Chapter 9

Major Individual Donors:
Rich and Not-So-Rich People

People can give relatively large amounts of money to your group without being fabulously wealthy. For you, a gift of a few thousand dollars, or even a few hundred may have significant impact.

For the purposes of this chapter, the definition of `large gift' will remain open. Start with whatever amounts the top 20% of your current donors (if you have any) give. Consider who may be worth approaching with the one technique that is more effective than any other: the face-to-face request.

Only gifts from individuals (or couples) will be discussed in this chapter. The techniques outlined here do not (repeat: do not) necessarily work with institutional givers such as companies, foundations and governments.

The task of soliciting large donations from individuals causes most people great anguish. Many are convinced that they personally could not successfully request a major personal contribution, no matter how much training they have. Sometimes they are right.

Some don't believe anyone who could accumulate enough money to make a donation could share their values. They are often angry at rich people. This may be based on political analysis, hard personal experiences or simple jealousy. It is important to be able to put this feeling aside if you hope to gain support.

Fundraising is not a revolutionary act, as author and consultant Joyce Young has said. You may want to change the system. But the secret of getting money from very wealthy people in our society is to understand as best you can how the political and economic system works. Not to figure out how it should work, but how it does work today. Then utilize this to the advantage of your cause.

There are a minority of people in this country, and in any community, who have more money and more power than the people you are trying to help. The question is, how can you gain access to that money and power, to make positive changes.

Profile of Major Individual Donors

Major donors do have more money than the average. Although there are a saintly few who live quite frugally and give away large sums, it is often easier to recognize potential major donors by their income and lifestyle than by their donations. On the other hand, people with very ordinary incomes and lifestyles have given donations of $500 to $1,000 or more to many groups.

Major donors are not limited to the handful of super-wealthy families with famous names. They do not even have to be what is commonly thought of as rich. An income of $75,000 a year and up qualifies a person as rich in Canada. In some communities considerably less will do. Many people who earn their living in professions and middle management are sufficiently wealthy to help your organization. Two income families may well have the surplus income to share.

Many people who are now major donors, even among the truly wealthy, had idealistic youths. They may still have strong ideals which they have only partially put aside to get ahead in their fields. They may still feel strongly about causes, and want an opportunity to help.

Others inherited their money and shouldn't be tainted by the methods that their ancestors used to get it.

Major donors do give money away. Perhaps they have a sense of noblesse oblige. Others have personal reasons to give to your cause, perhaps because they, or people they love, are disabled, or involved in the arts, or affected by pollution or urban crime, or whatever is the focus of your group. Perhaps they simply agree with you, at least in part.

They are not always famous. Most have low profiles, so you will need help to find them. For everyone whose name appears on a building there are many more who give without public recognition.

People with money like to have fun, just like everyone else. The richer they are the more they can spend on having fun, as John O'Leary points out. That is why so many nonprofits have gala special events that successfully charge high admission prices.

They like political power and influence. They may be active in party politics. Often this is seen as a necessity to preserve their way of life. They may also use politics as a method to make useful contacts. Ask friendly politicians to help identify potential major donors.

They are incredibly busy. A stranger may have to book six months in advance to get their time.

They are decisive. A major individual donor considering giving money to a nonprofit doesn't have to take three months or more to clear it with a board. A major individual donor can pull out a chequebook and contribute on the spot. They can be a source for quick cash — which is invaluable in moments of crisis or unforeseen opportunity.

Wealthier major donors often do not have the fear of fundraising that so many other people have. They talk about money all the time, whether discussing business, consumerism, or charities. They often give to each other's causes.

The richer they are, the more they form a close community. They live together, go to school together, marry one another — especially in Toronto, Vancouver, Halifax, Montreal and other larger centres. Even when urban renovations result in very mixed communities, there is not usually much inter-mingling between neighbours in wildly different income brackets.

They are virtually the same in French or English.

Where do generous people live?

