Helen Brown Group

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Life in fundraising’s fast lane

A couple of times every week my other half and I are on a particular section of highway in rush hour that is backed up for 7-10 miles. I am always grateful that there are the two of us, but most especially those times because we slip into the HOV lane and speed past the bumper-to-bumper madness to get to work on time.

As I was thinking about what I wanted to say to kick off Research Pride month this week, it occurred to me that prospect research, prospect management, and fundraising data science are a nonprofit’s HOV lane. Its warp drive, if you will. A nonprofit can certainly fundraise without fundraising intelligence, but it’s a bumper-to-bumper slog.

In fact, academic research undertaken at the University of Kent by Nicola Williams, MA, showed that 100 percent of fundraisers surveyed felt that research is necessary to helping them understand a prospect’s capacity to give. Eighty-six percent felt it was necessary to prioritize prospects, and 80 percent for understanding a prospect’s affinity with their organization.

84% of fundraisers said that prospect research helps them raise more money.

Those of us in research, prospect management, and data science have always known it in our bones, but finally the academic research (and most importantly) the opinions of our colleagues – frontline fundraisers – bears out the truth of our impact.

This #ResearchPride month, whether you’re a frontline fundraiser or prospect development professional, please tell your impact stories in staff meetings, on social media, at professional conferences, or wherever you gather.

If you’re a frontline fundraiser, how has fundraising intelligence made an impact on your work, on your campaign, on your fundraising totals? If you’re a prospect development professional, celebrate those prospects you found that turned into major donors or share the impact of your new or renovated prospect management system.

There are still fundraisers at nonprofits struggling in the slow lane, and some of them don’t even know that prospect development exists. Get the word out about your great work, and share your pride!

#ResearchPride

#PDPride

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Is philanthropic influence always a bad thing?

You may have seen that Forbes magazine recently came out with their “100 Most Innovative Leaders” list. Compiled by a panel of four male contributors, the list-makers built algorithms designed to highlight the best-performing CEOs at publicly-held companies with turnover over $1 billion. As you have probably heard by now, the list contained 99 men and one woman.

After an indictment of sexism in the court of public opinion, Forbes put Moira Forbes, publisher of ForbesWomen on the hot seat for a public response with “We Can Do Better And We Will.” It must have been kind of a drag for a woman who champions women business leaders to be asked to defend the efforts of her male colleagues on their nearly women-less list.

Forbes editor Randall Lane then issued a tepid apology with a companion article, “Opportunity Missed,” which partly argued that it wasn’t really that the guys purposefully excluded women, it was the algorithm that did it. And also, there aren’t any women leading billion-dollar publicly-held companies, so, he implies, the business community should get right on that.

I’ve looked at hundreds of richest/most innovative/most-powerful/40-under-40 lists in my career so far, and usually the feeling I experience when finding a woman on a list like that is like the joy you feel on finding that half smooshed mini peppermint patty in the bottom of your bag when you desperately need chocolate. You’re so grateful to have found it, but it’s sad that you had to look that hard.

The Forbes list made me think about the female innovative/powerful/leaders in fundraising, and I noticed with interest that the newly-minted group of Certified Fund Raising Executives this year is 80 percent female. Sixty percent of directors of prospect development at Ivy League universities are female. Sixy-nine percent of the Apra board and 75 percent of the NEDRA board are female. We may not be leaders at billion-dollar companies, but we’re definitely represented and leaders in this profession.

I’ve been thinking about this even more lately because the HBG Book Club is starting our new book Funding Feminism; Monied Women, Philanthropy and the Women’s Movement, 1870-1967 by Joan Marie Johnson next week. The new book comes at a pivotal time in philanthropic current events.

Why pivotal?

In the first two chapters Johnson discusses how wealthy women strategically used their money, and purposefully threw around the weight that came along with it, to bring about the 19th Amendment – the recognition of the right for women to vote.

Even though Funding Feminism focuses on history, Johnson’s discussion of how mega-philanthropy can allow donors to wield undue power over the cause or nonprofit they support and use it for their advantage – whether it’s social acceptance/mobility, reputation laundering, or to change entire political systems – is pretty current right now.

