Donor Advised Funds – the Magic Bullet of Fundraising

By Chris Cloud

Donor advised funds (DAF’s) are the secret weapon of many fundraisers. It represents money that is already donated so the decision hurdle for making a gift has already been cleared by the donor.  DAF’s are therefore the easiest, most readily giftable major gift out there for most charities.

Donor-advised funds are philanthropic vehicles that allow individuals, families, or organizations to make charitable contributions to a fund, receive an immediate tax deduction, and then recommend grants from the fund to nonprofit organizations over time. DAF’s are a favorable and flexible way for many people of wealth to secure a charitable donation, secure an IRS deduction, preserve flexibility in how they give and when, and retain privacy of their charitable dealings.

DAF’s are booming in popularity and it isn’t hard to see why.  Imagine that it’s nearing the end of the tax year, you earned a lot, you know you’re going to get a big tax bill from your earnings, you want to claim a charitable deduction and moderate your tax bill, but you don’t have time to research and decide where to give. The DAF is a perfect solution. You donate to a non-profit that is in the business of holding donated assets and giving from those assets based on the donor’s recommendations. Thereafter, over subsequent months and years, the original donor can pick and choose causes to support and make donation recommendations and the fund holder will honor those recommendations. If desired, this donor can remain completely anonymous – the recipient charity will only see the check that comes from the holder of the funds and not necessarily the identity of the original donor who recommended the donation. (Atlantic 2017 article on DAFs.)

DAFs receive criticism. There’s no financial incentive to quickly donate the funds out to causes and often donations are made simply from one fund to another. The criticism is that in some cases the original donor retains control, claims a donation, and effectively parks funds intended for charity indefinitely without the funds flowing to organizations doing traditional charitable work.

It’s important for fundraisers to come up to speed on DAF’s, understand their growth, and try to parse the trends. There is obvious major gifts potential – DAFs are easy for donors to make: they’ve already paid out the money, claimed their tax deduction, and the funds are simply in a holding pattern awaiting allocation.

DAFs are increasingly prominent on the philanthropic landscape so it’s important for fundraisers to understand them and factor DAF idiosyncrasies into their pitches to prospects. These idiosyncrasies include: 1) education is a favored recipient, 2) funds flowing to DAFs are growing fast, but the range of charity grantee organizations is growing much more slowly, 3) DAF giving appears to be responsive to crises, 4) DAF donors approach DAF gifts in a more specialized way then their ordinary giving, and 5) much like an ordinary giving larger charities are favored as DAF grant recipients ($20-million-plus-budget charities get half of DAF gifts).

These conclusions suggest that DAF donors treat their DAF accounts as something different than ordinary giving. They appear to resort to tried-and-true recipients like their schools and larger, blue-chip charities. However, in the face of a crisis many appear to “remember” the DAF resource and deploy it.

We are suggesting to my clients with major gifts programs that they take steps to remind donors about DAF resources they may have and work to present their charities as viable recipients of those funds. We believe it is going to be important going forward to expand the usual research that goes into briefings to include the presence of donor advised funds.

Chris Cloud

Tel: 646.596.3607
Email: chris@constellationadvancement.com

Client Profile | The Theodore Roosevelt Presidential Library

Constellation was retained for a comprehensive scope of work with the Theodore Roosevelt Presidential Library Foundation. We were privileged to inaugurate and build out their fundraising function at a moment when the plans for the project took flight.  Our work involved fundraising staff hire, practical onboarding, development of the original case for support, governance work to recruit new members, enlargement of board committees, professionalizing charters, board recruitment packages, as well as principal gifts fundraising.

Practically speaking, the TR Library is animated by the spirit of North Dakota and by the visionary leadership of Governor Doug Burgum. In a larger sense, the Library project is energized by the legacy of one of the most intriguing figures in our nation’s history, as well as the location in one of our nation’s most iconic settings. Medora, North Dakota.  Theodore Roosevelt first arrived in the Dakota Badlands in 1883 seeking sport and adventure. He then returned to Medora the following year to heal his broken spirit after the deaths of his mother and wife both on Valentine’s Day, 1884.

