Personalized Philanthropy and the Four Donors - Part 1 of 6

Personalized Philanthropy and the Four Donors - Part 1 of 6

Parables for Radically Rethinking Your Philanthropy
Article posted in Values-Based on 19 August 2014| comments
audience: National Publication, Steven L. Meyers, Ph.D. | last updated: 22 August 2014
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by Steven L. Meyers, Ph.D.

EDITOR’S INTRODUCTION –

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. 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 which 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 organization's 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 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.

Author Steve Meyers has 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 towards 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 who those who have just flirted with philanthropy. Advisors (especially those who have never have 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 their estate plans, but beginning during their own lifetimes. Personalized philanthropy can advance the causes they care most about for themselves, their families and communities, for the benefit of humanity.


 

Why isn't all philanthropy Personalized Philanthropy?

Key points:

  • How can a simple parable open up a whole new thinking about philanthropy?
  • Can just four represent the donors in all of us?
  • How is it that a donor’s full giving capacity gets lost in the fundraising mix?
  • Is there any way you and your advisor can untangle the matrix?

Why isn't all philanthropy Personalized Philanthropy?
As a donor seeing the term “Personalized Philanthropy” for the first time, you 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 is, and the little secret fundraisers and charities are reluctant to talk about, is that this is so often not the case.

Conventional best practices counterproductive to true philanthropy –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” than the merits. Meaning what counts is how well they are servicing these separate campaigns rather than their true fundraising achievements.

“What are they talking about?
I thought ALL philanthropy was personalized philanthropy.”

Accounting versus Counting – The problem with conventional fundraising goes deeper than how just 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 which are quite appropriate as financial measures and which show results as “present values” are quite different than 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 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?

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 fund raising establishment.

We’re finding that the new personalized gift designs can make all the difference in the world – especially those which combine current and future giving. Using the approach suggested here, it is now possible to tap into your 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 – not just after their lifetime, but now. I hope you will join them soon.


A few years ago, I wrote a riff on a great classic parable.

My insight came while re-reading the story of The Four Children, that part of the traditional celebration of the Jewish Passover service known as the Seder, which 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 peoples 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 children in the story could stand in as analogies of four donor personalities I so often encounter. OK, there are a few twists. There are so many systems fundraisers have for “donor profiling” that you can hardly keep track of them. So often, the characters’ descriptions all resonate for me, but I can never remember them. For one thing, there are always more than four. But, the Four Children? I already know them.

What is so distinctive about The Four Children (and the thing which makes this a parable) is that the story actually teaches us something. It prescribes meeting each child where they are and suggests a specific place to start for engaging with each of the types of children.

Not only did the four children resonate strongly for me because they were familiar personalities, but because the story reflected how I had in fact already been approaching and engaging with many donors for years, without ever realizing it until that ah-ha moment.

Perhaps these characters and the story will resonate with you as well.

The story of the Seder introduces us to four children –
the wise, the wicked, the simple and the one who doesn’t know how to ask.

The essence is that while there may be one truth and one path for every person ... we should not use a standardized, unvarying approach for all types of students but must tailor [our] approach, words and method to conform to each individual student.

(c) Meeting Donors Where They Are

The core idea of the four children, in my opinion, is that a personalized kind of engagement with each individual is likely to have the most beneficial and satisfying outcome for all parties involved. This is something a lot of people feel just intuitively, somehow, but there are plenty of others who feel a single prescribed and unwavering answer is best for everyone.

While the Passover Seder service describes children of only four types of character – the Wise, the Wicked, the Simple and the Naive (the child who does not know how to ask) – the reality of the parable indeed is much more complex, with new meanings discovered in the retelling year after year.

What is the challenge that each child presents to its elders? Here is my not-so-traditional rendering:

The Four Children of the Passover Story What do they ask?

Wise  – Immersed in the letter and spirit of the laws, driven to curiosity, the wise child asks: Will you tell me more so I can do more?

Wicked  – Has wisdom to understand, but because the rituals seem lacking personal meaning, asks: What does all this have to do with me?

Simple  – Overwhelmed by the magnitude of ritual, the simple child asks: What is this all about?

Does not know how to ask  –  This child, naïve, uncertain and intellectually curious, cannot figure how form a question. It is up to us to ask on their behalf: where can we begin?

The idea of engaging children where they are sounds simple, but seen in the light of experience there is certainly more to it first thought. 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, since each donor starts in a different place, they 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 present and a sense of their mind-set when approaching philanthropic questions.

The Four Philanthropic Donors How do we characterize them?

Wise  – Astute, aware, careful, clever, discerning, thoughtful. “I’m in.”

Wicked  – Reserved, mischievous, competent, expert, adept, able, questioning. “I’m out.”

Simple  – Straightforward, uncomplicated, sincere, trusting, direct.
“I haven’t thought about that question.”

Does not know how to ask  – Naive, curious, inquisitive, searching.
“I didn’t know one could ask 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 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 each of the Four Donors helps translate our charitable inclination and personalities into action in a different way. Since Personalized Philanthropy is about finding just the right gift for the right person and purpose at just the right time lets 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) – This is the wise and loyal annual donor, who gives 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 gift, even without changing one bit 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 twenty times the impact of a solitary gift (based on a spending rate of 5%). 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.
  1. The Wicked Donor (Reserved, mischievous, competent, expert, adept, able, questioning) – This donor is not in any way wicked, but usually more reserved and cautious. They give, but also want there to be a ‘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 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 that they don’t need. Because they feel so intrigued and invested, they are also pleased to learn that many annuity donors have made bequests, which turn out to be much larger than any gifts they could make during their lifetime. There are so many possibilities to explore.
  1. 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 chose the same form of giving as their parents, thinking ‘as my parent planted before me, so do I plant for my (charitable) children.’ They come to see their gift as something greater than just themselves and are aware that bequests often are the largest and most significant contributions organizations receive. Bequest donors are often the most ardent supporters that charitable organizations have. Some are only too happy once they understand the more immediate impact they can have, to begin making a modest annual gift, (perhaps to start up a scholarship) during their lifetime with spending rate gifts. Knowing their gift of greatest significance will come later, they become increasingly comfortable with their support.
     
  2. The Donor who does not know how to ask – (Naive, curious, inquisitive, questioning, searching) – The Searching Donor by no means doesnt know how to ask or is naïve; they just might not know how to act on their charitable impulse. While usually very successful financially and worldly-wise, they may not know what the stunning effect of a pledge could be; or perhaps they may have recently inherited great wealth and now feel overwhelmed at being the steward of a legacy. Even with the smartest and best-intentioned advisors, along with a great drive to give, they might have no idea about how, or where, or even what to give for. To a thoughtful gift officer or advisor, it is a special privilege to assist a donor who, though they may not know “how to ask,” has the strongest charitable impulse to drive their philanthropy forward, for the benefit of the causes they care most about.

 

Upcoming Articles:
 

2) Bringing Change to the World Through Personalized Philanthropy

  • Connecting your values to actions

3) The Grail of Fundraising – Personalized Philanthropy for the Four Donors Within You

  • The wise
  • The wicked

4) The Power of Spending Rate to Transform Philanthropy

  • The simple

5) The Cross-Fertilization of Finance and Philanthropy

  • The one who does not know how to ask

6) Lessons Learned: Three Pillars of Personalized Philanthropy

  • Thought questions

Resources and Fruitful Speculation

  • The Passover Haggadah and Philanthropy, by Rabbi Steven Steinberg

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