With the number of high-net-worth (HNW) and ultra-high-net-worth (UHNW) individuals growing at an unprecedented rate, many charities and individuals are left wondering, “how can we encourage more to give?” Whilst I won’t support or condemn those who choose not to give, what I will do is explore possible reasons why, and outline simple considerations for the sector to keep in mind if we are to captivate, inspire and harness the passions of the wealthy so that one day they, too, will choose to join the journey of philanthropy.
In order to truly grasp understanding, we need to see the world through their eyes and understand how they have accumulated their wealth in the first place. In my opinion, there are three types of wealth: inherited wealth, self-made wealth and ‘bloody lucky’ wealth. Seeing as Australia is a country of relatively new wealth, I choose to focus on self-made wealth.
Many self-made individuals have accumulated wealth through entrepreneurship. It’s not unknown that to do well in business, one must struggle: a business is a 24hour/365 days per year operation generating buckets of stress that sometimes, for some, yields large rewards. To do well in business, individuals take calculated risks, set benchmarks, milestones and exit strategies; but most of all, put in blood, sweat and tears in order to become successful.
Simon McKeon’s recent National Press Club address highlighted the fact that the sector had a lot of work to do in regards to inspiring wealthy individuals to engage in philanthropy. But, before targeting this potential group of supporters, it’s important to ask:
1. Is your not-for-profit or charity operating in a business-like manner?
This industry requires individuals to think with their brains. In philanthropy, we ask them to think with their hearts. This can be a very tricky switch. But, who said we had to switch – why not both? Successful organisations have strong governance, think logically and approach risk in methodological ways (brain), but when this is merged with passion (heart), if done well, it has the potential to achieve some pretty extraordinary things.
Steve Forbes’ recent Washington Post article on how billionaires are fixing philanthropy noted that ‘more than ever, individuals are funding solutions, not stopgaps,’ and that a new crop of philanthropists that have made their millions through business sense and entrepreneurship are using these skills to help others. However, Steve Forbes notes that instead of just giving money, these philanthropists are taking a vested position, fueling ideas that work, discarding those that don’t and expecting a tangible return of investment measured in social impact. In other words, these individuals have strong expectations.
2. Are you appreciating rather than expecting?
Saying thank you and meaning it are two different things. Based on my personal experience, I’ve found that a lot of times, there is a culture of expecting gifts rather than appreciating them. The focus is often around getting money through the doors rather than achieving impact against their mission. Malcolm Turnbull’s recent speech on philanthropy noted that ‘every dollar given to charity is a dollar wrapped in love’ and it’s important that we don’t get ahead of ourselves and forget that. By supporting you with a gift, donors are saying ‘I believe in you’ – and that is worth more than the money itself.
3. Are you only asking rather than offering?
Keeping in mind that these individuals are likely to be surrounded with people requesting and expecting something from them most of the time, perhaps think of what you can offer and ways your organisation may be able to help.
4. Are you communicating and engaging in different ways for different audiences?
In terms of communication, a ‘one-size-fits-all’ approach will not work with all donor groups. The same approach will also not work with all wealthy individuals. They are after all people, and all people are different. Research each individual properly and take your time. What are their interests and what other boards do they sit on? Who are your board members affiliated with?
The traditional ‘emotive’ speech may not necessarily work. I’m not saying they don’t have emotions, but in business they may have often had to set them aside. Entrepreneurs tend to be interested facts, strategy, benchmarks and impact; not spin.
5. Is your organisation ready to start engaging with HNW and UHNW individuals?
Seeing as you are likely to only get one chance to resonate with and captivate these potential supporters, don’t waste it.
My rule of thumb: if you wouldn’t donate to your not-for-profit, how and why can you expect others do so? If that’s the case, ask yourself why. Those reasons are very likely preventing others from doing just the same.