ELITE ADVISOR BEST PRACTICES

Personalized Philanthropy and the Four Donor Types - Part One

Become the “go to” advisor in your niche by demonstrating your expertise

By Steven Meyers

Key Takeaways:

  • A simple parable can open up a whole new thinking about philanthropy.
  • Most donors fall into one of four key personality types: wise, wicked, simple and naive.
  • Don’t let a donor’s full giving capacity get lost in the fundraising mix.
  • There are smart ways for advisors and their clients to untangle the giving matrix.


Why isn’t all philanthropy Personalized Philanthropy?

If you have charitably minded clients who are seeing the term “Personalized Philanthropy” for the first time, they might do a double take and wonder, “What are they talking about? I thought ALL philanthropy was personalized philanthropy.” That is what most people think.

But the truth, and the little secret fundraisers and charities are reluctant to talk about, is that this is often not the case.

READER NOTE: In the coming months, we will be pleased to introduce a series of six articles as a companion to the author’s new book Personalized Philanthropy: Crash the Fundraising Matrix and Make the Real Shift to Donor-Focused Giving. See conclusion for more details about ordering.

Meyers

The reality is that for quite some time, most fundraising has followed conventional ”best practices that are counterproductive. The prime example is the common practice of channeling donors into separate silos for ”annual,“ ”major“ and ”planned gift“ campaigns. Most fundraising professionals cultivate and solicit donors in each of these categories, and their performance is judged more on the ”metrics“ of their fundraising activity than on the merits. In other words, what counts is how well they are servicing these separate campaigns rather than their true fundraising achievements.

Accounting versus counting

The problem with conventional fundraising goes deeper than just how the fundraisers are recognized. It’s how donors are recognized. The way donors’ gifts are ”booked“ would surprise many donors and their advisors. Accounting practices that are quite appropriate as financial measures and that show results as ”present values“ are quite different from fundraising achievements that expand philanthropy. Yet many of the largest and most significant gifts and commitments you have executed with your advisors may never even show up on your organization’s radar until you have passed away, let alone begin to have a philanthropic impact in your lifetime. The legacy societies established at many organizations often struggle to make their donor recognition programs meaningful because deferred planned gifts are often marginalized and it is not always the case that planned gift donors can claim a seat around the major gift table.

Donors’ real capacity lost in the mix

The conventional fundraising establishment tends to operate in these silos and channels in an institution-focused way, almost as if in a matrix, where the donor’s lifetime value is hidden. Clearly, these practices need to evolve for donors of today and certainly for those of tomorrow. While there is no doubt that conventional fundraising through ”institutional advancement“ has produced some wonderful results, the honest truth is that donors’ full lifetime capacity and interests often get lost in the mix.

We (donors and fundraisers) know that we need a much more personalized approach—especially for our organizations’ most ardent supporters—so we can plan together more holistically and in less of a merely transactional manner. We know we need to view giving not just as the transaction of a moment, but in the fullness of time. But we’re trapped in many respects by our system. How do we crash this matrix?

Meyers

Otherwise, to put it plainly, some of the most important philanthropic programs (for example, yours) simply might not happen on your watch because they must be deferred until after your lifetime.

The unique power of Personalized Philanthropy derives from the real possibility that your charitable impact and recognition can begin immediately and grow over time.

Yet what may appear to be a simple switch of the dial from ”organization focus“ to ”donor focus“ is really a major challenge for the fundraising establishment.

We’re finding that the new personalized gift designs can make all the difference in the world—especially those that combine current and future giving. Using the approach suggested here, it is now possible for your clients to tap into their full lifetime capacity for charitable giving.

In fact, Personalized Philanthropy is already changing the way philanthropy is done, so that many more donors giving with a ”warm hand“ can enjoy the impact and recognition of their gifts now—instead of just anticipating what those effects will be after their lifetime. I hope you will join them soon.