Scheduled for groundbreaking in mid-2023, this will be the first presidential library attached to a national park. The Library’s proximity to Theodore Roosevelt National Park pairs two key Roosevelt philosophies: love for the outdoor life and love of learning. The location is truly the cradle of conservation in America, one of Roosevelt’s primary concerns in office.  As president, he created the United States Forest Service and established 150 national forests, 51 federal bird reserves, 4 national game preserves, 5 national parks, and 18 national monuments. The Theodore Roosevelt National Park was named in his honor and is the only national park in the US bearing the name of a president.

The TR Library will be the first fully digital and interactive presidential library concept in the country.  It will preserve the stature and archival richness of a US presidential library and combine them with other inviting features. With a recreated San Juan Hill adventure and canoe excursions up the River of Doubt, this is a destination where children will drag their parents. It explores the energy, achievement, and possibilities of our 26th American president. The example of TR’s colorful life presses the question to our visitors: What would you do if you knew you would not fail?

Geographically and economically, the TR Presidential Library project creates a natural triangle of visitor interest with Mount Rushmore to the south (2.3 million visitors per year) and Yellowstone National Park to the southwest (4.1 million visitors per year). The TR Library adds a new point of interest to this triad of national sites. The Theodore Roosevelt National Park offers 600,000 visitors per year with many of those visitors attending the Medora Musical each summer.

In April 2019, the funding imperative for the project took shape when the visionary North Dakota Legislature approved the creation of a $50 million Theodore Roosevelt Presidential Library and Museum Endowment Fund to be used for operations and maintenance of the facility in Medora. This commitment by the Legislature was contingent on the Library Foundation separately raising $100 million in private donations during 2020.  This commitment galvanized the board and leadership team, inspiring the Trustees to hire senior-level staff capable of raising funds at a significant level. Ed O’Keefe was hired to lead the project in mid-2019 and by late in the year he had retained Constellation to build out a nascent institutional advancement program.

Raising $100 million to satisfy the match requirement was more than challenging after COVID-19 lockdown struck the world in March 2020.  To meet the challenge Constellation organized a virtual briefing program that enabled outreach and high-level solicitations over videoconference. Constellation led a board recruitment drive and an interview-based campaign study to gauge interest and map opportunities.  It also spearheaded staff recruitment for the development office (using videoconference to interview candidates).

On TR’s birthday, October 27 of 2020, the North Dakota Legislative match challenge was officially captured and announced to the public. Norway-based Snøhetta was selected as the design architect for the project. Snøhetta has designed some of the world’s most notable public and cultural projects including the Alexandria Library in Egypt, the Norwegian National Opera in Oslo, the San Francisco Museum of Modern Art in California, and the National September 11 Memorial.  The Presidential Library design will be inspired by the natural grandeur of the Badlands, drawing from vernacular, climate-responsive building precedents in the region, and functioning in harmony with the unique ecology surrounding it. Its construction will use natural and renewable materials, and its sophisticated energy systems will set a new standard. It will diminish the impact of wind and other climatic factors, making it accessible in all seasons.

The T.R. Library will not be a traditional presidential library. The audience will be the hero and Theodore Roosevelt will be the guide. Participants will learn about Roosevelt, but, more important, they will learn from him. They follow him on a journey of knowledge and adventure that stimulates all ages. They emerge, transformed into leaders and citizens inspired to Dare Greatly, Think Boldly, Care Deeply, and Live Passionately.  The Library offers the tools, the inspiration, and the courage to get into the arena. By putting the participant in the center of the action, we will help them succeed in their own hero’s journey, leaving them transformed and inspired to make the world a better place for future generations.

