December 26, 2020 / Esther Choy
Have you ever been surprised by news so positive, you had to pinch yourself to make sure you weren’t dreaming? Quite a few colleges and universities were in this position recently when they started receiving $10, $20 and $50 million dollar donations, all from a mystery donor.
Finally, this past Tuesday, the stealth donor was revealed. It was novelist MacKenzie Scott, who was formerly married to Jeff Bezos and is the world’s 18th richest person. Even when the donor’s identity was revealed, people were still surprised.
After all, one might picture one of the top 20 richest people in the entire globe giving to elite universities. These, in turn, would increase her own prestige. One might expect her to give with strings attached. Maybe she would require a “MacKenzie Scott Hall.” Perhaps an endowed professorship would bear her name. Instead, she gave to organizations that serve regional, minority and lower-income students. And she gave these higher education institutions complete freedom to decide how to use the funds.
Surprising? Well, it certainly breaks a lot of assumptions. But if universities and nonprofits do their homework, they shouldn’t be surprised if they receive large donations. If major gift officers pay attention, they will discover these three storytelling secrets.
1. Collect Your Donors’ Stories.
Over the six years that I taught major gift strategy at Kellogg School of Management, I always assigned the same homework:
Go to your most loyal, consistent supporter and ask, “what drew you to us? What has kept you involved? What are your best memories with us?”
The appreciation each class expressed showed me that they had not done this before. “So you wouldn’t otherwise ask?” I wondered.
The truth is, fundraisers tend to under-appreciate existing donors and go after new ones. But to be more successful, major gift officers have to figure out the “Passion DNA” of their best, most consistent donors. Once you uncover their Passion DNA, you have a sharper lens through which to look for the right donors. And you acquire the “language” to market your organizational mission and tell your stories.
2. Understand “Stealth Wealth.”
After taking time to listen to your core donors, research the characteristics of others who have the capacity to donate transformative gifts. Only a finite number of people can give million dollar gifts that create radical new possibilities for organizations. So get granular—because wealthy people think of their wealth in vastly different ways.
In fact, when my firm Leadership Story Lab conducted lengthy interviews with 20 first-generation wealth creators recently, I discovered that this subset—those who have earned rather than inherited their wealth— do not like to think of themselves as “wealthy” at all. First-generation wealth creators feel that the “wealthy” label represents a set of values they simply don’t adhere to.
That means that if major gift executives are viewing wealthy donors as a monolith, they are misreading the majority of their donors. A full 68% of wealth is currently earned rather than inherited, according to the Wealth-X report, “Ultra Wealthy Population Analysis: The World Ultra Wealth Report 2019.”
Those who have earned rather than inherited their assets are misunderstood by the very people who should know them best, as Stephen Kraus and Jim Taylor have demonstrated in The New Elite:
Foremost among wealth creators’ values is the concept of “stealth wealth.” They avoid showing off their wealth and maintain middle class values.
Fundraisers can’t appeal to this group unless they understand them. In fact, in the course of our interviews, we found that first-generation wealth creators want to use their financial assets for good but repeatedly hit three barriers.
Barrier #1: They are not often asked to tell their stories. Pitching to wealthy donors can be nerve wracking. What my fellow Kellogg faculty and I have observed is that gift officers usually start talking about their organizations more often than they skillfully ask for donors’ stories. Even those who remember to ask often rely on canned questions. Canned questions lead to canned answers. Still better than nothing, but that doesn’t get you very far.
Barrier #2: They take an entrepreneurial approach to giving. (After all, their scrappy, make-it-happen attitude is what got them where they are!) This often creates tensions with nonprofits. These donors can spot organizational weak points and may want to “fix” them. Otherwise, they may deem the organizations not efficient or effective enough. Consequently, these organizations with honorable missions may not come across as “investable,” something many modern donors value.
Notably, MacKenzie Scott, who didn’t come from an uber-rich family, gave organizations full freedom to use the money how they wished. She did her research ahead of time. Once she’d evaluated organizations for weak points, she then gave the money to organizations that survived her scrutiny and gained her confidence.
Barrier #3: Donors are always asking (consciously or unconsciously), “Are these my people?” This happens even if they support the cause intellectually. In particular, first-generation wealth creators strive to be modest in their own spending and appearance. They thus avoid charitable events and organizations that feel like an “in-club” for the very wealthy.
This modesty perhaps explains why Scott stayed anonymous at first, and revealed her identity only when she wanted to send a message.
While major gift officers may never have a chance to pitch to Scott, they may have a chance to talk with others who are the first generation of their family to be wealthy. And when they have this chance, they will need to “get” who they’re talking to.
The problem is that fundraisers often hang out with fellow fundraisers. They attend professional events and conferences with other fundraisers. Or they hire them as consultants. Often, they forget that to get donors to say, “yes, these are my people!” they have to find their information at the source: the donors themselves.
3. Field-test your message.
A first-generation wealth creator I know recently attended a fundraising event for a veterans’ organization. This organization promotes time in nature, specifically fly fishing, as a way of healing trauma.
This potential donor is an outdoor person, his dad was a World War II veteran, and he himself was the founding donor of a veterans’ memorial museum. He not only has personal ties to the cause, he understands the means by which the organization hopes to bring change. Plus, he has a track record of giving plenty of money to the same kind of cause.
But something obviously went awry because he walked away shaking his head about the means and chuckling, “Fly fishing, are you kidding?”
Ultimately, he did not care for their story. That made all the difference. Did the fundraisers field-test their message? Probably not. Or at least not with donors who were anything like my colleague.
Unless major gift officers are field-testing their messages, they are relying on luck alone.
And relying on luck alone could mean missing out on millions. The truth is, even as the amount of wealth in the United States is expanding, the number of people who control that wealth is shrinking. Although major gift officers are competing for a growing pool of assets, a smaller number of decision-makers will allocate those funds. This small number of decision-makers are making more and more transformational gifts each year. There’s no reason your organizations can’t be the ones who receive news so positive you’ll need someone to pinch you.
To get a head start on understanding first-generation wealth creators, write to us to request an advance copy of Leadership Story Lab’s latest research, “Transforming Partnerships with Major Donors: Aligning the key values of first generation wealth creators and fundraisers in the age of ‘Winner Takes All.'” The report will be published in January 2021.
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