Discover more from Philanthropy 451
Donors: When (And Why?) To Just Say "No"
It’s a story that most fundraisers are familiar with — major donors make demands, and you and your team lose your minds trying to retain the donor’s money while keeping “on mission”.
If you have every felt that a donor “stole” hours and hours of your time that you’ll never get back, this newsletter is for you.
Town and Country magazine, the publication that, as their website tells us, showcases “a world of exceptional people and exclusive places,” published this wonderful and telling article about “high maintenance donors”. They provide some shocking statistics on difficult donors vis a vis fundraisers. They report that:
66% of fundraisers surveyed report that donors have used controlling behavior that compromises the mission of the organization.
The fundraisers they surveyed report that donors have implied or stated outright that they would not make a gift unless they got what they wanted.
77% of fundraisers surveyed say that they have worked with donors who have “used their influence for favors or benefits they don’t deserve.” (The “deserve” part there annoyingly subjective, but you get the picture.)
Based on my experience, here are some examples of unreasonable donor demands:
A donor insists that an academic institution allow him to “weigh in” on decisions about the organization’s leadership and curriculum.
A (married) donor demands an out-of-town date with an unmarried staff member, and the organization tries to “keep him happy” by insisting that the staff member comply.
A donor offers to give a “large” gift for the nonprofit to install a garden on their premises. Fair enough — but they also dictate that the money be spent immediately and that they would be included in a press release honoring them for that gift. We later find out that the donor had some legal trouble and wanted to use their “charitable support” to, well, secure a “get out of jail free” card.
A board member insists that “all gifts are fungible” and ignores the restrictions on several endowment gifts.
A donor requires that the fundraiser (or, most often, the ED) attend events with them — often out of town. The donor doesn’t seem concerned about the costs to support that requirement, including travel costs, opportunity costs (costs of being out of the office focused on one person), and personal costs (time away from home and family). Note that this is not to secure a larger gift, rather, it’s a requirement (implicit or explicit) of the donation.
Know that this isn’t an exhaustive list, as most readers will have had their own stories of “over the top” donor demands. (Feel free to send me your own stories!)
The point of all of this is that these are ridiculous and obnoxious requirements from donors who use their “gift” as a carrot. Some people enjoy watching staff scurry around doing things to make them happy. It’s a control thing — don’t give them the satisfaction.
The message here is that every hour you spend with, or relative to, these types of donors is, most often, a colossal waste of time. This “pandering” takes away time and energy that could be used to further your organization — and it often has no impact on the size of the “gift”.
So how do we know when jumping —when they say “jump” — is worth it, and will result in a substantial donation? The time we spend wringing our hands and analyzing these situations could be better used elsewhere. Even if one out of every ten of these donors gives a giant gift, it’s still, in my opinion, rarely worth it. The exceptions to this are (a) if you’re truly certain that the time spent will result in a specific gift, and/or (b) if not doing what the donor wants em will likely impact other donors’ gifts.
There are definitely some gray areas and some unknowns there, but I would start by saying “no” to anything that seems or feels out of line. Despite what some people think, donors won’t mind being told “no”. It gives them clear boundaries, and if they are entranced by what your organization does, they’ll understand that they hit the boundary and they’ll happily give, especially if you back that up with a specific reason. Some good reasons would be “that’s inappropriate” or “that’s unethical” or “doing that would distract us from our mission”.
I recognize that this can feel difficult and a bit scary. So here’s a mantra or two for you as you contemplate saying “no” to a donor. Read and repeat:
“There are over 600 thousand millennial millionaires out there who we aren’t soliciting while we waste time on this person.”
Here’s another one:
Only 9% of recurring gift donors are acknowledged after month three. Recurring donors give 42% more money per year than one-time givers. Overall, recurring revenue from monthly giving is now 22% of all online giving, and grew over 16% in 2021 over 2020. They are also more likely to give a second gift during the year. Why aren’t we allocating more resources to monthly giving? Oh, I remember — it’s because we’re spending so much time with an unpleasant, hard-to-please donor.
Here’s one more:
By spending so much time and resources keeping a comparatively small (and often homogeneous) group of donors happy, we are not only shooting ourselves in the foot, but we’re leaving huge amounts of money on the table.
We must learn to think differently about the donors we approach. The Great Wealth Transfer — the 25 year period that will see the largest wealth transfer in history (some say $63 Trillion— began about three years ago. That money, or much of it, is going to younger people and women. The younger people go from GenX to GenZ (with the Millennials in-between), and women of those ages and older will also see a great influx of money. It’s estimated that by 2030, more than two-thirds of wealth in the US will be held by women. It’s true that today, Baby Boomers still hold most of the wealth, but that’s changing daily. As of late 2022, approximately 1.79 million of the 22 million millionaires in the US are under 30. Yet many, many nonprofits are still prioritizing older men for their fundraising. It’s critical that we at these numbers and realize that we can’t wait another day to learn about what these “different” demographic groups want and expect when it comes to charitable donations.
Think of the hours and hours you’ve spent trying to keep one cranky donor, when you could have spent that same time learning about and communicating with younger donors and women.
And a final “mantra”:
Somewhere between 60 and 85% of today’s HNW (High Net Worth) individuals are self-made, yet many or most of them aren’t anywhere on your radar. We can’t waste another minute before we learn about and embrace these folks. We need to find the time and resources to create and build relationships with people different than the usual suspects, and we need to do it now. The days of only focusing on the “regulars on the list” who have long-term inherited wealth are ending, as only about 20% of wealthy people today (at least in the US) inherited their money. The idea that 30 year olds and women neither have nor control money hasn’t been true for years.
If you haven’t read it yet, my book, Philanthropy Revolution, details a number of negative experiences that I personally had as a “newly wealthy” person and a woman. It’s painful to realize that every day others are going through what I went through. So think about the true value (both short and long-term) of every minute you spend with your donors. You might want to make a change.