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Fundraising,Planned Giving Published Date, 2022

The “Next Generation Of Campaign Gifts” Summit: 4 Takeaways That Are Shaping Our Understanding Of Philanthropy

Created By: Lauren Hancock
September 19, 2022

Last month, Orr Group and The Burgess Group hosted a summit in Sundance, Utah, dedicated to the “Next Generation of Campaign Gifts.” Amidst the vibrant exchange of insights into fundraising and finance today, I came away with four lessons that will continue to shape my understanding of philanthropy.

1. Farewell, 80/20! It wasn’t long ago that fundraisers cited the 80/20 rule as gospel. 80% of campaign dollars came from 20% of donors. These days, the balance (or imbalance) has shifted further, where a 90/10 or even 95/5 ratio is more realistic. And no wonder, when the net worth of the top 1% of earners in the U.S. increased from just $2.3 million in 1989 to $11.1 million in 2019. Development departments will get more bang for their buck by pursuing a small number of mega-donors who want to make their mark through transformational investments in nonprofits.

>>>Philanthropy Is A Financial Activity: Nonprofit Executives Need To Speak The Language

2. Cash is not king. The title of an eye-opening presentation by Texas Tech University’s Russell N. James III is rooted in the fact that cash constitutes 3% or less of financial assets held by families. “If you are asking for cash,” he advises, “you are asking small.” As campaigns and fundraising rely more heavily on high-net-worth donors, an asset-based approach to asks is key. A check will always be welcome, but in today’s world, productive relationships with high-net-worth individuals usually entail more complex transactions, which unfold over a period of months or years. There are two exceptions that prove this rule:

  • A groundswell of relatively small individual gifts (through crowdfunding, for example, or a year-end matching gift opportunity) might be useful to demonstrate your relevance to a big donor.
  • Donors who want to teach their children about the power of philanthropy might be engaged through lemonade stands, bake sales, and similar fundraisers, but the engagement is the point here, not the revenue.

3. Here come the new asset classes. At the Summit, the financial experts at The Burgess Group helped the group of nonprofit leaders gain a better understanding of a variety of old and new vehicles used by high-net-worth individuals. We discussed the advantages of charitable lead trusts, premium financed life insurance, and more. Meeting the top of the donor pyramid on their terms means embracing strategies that draw upon the right asset class at the right time. In many cases, planned giving will play a part in a blended gift. Remember, we are on the cusp of the largest wealth transfer in U.S. history—estimated at $68 trillion, with about 9% going to charity. Many of the gifts you receive (assuming you are prepared) will come in the form of home or business equity, stock transfer, cryptocurrency, and other vehicles. Getting more sophisticated financially is no longer a luxury.

Source: The Great Wealth Transfer, Cerulli Associates

4. Planned giving should be more than an afterthought. Professor James has found the average planned gifts to be significantly larger than a donor’s largest cash gift. Moreover, in terms of staff time, this type of support will net your organization substantially greater return than major gifts, annual giving, and events. Finally, it helps you to plan for and mitigate the impact of financial crises and can help build reserve funds and create an annual stream of revenue to help provide long-term stability.

>>>Has Planned Giving Made It Into Your Nonprofit Organization’s 2022 Development Strategy?

There’s nothing like supporting the mission of a nonprofit you believe in. As a fundraiser, I find it immensely gratifying to play a part in helping an organization realize its ambitious educational, environmental, or justice goals. At a time when the missions of nonprofits matter more than ever, there’s not a moment to waste to become more sophisticated about how we do our jobs—especially if it means growing our impact.

Want to increase impact and drive innovation at your organization? Get in touch with Orr Group today to understand how we can help you grow.

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