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Don’t Be Afraid of Your Mega Donors

Don’t Be Afraid of Your Mega DonorsIn my years working with nonprofit and development directors, I’ve noticed a certain underpinning fear of major donors. This is not a monster-under-your-bed fear (or maybe it is for some of us). Rather it’s a reverence, awe, caution, and wariness that permeates the relationship and all interactions with the donors. 

And this makes sense. Your mega donor is literally the epicenter and foundation of charitable giving to your organization. And even I, an advocate of crowdfunding and the power of micro-donations, still realize that the majority of your monetary support will be generated by major givers. 

But sometimes this reverence and fear can lead to unhealthy practices. 

One of the most common ways this fear holds us back is pledges. Or rather, the rules we establish at the outset of seeking and following through on these promises. As anyone in the space knows all too well, pledges do not always a donation make. You know how the joke goes: an outlaw once decided to hold up a town of philanthropists. At the end of the day, he made off with $100K in cash and $100M in pledges. 

Many nonprofit professionals have expressed their hesitation for executing the proper—and critical—infrastructure to ensure pledges are met. I’ve seen major pledges to major institutions that have never been realized. So when you meet with your mega giver, you have to be clear about what you’re getting yourself into, because the last thing you need is to commit yourself to a project contingent on a major gift or to publicize the pledge with your donor community, and have it fall through the cracks. 

It is vital to delineate a collection process at the outset. Don’t be afraid of instituting strong legal practices, such as a letter of intent (LOI), that communicate clear, assertive measures to guarantee co-operation and fulfillment. As a representative for your entire organization, it is important that you speak to a consultant and create a system with a realistic payment plan and explicit time frame—even if the latter stretches over a long period of time. 

Anonymity is another contributing factor to pledge-failure. Everyone has a right to make his or her gifts anonymously, and no one should ever feel pressured to reveal his/her identity. That being said, transparent giving builds accountability and trust, and inspires the greater donor community to get involved. This trust is especially crucial in a matching campaign, as private giving does not elicit the same impact within the broader spectrum of supporters. When planning such a campaign (or seeking pledges for an upcoming initiative), make the case from the get-go. If your mega givers want to create the most bang for their buck—and they generally do—illustrate how their gifts will motivate other donor participation, launching a domino effect of giving. 

Another example of unhealthy practices is fear of recontracting. If our mega donor made a pledge on certain terms, such as sponsoring an annual scholarship fund, and this year you have an opportunity to allocate those funds through a new initiative or program, you should not be afraid to go back to your philanthropist and recontract, or even ask for an increase, guaranteeing an even greater ROI. If that $10K can be used to leverage another $10K from the extended donor community, it’s accepted and encouraged to recontract that gift, changing the way it will be allocated and marketed to elicit the greatest impact for your cause. 

But he’s so eccentric!!! Many times, an organization won’t even bother approaching a mega donor to follow through on, or recontract a pledge, because they think he or she is “eccentric.” And maybe he is. Maybe he spends his days playing golf in his bathrobe and riding ostriches, but you, as the representative of your organization, still have the responsibility to represent both your cause and his investment. You are the matchmaker. The shadchan. And like all marriages, it might take a lot of not-so-silent tantrums, Kleenex, and mimosas at 10 a.m. to get through it. 

What you should not do is push off that meeting when you have a unique opportunity for her investment. If you have bad news, yeah, you might be afraid to press the call button, but if you are presented with the chance for something wonderful, to make her investment more impactful and efficient, she will be happy to hear from you. 

The worst she could say is no. And chances are you’ve reaped a fair share of those. But keep this in mind: If you ask, it’s possible you will get that no. But if you never ask, it will be impossible to get that yes.

Don’t Be Afraid of Your Mega Donors

Moshe Hecht, @moshehecht, is chief innovation officer of Charidy, @wearecharidy, a crowdfunding program that has helped 1,500 organizations raise over a half billion dollars. Moshe is an accomplished entrepreneur and team leader whose passion lies at the intersection of technology and charitable giving. When Moshe is not at the office, he is writing music and enjoying downtime with his wife and three redheaded children. 

 

Topics: Donor Relations Major Donors