There are 3 components that need to come together for a major gift prospect to become a major gift donor:
- Assets – The prospect must have the financial capacity to make the major gift commitment;
- Personal Relationship – The prospect must come to understand, appreciate, and value the mission and vision of the institution or program;
- Generosity – The prospect must understand how to be generous.
When I interview major donors and prospects and ask questions to better understand them and their perceptions regarding making substantial commitments, it is relatively easy to mine information and data about the first 2 components. Wealth screens and giving histories give me a sense about financial capacity and well-crafted questions can further enlighten me as to their financial wherewithal. Similarly, it is easy enough to gauge the strength of their personal relationship and belief in an institution through questions about mission, vision, leadership, and particular funding priorities.
But, getting a better handle on generosity is another matter altogether. Of course, if the prospect has made previous gifts to your institution, you have a sense of how generous the donor is. Or, if you have confirmed that they have made major gifts to other institutions. But what about the major gift prospect who has never made such a commitment? If you feel secure that their financial capacity is high and they answer questions about mission, vision, leadership, and priorities in an affirming way, how can you tell if they have learned to be generous?
One approach to better understanding how generous major gift prospects might be is to learn how they perceive what I call the “locus of philanthropic control.” You remember the “locus of control” concept in your psychology 101 class. It’s the notion that people either view themselves as being in control of their own lives (internal locus of control) or that the environment is in control (external locus of control). In other words, does the prospect believe that donors control their own decisions about giving, or do they believe something outside the donor – usually,”the economy” – controls the donor’s decisions about giving.
Recently, I was interviewing a major donor prospect who is a very successful hedge fund manager. She is engaged with the institution we were discussing and her financial capacity is known and not questioned. But she has never made a significant commitment. We had been talking about a potential campaign and I asked her a simple question: “From your perspective, what are the prospects of success for this campaign?”
Her response told me where she believes the locus of philanthropic control lies. She said, “I can’t answer that question because I don’t know what the macro-economy will do in 5 years. That’s not really a very good question. Nobody knows what the macro-economy will do. And what about taxes? If there is significant tax changes over the next 5 years that would be huge for any fundraising.”
Clearly, at this point, her view is that major donors give only when the economy is strong and when there is some sense of economic stability. And while we all know that total giving does typically move in harmony with GDP growth, major gifts are still given and campaigns are still successful even when economic times are tough. The reason, of course, is that individual donors make decisions, not the macro-economy. And those individual donors make decisions based primarily on the strength of their personal relationship with you and their belief in your institution.
Today there are numerous organizations that are researching why major donors give. One of the most easily digestible set of studies that highlight the thinking and actions of major gift donors are the Bank of America High Net Worth Philanthropy Studies. These studies of major gift donors highlight the fact that these folk typically are motivated to give by personal beliefs and engagement, not by tax benefits nor the broader economic environment. Far too few practitioners are using studies like these to educate Board members and other major donors and prospects.
We spend so much time teaching our prospects about our mission, our vision, our programs, and our needs. But if you have a Board member or a major donor prospect who views development success through the lens of the economy, you probably should be providing a different kind of education. An education that focuses on teaching generosity. Spending time educating our most valuable prospects on what truly motivates major gift donors to give could be a very wise use of time. Afterall, education is, in fact, one of the best forms of donor cultivation.