This post is reprinted from Karen’s turn as a guest blogger on Blackbaud’s blog site: www.npengage.com on April 14, 2014.
High Net Worth Individuals.
These are very special people. They are part of the 5% or 10% of the population in terms of wealth, as well as members of giving in America – generous people of every age and financial capacity. They have the powerful combination of wealth and a giving heart.
Last Summer I participated in a conference held by CASE (Council for Advancement and Support of Education). A member of the faculty interviewed five philanthropists representing several age groups.
“How do you decide which organizations or institutions in which to invest?”
The answer from three out of the five began with, “I’m all in.”
They gave the most where they were deeply engaged and used all of their personal capital – human, intellectual, network and financial – for the good of the mission, vision and work. HNWI give more where they can contribute the most including their ideas, talents and expertise. In a 2010 study by Indiana University and Bank of America, HNWI donors reported giving on average $35,000 a year when not engaged and $124,000 when engaged. That amount jumped to $158,000 when the organization tapped into the donors’ professional expertise. Engaging HNWI in thoughtful, meaningful and productive ways resulting in them being “All In” garners mega gifts.
BIG IDEAS BEGET BIG GIFTS
Engagement, however, is not enough. In another study, the researchers asked donors who make $150,000 or more about giving motivations. Everyone, no matter how much they made, reported “wanting to make a difference.” HNWI, however, emphasized “wanting to solve a societal problem.” Whereas, those making under $150,000 “wanted to save or touch a life.” To inspire big gifts from HNWI, we need big ideas that speak to solving a pressing societal problem, fixing or changing something that requires extraordinary investments. Check out this TED talk by Simon Sinek. Are you telling your story in a “why” and impact manner?
WOMEN DRIVE PHILANTHROPY
In the USA and 20 other countries, women are the philanthropic driving force. In fact, 92% of HNWI men report that their spouses drive the amount given and the charities in which to invest. Women report deep engagement as a giving motivator along with transparency and proof of impact and societal return on investment. Forty-eight percent of HNWI women report wanting to share their philanthropic values with their children. In fact, in the study mentioned earlier, the average gift from HNWI donors jumped to $244,000 when their children were part of philanthropic engagement and decision-making.
“Retention is the New Acquisition and Customer Service is the New Marketing” – Joe Connelly, WSJ
Within the ranks of donors who give small gifts are many HNWI. They have the capacity to make life-changing gifts but send $25 or $100 contributions. Twenty-two percent of NGOs don’t send thank you notes. Thousands send thank you notes well past best practice times of 24 to 72 hours after receipt. Thousands of NGOs either don’t track donor retention rates or don’t have a plan for turning them around so millions of dollars walk out the door and down the street to the organization that demonstrates care, appreciation and results.
WANT TO INSPIRE MORE NNWI?
Understanding that they give the most where they are deeply engaged means that it’s important for your organization to truly understand who they are as individuals and as donors. High Net Worth Individuals are of every age, so their behaviors, preferences, and passions vary based on the generation they represent.