Manitoba and PEI had the highest percentage of contributors in 1994 for the fourth consecutive year, according to a Revenue Canada study. In both provinces, 33% of tax-filers claimed charitable donations. The highest percentage of tax-filers donating were located in Rockliffe, Ontario (a wealthy part of Ottawa), where 47% of tax-filers claimed a charitable donation.

The average Canadian claimed charitable donations totaling $586, up from $567. Half of contributors gave $130 or more, unchanged from 1991. This is the median. The higher average is explained by a small number of Canadians who contributed very large amounts.

The average donor was 48 years old. However, the age group with the highest donation is the 55-to-64-year-old category, giving an average of $1,500. Those over 64 were second highest, at $840. Although the data were not available, it seems likely to confirm that the oldest group gives the most as a percentage of income. Canadians under 35 gave the least, an average of $300.

Newfoundlanders had the highest median contribution: $240. This was $100 greater than the national median. This proved an old theory true, yet again: the poorest people give the most. The numbers bear this out with minor variations. Newfoundlanders had almost the lowest median income among donors, at only $26,600, yet they gave both the highest median donations and the highest percentage of their income to charity at .9%. Donors from PEI had the lowest income, at $26,300, and gave second highest, .84% of their income.

The donors with the highest incomes were in the Northwest Territories and the Yukon, and they gave roughly the lowest percentage of their income. In actual dollars, however, the median donations were about the middle of the pack.

People in rural areas again proved the most generous. The top 12 donation areas were all rural. Cardston, Alberta, a community with a large Mormon population was the most generous, with a median donation at $2,010. Next were Raymond, Alberta, and Blumenort, Alberta, tied at median donations of $1,915. Caronport, Saskatchewan, gave $1,865 and Hepburn, Saskatchewan, $1,600.

Quebec was the province with lowest median gift at $90. This may be a measure of attitudes to income tax more than to charity. The procedure for claiming charitable tax credits is more complicated in Quebec than any other province. Reportedly one in four Quebeckers do not even request tax receipts for donations.

Despite Quebec's overall low rating, Hampstead, Quebec, a region of greater Montreal, had the highest median donation of all cities, $1,040. Winkler, Manitoba ($960), Steinbach, Manitoba ($860), Rockliffe, Ontario ($750), and Coaldale, Alberta ($590) came next, in that order.

The highest increase in average donation was in the Northwest Territories and British Columbia.

Breaking the study into smaller groups, the postal Forward Sortation Area (FSA) with the highest median contribution, of $1,230 was the M5N area of North York. North York also ranked fourth and seventh, with M4R and M4N.

Quebec had three of the top 10 FSA's, despite its overall low giving level. These were H3X in Hampstead, H3Y in Westmount, and H4V in Cote-St-Luc.

Breaking it down even finer, Revenue Canada looked at individual postal walks. The most generous were in Toronto, North York, and Hampstead. An unspecified postal walk in the M5P area had a median contribution of $2,790, and a postal walk in the M6B area had $2,385.

What about the really rich?

Although major donors do not have to be rich to be generous, odds are you have a connection to someone who is rich. “The fact of the matter is that there are a lot of wealthy Canadians”, reported the Financial Times of Canada on 29 May 1993.

A wide-ranging study of wealth a couple of years back by the Toronto-based accounting firm of Ernst & Young found that some 427,000 Canadian households ranked as millionaires. That's 4.5% of households. Of them, 268,000 have $1 million to $2 million in net assets; and 18,900 have more than $5 million.

As for the really rich, some 500 households were in the $50 million to $100 million range and another 135 households had $100 million plus…

Many of the millionaire households in the $1 million to $2 million range would not consider themselves wealthy…

In the next decade, the number of households in the $1 million to $2 million is expected to grow by a whopping 201%. And “a large number are expected to make it over the $5 million threshold, where the number of households is projected to grow more than sevenfold.”