In fact, David Callahan’s The Givers and Just Giving by Robert Reich (which we also read in the book club) argue adamantly that wealthy donors wielding power and undue influence through philanthropy is a dangerous thing.

But is allowing a handful of wealthy people to influence public opinion or public policy in such a way that society is changed forever always a bad thing? If a previously underrepresented segment of society, such as wealthy supporters of the suffrage movement, band together to radically change an unjust system, should we cry undue influence? Will we only know a hundred years later if that influence was okay?

I’m really looking forward to hearing my fellow book clubbers – and your! – thoughts on this topic.

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A snippet of usefulness from the World Wealth Report

Prospect research is an artfully scientific mixture of fact and conjecture. We spend a lot of time delving into sources of record like newspapers, SEC documents, real estate records, contact reports and other records from our own databases. Then we add informed opinion like white papers, rich lists, and our own experience. If we’re lucky, we can include some data science into the mix.

As we mature in the profession, what we become comfortable with is a curious amalgamation of truth and speculation that we use to rank, score, and predict which groups of people or individuals are likeliest to give to our organization.

It’s not a perfect science yet, but over the years we prospect development pros have gotten pretty good at uncovering useful information and helping organizations use it successfully. According to a recent MarketSmart major gift benchmark study, 84% of nonprofits that use prospect research meet their fundraising goals every year. Only 65% of nonprofits who don’t use prospect research meet their goals (which, you could argue is still pretty good odds, but why not be better prepared and 20% more likely to succeed?)

Last week I highlighted the Fidelity Donor Advised Fund Charitable Giving Report, which is worth adding to your reading list if you haven’t already (especially if your nonprofit type is in one of the top 5 giving priorities).

This week I want to highlight a key graphic in the 2019 Capgemini World Wealth Report (WWR) and add a little context.

In the graphic we can see the different categories of assets that high net worth individuals (HNWI) worldwide tend to hold, and the percentage of their assets that each category is.

How can we use this?

Research on people who live outside of the US is traditionally more difficult than domestic research, so any piece of information on international prospects is potentially useful. But specifically, let’s say you know one piece of the puzzle; that your French prospect has two properties beside their home. Once you find the value (or relative value) of those two properties, you know from the chart that those properties make up 14.5% of their total wealth. Calculate a back-of-the-envelope total visible asset figure et voilà.

No, it’s not hard, specific, factual, information about the individual you are researching, but it is another piece of the puzzle that you can use to get a less fuzzy picture of your prospective donor.

Something else I found interesting in the report was the discussion on how those asset allocations have changed since last year. Nervous HNW investors (whose wealth decreased last year) are moving their money out of equities and into cash, cash equivalents, fixed-income investments, and alternative investments like commodities and private equity. Does this point toward another global recession? Maybe not, but it sure doesn’t suggest that they’re bullish.

I’d love to hear your thoughts on the World Wealth Report, and if you found anything interesting in it that you’d like to share here.

 

 

 

 

 

 

 

 

 

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Hidden gems in the 2019 Fidelity DAF report

Today I’d like to draw your attention to the Fidelity Charitable Giving Report, 2019 edition. You can download it for free here. The report summarizes Fidelity’s donor advised fund activity for the past year, and there are some important opportunities I noticed that I wanted to share with you.

In case you’re not familiar with Fidelity Charitable(™), it is the largest sponsor of donor advised funds (DAFs) in the United States. Fidelity is cagey about the total assets under management, but donations made last year from the superfund’s 204,292 (and growing) DAF donors totaled $5.2 billion.

While you might expect that a super-large fund of funds would be a great place for privacy-seeking billionaires to cache their philanthropic dollars, the median DAF size at Fidelity is $17,670. Just 8 percent of Fidelity DAF accounts hold over $250,000 in money waiting to be donated, but even so, that small slice of funders gave over 582 donations of $1,000,000+ last year.

That $5.2 billion in donations last year was an increase of nearly 20 percent over 2017. Fidelity says that the majority of donations – 60 percent – were specifically unrestricted. Normally with a DAF gift distribution, a donor can suggest a gift designation but the DAF sponsor – Fidelity in this case – can choose to honor or ignore the restriction.

