According to the Beacon Collaborative report on “Scoping The High Net Worth Philanthropy Market“, there is a lack of research focus on high net-worth (HNW) philanthropy in the UK. It suggests that the charity’s understanding of this particular segment’s contribution is limited. This results in inadequate strategic planning, ambiguous media narratives about HNW giving, and missed opportunities.
Charities can meet their fundraising goals with less donor count by targeting high-net-worth individuals (HNWIs). To get their attention and establish strong relationships with these donors, charities need to understand their charitable needs and behaviours.
This article presents practical strategies charities can use to strengthen their relationship with high net-worth donors. Before diving into these methods, let’s understand who they are and why they are important for charities.
What are High Net-Worth Donors?
High net-worth donors are individuals or entities with significant financial resources to contribute substantially to nonprofit organisations.
The “Giving Experience Report” by the Beacon Collaborative indicates: “Giving levels vary widely among the wealthy population – there is no benchmark for “major giving”. However, the starting threshold is between £1,000 and £4,000 depending on the level of wealth.”
Another report, “Money For Good UK” by New Philanthropy Capital, states £1,282 to be the average donation by high-income households in the UK. It falls under the same donation range mentioned in the Beacon Collaborative report. These reports give a baseline for charities to segment their high net-worth donors based on their donation volume.
Why Should Charities Nourish Their Donor Relations?
A nonprofit organisation is as solid as its donor relations. Donors support charities for various reasons: a personal experience of a charity helping them or an emotional connection with the charity’s mission. Regardless of motivation, charities must nourish their donor relations to retain them long-term.
It is not uncommon for charities to face donor churn. The “Charity Commission Report” mentions that the public is interested in supporting specific causes rather than individual charities. It also highlights the possibility of donors changing their support from one charity to another. This puts stress on charities to nurture donor relationships and enjoy the following benefits:
- Enhanced Donor Loyalty: Cultivating meaningful connections with donors fosters a sense of loyalty. Loyal donors feel committed to the charity’s mission and values. It also leads to continued and increased support.
- Increased Referrals and Advocacy: Satisfied and engaged donors share their positive experiences with others. Increased word-of-mouth referrals and advocacy expands the charity’s supporter base.
- Enhanced Public Image: Positive donor relationships reflect well on the charity’s public image. It enhances its reputation as a trustworthy and transparent organisation.
- Opportunities for Collaboration: Strong donor relationships can open doors to collaboration and partnership opportunities. They allow charities to leverage additional resources, expertise, and networks to further their mission.
How to Take Care of High Net-Worth Donors
Taking better care of your donors requires creativity. Below, we discuss the strategies for effectively engaging high-net-worth donors.
1. Identify Untapped HNW Donors in Your Existing Donor Base
The first point of call for a charity is to assess their existing data regarding potential high net worth donors. Giving levels of a minimum of £1,000 can serve as an initial point for identifying wealthy donors. Therefore, an organisation should:
- Have a repository or CRM that captures all the donations at set time periods.
- Extract the relevant donors based on pre-defined criteria (e.g. donations above £1,000, living in certain locations, etc).
- Begin a high net-worth donor communications strategy (see points below).
However, one important element to bear in mind is that many HNW individuals may not necessarily reach the internal minimum donation criteria of £1,000. They may give smaller amounts but still be classified as a potential high net-worth donor to target. How is this possible?
It is often the case that high net-worth donors may split their charity amounts between £1,000 – £5,000 per year between 4-5 organisations. This results in the annual giving between £166 – £800 per organisation. Therefore, at this level, charities might not acknowledge the donor’s potential for making larger contributions, as mentioned in the Giving Experience Report.
Collecting the major portion of their giving requires a targeted approach. By employing bespoke engagement strategies and personalised outreach, you can foster meaningful connections to identify potential high net-worth donors who didn’t cut the original £1,000 list. It can done by:
- Offering networking events and information sessions about your charity’s projects and their impact.
- Offering exclusive access to projects and events combined with interactive experiences, to connect them to your charity’s mission.
