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It has been an unusual and difficult time in fundraising. Now is the time to take stock, find the new angle and re-evaluate, advises Jodi Kennedy.

Over the past 18 months our active philanthropists (people who are establishing giving during their life) have been willing to re-evaluate their giving choices and the trends we’ve seen have been broad and diverse. From an active philanthropy point of view, we’ve seen changes in where they have been giving geographically, a relaxation of granting conditions and the amount being granted. 

That augurs well for fundraisers — opportunity is inherent in change. The upheaval we have all been through means we’ve all truly had to reconsider our values — and our priorities. 

As one of the country’s leading trustee sources of philanthropic funding (around $100 million annually), Equity Trustees saw change in 2020. We saw a rise in giving to NSW-based organisations, which is likely connected to the catastrophic bushfires of the summer of 2019/20. In the aftermath we fielded many questions from our clients about how to best assist the communities, fauna and flora in bushfire affected areas, and as a result we saw donations to NSW-based organisations move from 6% (FY19) to 9% (FY20) of our total granting. 

Importantly, we saw more clients asking their sector partners the question, “What do you need and how can we best support you?” and moving to provide untied grants, rather than specific project-driven granting. Almost a quarter of our active philanthropy clients deliberately repositioned their granting toward organisations assisting bushfire or those impacted by COVID-19.

In terms of the type and amount of funding coming from the philanthropic trusts under our stewardship via the general granting program, it was on a case-by-case basis. We did however see a rise in the total number of grants made from our philanthropic trusts >$100,000 from 189 grants (FY19) to 204 grants (FY20). 

The pool of available funds to distribute relies on a modest but steady flow of newcomers keen to begin their journey in structured philanthropy, as well as experienced and established philanthropists contributing to their funds. In our latest Giving Review, it was positive to see this in action, with philanthropic funds under management (FUM) growing by 23% in FY20 compared to the year prior, despite COVID impacting discretionary spending. For those who choose to establish their philanthropy via a sub-fund in our Equity Trustees Charitable Foundation, donations were up a cumulative 9% more than the previous financial year. This is important because the more funds invested, the greater opportunity to maximise the money to be directed to for-purpose organisations and charitable projects. 

Despite an increase in giving from many clients, there still remains significant challenge in the sector because of unprecedented need in communities, locally and around the world. The reality is that philanthropy will never be able to meet all social need, but we must do our best to maximise the effectiveness of funds available to us. As a large funder we are committed to constant and meaningful consultation with the for-purpose sector —we believe there is no other way to create meaningful impact and to support capacity building in organisations. That communication has reinforced for us how important it is for organisations to take a look at their approach in 2021 and make sure that they’re well positioned to receive relevant philanthropic funding. To do this, it’s a good idea to look inward and evaluate the way you communicate your story and reason for being, and especially your stakeholder stewardship. 

As a trustee, we are responsible for distributing funds of around $100 million every year thanks to the generosity of our clients past and present. This translates into almost 3500 grants annually. It gives us a unique insight into both sides of the coin — the changing needs of the community and the challenge of fundraising. 

We have learned that for fundraisers, analysing, critiquing and even recrafting your philanthropic narrative is an important first step in maintaining the engagement of those philanthropists already committed to an organisation or cause. And for attracting prospective new funders.  

The story you share with your longer-term philanthropic donors will align, but should be slightly different to, the story you share with your regular donor, workplace giver or corporate giver. It should essentially outline the story of the problem that you’re solving, how you contribute to the solution and what the world will look like when you’ve done it (or at least made progress on it).

It’s a challenge to communicate your story for the first time in a way that is compelling, direct and unforgettable, but with enough complexity that you engage a prospective philanthropist to take part in the journey towards a solution with you. Your mission is to help an interested philanthropist cross the line into true commitment, and to relay your mission and uniqueness to their peers. You need to equip them for the message they can share days or months after your initial meeting when you engaged them so brilliantly. If you can do this, you’ve done a good job at crafting your philanthropic narrative.

Looking to others in the ‘family’ or orbit of any person who commits to your organisation or cause is the next step. Often fundraisers will focus their energy on developing relationships with the family leaders — those who authorise the cheques as a priority. And that’s understandable. But it’s important to take a broad view and consider the next generation or next circle from the orbit, which can include their professional advisers such as lawyers, accountants and trustee companies who may have a degree of influence in a granting decision and who will surely be a part of any succession. Understanding a family’s giving philosophy or approach, for example the existence of a foundation, will give any fundraiser an idea about how many other stakeholders it would be wise to contact. 

Asking for permission to contact stakeholders in that ‘next’ circle should always be a priority — even better if your key giver or donor wants to engage them themselves. Permission to continue to contact them is a great step in forging a trusting relationship.  

Many of us know that tailoring communication based on a donor’s preferences will advance the connection between them and an organisation. This is a concept that is easier said than done. Understanding how much a donor or stakeholder would like to be contacted, the level of detail they require, their communication preferences and then tailoring your communications, is critical to effective stakeholder stewardship. 

A few practical questions to help evaluate the task at hand include:

  • A philanthropist who is giving from a foundation or a sub-fund philanthropist will probably have no tax reason to receive EOFY tax appeals — are your foundation donors receiving them?
  • Do the ‘next-gen’ of your committed donors receive the same style, detail and medium of communication? Is it working for them given they might be different from other generations or live and work differently?
  • Have you asked about the communication preferences (letter, video, phone call, email) of your major donors as well as their preference on high-level versus in-depth detail? Does your communication match their preferences?
  • For foundation or sub-fund givers, are you aware of all the professional service providers they engage and who are involved in the trust, beyond the direct family members? Do any of them have decision making influence?
  • Are your testamentary trust stakeholders receiving the same communications as your private donor (active philanthropist) families?
  • These are some of the considerations that can make real differences to building connection and commitment, not to mention longevity, from any donor base. Our experience shows they notice.

It is likely to be another challenging year for the for-purpose sector, as communities survive and recover from the impact of 2020 (like everyone, we’re hoping it is mostly relegated to ‘last year’ and stays there). Philanthropists and funders like us continue to see an increasing number of requests for funding support, and the reality is that approaches to philanthropic trusts may not always succeed. It’s a long game and endurance is important.

A recent survey by the XFactor Collective, revealed that employees in for-purpose organisations are feeling stressed and anxious, exhausted and frustrated — and up to 40% are not taking care of themselves (up from 18% pre-pandemic). Julia Keady, CEO of The Xfactor Collective, warns that we are relying “on the culture of self-sacrifice and increasingly a sector working under unacceptable health conditions.” No-one wants this.

The sector needs passionate, professional, capable and energised fundraising professionals. It’s up to all of us in the philanthropic ecosystem to be mindful of the very real risk of burnout and acknowledge we need fundraisers to play their linking role in the pursuit of funds for their causes.

To say the last 12 months have been challenging for so many communities, families and environments is a cliché, but it’s true. The good news is that there are positive indications that active philanthropy — practised during one’s life — is slowly increasing. Putting in the time to make sure your organisation is well positioned to receive relevant funding through sharpening your philanthropic story, tailoring your communications and embracing all of the stakeholders in your donor and philanthropic orbit will reap the rewards, and the dividends, that organisations need to meet their mission. 

To read more about our analysis and approach to philanthropy, see our 2020 Giving Review. We welcome your contact — so please get in touch with us if you want to talk. You can also find us on LinkedIn and follow us on Twitter.

Jodi Kennedy is General Manager, Charitable Trusts and Philanthropy, at Equity Trustees.

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