Fundraising presents a challenge to fundraisers and donors alike: the ‘ask’ can be uncomfortable. However, there are a few simple principles that, if borne in mind by fundraisers and applied to the process, can change the perspective and provide the basis for a mutually beneficial and lasting relationship.
1. Make a personal connection
HNW individuals are human beings, with human hopes, dreams, regrets and concerns. They have hopes for the future, they are sensitive to issues that affected them in the past, and they care about the communities around them. The primary goal for a non-profit fundraiser is to find a compelling reason for an HNW individual to give some of his investible assets to a particular cause.
Any conversation about giving must therefore start with establishing a personal connection between the HNW individual and the cause in question. Is the cause one about which the HNW individual cares enough to put his money (and his name) behind?
To answer this requires a thorough and delicate understanding of who the HNW individual is, where he comes from and how he got to where he is, and where his interests lie.
2. Focus on the detail
It is rare for wealthy individuals to stumble across their wealth by luck or by accident (and in the cases where that does happen, for example by winning the lotto, such wealth is unlikely to be sustained). Instead, HNW individuals build and maintain their assets by understanding the importance and power of return on their investments.
As HNW individuals seek monetary return on their financial investments, there is a similar and expanding demand for social returns on philanthropic investments. As such, NPOs need to shift the focus away from charity. In the current philanthropic climate, it is no longer simply a matter of seeking a ‘donor’. Instead, fundraisers need to be able to present and promote the opportunity to invest in a cause.
They must become comfortable with the details and demands of using metrics to show the active, cause-related impact of an investment. An NPO should become – and should be seen as – a platform that delivers relevant and measurable social and/or environmental returns.
3. The power of relationships
HNW individuals spend much of their time – personal and professional – with other wealthy individuals. And when people get together, they talk. As a fundraiser, consider: Is your cause providing a new topic of conversation? Are you able to provide an interesting and optimistic piece of news to present at a dinner party?
For example, an inspiring person is making positive change to the country, and this has become possible as a result of the efforts of your cause. The best advertising is endorsement and referral. This does not mean cold calls or personal introductions, although these too have their place. Rather, fundraising has always prioritised relationships first – and transactions only thereafter.
It is critical to focus on the relationship you are attempting to build at all times. The opportunities to ask for and receive donations will present themselves through that ongoing, personal connection.
4. It’s not all about the money
Reports show that, although there are a growing number of generous donors in South Africa, the majority of wealthy donors give less than R25 000 per annum to charitable causes. This is a surprisingly small proportion of the total incomes of HNW individuals.
On the one hand, there are a number of tax benefits related to charitable giving and these must be properly understood and exploited. On the other, it is important to bear in mind that giving comes in many shapes and forms – particularly in Africa.
Non-monetary donations are often the most valuable gifts. Formal fundraising targets should be expanded beyond the monetary to include other assets: property, products, materials and equipment, as well as personal and time-based contributions, such as mentorship or serving as a director on a board.
5. Looking beyond HNW individuals
HNW individuals are not the only group on which to focus fundraising efforts. A high income is not necessarily indicative of a likelihood of large donations. Indeed, many less wealthy individuals routinely give a proportionately high portion of their income to charitable causes.
Fundraisers should research potential supporters of their causes carefully. It may be beneficial to balance the traditional attention on HNW individuals with an approach that focuses on less wealthy, but potentially more accessible donors who are willing to support your cause.
The fundraising landscape in South Africa is changing. It is no longer simply a question of charity: donors need to embed their philanthropic activities in a broader framework of sustainable investing. However, with careful research and sensitivity to context, NPOs can encourage support for a cause with grace, and establish lasting relationships in the process.
Colin Habberton is the Director of Global Partnerships for the GivenGain Foundation. He is one of the cofounders of the NPO Collaboration Dialogue, a fellow of the Institute of Directors in Southern Africa and a member of the advisory boards of a number of local and international nonprofit initiatives, including the Resource Alliance’s International Fundraising Congress.
Source details: Nedbank Private Wealth Giving Report III