprofits that don't have a strong major gift pipeline is to look elsewhere. The current environment requires a long arc to build relationships that serve the interests of major donors. In other words, it's becoming more about their interests first and then the mission.

Why Major Donors Are Pulling Back

As we know, we're in an era of massive uncertainty. No one knows what tomorrow's going to bring economically, politically and socially. That means that wealthy people have started to retrench, and we have to understand that they're doing what humans tend to do — protect their interests. The reality is that wealthy people are risk averse by nature, which is how they build their wealth, so it's important for nonprofit leaders to understand this reality.

For better or worse, there’s a shift from donors wanting to attach their names and money to any organization that might attract the wrong kind of attention. All you have to do is look at the matter at Harvard University. Broadly speaking, it's picking up donors from its alums, but there's tension at the highest level of the richest university in America. Some uber-wealthy donors want it to strike a deal with the government. 

What’s the Path Forward?

If your nonprofit's major donor program is going well, this is the moment to bring those people closer. This is the moment to communicate more impact, ask their opinions and engage them in substantive discussions about how to navigate immense uncertainty. It’s essential to let current major donors fully appreciate the impact of their gifts. Invite them to the mission in a way that makes them feel like partners, not just donors. 

You can look at average donors who donate between $100 and $500 monthly. They're a goldmine of potential. In many cases, news headlines don’t easily sway average donors who don't live in high-rises with car elevators. Average donors give because they believe, and, with cultivation and consistent outreach, they could slowly become your most committed major and planned gifts donors. 

Not too long ago, a nonprofit leader told me that they were looking to invest $40,000 in AI to identify major donor prospects. I told him not to do it. The $40,000 could instead be redirected to hire a development officer who could do outreach to current mid-level donors and work to increase their giving. Sure, technology has its place in fundraising, but the absolute best approach to raising funds is building personal relationships with as many people as possible.

No technology can do the hard work of building relationships, and your data analysis is only as good as your fundraisers building real and meaningful personal relationships with donors (especially those who aren’t major donors). So, if you want to future-proof your fundraising, skip the top 1% — unless you’re willing to invest five to 10 years. Instead, create experiences and relationships and build a relationship program with every donor. 

The preceding content was provided by a contributor unaffiliated with NonProfit PRO. The views expressed within may not directly reflect the thoughts or opinions of the staff of NonProfit PRO.