The Science of the Squeeze
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There was no confusion about their target: If you have a few assets, my friend, these people want to talk to you. And the more you have, the more interested they’ll be. According to research from the Giving USA Foundation and other sources cited by Falk, nonprofits collected $248 billion in contributions last year, and 83 percent of it came from individuals. While the average American donated about 2 percent of personal income, people with a net worth of more than $1 million anted up nearly half of the total contributions. Most striking: a study by the Indiana University Center on Philanthropy found that single gifts of over $1 million from living donors shot up from 396 in 2003 to 501 last year. Religious institutions got the largest share, 35 percent; education was a distant second at 13 percent, and the arts and the humanities got 5.6 percent, down from 8.4 percent in 1992.
Once the prospects are corralled, it’s time for “tiered cultivation.” That means identifying those who are likely to increase their gift over time and moving them up the “giving pyramid.” (“You can’t spend the same amount of money on a $100 donor who’s likely to double their gift over a few years as you would on a $1,000 donor who’s likely to increase to $5,000,” Falk said.) This requires a dispassionate assessment of human nature. Donors fall into two main groups: the philanthropic, who give for the greater good of the organization, and the entrepreneurial, who give to get specific results and benefits. And on that score we’re not just talking tote bags, good seats, and parking: big-ticket donors are likely to be motivated by access and recognition. A savvy fund-raiser throws them an annual party, arranges a private dinner with the artists, stewards a camaraderie-building field trip to the theaters of London with the company’s artistic director as guide, and always, always remembers to say thank you.
