Natalea Iskra
How are major gifts programs and capital campaigns surviving the aftermath of Australia’s personal wealth shrinkage? Natalea Iskra investigates.
During the last financial year, the coffers of prosperous Australians took a severe battering. In fact, according to The Boston Consulting Group’s global wealth report, the downturn has slashed Australians’ personal wealth by a staggering 27%.
What impact has this had on major gifts programs and capital campaigns – the two areas of fundraising most reliant upon personal wealth?
F&P recently spoke with a number of fundraising managers and industry leaders to try and ascertain how the landscape of high value (i.e. major gift and capital campaign) giving has shifted since the downturn.
The findings?
High Value Giving Remains Buoyant
One revelation emerged very clearly from our investigation: Australia’s well-heeled are still responding generously to calls for high value gifts from nonprofits.
If the organisations we spoke with indeed reflect the broader sector, it would appear that high value gift income has decreased for 24%, and remained stable for 58% of nonprofits, while the remaining 18% are actually achieving better results since the downturn. That amounts to 76% of nonprofits reporting success with big asks.
Compare this to the US, where, according to The Centre of Philanthropy at Indiana University, 73.1% of fundraisers reported success with major gifts between December 2008 and July 2009.
Specifics Under Scrutiny
In researching this story, we asked interviewees to identify specifics regarding the performance of their high value gift programs, for example how the number and value of gifts has changed, and which end of the donor spectrum was proving most generous.
Our aim was to see whether any clear patterns might come to light that would point to the nature of the changes in high value giving across the sector. For example, were more or fewer people giving? And had the average donation risen or slumped?
While it was unanimously agreed that on the whole, high value giving income has remained buoyant since the downturn, some of the finer details of interviewees’ responses varied markedly.
Size Of Gifts
According to Troy Yerkovich, chief executive officer of Fundraising Management Consultants (FMC), the size of the average gift has notably increased.
“We recently completed a $20 million campaign where the average gift was $100,000-$125,000 – this is well above average,” he says.
The Australian Ballet, too, has been privy to a good influx of high value donations, including a $1 million gift this year.
But the director of Xponential, Craige Gravestein, observes a contrasting trend.
“The value of gifts has remained stationary, if not declined in recent times,” he says.
Jo-Anne Reeves, fundraising manager for Vision Australia, says that since the downturn, “quite a few donors have reduced the size of their gift.”
Developing lower price points to make major giving more attractive to a broader base of supporters has been one tactic the organisation has employed of late. However, Reeves explains, “this development was part of our major gifts strategy, and not simply a reaction to the GFC.”
Are More People Giving?
The general consensus is that yes, more donors are making larger gifts to nonprofits.
“Due to our recent initiative, Vision Australia saw a significant number of new major donors come on board last financial year,” says Reeves. “Unfortunately, we also had a large percentage of regular major donors who didn’t give at all. But on the whole, the numbers have risen.”
“We’ve definitely seen an increase,” concurs Paul Freeman, manager of community relations and fundraising for the Royal Institute for Deaf and Blind Children, which classifies a major donor as anybody who gives $1,000 or more.
Gravestein, too, has observed a spike in the number of donors across the campaigns he’s overseen of late.
Which End Of The Donor Scale Is Most Generous?
Owing to their recent initiative, Vision Australia’s major gifts campaign has been prospering mostly at the lower end of the donor value scale.
“We went out asking for $1,500 from donors who had been giving $100 a couple of times a year. This exercise resulted in nearly $300,000.”
For Bush Heritage, the increase in gifts has been more at the medium range, the $10,000-$20,000 level.
Yerkovich reports an altogether different scenario. “We are seeing more gifts at the top end of the scale,” he says.
An Increased Sense Of Responsibility To Give
According to Gravestein, “Many high-net-worth individuals are making more gifts or larger gifts because they recognise that giving across the board is down. They feel a sense of social responsibility to ensure the causes they care about can weather the storm.”
Yerkovich cites a similar reason.
“The philanthropists I deal with on a week to week basis are saying, ‘we understand that the GFC is having an impact, we have the capacity to give more and so we’re giving more.'”
Are Planned Campaigns Halting Due To The GFC?
So far we’ve explored the effects of the GFC on high value giving programs that are in full swing, but what about those that were due to launch in the current climate – has the GFC ground them to a dispirited halt?
Unequivocally no, by all accounts.
In the course of researching this story, F&P was made aware of 12 different organisations that have recently completed a feasibility study for a capital campaign where the final recommendation was not to proceed.
Not a single one of these 12 ‘no go’s’ could be directly attributed to the economic situation. All were due to the organisation’s lack of preparedness regarding matters such as the case for support, management strategy and prospect cultivation.
Current Challenges
Volunteer recruitment is proving difficult for some in the current climate.
“At this time, people don’t want to be hitting up their friends for money,” Gravestein explains.
Another cause for concern for a number of nonprofits is the high cost of planning and conducting a high value giving program, especially in light of the massive losses many have suffered to their investment portfolios.
“A huge expenditure must occur prior to actually seeking gifts,” Yerkovich says. “Usually donations come in steadily only after a solid period of very careful planning.”
What’s more, Yerkovich advises, planning and due diligence must be undertaken to an even greater degree than before.
“Philanthropists are looking more carefully at the triple bottom line. They’re watching very closely for organisations to demonstrate accountability and expertise, and asking for proof of the project’s economic benefit.”
What Are The Opportunities For High Value Giving Programs?
But donors’ increased level of scrutiny can also translate into an opportunity for nonprofits. Organisations that undertake the due diligence and carefully prepare a solid case for support will be better placed for their campaign to succeed.
“One of the problems before was an inflated sense of optimism,” says Nick Jaffer of Global Philanthropic. “Many nonprofits were launching into campaigns without undertaking a feasibility study. The smarter organisations are now changing.”
Now is also an opportune time for organisations to focus on cultivating donors and nurture donor loyalty through stewardship programs.
What Lies Ahead?
“Because philanthropy is a lag indicator, we anticipate 2010 will be a challenging year,” says Valerie Wilder, the Australian Ballet’s executive director.
Here again, opinions differ.
“We are optimistic that markets and public confidence will improve around March next year, which will reflect positively on high value asks,” Yerkovich concludes.
Natalea Iskra is a freelance writer and regular contributor to F&P.
