Major Trends in Philanthropy
by Ashley High

Cynthia Krause, who works in the planned giving department for Baylor Medical Center, met with Phil Cubeta, The Nautilus Group’s Chief of Staff, to discuss the megatrends in philanthropy. Cubeta noted that “one such trend is the shift in philanthropy-as-driven-by-fundraisers to philanthropy-as-driven-by-advisors and financial institutions.” Cubeta made the following observations:

 

• Fundraising and small donations often follow the standard process of meeting a contact, telling the charity’s story, asking for a donation, and answering questions. This method usually results in small, but frequent donations. However, since many fundraisers and salespeople have quotas, their fundraising pitches becomes routine, making the donor feel dehumanized, as if he were only an ATM.

 

• Major gift donations are relationship based, time consuming, and require a thorough understanding of the donor’s goals, values, and dreams. While these gifts are few and far between, they involve a large team of people including an insurance agent, financial planner, JD, CPA, investment advisor, and maybe even a family business consultant or a family dynamics consultant. However, the whole process is overseen by a trusted advisor. As shown by much research, fundraisers are rarely a part of this procedure. In fact, many of a fundraiser’s major gifts are canceled because the fundraiser did not communicate with the advisor.

 

• Philanthropic planning, according to banks and brokerages, generally means keeping the funds inside a foundation, charitable remainder trust, or donor advised fund that the bank or brokerage controls. While small portions of the money may eventually be distributed, the banks and brokerages generally try to keep the money under their control.

 

• While both advisors and fundraisers want the money in their control, the advisors want the money in accounts to be used later and the fundraisers want to use the money now. However, both people need to have the same goal – to serve the donor and his heirs. If the advisor and the fundraiser do not serve the donor, they will lose the donor.

 

Tips for Fundraisers: Instead of just closing for a large gift, ask to speak with the donor’s advisors. Meet with them and ask for their advice on how the gift would be best arranged. Open questions like these will make the advisors more likely to become allies.

 

Tips for Advisors: Understand that charity is about changing or saving something in the world. If all the money is put into a deferred account, it will not change the world until later, at which time it may be too late. Discuss including current grants in the donor’s plan. Most donors are happy to know they can give now without affecting their other giving goals.

 

Tips for Nonprofits: Since a current megatrend is advisor engagement, nonprofits should hold events for donors and advisors and teach them how to form better partnerships. Also, the nonprofit should highlight advisors and firms that support current, direct gifts. This encourages advisors to think about the impact of their gifts, not just about the tax deductions and the amount of money they control.

 

Tips for Those Who Manage Fundraisers by the Numbers: Donors tend to put fundraisers on hold while they consult their trusted advisors, a method that does not benefit the nonprofit. While Cubeta does not suggest taking fundraisers off their quotas, he does recommend encouraging fundraisers to spend 10% of their time using a “relationship intensive, donor-centered transformational process as pioneered by, say, Charles Collier, Senior Philanthropic Advisor at Harvard.” Cubeta says that within two years, this method will account for at least 50% of the fundraiser’s results.

 

Appeal to Faith-Based Nonprofits: Cubeta points out, “Why not align your giving programs with your institutional values and treat donors as cherished members of the kingdom of ends (Kant) rather than as means to an end? Get your giving process aligned with your deepest mission as an organization, and…your fundraising will flourish as never before.”

 

Donors, advisors, fundraisers, and nonprofits all need each other for effective philanthropy. When these people work together, there will be “happier donors, more fulfilled heirs, more effective plans, healthier nonprofits, and a better world.”

 

Information taken from: Phil Cubeta. “Megatrends in Philanthropy: Towards Donor, Advisor, Nonprofit Collaboration.” www.gifthub.org.

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