A visit to the TR Library will start with the architecture (the built spaces) and lead to the interpretive design (experiences inside the building) but must also extend to the full array of activities and public touchpoints radiating out of Medora and into the region. Through our marketing reach and digital presence, we will project across the country, and around the globe. Activities and touchpoints include our distributed story plan, onsite and global programming, digital archive, content and media strategy, marketing and PR, and our campaign designed by Constellation to raise the funds for the project.

The Post-Covid Face of Fundraising Feasibility and Planning Studies

By Dave Gallagher

COVID-19 changed many things, including the ground rules for feasibility and planning studies for fundraising campaigns. Based on what we see in the years since pandemic restrictions subsided, we think it’s time to rethink these studies, the cost, the effectiveness, and the overall approach.

Conducting a feasibility and planning study is professional groundwork in advance of a fundraising campaign. The study tells you if your goal is realistic if you are staffed sufficiently, if your case “sells” if your lead donors are with you, and generally what you are getting yourself in for. Boards often want these studies, so they become professionally informed about the expectations of a campaign taking place on their leadership watch.

These studies have been a staple in the profession for decades. Not everyone believes in the value of studies. Some criticize that they take too long, are cost-bloated, and are conducted by a jumble of junior associates who do not compare notes when compiling the report, do not furnish valuable insights, and do not represent the client and the best light. However, even with self-interest factored in, most good fundraising professionals swear by the ultimate, overriding value of studies. The intelligence gathering is unequaled – you seldom get this quality of direct donor insight. It also puts your NPO in a good light: Arranging for a polished fundraising professional to interview your top prospects about a visionary campaign demonstrates that you are serious, deliberative, and professional. Usually, your top donors come away thinking that your organization knows its stuff.

Studies are expensive. This is a valid criticism. The cost of the study is usually scaled to how many interviews are promised and delivered. The number of interviews can be anywhere from 25 to larger studies of hundreds of interviews. As a rule of thumb, the larger firms will charge $1,000 per interview delivered. I did several 50-interview studies for $35,000 in the day, but it is an all-consuming load of work, and that price point was never fully satisfying to either client or consultant. On top of the fee, there’s the issue of travel. Interviews are profoundly more effective face-to-face than by phone, but travel is expensive. It is always necessary to include several telephone interviews in a study because of distance, and the client is always promised that this will be a small ratio.

What a Difference a Lock-Down Makes

During covid lockdown, studies were conducted via Zoom. The acceptance rate for interviews, which was traditionally about 50% in a good study, shot up sometimes to 100% for Zoom interviews. That kind of interview acceptance never happened in traditional studies. Even as things begin to open, we find most interview subjects continue to prefer the economy and convenience of Zoom. We find that the quality of interviews via Zoom is substantially better than by telephone, though lacking the ideal dynamic of a face-to-face meeting.

What if the old feasibility and planning study is dead? What if teleconference-based feasibility and planning studies offer more efficiency and deliver better yields? The efficiency is terrific! In-person interviews are generally limited to three per day if you travel office to office, perhaps double that if interview subjects are willing to come to the client’s office to be interviewed. With Zoom it becomes realistic to convene six or eight interviews a day. With that kind of efficiency, a traditional study that required three months to complete with in-person interviews can be completed in six weeks with Zoom.

I don’t know if high interview acceptance rates are unique to lockdown when people were open and even eager to speak with an outside voice. But the efficiencies will remain. Zoom is faster and cheaper. Interview subjects who feel the need for more control of the exchange may accept at higher rates with videoconference.

The pricing model must be revisited. With teleconference efficiencies, fundraisers can more easily dedicate seasoned, polished principals at their firm to make interview outreach, as opposed to greenhorn subordinates who are obliged by juniority to schlep and travel. The other advantage to the consultant is a bigger client load. Conducting Zoom-based studies provides opportunities to interleave multiple clients.

We can now see a way to address the most valid criticisms of feasibility and planning studies. Fundraisers should adjust and pass these benefits on to their clients.