It is also an opportunity to learn more about prospective people to decide if they fall under the high net-worth donor list.
2. Communication Based on Donor Segmentation
Charities can support their relationship-building with wealthy individuals by establishing segmentation programs. Such segmentation can help them understand their donor’s intent and behaviour. The “Giving Experience Report” segments wealthy individuals into three behavioural groups in the UK: Prospectors, Pioneers and Settlers.
Note: This article focuses on the prospectors and pioneers, with only an introduction to the settlers segment.
Prospectors:
More than half, 52%, of wealthy individuals in the UK fall into the “Prospectors.” Prospectors are particularly driven to accumulate wealth and also to donate it. They are people-driven and prefer to participate actively in philanthropy.
- What charities need to know about them: These donors require consistent communication and acknowledgement from fundraisers.
- Engaging with Prospectors: They require a solid commitment to personal relationship management. They expect a partnership with regular updates and events, valuing connections with fundraisers, the broader team, and beneficiaries. To turn them into regular supporters or major donors, the organisation must consistently stay on their radar and involve them in various aspects of the programs and the organisation.
Pioneers:
Around one-third, 33%, of the affluent population in the UK are categorised as “Pioneers.” Pioneers are ambitious thinkers. They are well-informed about the causes important to them and seek out organisations actively. They value evidence and evaluate organisations based on their public image.
- What charities need to know about them: When dealing with these donors, an outreach approach from a fundraiser might not yield the desired results.
- Engaging with Pioneers: They prefer organisations with clear communication, especially regarding impact. Pioneers continuously evaluate organisations based on evidence, particularly numerical. International causes appeal to them. While they appreciate opportunities to see the organisation’s work, they prioritise a less intensive relationship due to time constraints. “They don’t guarantee future funding and make commitments based on results, not relationships.”
Settlers:
15% of the UK’s wealthy population are “Settlers.” Their naturally prudent nature makes them more concerned about their financial stability. They develop relationships with organisations gradually. They also prefer structure and are likelier to contemplate making commitments or including a legacy in their wills.
A comprehensive understanding of these individuals and their needs allows charities to develop personalised relationships and segmented communication.
Engage Donor Segments:
As mentioned in the “Giving Experience Report”, research suggests four critical factors organisations need to offer to attract wealthy donors to their cause. 80% of wealthy donors say these factors are likely or very likely to influence them to commit financially to an organisation.
“For Prospector donors, these touchpoints are important. For Pioneers, they are crucial.”
Role of the Fundraiser in High Net-Worth Donors Relations:
Fundraisers not only provide advice but also take the time to listen to donors. Although experienced fundraisers can develop personal relationships with donors through soft skills, there is a risk that they can move from one organisation to another. A more effective approach to donor relationships is a focus on building organisational relationships.
It means that the fundraisers should develop programs, activities and information that meet diverse donor needs. For this to be fruitful, fundraisers need to be fully supported and integrated into the daily operations of an organisation.
3. Make Them Feel Valued and Share the Impact of Their Donations
Informing high net-worth donors about the tangible impact of their contributions is instrumental in fostering stronger connections. Such initiatives emphasise the charity’s commitment to transparency and accountability.
Charities can do the following to make their donors feel valued:
Tailored Proposals:
Fundraisers can craft tailored proposals that resonate with their donors’ past experiences and preferences. This is based on initial discussions of sectoral interest (e.g. Education) and other factors.
A quick tip: Having someone in your Projects or Strategic Partnerships team focusing on bespoke proposals for high net-worth donors is worth it!
Unique Experiences:
Charities can extend invitations to special events, behind-the-scenes tours, or exclusive meetings with ambassadors (celebrities/influencers) associated with them.
You can elevate their experience by treating them as VIPs at key events, making them feel special and appreciated. This can be via VIP seating, meeting keynote speakers or celebrities, having high-level key project staff greet them upon arrival or acknowledging their contributions publicly (if they are comfortable).
Charities can utilise donor segments to send personalised emails that speak directly to each donor’s interests and past involvement.