Six-part series for advisors and their clients

To that end, we are pleased to introduce this series of six articles as a companion to the book by Steven L. Meyers, Personalized Philanthropy: Crash the Fundraising Matrix and Make the Real Shift to Donor-Focused Giving.

  1. Why Isn’t All Philanthropy Personalized Philanthropy?
  2. The Four Donors: a parable for rethinking your philanthropy

  3. Bringing Change to the World Through Personalized Philanthropy
  4. Connecting your values to actions

  5. The Grail of Fundraising—Personalized Philanthropy for the Four Donors Within You
  6. The wise

    The wicked

  7. The Power of Spending Rate to Transform Philanthropy
  8. The simple

  9. The Cross-Fertilization of Finance and Philanthropy
  10. The one who does not know how to ask

  11. Lessons Learned: Three Pillars of Personalized Philanthropy
  12. Thought questions

While that book was written primarily for gift officers and professional advisors, these articles are written for advisors to share with donors—hopefully to begin a new conversation about philanthropy with clients/donors who ardently wish to support their most treasured charities. The articles aim to introduce some of the basic concepts of Personalized Philanthropy, a powerful new and tested model for charitable planning that challenges conventional fundraising practices in bridging current and future giving so that donor impact and recognition may begin immediately and scale up over time.

For donors, there is special access to new insights in charitable giving. Enlightened gift officers and their organizations’ most committed supporters are beginning to explore these techniques together—and with some very good outcomes. For professional advisors, at first blush, Personalized Philanthropy presents a dilemma: It offers a solution to a problem that many of us don’t know we have. The ”killer apps“ and gift designs described enable donors to enjoy immediate recognition and the impact of their philanthropy—benefits largely deferred or denied in our traditional financial and estate techniques, simply because the trusts and other vehicles that power them, with some exceptions, are not effective philanthropically until the death of the client. Because we don’t even see the potential opportunity to structure gifts for immediate recognition and impact, we don’t talk about them. Maybe we will now.

Charitable planning apps

I have developed a series of ”killer apps“ that change the way we can think about charitable planning simply by overcoming conventional fundraising practices that constrain creativity and by working with the basic building blocks of philanthropy in a new way. If you look beyond the first blush, you will find that increasing your facility with these personalized gift designs will likely lead more client families to gravitate toward your enhanced values-based practice, increase their satisfaction and lengthen their tenure while not coincidentally expanding philanthropy overall.

We expect the brief ”origin“ stories in this little volume to spark and hopefully enliven new conversations with both veteran donors and those who have just flirted with philanthropy. Advisors (especially those who have never thought of combining the basic building blocks of philanthropy just this way) may find a new way to achieve important client objectives—not just over the long run of clients’ estate plans but beginning during their own lifetimes. Personalized philanthropy can advance the causes they care most about for themselves, their families and their communities for the benefit of humanity.

Conclusion

I have serialized my new booklet, Personalized Philanthropy and the Four Donors, into six articles for financial advisors. I’ll be sharing them with Elite Advisor Report readers this fall so you can provide insights for your clients and those interested in personalizing their philanthropy. On tap next: Why Isn’t All Philanthropy Personalized Philanthropy?

To learn more about the full-length book or to order Personalized Philanthropy: Crash the Fundraising Matrix and Make the Real Shift to Donor-Focused Giving, click the link here.

If you would like to have co-branded copies of the printed booklet Personalized Philanthropy and the Four Donors for your clients/donors, please contact Stephen Nill at Stephen.Nill@CharityChannel.


About the Author

Steven L. Meyers, Ph.D., is Vice President of the Center for Personalized Philanthropy at the American Committee for the Weizmann Institute of Science. Steve is a primary developer of personalized philanthropy, based on his mantra of “the right gift, for the right purpose, for the right donor.” Steve’s innovative donor-focused gift designs, especially a series of arrangements he calls “killer apps,” combine the full spectrum of current and future gifts so that donors can create a lasting legacy where impact and recognition are able to start up right away.