Dave Gallagher

Tel: 215.262.6508
Email: dave@constellationadvancement.com

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Dave Gallagher has a career of experience in fundraising campaign planning and execution. Contact Dave today to find out how he can further your project.

How to Use your Major Gifts Team to Professionally Staff Board Development

By Chris Cloud

I did a podcast about how to professionalize your board development function at your nonprofit organization. We talked about using your major gifts professionals to drive this process, and I have clients who are adopting this method now. This is different than hiring a broker on a fee basis to source board members. The idea is to activate major gifts professionals to drive action. They have complementary interests. They are pros. They will produce better results than lay volunteers working on their own.

Board development is too important to leave solely to volunteers. Instead, charge your major gifts officers with doing the support tasks. Have them report to the nominating committee on an ad hoc basis. Have them identify potential board members (subject to nominating committee approval). After all, their main professional task is identifying, qualifying, and approaching suitable prospects. That’s the skill set you want. These fundraisers have an institutional database to work with and professional research tools available. They know who has money. They can work lists of approved prospects, make initial contact, and get meetings on the calendar with nominating committee members. They can drive action week by week.

Crucially, major gifts officers can reliably manage the homework that flows from board recruitment meetings, including follow-up letters, providing requested materials, and feeding contact details into the institutional database for tracking.  This follow-up is vitally important. If the follow-up is crisp, fully-informed, and attentive it sends exactly the right message and maximizes the chances of successful recruitment. On the other hand, if your board members are tasked with this, you will have delay and incomplete focus which is only natural because board members usually have day jobs that take priority over volunteer tasks.  The suggestion is to assign these professional tasks to the actual professionals.

There are many advantages to this kind of arrangement. For your nominating committee, you get staffing and attention, more board candidates with more money, and you get crisp, professionalized follow-up that maximizes the impression you make and chances of recruitment success. You also get a more uniform, better-quality presentation for things like prospective board member packets and new board member orientation materials.

It’s worth noting that there are also distinct advantages for your major gifts team that will make them fully motivated partners. Working with the nominating committee under the banner of board development gives major gifts officers an offer-based approach to big prospects. Major gifts officers are constantly wondering: how do I make contact with a big prospect? What’s my point of connection? What’s the rationale for outreach? If their call is about brokering a meeting with senior board members who will be asking for advice, that changes the equation. It is flattering; it offers something. A meeting framed this way is also likely to kick up other names of people who might be suitable for board or major gifts consideration.

Major gifts driving board development is an approach that expands a prospect list and provides new tools to get in front of people who can make a difference for you.

Chris Cloud

Tel: 646.596.3607
Email: chris@constellationadvancement.com

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Contact Chris today about expanding your board and testing your message.

Crossing the Finish Line: How One School Created a Campaign within a Campaign to Raise the Final Million

By Jay Angeletti

Following the excitement of the initial lead gifts, a campaign launch, and early success, it’s easy to reach a plateau or even stall in the later years of a major fundraising campaign. That’s when it’s most important to identify creative strategies to engage new prospects, close gifts, and cross the finish line of the campaign.

During their largest fundraising campaign, one school seized the moment of their Head of School retiring as an opportunity to launch a “campaign within a campaign” in her honor, re-energizing the stalled campaign with new momentum.

Greens Farms Academy (GFA) is an innovative, independent PreK-12 co-ed day school located in Greens Farms, CT. In 2012, the school embarked on the $21 million Lead with Excellence campaign to raise needed resources for capital projects and endowment. In 2017, with 85% of the goal raised, longtime – and greatly admired – Head of School Janet Hartwell announced her retirement. Janet’s wonderful legacy provided the platform to celebrate the school’s journey and its future. Janet was a strong proponent of the school’s endowment for financial aid and faculty development. As such, GFA’s Advancement Office launched the Year of Celebration with a goal of raising $2 million for the endowment to honor Janet’s legacy and round out the campaign.

