Stories from the front lines
A new era of giving is not somewhere on the horizon — it is here. A donor-centric approach to communication and engagement is necessary if organizations today are to be effective in their fundraising. No matter how much one might agree with the idea of being donor-centric, it can be difficult to know what this approach actually looks like day-to-day.
Recent research provides an informative glimpse into some of the most compelling trends in philanthropy today and how they can be mined for practical guidance.
Next-Gen donors want to be engaged, theyʼre idealists and they are impatient.
The source of this insight is the second Influencers in Philanthropy report, which launched last month. Leaders across the philanthropic sector were interviewed to get their take on the key trends, disruptions, challenges and opportunities in the sector. This provides a unique opportunity to hear directly from the heads of the largest nonprofits, leaders among the top private foundations, mega philanthropists and corporate executives with exceptional corporate social responsibility (CSR) initiatives.
What’s Working, What’s Next
Following are some of the noteworthy observations that emerged from this recent research. These thoughts provide real world responses to the challenges faced in today’s philanthropy. They include:
The Collaboration Dividend. Collaboration is a valued and essential practice at many organizations. Entities with complementary missions and resources often team up to maximize impact, sometimes at the insistence of grant-makers.
This is particularly true for research- focused causes. What you can accomplish at scale collaboratively dwarfs splintered individual efforts. As one respondent noted: “The challenge of collaboration, trying to knit together a coalition of people, necessarily requires people to give up a little bit of control.”
From a programming perspective, there is renewed attention on minimizing overlap and redundancy. As today’s donors push for greater transparency regarding effectiveness and efficiency of programs, collaboration among organizations with complementary missions holds even greater appeal.
Evolving Donor Dynamics. Just as the financial world has activist investors, today’s philanthropy has “activist donors.” Donors are bringing a results-driven, business-like metric approach to their philanthropy. This presents an opportunity for even greater engagement with stakeholders.
Donor engagement is more than a mantra as the sector works to build deeper, multi-point connections with donors. For example, as one organization’s capital campaign for its faith-based schools serving inner city youth struggled to gain traction, a new donor engagement strategy was launched.
Potential donors were invited to join the students for their federally-subsidized lunch. This was followed by a presentation using a variety of economic and demographic data points to connect the superior academic outcomes of these schools with potential economic revitalization of the area. This reset of the effort, with a deeper connection to the donor perspective, proved successful.
While connecting donors more directly with mission and impact can yield results for your organization, such engagement is a challenge for those whose work is primarily research-oriented or geographically dispersed. Here storytelling — with emphasis on authenticity — remains a dependable and effective approach, according to respondents.
A New Perspective on Structure. What an organization “is” has become less important than what it gets done for many of today’s donors. Supporting a cause is no longer confined to philanthropic donations alone
Consumers, particularly younger consumers, increasingly take an all-encompassing view of their support of causes they care about. The goods they purchase, the services they engage, are also evaluated for their compatibility with deeply-held views on topics such as the environment, ethical sourcing and workers’ rights.
In a tight labor market, companies are working to differentiate themselves via their track record. Corporations are expected to not only do well but to do good in the process, or at a minimum do no harm.
While donor-advised funds are on the rise, today’s philanthropists are also looking beyond mere grant-making to address issues. Equity-like structures, impact investing and microfinance strategies that leverage technology and entrepreneurship are just some of the “non-nonprofit” approaches proliferating.
One global nonprofit, seeking affordable insurance for its constituents, owns an insurance company. Such social/business hybrids are likely to continue to grow with technology providing a key to implementation.
Tech talks, but still softly. The embracing of technology’s increased capabilities is more evolutionary than revolutionary at many organizations. Audience segmentation and highly personalized messaging are some of the low-hanging fruit, yet this fruit is still out of reach for a surprising number of respondents.
Some innovators are exploring exciting new avenues that leverage artificial intelligence (AI). But cloud-based services that tap into even the most rudimentary AI insights are still relatively rare in philanthropy, a source of frustration for technically-savvy practitioners. Some cite the value of blockchain and cryptocurrency in extending the reach of their programs. Still, technology is viewed as having its limits.
“One anxiety I might have is that there is a hope to believe there is a tech fix for some of the issues we are facing that cannot be replaced by human-to-human relationships,” one respondent shared. “Relationships can start online but they need to be nourished in a face-to-face experience. That’s how you build trust.”
Next-Gen donors. While the next generation of donors is often discussed with a sense of mystery, many of the report’s respondents were increasingly successful in their engagement strategies with this cohort. As a result, they were quite optimistic about the next evolution in philanthropy.
Many noted an entrepreneurial, portfolio- like approach of younger donors in their evaluation of organizations they’d consider supporting. What is the return on investment? How effective are the programs? This questioning of efficacy can even extend to board composition as activist donors include review of board dynamics as part of their assessment of organizations they support.
“They want to be engaged. They’re idealists and they are impatient,” said one philanthropic leader who participated in the report and strikes a chord of great optimism regarding the future of philanthropy and the next generation. “So, they are looking at the most marginalized populations here at home and abroad. They are going to teach us a lot and we need to all appeal to their greatest hopes, not their greatest fears.”
Brian Crimmins is global managing director of ONE HUNDRED agency in New York City. His email is brian.crimmins@onehundredagency.com
