By Hannah Martin and Ellie Buteau
There is tremendous opportunity for philanthropy to contribute significantly to progress against the toughest social problems that defy government and market solutions. While philanthropy alone cannot solve all of the world’s complex social problems, it can take on pressing challenges that other actors in society cannot or will not.
Individual donors have long been a significant source of philanthropic support, and are currently the largest source of philanthropic support, making up 68 percent of the total charitable giving in the United States. However, a recent decline in giving by small- and medium-gift donors has left many nonprofits to become increasingly reliant on major donors*, and led those considered major donors to have a progressively important role to play.
Last fall, CEP set out to investigate what this means for nonprofit leaders and major donors alike: how can major donors better support nonprofits? What kinds of support are major donors currently giving? And what are the differences in nonprofit leaders’ experiences in working with a major donor versus a staffed foundation?
CEP’s new research report out today, Crucial Donors: How Major Individual Givers Can Best Support Nonprofits, shares some answers to those questions, based on the perspectives of 198 nonprofit leaders from across the country, all of whom are part of CEP’s Grantee Voice panel.
From these leaders, we learned that:
- Relationships matter. Nonprofit leaders spend more time building personal relationships with major donors as their gifts become larger. In the coming years, the most common trend nonprofit leaders expect to see in how their organizations will work with major donors is that they will place greater focus on building personal relationships with them.
- There is an understanding gap. To be most helpful, nonprofit leaders believe major donors need to understand their organizations and the context of their work better than they currently do.
- Nonprofits most need multi-year commitments, unrestricted gifts, and support beyond money. Nonprofit leaders say that these kinds of support help their organizations do their best work and plan for the future.
The report features quotes from both the donor and the nonprofit perspective, which allows major donors to learn from their peers and to hear candidly from nonprofit leaders. It also includes questions to guide major donors in building relationships, addressing the understanding gap, and deciding what kind(s) of support to provide to nonprofits.
Major individual givers are crucial to nonprofits, and we believe that this research report will help major donors best support them. While these key insights are applicable to donors of all kinds, they are particularly important for major givers as they continue to become an increasingly crucial resource for nonprofits. By learning and providing what nonprofits most need – in terms of relationships, understanding, and types of support – major donors can have an even greater impact on the issues they seek to affect.
More donor-specific resources from CEP can be found at cep.org/donors.
Hannah Martin is a senior analyst, research, at CEP. Ellie Buteau is vice president, research, at CEP. Follow her on Twitter at @e_buteau.
Download Crucial Donors: How Major Individual Givers Can Best Support Nonprofits here.
*In the survey, we defined individual donors as “individuals who give to your organization directly or give to your organization through donor-advised funds at community foundations/commercial financial institutions.”
We defined major donors as “individual donors (as defined above) who give $7,500 or more to your organization in a given year.” We chose this threshold based on a study that found that the median gift size that nonprofits consider to be a major gift is between $5,000 and $9,999. We chose the middle of this range, $7,500, as the threshold for this study.