The Donor Journey: Moving from Reactive to Intentional Giving
During my time running the Effective Philanthropy Learning Initiative at Stanford’s Center on Philanthropy and Civil Society, I conducted research on HNW and UHW individuals to understand what they gave to & why, how they gave, what challenges they faced, and more.
Here’s what I found: The vast majority of donors I spoke with, graduated from college and were asked to make a donation; they did. They went out into the world, got their first apartment and job, went to local cultural events (gave to those groups), were asked to contribute to friends’ races (raising money for charity) and did. Maybe they got married eventually, maybe they had kids, and if they did, they went to the zoo, became members and made donations. Their kids went to school and they started donating to the kids’ schools, and so on.
What I found, however, was that for some donors, with their income steadily (sometimes quite quickly) increasing, they wanted to do more, have a bigger impact, but they didn’t know how. They weren’t totally satisfied with this “reactive” giving. They wanted to be in the driver's seat (not just give when asked) and they genuinely wanted to make an impact with their dollars.
However, there really weren’t resources or options for the kind of support they needed. At one end of the spectrum, there were philanthropic advisors who charge $50K++ to even begin an engagement for donors with highly complex and significant charitable needs (not the right fit for these donors), and at the other end of the spectrum, there were online do-it-yourself resources which often led to feelings of overwhelm and uncertainty about which path to choose. These donors are the very donors who hire a financial advisor to listen to them and give them personalized advice–they want to speak to a human, but they certainly aren’t planning to hire an expensive philanthropic advisor/firm with a solution that’s the wrong size for their needs.
I realized that what these donors needed could be boiled down to 3 things. They need help:
Determining a charitable strategy. Which causes, populations, and geographies are important to them?
Determining the right giving budget and charitable vehicle given their unique circumstances.
Finding nonprofits to fund aligned with their priorities.
This is where the idea for GiveTeam was born. Creating right-sized support for donors whose needs aren’t met with the existing philanthropic advising resources, who need some support, but not as much as mega-mega donors.
As donors make the shift from reactive giving to intentional giving, I believe there are two critical components to supporting donors in this segment:
Introduce them to local/regional organizations. These donors have mostly been giving to (a.) organizations where they already have a strong personal relationship, or (b.) really large national and international organizations whose missions they care about but don’t really have opportunities to interact with. It’s best to introduce these donors to new local/regional organizations so they have the chance to attend an event, volunteer, or get involved in some way. They’re more likely to feel that connection and continue supporting the organizations in the years to come.
Introduce them to smaller/medium-sized organizations. These donors are not writing million dollar checks to one nonprofit. Their check size might be $1K, $5K, $15K, $25K, $50K. That level of donation goes a lot further with an organization whose budget is $400K, $750K, $1M, $2.5M. They will be a “major donor” right away and feel the outsized impact of their gift. There is a psychological component of giving away money–helping donors right-size their gifts and have a disproportionate impact feels great. They don’t have to be MacKenzie Scott or Bill Gates to support their community in a meaningful way.
There are so many donors who fit these criteria–they are your clients, your neighbors, your friends, maybe even you. As a financial advisor, what are you doing to engage them around their charitable giving? How can you support them, add value, and in turn, help them leave a lasting impact on the communities they care about?