The Year of Celebration included special events, donor receptions, and communications specific to Janet’s legacy and the importance of the school’s endowment. This effectively allowed GFA to return to some of the campaign’s lead donors and ask them to make one more commitment in honor of Janet. Many donors took pride in propelling GFA across the finish line of the campaign they had helped to launch years earlier. It also helped to expand the prospect pool by re-engaging past parents who wanted to be part of honoring Janet.

“We asked all families to do something extraordinary,” says Jennifer Klein, Director of Institutional Advancement and External Affairs. “We asked for their annual gift, but also to do something on top of it and give to the Janet Harwell Fund, even if they had already given to the campaign.” And families delivered. Together, the school raised $2.7 million for the Janet Harwell Fund, exceeding the campaign’s $21 million goal, making it one of the largest campaigns in the school’s history.

Fueled by the generosity and loyalty of the school’s community, Lead with Excellence transformed GFA’s campus, providing new, state-of-the-art facilities for its outstanding academic, arts, and athletic programs. In addition, the endowment increased significantly to over $44 million, including $3.5 million in new funds.

Just like GFA, a campaign within a campaign may be what your school needs to succeed in the final leg of a campaign. Below are a few ways you can use this concept to your advantage:

Highlight something special. Just as GFA highlighted Janet’s announcement in its year of Celebration, find something that marks a moment of great change or celebration at the organization, such as an anniversary or other special event. Has nothing come to mind? Create an opportunity with a challenge gift. Often, to help a campaign reach the finish line, major donors will consider giving a matching gift to motivate others. Whether it’s a single donor or a group of influential donors (such as a board gift, a class gift, etc.), secure a commitment specific to the campaign and ask donors to make a new contribution that will be matched by the challenge donors.

Shake things up. Use the campaign within a campaign to reach out to people in a different way than you had earlier in the campaign. Deploy a multi-channel outreach plan, host special receptions for those who have already given to the campaign and ask for their recommendations for reaching new people. This is a chance to re-imagine how you are connecting with people.

Think of the campaign within a campaign as a new effort. Take the same steps you did at the start of the campaign, but with a refined scope and focus. Create a gift table that shows what’s left to raise or how much you seek to raise in this new initiative. Include prospects at each gift level – including those who have already committed to the campaign and who may be approached again. Recruit a new, focused, and time-limited special Committee that includes new volunteers who haven’t been involved with the campaign yet.

Clarify the impact. A targeted campaign to finish out a larger campaign is the perfect opportunity to show your donors what their money is providing. Some of the projects may already be underway; show your donors projects in the works with hard hat tours and site visits. This will help them feel the impact of their dollars and consider increasing their involvement.

Revisit old leads. With much of the campaign already completed, prospects who may have been hesitant in the beginning of the campaign may be inspired by the campaign’s proven success and excited about the idea of helping to reach the goal. Revisit these prospects with the campaign within a campaign in mind and show them what has been accomplished. Make them feel essential to finishing the project – “we need everyone to come together to make this transformative change – and we can’t do it without you.”

Jay Angeletti

Tel: 917.584.9920
Email: jay@constellationadvancement.com

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Contact Jay today to find out how we can help you with the challenges you are finding.

Does Your Nonprofit Organization Really Have a Gift Planning Program?

Savvy fundraisers and nonprofit board members are re-focusing on the massive revenue potential of gift planning (deferred gifts in wills, gifts made through trusts, retirement accounts, etc.).

Many people in these circles have heard about the groundbreaking study entitled, “Millionaires and the Millennium: New Estimates of the Forthcoming Wealth Transfer and the Prospects for a Golden Age of Philanthropy.” The study predicted that between 1998 and 2052 a minimum of $41 trillion would pass from one generation to the next in the US. This includes between $6 trillion and as much as $24.8 trillion given to charities through bequests for the same period. Updates of the Boston College study show the estimates remain on track.

