Philanthropy 2.0: Why Nonprofits Need a Bold Vision

Not too long ago, I spoke to an academic institution about their conversation with a billionaire prospective donor. The development director had an important meeting with the donor about its future. During the conversation, the chat inevitably turned to money. The billionaire asked the fundraiser how much the vision would cost. The reply was that the endowment would increase from $10 million to $15 million. The donor then said it was not big enough.

As many fundraisers do, the fundraiser got caught in the trap of small thinking. This person spoke about the broader vision, but when the moment of truth arrived to support the vision with a bold ask, this fundraiser played it safe with a modest $1 million ask. The billionaire donor wasn't impressed, and the fundraiser left the meeting without funding. In short, it’s time to rethink nonprofits and how they operate.

Historical View of the Nonprofit Sector

When I started in the sector, events and galas were a big deal, and some still garner seven figures in revenue. A lot of money came through an honoree and chairperson. Of course, we also leveraged year-end giving, and when GivingTuesday started in 2012, nonprofit leaders and fundraisers got on that bandwagon. Since then, so much has changed, as we all know, including a new generation of adults (e.g., Generation Z) who seemingly prefer not to attend galas.

There's been a significant shift at the top regarding wealth accumulation. As more wealth has accumulated to the top 1% to 10%, there's a perception that the social contract of major donors supporting nonprofit causes is ending. Some have even said they’re selfish. I won't debate wealth accumulation, but in my many conversations with the uber-wealthy, they're not any less charitable. They're simply supporting causes differently. 

You see, Generation Z, millennials and the wealthy have something in common. They don't have an issue with making money while they do something good for a cause. That's why donor-advised funds, impact investment funds and social venture capital funds have become the vehicles where increasingly billions and eventually trillions of dollars are going. In short, there's a general sense that the nonprofit sector continuously looks through the rearview mirror. 

The Windshield Versus the Rearview Mirror

When nonprofit leaders and fundraisers rely on activities like GivingTuesday, events, the usual fundraising campaign, etc., they look through the rearview mirror into the past. What's needed now is for nonprofits to have a fresh take on philanthropy. For instance, nonprofits can change their business model and create an impact investment fund, offering a win/win to a social organization and the donor with a return on investment. 

Generally speaking, millennials and Gen Z have their own expectations and preferences, and they're not content with the conventional approach to fundraising. As an example, they're not going to write a check. Most don’t even have a checkbook. Still, Gen Z, in particular, is pushing to reinterpret philanthropy from the 20th-century approach that started with the likes of Andrew Carnegie and Cornelius Vanderbilt to what's known as philanthropy 2.0, which leans on artificial intelligence and digital technology. 

Donors younger than 40 and wealthy donors show that the rearview mirror is not the right approach. What's needed is a paradigm shift and courageous leaders willing to look out the larger windshield and into a bold future. That means separating from outdated approaches (e.g., galas) and moving head-on into technological innovations for fundraising, marketing, operations and mission delivery. 

Global Social Responsibility

One other element is playing into this changing landscape within the philanthropic sector. Money has shifted from United States causes to global issues related to the wars in Ukraine and between Israel and Hamas. But the truth is that because of technology and globalization, hundreds of billions of dollars get transferred annually. Moreover, the planet has a significant climate crisis, so philanthropy is truly borderless.

As a result, socially minded leaders need to tap into the innovations and new sensibilities of today's donors. Further, they have to get past the idea that because they're still getting funds through their annual gala, GivingTuesday or fundraising campaigns, everything's still the same. Unfortunately, more and more nonprofits will experience a decline in giving year over year if they stay with the traditional approaches of fundraising and ongoing oversight failures for today’s challenges. 

Remember, sometimes major gift donors are not apt to share their feelings on why they won’t support your organization. Donors will deflect or avoid the request. However, if they get the opportunity to share a bold idea and vision that's transformational, which fundamentally positions the organization to lead in the 2020s and beyond, the donor is much more likely to engage with the fundraiser. Involvement and engagement get ownership, and ownership gets investment. Keep an eye on the horizon and embrace the opportunities rising into the near and long-term future. 

The preceding blog was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.