My Comments on Philanthropy to Development Directors 4/9/19

Donor cultivation and approach:

Start by building a relationship not predicated on giving, but mission. Do your homework, know with whom you are meeting and understand their relative capacity. Be concise, explain your passion for the mission, ask questions, and allow silences. Ask how they like to be communicated with (email, phone, in person, mail etc.) Finally, don’t beat around the bush; ask for what you want: money (have a number in mind before you meet and don’t be afraid to ask for more than you expect), consider board service, volunteer etc. Follow up with letter of thanks and 501c3 IRS documentation if appropriate. Don’t send a material gift. Exclude your new donor from an imminent auto-campaign that asks for a donation; it’s an insult and reflects poorly on your donor management.

General observations:

Philanthropy can’t fix a broken value equation.

All non-profits can be categorized as either mission-driven, money-driven or ego-driven

Philanthropy is changing: Donors are becoming more reflective and less reflexive, encouraging delivery on mission and collaboration… increasingly reluctant to fund infrastructure and endowment.

Competition works in the business sector but not in the mission sector. Donors expect non-profits to collaborate on mission.

Much of measured philanthropy is religious.

Check your rating on Charity Watch

Make sure you website reflects who you are, your mission, and values effectively. It is the major entry portal to your organization.

Philanthropy also has the capacity to incur or perpetuate damage.

The current tax code needs revisions as it relates to philanthropy:

  • An organization that alleviates hunger, a college that studies hunger, and a policy “think tank” seeking, for policy reasons, to convince us that hunger is not an issue are all tax deductible today.
  • Donor-advised Funds (DAFS):There is $110B sheltered in tax-advantaged DAFs with no legal obligation ever to donate even though the funds can only be used for charitable purposes. Encouraging news is that grants from the 463,000 DAFs, whose total value is $110B, grew 20% from 2016-2017 amounting to $19B in charitable grants.
  • Endowment earnings are generally not taxable.
  • VT has replaced the deductibility of charitable donations with a fixed tax credit for better or for worse.
  • Last year $10B was spent to influence public policy by tax advantaged PACS and “think tanks”. Citizens can’t compete with the donor class in influencing public policy.

Enlightened philanthropy seeks to unwind privilege and wealth disparity rather than enshrine it.

See: https://www.newyorker.com/magazine/2018/08/27/gospels-of-giving-for-the-new-gilded-age

Further references:

Winner Take All by Anand Giridharadas  /  Dream Hoarders by Richard Reeve