With these massive predictions, it remains a mystery why so many charitable organizations don’t seek planned gifts from their regular donors. There are several likely reasons for this. The most likely may be that we all worry most, and maybe exclusively, about revenue this year, not in years to come. In a busy world deferred gifts get prioritized back.

Many nonprofits also regard gift planning as technically out of reach. What if you need a lawyer or financial specialist not on staff? But creating a simple bequest society can be accomplished in an afternoon by a development assistant with internet access. Even with more complicated transactions, there is so much consultancy expertise available that it doesn’t make sense to turn away from the potential. After all, if you risked loss from a lawsuit you’d find a lawyer. If you stand to gain substantially from a planned gift why wouldn’t you get a consultant to navigate the transaction?

Another reason people shy from gift planning is that they feel their donors are not sufficiently wealthy. This is perhaps the biggest fallacy of all. A regularly donating, childless couple living on a fixed retirement income with a $300,000 home in the suburbs may not be major gifts prospects, but they are certainly six-figure planned gift prospects. Major gifts officers would ignore them.  Planned giving officers would put them front and center in their portfolio.

Is your fundraising office systemically ignoring six-figure prospects? Anyone in development would consider that a problem. Some chief development officers can feel intimidated by the esoteric nature of gift planning. They can feel threatened by suggestions that their program is structurally deficient.  But failing to get a gift planning program properly on course is no more than garden variety procrastination. Big remedies can happen very quickly and put you on course.

Consider this: at the Cooper Union, a famous private college in New York, half of the philanthropic revenue in recent years comes from planned gifts thoughtfully and deliberately put into place a decade ago.

Here is a list of penetrating inventory questions that reveal how serious they are about gift planning.

What is your nonprofit’s average bequest gift amount?

Do you have a legacy society that recognizes people today for putting your organization in their will?

Have you personally contacted all your legacy society members within the last 18 months?

What % of your board has made a planned gift commitment and what is the plan to improve that?

Client Profile | The University of Freiburg, Germany, US Alumni Program

Parents of US college-bound students should know – there are English-language arts and sciences programs nested in some of the great learning institutions of Europe that cost a little more than the registration fees.  University College at the University of Freiburg in the Black Forest of Germany is one such program. On the strength of University College launched in 2013, Freiburg has had other visionary ideas to expand reach and fundraising potential and Constellation is a partner.

The University of Freiburg approached Constellation to help establish US alumni associations to build networking connections, raise money, and increase the value of the degree. The fundraising implications are particularly impressive and were illustrated recently when the Tate Modern in London established the Tate Americas Foundation and raised millions. Freiburg worked with Constellation to conceive and build a US alumni program that now has staffing and an office in the German Mission near the United Nations in New York City. They have been one of our more inspiring clients in terms of their ambition and shining vision for their role in global education.

Officially called Albert-Ludwigs-Universitaet Freiburg, “Uni-Freiburg” has 24,000 students, 2,000 faculty and staff, and consistently rates among the top 100 universities globally. The student body comprises 120 different nationalities. International students make up 16 % percent of the total.  It is largely funded by the German state of Baden-Württemberg. Tuition is free for both EU and non-EU students except for a small administrative fee each year. 

We began our Freiburg engagement by organizing a board of directors, establishing elemental governance structures, and then building out the legal structure for an American 501(c)(3). We suggested legal counsel for corporate setup and charities registration. We were soon ready for a small calendar of get-together events at German restaurants and soon approached the Max Kade Foundation for a successful $600,000 grant request to build out the main presentation hall in the oldest Freiburg campus building, home of University College.

Fortunately, the University of Freiburg has the brand and far-flung alumni base to make a US “friends of” program work. Younger alumnae seek networking opportunities to leverage their careers. Older alumni seek legacy and validation of their life choices and experiences, as well as nostalgia and a sense of giving back. Once there is a structure that serves connection and socializing, it becomes possible to convert to donations.  Donors are always looking for vision – that is what makes the difference in their philanthropic decisions and their involvement as volunteer leaders in nonprofits.

