This article was published in 2016 and serves as a valuable resource for tracking changes in priorities among ultra wealthy individuals. We published an update to this research in 2023.
It is not necessarily your organization’s mission that matters most to ultra-wealthy donors.
Some data sets are worth going over twice and making a video about them so that they sink in. This week’s Fast Facts video is one of those data sets. After all, what organization couldn’t benefit by better understanding the factors that inform and motivate a gift of more than one million dollars to a nonprofit organization?
The results of this study are worth blazing into our brains. While you may have guessed that the items topping the charts would be on the list, you may not have guessed that they would be the most important factors when high net worth donors considering making a gift.
So, how can organizations engage high net worth donors? To get to the bottom of this million-dollar question, we asked these individuals themselves. The answers might not be what you think.
We define an “Ultra High Net Worth Individual” as someone with net assets greater than $50 million. 38,000 such individuals reside in the US, and that’s the greatest number of these folks in the world. The study below collected responses from 112 Ultra High Net Worth Individuals. For the study, undertaken by IMPACTS, individuals were asked open-ended questions to identify their most important considerations with regard to making a gift greater than one million dollars to a nonprofit organization. Individuals were then asked to rank considerations from 1-10 in terms of their importance.
There’s a tie for the first place consideration. Who else has given to an organization and how much other major donors have given are the most important factors when these folks consider making a major gift. Who is on the board is the next consideration, followed by how much those board members have contributed, round out the most important factors informing giving from ultra-wealthy individuals.
Interestingly, it isn’t until the fifth, sixth, and seventh considerations that the impact of a major gift, mission, and an organization’s commitment to that mission make an appearance.
To whom an organization’s mission matters, matters most when it comes to making a large gift.
These findings are not altogether surprising. Successful fundraisers know that money often follows money, and that social connections play a big role in securing gifts from very large donors. But what’s interesting is that simply being good at your mission often isn’t enough. You need to have demonstrated that your mission is worthy of investment among high-impact individuals.
These data also demonstrate the importance of having a connected board that is willing to put its money where its mouth is. After all, if the folks on an organization’s board dont care enough about an organization’s mission to support it in a meaningful way, then why should someone else?
Mission and impact are important. After all, data suggest that the mission and purpose of the organization play important roles in securing quality board members in the first place. That said, once the board is complete and it comes time to look for high net worth donors, having wealthy evangelists (or a group of them!) advocating for your organization may be critical for success when it comes to fundraising.
This information may be seen as a call to action for board members. The data underscores why organizations need them most. And, interestingly, studies reveal that board members often misunderstand their role as financial supporters within cultural organizations. It’s time for all of us on boards to step up. Again, if we’re not giving or championing the cause of our institutions, how can we reasonably expect someone else to do so?
It’s also a wake-up call for staff members. The identity of donors and board members and their giving fuel major gift decisions. Certainly, staff may play a role in facilitating and supporting connections between board members and potential donors, but what matters most to donors are the philanthropic commitments of their peers. If board members don’t step up, then it is difficult for organizations to overcome this internal giving deficiency. And that’s exactly what board members who do not give adequately create – a deficiency.
For all of us on boards, let’s rise to the occasion. We’re in the most target-rich country for ultra-wealthy individual giving in the world. Our development staff can do great things, but they need our support when it comes to our most potentially impactful donors.
And nonprofit organizations: When you get a big donation from a key player, milk it. Shine lights on it. Celebrate it. Leverage it. Knowing what motivates giving for ultra-wealthy individuals can only help us better reach our goals.