Seven reasons why charities can’t secure major gifts

Charity fundraisers may lament the publishing of the Sunday Times Rich List each year. How many times do we find that well-meaning trustees or institutional leaders hand us a copy and say, “Why can’t we be raising more from wealthy individuals? My university received a gift of £1m from Mr Y.”

We might find ourselves responding by saying, “But it’s different for universities.” There may appear to be reasons why universities might be more able to attract large gifts from individuals on the Rich List than charities. When pondering this issue, I found seven possible reasons. You might be able to find more. The question is: are they ‘reasons’ or ‘excuses’?

1. The alumni database

“Universities have big databases of alumni who are loyal to their cause.”

Yes and no. Universities might have quite big databases – it depends on the age and size of the institution. The Exeters, Surreys, and Readings of the world might have 70-100k contactable alumni. The older, larger institutions perhaps have three times this amount.

But let’s dig a little further. How many of these alumni are actually giving to their alma mater? 2-3%? Perhaps they have 2-4k donors? Looks a bit different now, doesn’t it? And amongst that alumni database, how many are capable of giving £1m+ gifts? 50-200? And how many of those who are capable of giving £1m+ are warm to the institution 5? 10? 20?

Now let’s look at how many of these £1m+ gifts were actually from their alumni. Maybe half? Many are from high-level philanthropists who now ‘shop around’ to find the institution best placed to deliver the impact they want.

Turn to the charity sector. How many charities have databases with more than 2k donors? Lots! How many have wealth screened their databases and identified those who could give £1m+? Not so many. How many have identified non-donor philanthropists who could give £1m+ to their causes and planned how to develop relationships with these philanthropists? Again, not so many.

2. Big projects

“Universities have big capital projects and research programmes that attract £1m+ gifts.”

Yes, they do. Universities often attract £1m+ gifts from donors who wish to be actively involved at a high level and have strategic input into projects with scale and impact that tackle issues they care about.

Not the territory of charities at all then??!! How many charities could tell the story of having significant impact on an urgent issue? How many have leading experts delivering projects which change lives? Many. How many have a big project they want to undertake that would transform the way they do their work? They just need to tell their stories in a different way and be willing to allow big philanthropists to have a strategic involvement in the project.

3. Honorary degrees

“Universities can give people honorary degrees. We can’t.”

Yes, universities can give people honorary degrees, but they have strict rules to ensure that these degrees are not connected to gifts. Some £1m+ donors may have received honorary degrees in recognition for their expertise and achievement, but they gave their gifts because the university built a long-term relationship with them, and they were inspired by a project and wanted to make change happen. They will have enjoyed high-level discussions with leaders of the university. They will have been consulted on strategy and treated as a true partner.

Charities can do this too. How many charities have high-level boards and patrons who could engage with donors? How many could involve donors in strategic planning, invite them to join an advisory board, involve them in co-creating a project, nominate them to receive an honour in recognition of their work for the charity?

4. International students

“Universities attract rich international students whose families give or who give after graduation.”

It’s true that many universities have in recent years recruited increasingly from SE Asia, and it’s also true that many of these students come from quite wealthy families. But the £1m+ gifts from international donors are not coming from these students or their parents. Indeed, many universities will have strict rules about fundraising from students and parents in order to ensure that there can be no suggestion of it affecting a student’s awards. In addition, if you look at £1m+ gifts from international donors, these gifts are either from alumni or from high-level philanthropists with an interest in the cause. The university will have invested time and resources in building these relationships over long periods of time (see the previous point).

5. Major Gift Fundraisers

“Universities have big, well-paid fundraising teams.”

Well, it’s true that the average salary of a fundraiser in HE is higher than in the charity sector. (Maybe you should review your salaries?) However, it’s not true that all the universities that receive £1m+ gifts have big fundraising teams. What is true is that they will have invested time and expertise in research, employed fundraisers to go out and build relationships face-to-face with potential major donors, and ensured that they have a programme of cultivation activities in place for those potential donors.

All of this is possible for a charity. Invest in major gift fundraising for long-term growth in income. There is no reason why you cannot do that.

6. Leadership

“University Vice Chancellors spend their time fundraising.”

Some do. Some might spend 10% of their time on fundraising. The odd one might spend 20% or perhaps more. That doesn’t mean they all like doing so, and it doesn’t mean they are all naturally good at it. But it does mean that they understand that the big donors want and need to have relationships with them as the institutional leaders. Many of them seek coaching to gain skills in this area, and they need a Development (fundraising) Director alongside them to work with them.

Doesn’t your CEO spend that amount of time on fundraising too? They probably go to events, meet volunteers, etc. To be successful in major gift fundraising, they will need to spend time with potential donors, and many need coaching to help them feel comfortable with this role. Surely, not impossible.

7. Budgets

“Universities have big budgets and can invest in fundraising without needing a quick return.”

This certainly may have been true and is a big advantage. Universities have been able to generate surpluses and invest in things like fundraising. They have been able to think long term – to expect a return on investment within a couple of years, and not within one year.

For some charities with highly constrained budgets, they need to know that every pound they spend on fundraising will have a return within a year. Trustees have expected this and have focused on the measure of cost per pound raised to ensure ‘efficiency’.

However, many charities have reserves or receive an unexpected legacy. Trustees need to be educated to think longer term about ROI – to look at it over a three- to five-year period, and invest in new fundraising activities which will reap rewards for the long term. Possibly hard, but not impossible!

I am not saying it’s easy, and I am not saying every charity can attract £1m+ gifts. I am saying that most charities (all?) could attract major gifts – gifts that could help transform their work and increase their impact. It requires leadership, time, and investment. Most of all, it requires taking the decision to give it a try. Excuses over.

Susie Hills is Managing Director of Graham-Pelton.

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