Concierge Stewardship

By Brian M. Sagrestano, J.D., CFRE, and Robert E. Wahlers, MS., CFRE

The concierge at your favorite hotel can make your stay a memorable one, securing dinner reservations, obtaining tickets to a sporting event or show, booking a sightseeing excursion—all the special touches that keep you coming back. If you enjoy life’s finer things, the crossed Golden Keys (Les Clefs d’Or) awarded to top experienced and recommended concierges are a familiar and welcome sight.

Philanthropists who make transformational gifts need to feel a lifetime of commitment to and from a charity. The difference is in the delivery of stewardship activities. Throughout the philanthropic-planning process, this group of donors was worthy of one-on-one attention – and their stewardship should be no different.

Regular interaction and communication are an integral part of a successful stewardship program. Care must be given to not only offer information that consistently keeps donors abreast of the outcomes of their investment but also position the case for making the next gift to an organization. (See sidebar.) Charitable organizations should provide one-on-one support, help and affirmation that are personal and customized to donors’ needs and objectives – “concierge stewardship.”

Concierge stewardship gives donors exactly what they have stated they want to see from an organization. A very creative and customized program mapped out to provide supporters with the seven touches will remind them how valuable they are to your organization.

With competition for the wealthiest donors, charities need to adapt to the needs of donors born in 1946 and afterwards (the new Philanthropists) who have come to expect that their gifts will be honored and put to good use.

Like the concierge service at a fine hotel, a nonprofit- may have a variety of services and items that it can provide to its donors. Organizations will have distinctly different offerings chosen by the development officer, the nonprofit’s primary relationship manager, that are selected based on the fundraiser’s knowledge of the donors and their wishes. This approach gives donors a tailored stewardship regimen. For example, to show the outcomes of their giving, an organization may engage donors by giving a first-hand look at successes. In health- care, supporters may have an opportunity to shadow a physician during afternoon rounds. In higher education, donors may attend a lecture on a topic in an area that they funded. These would be tremendous glimpses into programs made possible by the donors’ generosity.

Stewardship of donors at the top two tiers of the Philanthropic Planning Pyramid should be commensurate with their philanthropy. Concierge stewardship ensures that philanthropists are receiving the attention, information and experiences they expect as investors in the organization’s mission.

Ideally, charities and professional advisers would have the time, volunteers and staff to work with all philanthropists equally. However, with limited resources, charities and advisers need to provide the highest level of attention to those philanthropists who are capable of making the most meaningful and transformational gifts since charitable giving by high-net-worth households to nonprofit organizations accounts for about two-thirds of all individual giving and half of all charitable giving in the United States.

Principal gift or Tier One prospects make up the top 1 per cent of all donors and drive individual gifts philanthropy in the United States. This group expects concierge-level treatment, with charities and advisers working collaboratively to integrate individual goals, objectives and values with philanthropic plans, particularly as the new Philanthropists seek to do their planning. A philanthropic planning program allows for the integration of high-net-worth donors’ values, including the charities they care about, into their financial and estate plans, complementing traditional tax and estate planning, encouraging partnerships with the donors’ own advisers and promoting family strength, unity and involvement. Charities and advisers offering philanthropic planning to their top donors and clients are truly offering them a tremendous service that will serve them and their families for multiple generations.

Perspectives of different generational cohorts

When dealing with major donors, the stewardship of each gift should be customized to meet the expectations of the donor and documented in the gift agreement. Unlike in the past, when a one-size-fits-all approach was applied to stewardship (because charities were stewarding only older donors), differences in generational cohorts now require a more robust stewardship effort to meet different generational expectations.