Of course, they’d be operating at their peril to ignore the donor’s wish in all but the most outlying cases, so DAF managers generally pass that restriction along to the nonprofit. The fact that this growing number of Fidelity DAF donors largely gives unrestricted money is good news, considering that most foundations won’t cover overhead and major gifts from individuals tend to be restricted.

The report breaks down giving by recipient type and a companion piece slices the data by geography, and I found these two breakdowns fascinating:

Recipient type

DAF donors give differently than average Americans do (as described in Giving USA). Year after year, their pie charts show us that religious organizations receive the largest piece of the pie in terms of dollars. Last year, religion received 29 percent of total giving, which amounted to $124.52 million.

But although Fidelity’s DAF donors gave the highest volume of gifts to religion, the segment which received the most dollars was education, which at 29 percent of all giving was nearly double the amount of religious gifts, at 15 percent. Religion actually came in third place, just after ‘society benefit,’ which was 18 percent of DAF giving at Fidelity.

And that’s not unusual. In fact, according to the report:

 Since Fidelity Charitable launched the Giving Report in 2013, education has regularly received the most yearly grant dollars; religion has received the greatest grant volumes.”

From a prospect identification / donor segmentation perspective, that’s pretty interesting, eh?

Geography

A companion piece to the report provides a closer look into what Fidelity calls the 2019 Geography of Giving, where you can drill down on each of Fidelity’s top 14 markets as it compares its “Top Cities for Giving“. They are:

Atlanta, Boston, Bridgeport, Chicago, Cleveland, Dallas, Denver, Los Angeles, Miami, Minneapolis, New York, San Francisco, Seattle, and Washington, DC.

There are all sorts of interesting statistics for you to find in each city’s one-sheeter. Take a look at Chicago, for example. Human services, religion, and education may be the top 3 charitable sector priorities for all Fidelity DAF donors in that city, but nestled among the top five most popular recipients of donations are two public media nonprofits.

Hmmm, that’s interesting! What about New York? The top three priorities are education, human services, and health, and (well, look at that!) at #1 for donations is New York Public Radio and at #4 is WNET. Again, two in the top five.

So of course I had to check out my home town, Boston. Top three priorities for Boston DAF donors? Just like New York, the top three are education, human services, and health. But look here: at number 3 for largest dollar support is the WGBH Educational Foundation (yay Masterpiece!) and at number 4, Boston University (which beside being a university also houses Boston’s other major public media station, WBUR).

In San Francisco, the number one spot for donations is KQED. In Atlanta, public media is at #4 (under the guise of the Atlanta Educational Telecommunications Collaborative).

If I were working in public media, I’d be paying a lot of attention to my Fidelity DAF donors right now (or maybe these numbers point to the fact that they already are…)

But even if you’re not in public media, there’s a whole lot more in these reports of interest to all organization types that can help you think creatively about donor engagement strategy. These are just two areas that I wanted to highlight that grabbed my attention. Take a look and see what information you find that’s relevant to your nonprofit – and if you find something that grabs you as fascinating, share it with all of us in the comments!

 

 

 

 

 

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An Active Kindness

The complaint I hear most often about social media, and Twitter in particular, is that it’s a cesspool of people screaming ignorance, inanity, incivility, or ill-will. Maybe I’ve been lucky, but so far I haven’t experienced anybody leveling vitriol at me, and if I see someone I follow doing it elsewhere, I just unfollow and/or block them.

Life’s too short to deal with angry people spewing hatred. A bad day every once in awhile is understandable, but I can’t deal with constant cortisol.

I actually get a lot of positivity from social media. The people I follow tend to be aspirational and inspirational to me. Leaders I learn from. Colleagues doing cool things at work and at play. Consultants who teach me how to be better at what I do. News sources and industry press that keep me current on the world and topics that impact my work. And the occasional account that just makes me chuckle.

I started noticing something new popping up in my feed a couple of months ago from fundraising consultant Susie Hills of Halpen Partnership. It was right about the same time that I did a mass purge of accounts I’d been following to stay aware of current events that I found were really stressing me out, and Susie’s posts were focusing on kindness. It was really what I needed to hear right then.