As an example of a unique experience, the British Heart Foundation, a cardiovascular research charity in the UK, lets its supporters engrave the name of their choice on the Heart of Steel for just £30.
“The Heart of Steel is a monumental sculpture and a part of the wider Steel Man project.” They also send an email with a downloadable certificate along with a printed certificate in the post to their supporter as a celebration or remembrance of their special ones.
They also conduct charity runs, bike rides, swims, walks, and treks to encourage their supporters to fund their life-saving research.
Field visits:
Field visits where individuals can visit projects on-site are an eye-opening and key method of showing impact. These tours facilitate direct interactions with beneficiaries and showcase the real-life transformations brought about by their support. This is, of course, based on the organisation’s remit and requires DOC (duty of care).
A visit by high-level donors to the Nahr el-Bared Palestine Refugee Camp in Northern Lebanon, organised by UNRWA Lebanon.
Members Group:
Establish a members group that offers exclusive insights, updates, and values, fostering a sense of belonging. For example, the San Francisco Opera Association is a nonprofit that offers multiple membership options with varying perks.
The Opera Association allows people to become ‘patrons’ according to different donation levels. The greater the donation, the greater the benefit. For example, an associate patron (who gives $500) is invited to a member-only annual meeting. An added advantage of this approach is that it makes the donor feel part of a community, instilling greater loyalty.
By implementing the above-mentioned strategies, charities can actively demonstrate appreciation for their donors.
4. Build Trust, Recognize, and Offer Inclusion
Trust is not a static element; rather, it evolves through consistent efforts and meaningful communication. High net-worth donors prioritise certain critical factors when considering their philanthropic engagements. These factors include:
- A keen interest in understanding the organisation’s mission and work
- Confidence in strong financial management practices
- A demonstrated track record of tangible impact
- Assurance of the organisation’s financial sustainability.
Based on the above report, “Once engaged, three-quarters of the wealthy population seek ongoing interaction with the organisations they support.”
To keep the high net-worth donors involved in your charity, you can:
- Acknowledge them publicly through various platforms, such as social media, annual reports, or donor recognition walls.
- Provide comprehensive reports on the organisation’s financial management, program outcomes, and future goals, demonstrating the organisation’s commitment to responsible stewardship.
- Share impact reports from key projects and audited financial statements. Even if this means sending them a bespoke email or printed versions of the report with a handwritten note, it can mean the world of difference.
- Invite donors to annual meetings for a firsthand look at the organisation’s results and financial status.
- You can even offer high-net-worth donors advisory roles on boards or committees. It allows them to contribute their expertise and insights to shape the charity’s projects. This goes beyond recognising their knowledge and involves them in decision-making.
To strengthen relationships with wealthy donors, it is essential to address these expectations consistently and help each other grow together.
Take Better Care of Your Donors
We looked at the importance of nurturing long-term donor relationships and how charities can develop these. While many factors contribute to building repo with your donors, communication is the key. One-size-fits-all fundraising will not be successful for all of your donor profiles. Hence, charities must leverage segmentation to develop tools to engage donors.
When it comes to donor relations, a charity CRM allows you to implement segmentation with all the data it stores related to a donation. You can extract insights from the donor data to connect with them through timely and relevant communication. Keeping this in mind, we have designed and developed Engage CRM to empower your charity. With the Engage Communication feature, you can:
- Automate donor communication: Use triggers to automate emails for donations, accounts created, and orphans sponsored. Utilise email, print, and SMS lists for targeted campaigns.
- Manage communication from one place: Generate bulk targeted communication with branded templates. Print correspondence in grouped print batches automatically. Have shared communication with donors with dedicated outboxes for each department. Keep all communications manageable with a visible, full audit trail.
- Synchronous donor communication for all teams: Send donor-specific feedback, e.g., you can send a winter campaign feedback report to everyone who donated to your winter emergency appeal. Or you can collect potential lost income by sending a one-shot email to all donors who have had failed payments.
- And more.
For more information on Engage CRM, please don’t hesitate to book a demo or contact us at mail@n3o.ltd.
