Reaching Out

Here's an article I just wrote for the APRA-UNY Chapter newsletter.

Them That's Got Shall Get:
Reaching Out

By Andrea Balzano

All kinds of donations by individuals, foundations and corporations are called “charitable.” Donations to homeless shelters and job training programs for ex-prisoners are counted as philanthropy alongside gifts to name new buildings at the wealthiest universities.

According to Giving USA 2010, gifts to human services were only 9% of the $303.75 billion in total giving by individuals, foundations and corporations in 2009. While some might think the disparity between giving to nonprofits that help people in need and giving to relatively wealthy organizations is the result of stinginess on the part of wealthy people, we as fundraising professionals know that the reason wealthy donors give more to colleges, hospitals and museums is that those kinds of nonprofits generate their own wealthy constituents whom their development staff identify, nurture relationships with, and ask for large donations. The truth is that many people capable of making large donations want to help people in need, and it is the job of fundraising professionals, including prospect researchers, to connect donors capable of making major gifts to nonprofits that serve the people these wealthy donors want to help, to persuade people with financial resources to give to nonprofits where there is not already a self-perpetuating pipeline of wealthy constituents through which such donations can flow. We have the expertise to remedy this disparity in giving.

Pablo Eisenberg, senior fellow at the Georgetown Public Policy Institute, writes often and passionately about this fact that foundations and wealthy individuals donate much more to established colleges and universities, hospitals and arts and cultural organizations than they do to nonprofits that serve and advocate for people in need. In a July 2010 opinion piece in the Chronicle of Philanthropy, Mr. Eisenberg responded to the efforts of Bill Gates and Warren Buffett to encourage ultra-wealthy individuals to donate larger portions of their wealth to charity with the concern that even if wealthy people donate substantially more in the future, those donations won’t go where they are needed most, and might actually intensify the already large gap in funding between larger, more well-resourced nonprofits and small nonprofits that serve and advocate for people in need.

Fundraisers are in a position to address this issue about which Mr. Eisenberg writes so passionately. We know better than most people that established educational, health and arts and cultural organizations generate their own major donors, receiving large donations mostly from their own constituents. Nonprofits that help those in need, on the other hand, have to look to non-constituents for major gifts. Wealthy people donate to organizations they know—this is the path of least resistance and is completely understandable. Small nonprofits, and particularly those that serve people in need, don’t have built-in natural constituencies of means, so they have more difficulty sustaining major giving programs. They often don’t have dedicated prospect researchers or systematic ways of identifying and cultivating prospects who might be able to donate large or even transformational gifts.

Some new types of organizations, like the Robin Hood Foundation in New York City, precisely fill this gap by advising wealthy donors who want to help alleviate poverty in their city about which nonprofits are effective. The Robin Hood Foundation doesn’t operate like traditional foundations, which give away relatively small portions of large perpetual endowments. Robin Hood’s endowment, donated by its founders and board members, covers its own operating expenses, and all the gifts raised each year—a famously impressive amount—go directly to the nonprofits supported by the foundation. Robin Hood is effectively a major gifts-raising operation. Unlike traditional foundations, Robin Hood provides to nonprofits multi-year grants and funds for operating as well as program expenses, and also provides technical assistance to help programs become more effective. In this way Robin Hood fills a gap where wealthy donors who want to contribute to the alleviation of poverty in their city can donate to an organization they trust to use their donations in an effective way. This type of “high-engagement” philanthropy is designed precisely to fill the gap Mr. Eisenberg laments.

Another way the funding gap could be narrowed is if nonprofits themselves were better able to raise major gifts directly, and prospect researchers in particular are in a position to help here. As fundraiser Armando Zumaya astutely points out, “many of the major donors to universities, hospitals and major museums also donate small amounts to small nonprofits. Fundraisers at small nonprofits don’t ask them for large donations because they don’t have the information they need to know to ask them. Not only is there a funding gap, there is an information gap with regard to prospect research and developing systematic methods for finding and tracking major gift donors. Small nonprofits get beat to the punch by big universities and other relatively wealthy institutions.” Small nonprofits and those that serve people in need don’t have self-feeding databases of alumni or patrons to mine for wealthy donors. Their staffs often do double duty as fundraisers and program directors. The gap can be filled, but it will take effort and commitment.

What specifically can we do? It’s not enough to point to a collection of static resources on a website or bookshelf or to recommend expensive conferences, useful though they are to fundraisers who use them. Certainly, many fundraisers who work at large, well-resourced nonprofits volunteer their time to small nonprofits in their communities, and this is laudable. But perhaps we as fundraisers can do something more systematic and have more of an impact as a profession.

Rather than waiting for small nonprofits to come to us for help, perhaps the most important thing we can do is reach out to those grant-dependent, endowment-poor, small nonprofits that serve people in need to help them take advantage of the methods that large universities, hospitals and museums use to identify and cultivate major donors, to help them jump start and sustain major giving programs. For example, APRA and AFP chapters might proactively advertise their programs and conferences to local nonprofits and encourage membership in their chapters through reduced membership rates. Foundations and other relatively well-resourced nonprofit organizations could provide free technical assistance in prospect research and prospect management to help small nonprofits create their own sustained major giving programs. The expertise developed by prospect researchers and other development staff over the last several decades at universities, hospitals, and large membership and cultural organizations can be pushed in new directions and into new arenas in ways that could help bridge the gulf between effective, small community nonprofits and large nonprofits with natural constituencies of means, helping to solve the disparity in giving about which Mr. Eisenberg writes so passionately.


Andrea Balzano is Research Analyst at Cornell University and has worked as a prospect researcher in higher education for seventeen years. She volunteers on the APRA Connections editorial committee, as a board member of APRA-UNY, and as editor of the chapter newsletter.

Summer 2010 APRA - UNY Chapter Newsletter