I noticed she was regularly tweeting recognition of people doing random acts of kindness, small and large…

…and adding commentary that resonated with me:

I thought it was really nice. But, you know, was focusing on kindness a bit sappy? Then I saw her post this:

In that quote from Allison Vesterfelt (now Fallon), I got what I think Susie is trying to do. It’s active kindness. It’s doing and recognizing simple kindnesses, but it’s more than just that. It’s standing up for integrity. Grit. Honesty. And purposefully working toward Platinum Rule-style justice.

I haven’t spoken with Susie, and we’ve never met. She doesn’t know I’m writing this article and I don’t know if she’ll ever see it. But her #teamkind initiative inspires me and is proof that putting kindness out there can resonate.

She’s not alone in the fundraising world recognizing how critical kindness is right now in our world. The Carnegie UK Trust in Scotland puts its money behind studying, quantifying, and bringing kindness into action in society. They have recently published several white papers (and a video) on the results of studies quantifying kindness and how it impacts public engagement, and on the practice of kindness from regional Kindness Innovation Networks.

It’s practical work, not kumbaya stuff.

In his article “Joining The Dots,” Carnegie UK Trust Policy and Development Officer Ben Thurman writes about the studies they funded:

 But we also learnt ever more about the limitations and the barriers that inhibit social connections and relationships. Kindness is contingent on other factors – the way that we design our physical environment, the nature of our public and civic spaces, the policies and procedures that govern the behaviours of organisations. Increasingly, we have found that all of this ‘infrastructure’ gets in the way of kindness…

…There is a whole raft of tensions: between kindness and risk, relationships and professionalism, emotions and performance management. Alongside this, we have perceived a sense of fear of ‘radical kindness’, which is perhaps unsurprising in a (public sector) context that does not always support risk-taking nor provide the time and space to invest in doing things differently.

We do not have all the answers. But we do know that any response to the complexities of kindness must be based on flexibility, trust and support to empower people and professionals to behave in a way that is authentic and, above all, human. And we also know that creating the time and space for challenging conversations about the type of communities, organisations and society that we are striving towards is a vital part of the process towards change.”

Over the past few years, maybe you, like me, have become worn down by the lack of civility we see in politics. I also have concerns with how the tech community and other businesses act regarding privacy and our data, and about how our young people are going to make it personally, professionally, financially, and physically in a changing environment.

But lately I’m given hope and being inspired by Susie and others. Even though kindness is generally the way I try to approach the world, I know that being actively mindful about recognizing it will positively impact both my work and my own inner dialog.

I’m on #teamkind now, and I hope you will join me.

 

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Usufruct

I listened to a fascinating, highly recommended episode of the Vox podcast series “Future Perfect” this week that was embedded in an article called “Dead people leave billions in their wills. How long do we have to listen to them?”

The theme of the podcast – should foundations exist in perpetuity? – is a topic that has increasingly appeared in fundraising periodicals and in our HBG Book Club discussions of The Givers (David Callahan), Just Giving (Rob Reich) and Winners Take All (Anand Giridharadas). Each book has a slightly different angle on the topic, but generally the consensus is that endowed foundations and donor advised funds take money out of circulation that could be used to solve problems now.

And further, maybe it’s not just that problems could be solved now, maybe it’s a problem that, for some of them, the needs for which the endowments were established no longer exist. Or the original terms were just really repugnant to begin with.

For example

The Vox podcast entertainingly shares two stories illustrating those case scenarios. One story describes a Georgia pleasure garden built for the perpetual, exclusive enjoyment of a city’s white citizens. What happens when, 50 years later, a foundation’s trustees or a municipality are charged with re-examining a donor’s intent? (In the garden’s particular case, the municipality shoots themselves in the foot. Listen to the podcast to learn more.)

If times change but the purposes for which a foundation is established can’t (or don’t, or won’t) change, does it even make sense for foundations to be allowed to exist in perpetuity in the first place? What happens if the disease for which a perpetual trust is established to remedy is eradicated? Sure, we can say that the trustees just have to go to court to get the money freed up for another purpose, but as the New York Times reported, sometimes the trustees don’t actually want that to happen.

And that’s where usufruct comes in. The podcast presenters, Byrd Pinkerton and Dylan Matthews, interviewed Boston College law school professor Ray Madoff (no relation to the con man), who describes what the general feeling was in the days before Rockefeller and Carnegie-style foundations came into being. Here’s an excerpt:

Matthews: So Byrd, you promised me an explanation for why we allowed people to have trusts that last forever.