Traditionalists (born before 1946). Traditionalists have an inherent trust that a charity will use a gift effectively. Because they want to see ideas put to work, their stewardship should include reports and personal contact telling them about how their gifts have made an impact. At a minimum, the stewardship should show how the charity is pursuing its mission in the area about which the donor is passionate. Donor stories are particularly effective in getting the message out that the gift has been put to work and is achieving results.

Leading Boomers (born 1946–1954). As the oldest of the new Philanthropists, their behavior is fundamentally different from that of previous generations. in the case of stewardship, most Leading Boomers are giving to social justice causes to make the world a better place, not just to affect the local community. The vision is larger, so the stewardship must account for it. Leading Boomers make gifts to areas of the charity’s mission about which they are passionate. They expect to get progress reports on the impact that their gifts are having on the targeted areas/populations. They also want to see multiyear progressions, showing how that impact is creating long-term outcomes – solving the problem they wanted to solve. Leading Boomers will seek out opportunities to serve on the board and advisory committees as a way to verify that gifts are being used as they intended and progress is being made.

Charities and advisers offering philanthropic planning to their top donors and clients are truly offering them a tremendous service that will serve them and their families for multiple generations.

Trailing Boomers (born 1955–1964). Trailing Boomers, much like the Leading Boomers, do not trust charities as much as older generations. They are looking for many of the same things as Leading Boomers – the impact of gifts and verified long-term outcomes. However, because they are a bit less trusting of charities than the Leading Boomers, they also want accountability. If they feel that staff is not getting the job done, they will stand up and try to redirect the charity. Their stewardship needs to be all about actual results that they can touch and see.

Gen X (born 1965–1976). The Gen X cohort looks at philanthropy differently. Because they are less focused on their careers and seek more work-life balance, they want to use some of that time to do work for charities, particularly in the areas where they have made gifts. Gen X is much less interested in serving on boards and advisory panels to rubber-stamp decisions made by the staff or the boomers in leadership positions on the board. They tend to be loners who are not interested in socializing with other supporters of the charity. Instead, they want to make gifts that allow them to be personally involved in the work of the charity in the area they are passionate about. They still need to see the impact and long-term outcomes of gifts and will want to see reports to verify that gifts are being used as intended and providing results, but they will feel most engaged when they are actually doing something meaningful. This is perhaps one of the most difficult areas for charities, as most are not prepared to provide real, quality volunteer opportunities for Gen X.

Millennials (born 1977–1984) Because Millennials are still in the accumulation phase financially and have sacrificed earnings to achieve a work-life balance, most of them are not yet making large gifts because they lack the resources to do so. Instead, they seek to actively participate (personally help) to solve a particular identified problem about which they are passionate. If they find such opportunities, they will support them within their means. However, Millennials are different from the other cohorts because they will not let a lack of resources stop them from making a difference. They are truly activist philanthropists and their stewardship.

If charities cannot provide Millennials with opportunities to help personally, they will lose them as volunteers and donors.

Other segments. Substantial research has been done on how to maintain relationships with other segments that might be focused on the mission of a particular charity. If a charity appeals to distinct groups or segments of its population based on other factors, such as gender or sexual orientation, then the stewardship program must account for these differences as well. There is no one right answer. Rather, each charity must build its stewardship program to meet the needs of its constituent base.

The key to concierge stewardship, compared with other customer service that charities or professional advisers may offer, is its proactive nature. Rather than waiting for something to happen, charities or advisers proactively reach out in anticipation of a need. An effective thank-you, recognition and stewardship program will produce donors who feel appreciated and respected. They will be more engaged by the mission of the charity, making them more likely to direct gifts to meet an organization’s needs and priorities. Over time, this increased level of engagement should lead to larger outright gifts.

Well-stewarded donors will eventually look for a wider range of charitable-giving tools to integrate their philanthropic goals for all organizations with their tax, estate and financial planning. They will become shareholders in the charities they support and engage others to support those charitable missions, becoming the best ambassadors for those charitable missions.