Ask a CEO

“Almost all CEO's have volunteered their personal time to a charitable cause at some point in their lives and many are current directors of various charitable groups or foundations,” according to a poll taken by the Angus Reid Group in 1992. In terms of their own personal financial commitment to charity, CEO's tend to be strong supporters and two in five give more than $3,000 of their own dollars to charities each year.”

How do you get Major Individual Donations?

The key is to get one of `them' to do it for you.

The first trick — perhaps the only trick — is to find your first major individual donor. One person who travels in the right circles and is willing to help is all that it takes to start, as John O'Leary pointed out.

Where do you find the one who will get you started?

Check your donor list. You may be surprised to find the name of a supporter who is well to do. She or he need not necessarily be rich.

Ask your board and volunteers to check their personal networks. Are there any people you went to school with who have the income to be a major individual donor? Did any of your relatives marry rich?

Make a list of 20 influential people in your community. Choose people who may have a connection to your cause, if possible. See if you have any routes of access to these 20 people.

Do you belong to the same church, community or social organization as any major donors? If not, could you join?

Politics is a good source. Major donors get involved, and so can you.

The least effective way to contact a major individual donor is a cold call. The richer they are, the worse this is. You are unlikely to do well by phoning to say “Hello, this is John O'Leary. Is Conrad Black there? No? Could you tell me when he'll be there? Could you ask him to call me?” Surprisingly, it does sometimes work, though.

If you must make a cold call, write a letter in advance indicating who you are, what you are calling about and when you plan to call, so s/he is forewarned and knows your name at least. If they are not interested, they will reject you faster — which saves you from wasting your time.

If you are persistent, you may eventually get an audience, or at least an opportunity to speak to an assistant. This certainly works with politicians, although it may not work as well with private citizens. Please note, however, that the cold-call method is not recommended.

Politicians as a working path to major donors

Aspiring politicians are among your best prospects. They have an immediate reason to help a good cause like yours. They want to be able to show how they care by their involvement in the community. Many have money. Most at least know people who have money. Major donors are essential to finance most election campaigns.

Politicians who have been elected are too busy. One who is still trying to break in to politics is more likely to work hard making friends everywhere.

Politicians in office may help if you call and say you are seeking an opportunity for mutual support on points you both agree on, not a protest on the points you still disagree on. They may well be willing to host a breakfast or reception on those principles. Later, you may even find them more approachable on the points you do not agree on.

Opposition leaders (especially at the provincial level) are good for this. Often they have difficulty finding public platforms where they can be seen to be doing good. If they are elected later, they may remember you warmly.

The Lieutenant Governor is a possible host. Although s/he can't be partisan, charity receptions are part of the job description.

What to ask a Major Individual Donor you haven't met

Don't ask anybody you don't know personally, unless there is absolutely no one better. Take your most influential volunteer with you.

Do not ask for a donation right off. It is too easy for a donor to say `no'.

“If you want money, ask for advice. If you want advice, ask for money,” says author Joyce Young. (See Resources for information on her book.)

Explain that you are trying to reach out for support in new circles, and need suggestions on how to do so.

Request time to explain your cause (a half-hour to an hour at most). Ask for help in phrasing the appeal in a way that would appeal to the kind of people s/he knows. Ask for help in identifying potential supporters.

Encourage questions. Listen carefully to the good ideas that are shared. Don't argue.

If the prospect seems convinced, ask for a contribution for the aspect of your work the prospect liked best. This may take a second visit.

If you get a donation, proceed to the next phase: the major individual donor you do know.

What to ask of a Major Individual Donor who supports you

Don't ask for another donation.

Ask them to help you on a specific task. Don't ask for an open-ended time commitment, such as serving on a board. Major donors are usually too busy. The project should be short-term with a goal that is easily in sight.

Ask one major individual donor to introduce your cause to her/his friends. Convince just one person, and s/he will give you access to a wider circle.

Best of all, ask them to do something that is fun, like host a reception, a luncheon or a breakfast. Tie it in with your project.