Pinkerton: Yes. So the first thing I learned from Ray is that is hasn’t always been this way.

Madoff: Historically we did not allow people to create their own donor-intent-preserved-in-perpetuity, right? We explicitly did not allow that for the first century after the country was formed. It was seen as aristocratic, it was not the American Way.

Pinkerton: We had literally just fought an entire war to establish democracy.

Madoff: These zombie entities that could live forever were seen as very disconcerting and not necessarily appropriate for a country that was supposed to represent the wishes of the people and that’s why Thomas Jefferson famously said that the world is held in usufruct for the living. And usufruct is a funny word, but what it means is life estate, that the world is to be held for the living for the time of their lives, and after that it is to be freed up for the next generation to hold the world as they see fit. And that was a very strong value of Jefferson and of a lot of the founders. The people in their time controlling the resources of their time for their time.

More generally, the word usufruct means having temporary access to another person’s (or entity’s) stuff, whether it’s money, or a private park, or some other benefit that you don’t actually own but you get to use, like that piece of clothing you borrowed with permission from your roommate’s closet. You get the benefit of it for a time, not for ever.

Things changed in America when the steel and oil and railroad barons started amassing more money than they could possibly spend, and public infrastructure increasingly needed upgrading. There was societal need and a sudden rise of income inequality in this first Gilded Age, but no mechanism or infrastructure for organized or institutional philanthropy was in place.

In modern history, nothing like this had happened before – commoners rising to the economic level of kings – and as far as the 1% of that age knew, based on history they would likely always be princes and the poor would likely always be paupers. An environment started to emerge that was more friendly to (or at least tolerant of) establishing charitable foundations in perpetuity to help keep the fringes of society’s infrastructure shored up.

So the rich (in the form of John D. Rockefeller), wanting to do something positive with this mountain of money, pressured lawmakers for change and eventually got it. The first endowed charitable foundation, The Rockefeller Foundation, was given permission by the US Congress to be formed in May of 1913.

And now here we are, today, discussing changing the rules

Over the past century, the establishment of foundations has undoubtedly made our society better. But the eke-ing out of 5% of foundation assets hasn’t gone a long way to actually solving the issues that face us. It’s increased endowments and given the folks managing assets meant for the underserved a good living.

Much of the commentary we’re seeing in op-eds, articles and books by philanthropy historians and thought-leaders during this second gilded age call into question this trickle of band-aid funding when bolder collaborations could take place. Some call for measured thinking while others are more strident, but the voices advocating for change are getting louder.

Some want endowed foundations to be a thing of the past entirely. Others call for a 100-year existence with mandatory sunsetting. And many (including myself) want greater transparency, protection for donors against misrepresentation and usury, and and at least a minimum donation requirement (or better – a maximum life span) for foundations and donor advised funds.

Now that we’ve had a hundred or so years of seeing the best and worst of the philanthropic foundation and the donor-endowed funds’ legacy, where will pressure for change come from?

Do we even want change? Are we used to perpetual, yet rationed, usufruct?

When change comes, I can’t imagine that it would originate with a state or federal government, and it probably won’t come from within the foundation world itself. Change would be unlikely to be broached by nonprofits who hold an uneasy power position as foundation-fund applicants.

But we’ve seen a movement start already with the creation of The Giving Pledge – donors committing to give away at least half of their net worth during their lifetimes. Maybe change could come from the donors themselves.

Or maybe it’s the press that will push our sector to shift our perspective? Anand Giridharadas, David Callahan and other journalists are gad-flying adjacent to the wealthy 1% and the third sector. Maybe change will come from the buzz they’re creating.

Or it could be a collaborative mixture of voices from inside and out of the nonprofit sector. Just Giving author Rob Reich is an academic at Stanford who most certainly relies on philanthropic support to fund his research.

And these were some of the last words I heard on the Vox podcast: “Future Perfect is made possible by a grant from the Rockefeller Foundation.”

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How the wealthy say ‘I do’ to philanthropy

Since June is the most popular month for the pledging of troths, it got me to thinking about The Giving Pledge, which is an organization of billionaires who pledge to give away 50% of their fortunes while they’re still alive.

