Joe Lepper looks at the latest thinking on how charities can engage with major donors and the benefits of doing it well

This year’s Sunday Times Giving List, which tracks philanthropy among the UK’s wealthiest individuals, revealed some impressive levels of giving among the super-rich.

Of the 300 people tracked a total of £2.577 billion was given away, up 7.8 per cent on the previous year. This financial elite are also getting better at planning their giving, with £19.042 billion in charitable cash at their disposal in 2015, up by 29 per cent on the previous year.

Among this group, which includes Sir Elton John, David Beckham and Lord Sainsbury, 106 wealthy individuals gave away at least one per cent of their residual wealth, another record for the list.

To help charities tap into this growth in philanthropy a support industry is emerging that includes specialist training in reeling in high-income donors. Paul Cartwright, a major donor fundraiser who made the move into training in this specialist area, says cuts to government funding for charities are having “such a significant impact” that targeting the super-rich is more important than ever to the sector.

Engagement

Cartwright says key skills are required for success, most notably communication, imagination and patience.

While as a major donor fundraiser for the Royal National Institute for Blind People (RNIB) he recalls tracking one major donor, who “we had been after for three years.”

He says: “I knew that his charitable objectives were different from what the RNIB did, so I knew I had to go above and beyond in terms of the proposal I put together.

“I also knew that the fundamental thing I needed to focus on was emotional engagement. If I could get him emotionally engaged with what the charity did I knew I would have a good shot.

“What I did was create a written proposal that put him in the position of someone losing their sight. So I faded it gradually as he read it, starting with black text, fading to grey and then fading out to simulate losing your sight. It was successful.”

This example also highlights another key piece of advice he gives charities, to treat wealthy donors as “just people, regardless of how much money they earn.”

This means rather than “anonymous mail outs” targeting them requires a far great focus on “building a rapport with them and face to face communication.” This psychological approach to targeting rich donors is among issues being looked at in a two-year study launched this year by the Centre for Sustainable Philanthropy at the University of Plymouth’s think tank Rogare. This builds on its research carried out two years ago looking at the motivation of giving among global wealthy donors.

The centre’s research director Professor Jen Shang says charities’ understanding of the character and motivations of wealthy donors needs to extend beyond initially targeting them and should form the basis of a long-term relationship. Charities need to understand donors’ “journey of giving,” she says, to ensure they can gain further donations and build their relationship over time.

Key stages in this journey include increasing the sums of money given and becoming more involved by offering their time as a trustee or advisor.

This journey is also likely to involve being an ambassador for the charity, recommending it to other wealth donors.

“By the time they are matured in their philanthropic giving donors are giving much more than money,” Shang says, adding that “charities can never have the view that their relationship with donors involves one exchange and that’s it.”

Impact

Impact measurement is a key part of this journey, according to think tank and consultancy New Philanthropy Capital (NPC).

Its survey of high-income donors, in its 2013 report Money for Good, found a strong appetite for robust evidence of success. This revealed that 61 per cent of rich donors want evidence a charity has made an impact before making a donation.

However, this survey also revealed how poor many charities are at supplying this information, with just 45 per cent of high income donors believing charities are performing well in terms of proving they can make an impact.

Angela Kail, head of NPC’s funders team, says a reason too many charities are failing to effectively communicate their impact is that they are unsure how often and what information they should provide.

“A lot of people do not want to be thanked in a high profile way but they do expect to be kept up to date on how the charity is performing,” Kail says. “They are expecting more than a photo and a statistic.”

Cartwright says: “I hear some horror stories where a significant donation is made and then the charity does not contact them again.”

He adds that knowing how to communicate with high-income donors is more simple than many charities think.

“It’s actually very simple, just ask them how they want to be communicated with and the level of information they want,” he says.

Among barriers to this basic form of human interaction between charities and the super-rich is a perception that they do not share “a common language,” says Shang. “But dig deeper and after just three or four layers they will find a lot of common ground,” she adds.

To help this process she urges charities to make better use of their trustees, who may come from similar business or entrepreneurial backgrounds.

Support

For donors there is also an emerging support structure, most notably being supplied by the financial services sector, where many of the new super-rich donors come from says Cathy Pharoah, co-director of the Centre for Charitable Giving and Philanthropy at City University London’s Cass Business School.

“Increasingly the major donors are those from the business sector of which finance has been the most successful part,” Pharoah says. “There has been an increase in donors coming from this financial services and wealth management sector.”

Among the most successful of these philanthropic support schemes for the super-rich is financial services giant UBS’s Optimus Foundation.

This helps UBS’s wealthy clients to target charities with strong evidence of success. Donations can also attract match funding from UBS as well as from UBS partners such as the Gates Foundation. Last year £50 million was donated globally through Optimus, including £10 million of UBS matching funds and £2.8 million to UK registered charities.

Tom Hall, head of UBS philanthropy services in the UK, says US and Liberia based international development charity Last Mile Health is a good example of where strong evidence and good communication helped secure a sizeable financial donation of £2 million.

“We had already been funding them for a couple of years and they had successfully proven that they had reduced infant mortality in Liberia,” Hall says of their work that involves training parents in communities to diagnose and treat diseases in communities as well as provide nurse mentors.

“When the ebola crisis broke we needed to act fast and a donation was made to support them to train community health workers to triage ebola. Together with Médecins Sans Frontières they managed to contain ebola in the areas they were working in.”

Last Mile Health was one of a number of charities that was discovered by UBS’s grant team, who look for “compelling organisations that offer meaningful change,” says Hall.

In addition UBS invites applications for donations, but this can be tough to access, with just 30 gaining funding out of around 1,000 applications last year. For those charities that can successfully communicate with and attract the attention of the super-rich there are further benefits, says Kail.

“With government funding it often comes with strings attached, but with philanthropic giving there is less of that. Often they are happy to let the charity decide how best to spend it,” she adds.

For those that take the time to understand the mindset of the wealthy the benefits can be huge.

Joe Lepper is a freelance journalist

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