Ask if s/he will invite 10 friends to see your project and then come back to his/her house for drinks. If there's nothing to see (and don't underestimate the value of seeing your tiny, underequipped but clean and efficient office), invite them to hear about your work at his/her house.

John O'Leary gave the example of an inner city children's centre where they have a Spring Showcase each year. A church hall is rented and the kids perform ballet, dance, and do skits. Harmless fun for all, with no moralizing on the problems. Care is taken not to be maudlin or exploitive.

A politician who had just been defeated but wanted to run again was asked to host an evening for friends after the Spring Showcase. The politician and his wife made up the guest list of 30 people the knew. They organized the reception and paid all the costs. The children wrote the invitations by hand.

Financially, the event was a success, although the dollar total was not large. The politician went around and subtly twisted arms. About $3,000 in cheques was raised on the spot that night.

More importantly, of the 30 invited, 27 people attended. Most had not even heard of the centre before. Now 27 potential new networks have been opened up. After the reception, a phone call was made to each guest to begin cultivating them for a second gift, and as a potential host for a similar reception.

The centre now does this twice a year. When they started, they had no budget, and survived only from month to month. Within a few years, they had four full-time staff and an annual budget of over $180,000.

Here are additional tips on how to approach major donors, and responses to concerns that people have expressed:

At the reception, a short discussion on the situation is important. Your major individual donor guests may not have the knowledge base to understand a situation beyond their experience, unless you explain.

The event must be kept positive and enjoyable. The guests are not to be shocked with the difficulties faced by the people they are asked to help. The children (or persons with disabilities) are not to be used in a crass, exploitive way.

Remember that the guests come, not because of the project or the organization, but because of who invited them. An influential friend says “I'd like you to come and hear about a project that I find exciting.” The network makes it work, not the issue. The implication for fundraising is that cultivating your donors is vital to success.

A breakfast meeting is especially good. People are more available at that time. A restaurant might be willing to give you a discount (or even free food) for the opportunity to serve a high-powered group.

An advocacy group's interests may be opposite to the politicians' or to the companies' which provide major donors' livelihood. If that is the case, obviously, these particular major donors are not the first people you contact. You may be able to find others who do not have conflicting interests, and who may be open to supporting you. It is dangerous and wrong to assume that merely having money means a person cannot understand your issues, or is opposed to you.

You may be surprised at the unexpected sources of support that can be found. In the US, Joan B Kroc, who inherited the McDonald's fortune, has reportedly put hundreds of thousands of dollars into the peace movement.

Helping you can be as valuable to ambitious major donors (especially aspiring politicians and young executives) as it is to you. It gives them a good reason to make contact with other powerful people around safe issues. Later, they may call to talk about business, or votes, or donations to the campaign, but you can provide them with an excuse they need, as well. It also provides them with a sense of meaning and satisfaction.

This opens the door in a small way. Once you have a few contacts, it is possible to begin developing warmer relationships, or wider circles.

Don't tell people you want help in fundraising. Ask them to help make the world — or at least your community — a better place. Give them an excuse to feel enthusiastic.

You don't have to put them on your board, if you don't want to. In fact, you probably shouldn't — you don't want them wasting time talking about your organization's personnel issues, your office arrangements or the long-range plan. You want them to meet once a month on Monday morning to talk about money, according to John O'Leary.

Not everyone will agree to help. Just because three out of five people say no when you first ask, don't give up.

People may decline because of obligations to larger nonprofits. If it seems appropriate, point out how much more satisfying it will be for them to serve a lean organization where they can play a big part and see real progress, compared to a large established group where they will be just one more person. An organization that is already successful won't value them as much as you will.

When they do help, thank them honestly for their efforts. Recognize the work they do in a personal way. A framed photograph of people who have been helped, a warm letter, or public recognition can work wonders.

For a more detailed exploration of major-donor fundraising, request a free copy of Face to Face: How to Get Bigger Donations from Very Generous People, available free from the Voluntary Action Program. See the resource section for more information.