I realized that I hadn’t really heard much about the Giving Pledge when it resurfaced in the news recently with MacKenzie Bezos’s sign-up. That could be because interest in the club seems to have waned a bit in the decade since Bill and Melinda Gates and Warren Buffet splashed out the announcement at its founding. 122 people signed on in the first four years, but only 68 have committed in the five years that have followed. [Read more…]

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Will “Anonymous” become ubiquitous?

Image by Pete Linforth from Pixabay

It used to be that anonymous donors were relatively rare. When I started my career, you’d see maybe two or three anonymous donors on any given annual honor roll of donors.

Now there are a growing number of opportunities for donors to hide in plain sight in addition to just a listing as “Anonymous,” and I’m wondering if the appeal of LLCs and donor advised funds (DAFs) and other vehicles-to-come will become even more attractive to a particular kind of donor.

Let’s say, for example, that you are a philanthropically-minded (yet very minor) member of a dynasty with a less-than-stellar public reputation. Or a member of a polarizing family or profession. A junior Sackler, say. A pot-shop millionaire. Tiffany Trump. Some nonprofits might welcome your money, but others might be uneasy with forging a relationship. You cause due-diligence alarm bells to go off. It’s awkward.

You have causes you want to support, but the causes don’t want your support. What do you do?

Well, you could make an anonymous donation via a DAF or LLC. You’d get the tax deduction, the nonprofit is blissfully ignorant of your identity and free of any pesky ethical/due diligence concerns (I’m playing devils’ advocate here, don’t @ me), and all you’re missing out on is the naming-rights glory which, given the circumstances, is publicity you don’t need right now anyway.

Or maybe you just want to give your tens of millions in peace. Announcing that you’re wiping out the student loan debt for a whole graduating class or signing the Giving Pledge invites too many hecklers yelling that you shouldn’t have made your money that way or that your personal and political beliefs are too self-serving or that you’re not giving to the right things. You’ve got some eloquent support, but giving anonymously is looking pretty attractive, right?

Giving USA and others do a great job of tracking trends of donations to specific causes, but I started to wonder if think tanks, consultants and/or nonprofits are starting to track what percentage of major donations annually are anonymous, and what percentage of total giving that represents. Is it increasing? Staying the same? Are certain (types of) donors more frequently opting for anonymity?

Depending on the answers, how might that data impact how a nonprofit approaches high-visibility (or highly risky) prospects?

I contacted my colleague Dan Lowman, senior vice president of the Survey Lab at GG+A, to see if they have been tracking any data on the subject and luckily, they had helpful information about $1M+ gifts from across the non-profit sector.

Source: GG+A Survey Lab

As you can see, it’s been a pretty bumpy ride over the past 13 years, but the trajectory of anonymous donations above $1 million is on the rise. We’re less than halfway through 2019 with only 43 anonymous gifts of $1m+ so far, but if the pace holds true to its acceleration, the Survey Lab projects an all-time high for anonymous gifts this year.

As a percentage of all $1m+ donations, anonymous giving this year could outpace each of the past seven years by a mile.

Source: GG+A Survey Lab

That bump in anonymous giving at the heart of the Great Recession is an interesting spike, isn’t it? Was that a time when philanthropically-minded individuals didn’t want to flaunt the fact that they were conspicuously wealthy? Or something else?

With income inequality on the minds of many, and intense public scrutiny of wealthy donors by philanthropy-watchers increasing, are we about to see another spike in anonymous giving? Will it be a blip or part of an on-going trend? I think it will take another two or three years for us to know for sure, but I for one am going to be watching with great interest.

FOR FURTHER CONSIDERATION

In this article, Vox.com’s Dylan Matthews interviews Phil Buchanan, president of the Center for Effective Philanthropy.

From the article:

 Stepping way back, for the last 18 years in this job I’ve felt like philanthropy and the nonprofit sector it supports often get taken for granted. I think we undervalue the role of this sector, particularly in our country, and I think much of the narrative has been, “Philanthropy and nonprofits are broken and business thinking has the answer.”

And now we have a new critique, which is more from the left politically, from folks like Anand [Giridharadas] and others, which is, “No, actually, philanthropy is just an anti-democratic force or a ruse to distract from evil-doing. Actually, government has the answer.”

