For many nonprofits, big donors who contribute big donations each year are essential to operations. This population, while small, has a lot to give and is often willing to give it. But the economic conditions have to be right and the individuals have to feel a strong sense of partnership with the nonprofit.
These ideas are echoed in findings from the 2014 U.S. Trust® Study of High Net Worth Philanthropy. This study conducted by the U.S. Trust in partnership with the Indiana University Lilly Family School of Philanthropy reveals many interesting insights about wealthy or “high level” donors.
In today’s post, we’ll take a look at some findings from this study and tell you how you can better connect and engage with high net worth donors.
About the 2014 Study of High Net Worth Philanthropy
The results from this report are based on a nationwide sample of 632 households with a net worth of $1 million or more (excluding the value of their primary home) and/or annual household income of $200,000 or more. You can view and download a full copy of this in-depth study here.
What We Learned About Big-Gift Donors from the 2014 Study
Here are some key lessons for nonprofits we extracted from the data reported in this study:
1. Wealthy donors are ready to give more.
After years of uncertain economic footing, wealthy donors have a renewed sense of optimism. According to the study, the average dollar amount given by wealthy donors increased a whopping 28% in 2013 compared with 2011—up from $53,519 to $68,580. That’s a huge shift.
Perhaps more importantly, the study also revealed that 85% of wealthy donors expect to continue giving as much or more to charity in the next 3-5 years.
2. It’s not always one extremely large gift.
A common (mis?)perception is that high net donors give very large contributions to only one or two groups each year. While that may be the case sometimes, it’s definitely not a steadfast rule.
The study shows that 1 in 10 wealthy donors gave a largest gift of $50,000, while almost two-thirds gave a largest gift that was less than $10,000. Pair that with the average annual dollar amount given listed above, and it appears there’s room for the wealth to be spread.
3. It’s not just about donating.
Sure, large donations are appealing to any nonprofit. But wealthy donors are valuable for more than their monetary contributions. This is actually a group that is very active on the volunteer front. The study reveals 75% of high net individuals volunteered in 2013. And of those who volunteered, 59% volunteered more than 100 hours. 35% volunteered more than 200 hours!
And, as is the case across almost all demographics, those who volunteered gave more. In this case, a lot more: Wealthy donors who volunteered in 2013 gave 73% more than those who did not volunteer ($76,572 vs. $44,137). Clearly, that’s a massive gap.
4. Online giving is increasingly important.
While online giving continues to grow year over year across nonprofit sectors, it may be surprising to learn that high net donors are also turning to the Web to make their donations.
The percentage of wealthy donors who give online has jumped dramatically in the past 10 years. Between 2004-2007, only 15% of high net donors contributed to nonprofits online. Between 2010-2013, that number jumped all the way up to 50%.
5. Those who monitor, contribute more.
Like all donors these days, high net donors want to know that their donations are being used effectively. The study reveals 81% of donors expect nonprofits to spend the “appropriate amount” of their donation on administration and fundraising.
High-level donors are also more likely to keep a watchful eye, with 53% monitoring or evaluating the impact of their charitable giving. This can be a very good thing if the individual likes what your nonprofit is doing. The study notes, those who monitor their giving donated a lot more in 2013—$104,265 compared to $28,543 from those who did not monitor.
Managing the Expectations of This Unique Group of Donors
“This year’s study, more than ever, tells us that when wealthy donors are intentional about and engaged in their giving—when they find that meaningful intersection between their ideas and ideals—they give more, are more impactful and more personally fulfilled,” said Claire Costello, national philanthropic practice executive for U.S. Trust.
That comment nicely sums up the unique relationship between wealthy donors and nonprofits. It also helps define how those relationships are different from other donor relationships. The main difference: There are greater expectations from both organization and individual alike.
A crucial mistake many nonprofits is not effectively managing donor expectations. Not just for high-level donors but for all donors, you have to address their specific needs, wants and expectations—which can vary greatly based on things like donation amounts and demographics.
When you better understand what high net worth donors are looking for from their nonprofit relationships, you can build stronger partnerships and open the door to more opportunities.