ELITE ADVISOR BEST PRACTICES
Personalized Philanthropy and the Four Donor Types - Part Two
Become the “go to” advisor in your niche by demonstrating your expertise
By Steven Meyers
- There are generally four types of donors, and it’s important for advisors to know which type best describes each client: wise, wicked, simple or naïve.
- Most fundraising professionals cultivate and solicit donors in each of these categories, and their performance is judged more on the “metrics” than on the merits.
- Fundraising pros tend to segment donors into separate silos for “annual,” “major” and “planned gift” campaigns. In reality, a more personalized approach is needed for each donor.
READER NOTE- Part One of this article series is located here.
A few years ago, I wrote a riff on a great classic parable.
My insight came while rereading the story of the Four Children, that part of the traditional celebration of the Jewish Passover service known as the Seder that talks about four types of individuals—their personalities, their learning styles.
Passover is the holiday that commemorates in story and song the end of the enslavement of the Jews by Pharaoh in Egypt—the Exodus. The term Seder literally refers to “the order of things” and shapes the annual retelling of the story.
For Jews, along with many others who can identify with being enslaved, this story of the Exodus is about how both individuals and people come by their identities. And for me, always on a quest for order, it was a turning point in my thinking about personalized philanthropy.
It occurred to me that the four types of children in the Passover story are much like the four donor personalities I so often encounter in my work. OK, there are a few twists. For instance, fundraisers have a wide variety of systems and techniques for “donor profiling”—so many that you can hardly keep track of them. So often the personas of the four children resonate for me, but I can never remember them.
What is so distinctive about the Four Children (and the thing that makes this a parable) is that the story actually teaches us something. It prescribes meeting each child where he or she is and suggests a specific place to start for engaging each of type of child.
The parable of the Four Children resonates with me strongly because each child represents a personality type that I am familiar with and the story reflects how I had in fact already been approaching and engaging with many donors for years without ever realizing it until that aha moment.
Perhaps these characters and the story will resonate with you as well.
The story of the Passover Seder introduces us to four children—the wise, the wicked, the simple and the naïve (i.e., the child who doesn’t know how to ask). The essence of the story is that while there may be one truth and one path for every person, we should not use a standardized, unvarying approach for each. Instead we must tailor our approach, words and methods to fit each individual.
Meeting donors where they are
At the core of the Four Children parable is that a personalized kind of engagement with each individual is likely to have the most beneficial and most satisfying outcome for all parties involved. This is something that many people feel intuitively, though others believe strongly that a single prescribed and unwavering answer is best for everyone.
While the Passover Seder describes children of only four types of character—wise, wicked, simple and naïve—the reality is indeed much more complex, with new meanings discovered in the retelling of the story year after year.
What is the challenge that each child presents to his or her elders? Here is my not-so-traditional rendering.
The idea of engaging children (i.e., donors) where they are sounds simple at first, but there is certainly more to it. It’s all about connecting and engaging with people at their own level, eye to eye, at a particular moment in time.
And when it comes to helping donors make major philanthropic decisions, mixing the financial, the personal and the philanthropic can get complicated pretty quickly.
Reflecting on donor personalities, I suddenly began to rethink the standard questions and answers. Observing and respecting the trajectory of each donor are important, since though each donor starts in a different place, he or she may end up in a different place. And so I began to think of the Four Donors as distinct yet related personalities.
Having always been intrigued by the questions and personalities of the Four Children, I wondered what it would be like to consider some of the innate processes that characterize donors when they are considering charitable action. Here’s my present thinking about just some of the dimensions that each donor can represent and a sense of their mindset when approaching philanthropic questions.
The Four Donors
A parable about choosing the right gift for the right purpose for the right donor and meeting donors where they are:
In the Passover Seder, the story of the Four Children offers a lesson on meeting people where they are and appreciating them for who and how they are. The unique characteristics and propensities of each of the Four Donors help translate our charitable inclination and personalities into action in different ways. Since personalized philanthropy is about finding just the right gift for the right person and purpose at just the right time, let’s explore how this might play out for you and the organizations close to your heart.
1. The Wise Donor (astute, aware, careful, clever, discerning, thoughtful)—These are the wise and loyal annual donors who give without being asked, perhaps even every year. Because they give every year and are wise, they are eager and excited to hear about ways they can increase the impact of their annual gifts, even without changing one bit of their regular habit of giving at first. For instance, when they commit to a series of annual gifts, each gift in the series can have up to 20 times the impact of a solitary gift (based on a spending rate of 5 percent). When the time is right, they’ll want to hear about other annual donors like them who established bequests and achieved an impact from their gift far beyond what they might have imagined possible.
2. The Wicked Donor (reserved, mischievous, competent, expert, adept, able, questioning)—This donor is not in any way wicked but usually more reserved and cautious. Wicked donors give but also expect some “give and take.” They may need something in return, or perhaps they are feeling slightly unsure and insecure financially. Among many possibilities, there could be a new way to give, through a charitable gift annuity or trust, so there will need to be assurance of receiving payments each year for their lifetime. Some, as they grow more confident about their own financial condition, become intrigued to hear that there are donors who establish an annuity every year (with some having a dozen or more), or they may add to grow their trust. Enjoying this security, a surprising number of annuitants do become annual donors by contributing some of their yearly excess income. Because they feel so intrigued and invested, they are also pleased to learn that many annuity donors have made bequests that turn out to be much larger than any gifts they could make during their lifetimes. There are so many possibilities to explore.
3. The Simple Donor (straightforward, uncomplicated, sincere, trusting, direct)—These donors are by no means “simple”—it’s tradition that usually rules for them. A bequest is the gift they begin and sometimes end with and are most comfortable with. They often choose the same form of giving as their parents did, thinking, “As my parent planted before me, so do I plant for my (charitable) children.” Simple donors come to see their gift as something greater than just themselves and are aware that bequests are often the largest and most significant contributions organizations receive. Bequest donors are often the most ardent supporters that charitable organizations have. Once they understand the more immediate impact they can have, some simple donors are only too happy to begin making modest annual gifts (perhaps to start up a scholarship) during their lifetimes with spending rate gifts. Knowing their gift of greatest significance will come later, they become increasingly comfortable with their support.
4. The Naïve Donor, Who Does Not Know How to Ask (naïve, curious, inquisitive, questioning, searching)—By no means do these donors not know how to ask or are they naïve; they just might not know how to act on their charitable impulse. While usually very successful financially and worldly-wise, a naïve/searching donor may not know what the stunning effect of a pledge could be or perhaps has recently inherited great wealth and now feels overwhelmed by being the steward of a legacy. Even with the smartest and best-intentioned advisors along with a great drive to give, naïve/searching donors might have no idea about how, where or even what to give. To a thoughtful gift officer or advisor, it is a special privilege to assist a donor who, though perhaps not knowing “how to ask,” has the strongest charitable impulse to drive philanthropy forward for the benefit of the causes he or she cares most about.
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 in this article series, it is now possible to tap into your clients’ full lifetime capacity for charitable giving. The notion of 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 during their lifetimes.