I actually think that nobody’s got all the answers. I think it’s particularly concerning right now because there’s some evidence that giving levels may be plateauing. It’s hard to tell for sure because we’re all waiting on the Giving USA data [the gold standard dataset on charitable giving]. And while I think we should be really critical of stupid or ineffective philanthropy, we should hold up giving as a value and recognize that when done well, it can have tremendous positive impact.”

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The Unease of the One Percent

We talk about “the 1 percent” a lot in our line of work. Yesterday, the HBG Book Club met to talk about chapter one of Uneasy Street; The Anxieties of Affluence by sociologist Rachel Sherman, and what spurred most of our conversation was the ambivalence high net worth people had toward their wealth.

In the book, Sherman interviewed wealthy Manhattan-ites to learn their attitudes towards their wealth and what they felt it means to be considered wealthy. She recognized a distinct pattern over time, and shares two distinct categories she observed depending on how people spoke about their wealth: upwardly- and downwardly-oriented attitudes.

The “downward-oriented” wealthy share an unease with having so many resources in a time of stark income disparity. Sherman found that this group are more likely to have inherited their wealth or have come from more modest origins. Most are not in a high-pressure earning environment. More liberal politically than the upwardly-oriented, people in this group are be more likely to mix with a more racially and income diverse group of friends. We posited that people with these attitudes might fall into the shirtsleeves-rolled-up volunteer-donor category.

The “upwardly-oriented” wealthy, she wrote, tend toward the attitude of “sure, I’m comfortable, but not like that guy. He’s really wealthy. I’m middle class compared to him.” There aren’t many inheritors in this group; they tend to be earners who make their money in finance, real estate, business, or corporate law. More conservative politically than the downwardly-oriented, their charity involvement may be less hands-on and more focused on opportunities to network with others.

As we were discussing this chapter, I was thinking about what it actually means to be a one-percenter, and if the attitudes of Manhattan one-percenters toward their money are the same as Mercer Island’s, or England’s, or if each locale’s attitude is like Darwin’s finches – unique to that island.

Naturally, I decided to do some research to see what it means to be a one-percenter elsewhere than New York City. Unsurprisingly, it really depends on your geography. Someone working in a senior leadership position in a large nonprofit in New York, Boston, or San Francisco would probably qualify as a one-percenter in Arkansas, where in 2017 the bar was set at annual income of $237,428.

Before seeing the article, I had assumed that NYC would be the top, but Connecticut actually beat out New York by a mile, $659,979 to $517,557. Even New Jersey got New York’s upper hand, at $547,737. What’s also fascinating to see in the article is that the average annual income for members of the one percent in each state is usually much, much higher than the threshold.

What we discussed in our book club was being aware of these geographic differences and, as always, understanding the context of where our prospects are in their life – living in an aspirational neighborhood with two kids in private school, or two-income, childless and nearing retirement. Taking Sherman’s observations into consideration as well – whether prospects are upwardly- or downwardly-oriented – may also provide us with help as we plan how to involve and steward major donors and volunteers.

Are you reading this book as well? I’d love to hear your thoughts in the comments.

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What to do when your PM system needs a reboot

What do you do when your existing prospect and performance management systems aren’t working for anyone? That’s the question Misa Lobato answers for us this week in our month-long Research Pride look at prospect management. Misa and her team embarked on a serious soul-searching, data-gathering, preconceived-notion-busting, solutions-finding mission to find out what would make their system actually work. Part of what they learned is that you have to measure what matters. And what matters? Read on! ~Helen

Photo by tracyshaun

Many years ago, when I first started learning about performance management in fundraising, I noticed a strange disconnect: there didn’t seem to be a correlation between gift officers meeting established individual goals and being promoted. In fact, often the gift officers who were promoted hadn’t met their goals. As I dug in a little further, I realized no one cares about these goals.

How did we get there, to the point where goals had been established to measure performance but no one viewed them as an indicator of success or failure? It seemed to me that goals had just been handed down year after year without being questioned. Goals were standardized across titles. Some were based on questionable industry lore–a gift officer should raise X times their salary. And some just seemed to be based on what had always been done. [Read more…]

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