By Todd Cohen
Donors in the inheriting generation are giving larger gifts to fewer causes because “they know they won’t get the necessary attention about what’s happening to their money from a charity unless they give a large gift,” says Penelope Burk, president of Cygnus Applied Research, a consulting firm in Hamilton, Ontario.
The need to pay closer attention to donors is doubly critical, she says, because of a huge gap between the number of active donors willing to put a charitable bequest in their will or make a planned gift, and those who actually do.
Forty percent of donors would make a charitable bequest or planned gift if they were asked, Burk says, but only 8 percent to 9 percent do.
“That gap is worth trillions of dollars,” she says.
A big reason the gap is not being bridged, she says, is that “the fundraising business is over-resourced at the bottom end and under-resources at the top end.”
Most of the fundraising business focuses on securing cash through direct-marketing programs, efforts that many charities simply ratchet up if their fundraising levels off, based on the “assumption we have to have more money at this minute,” Burk says.
“We’re not reshaping the fundraising system quickly enough to address the changes donors have made in their own behavior,” she says.
Planned giving, not big gifts of cash, will be the “fundamental underpinning of fundraising in the future, she says, and charity boards and CEOs need to recognize that shift and provide the attitude, training and investment their organizations need to secure planned gifts.
The focus, she says, should be on developing relationships with donors, and charities can outsource the technical and tax aspects of creating planned gifts.
The University of Western Ontario employs five people in its planned giving office and works with professional advisers to educate them about opportunities at the school for gift planning, and “hoping it will have some impact with clients they’re working with,” says Ted Garrard, vice president for external relations at the University of Western Ontario in London and chair of Imagine Canada, formerly the Canadian Centre for Philanthropy, a research and public-policy group in Toronto.
The University of Western Ontario, which each year aims to solicit more than 100 new planned gifts and to book at least $10 million in new planned-gift expectancies, already has secured well over $100 million in planned-giving commitments it counts on, a total that probably represents only half of planned gifts it actually knows about, Garrard says.
The Orchestre symphonique de Montréal is shifting its strategy by linking its annual fundraising and its endowment fundraising, says Mélanie La Couture, assistant general manager and director of the orchestra’s endowment fund.
With most of its private support coming from corporate donations, she says, the orchestra is developing a strategy that targets major individual donors, using its annual campaign to build relationships with those donors.
“These new donors are special,” says Daničle Lavoie, fundraising director for the orchestra. “They really want to know where their money goes, how it is invested, how they can give to a very special project. We have to be creative in a different way.”
Burk says that kind of approach is critical if charities expect to tap the wealth starting to flow through the intergenerational pipeline.
“In that period when donors have changed behavior but fundraisers have not,” she says, “we stand to lose the most ground.”
Other stories in the series:
Part 1: Canada gears for $1 trillion transfer.
Part 2: Philanthropy booming in Canada.
Part 3: Nonprofits in Canada aim to engage donors.
Part 4: Foundations growing in Canada.
Part 5: Financial-services firms in Canada target philanthropy.