Donor Interests.

Time for new approaches?

Predictions of exponential growth in philanthropic resources and greater discernment among donors in directing their gifts challenge fundraisers to consider their role in the fundraising process, asking if it's possible to serve donor interests and meet their institutions' needs.

Perhaps fundraisers should take that question a step further, asking whether it is possible, and indeed desirable, to serve philanthropy as a whole as well. By assisting donors in increasing philanthropy across the board, even if that means helping them give to other institutions, can fundraisers ultimately benefit overall philanthropy, the donor, and their own institution? Is it time for fundraisers to reevaluate their roles and consider a different perspective on fundraising?

Such questions are prompted in part by the supply-side model of philanthropy put forth by Paul Schervish, director of the Boston College Social Welfare Research Institute (SWRI) and a former Distinguished Visiting Professor with the Center on Philanthropy at Indiana University. His groundbreaking research on the transfer of wealth estimates that charitable bequests could swell to between $6 trillion and $25 trillion between 1998 and 2052.

Observers are divided on what impact the recent repeal of the estate tax will have on the growth of philanthropic giving. Some believe the absence of that tax incentive will make fundraising more difficult, at least among lower-level wealthholders. Others believe it may actually increase giving, especially among the highest wealthholders.

With the influx of philanthropic dollars generated both through the wealth transfer and the overall growth of wealth comes an expansive role for donors in directing resources to charities that match their interests. Wealth holders, Schervish maintains, want to be more of a force behind the success of institutions, a reflection of the influence they've wielded in achieving their own personal and commercial success, and this mindset will guide their thinking in making significant gifts.

Schervish's research suggests a coming golden age for philanthropy, at least in quantity. The challenge for nonprofit fundraisers will be to help guide the quality of giving. And that, he maintains, means adopting a new approach. Those organizations that wish to gain from the estimated transfer of wealth will have to take the time to help wealth holders go through a process of self-discovery or discernment, Schervish says, and in doing so, provide donors with opportunities to make fulfilling choices not to tell them what their wise choices should be, but to help them discern and make choices themselves based on their own interest and values.

As gifts increase in size, the interests and values of the donor play an increasingly larger role. By applying the discernment model, fundraisers can help donors increase their philanthropy. Indeed, this approach to fundraising may be especially important in light of the estate tax repeal. Without the estate tax incentive, many donors' decisions to give may be motivated even more than before by their personal interests. To be successful in this new environment, fundraisers will have to be more diligent in working with donors to help them determine how they can fulfill their values through their philanthropic giving.

An outcome of these strategies might be, however, that the donor chooses to make a gift to an institution other than the one represented by the fundraiser. In a paradigm that views philanthropic resources as scarce and hard won, such an outcome would be intolerable. And, indeed, as Paul Pribbenow, a respected practitioner and scholar in collegiate fundraising, observes in the February, 2001 issue of the CASE International Journal of Educational Advancement, much of the sector tends to the see the world through the lens of scarcity. Resources must be protected because there is never enough time or money or people to meet institutional needs.

On the other hand, Pribbenow believes the model of abundance borne out in Schervish's projections -- suggests that there is more than enough to go around and that if non-profits are imaginative and resourceful in their common efforts, more can be accomplished than ever thought.

The evolving role of the institutional fundraiser within a donor discernment model prompts the field to think about its work and the expectations that shape that work. For one, it would suggest that fundraisers engage in a broader civic purpose in their activities, undertaken to serve the common good as much as a particular organization. In that sense fundraising becomes a vocation - a calling to a public practice that promotes philanthropy in general.

Pribbenow and others have written of fundraisers as moral trainers or teachers, who can help donors discern their own moral values and link those values with their giving. But in the process of making that connection, donors might or might not direct their resources to the fundraiser's institution. In a model in which the fundraiser spans the boundaries between an organization and a discerning donor, it is important for all parties involved to be forthcoming and transparent in their relationships.

In this new model, disclosure is critical. Fundraisers who operate within this philanthropic paradigm must help their institutions understand that charitable giving is not a zero-sum game. And, organizations must decide how to recognize and reward fundraisers whose efforts with donors benefit the philanthropic sector in general, and not the employing institution only, or, at least in the short run, perhaps not at all.

This leads to the importance of the concept of trust and the ethical tensions that test trust in fundraising. Most ethical issues are not as simple as a series of "dos and dont's" that can be memorized and uniformly applied. Or as Bob Payton, a Center on Philanthropy colleague, has said, "There are no ethical answers; there are only ethical questions." Three questions, in particular, come to mind in contemplating a fundraising model focused on cultivating donor discernment.

Who is the client in this new model? Is it the organization? Or the donor? In truth, fundraisers must protect the interests of both. This heightens the tension between fundraisers as individuals and the organizations that employ them.

The question of "who is the client" is a serious one. Mediating between the donor and the organization is the most difficult role fundraisers play. They must recognize that both the donor and the organization have rights and interests. They must first understand the boundaries, the parameters of the organization. They also must understand the boundaries of donors in general and the particular boundaries and interests of particular donors. Being honest with the organization and the donor is the first step in mediating the interests of both.

Who owns the relationship? This question also speaks to trust between the fundraiser and the institution, and between the fundraiser and the donor. It's important to remember that the relationship with the donor exists because of the organization. The organization owns the relationship. The organization must trust the fundraiser that the relationship with the donor will remain with the organization if the fundraiser leaves.

Donors must be able to trust that the organization will be a good steward of their gifts, even if the fundraiser with whom they worked closely departs. The fundraiser must respect the organization's interests in the relationship if he or she pursues a larger advisory role with the donor.

Who benefits from the relationship? First and foremost, the fundraiser and the institution must strictly adhere to professional and ethical standards against personal inurement and must otherwise work to ensure that the fundraiser does not benefit personally from the relationship. Because the discernment approach deals with more personal issues, and in some ways expands the relationship between fundraiser and donor, some donors may be inclined to view the relationship as a personal one between individuals. In extreme cases, donors may try to express their appreciation to the fundraiser.

Fundraisers must guard against even the appearance of personal benefit and must be careful to keep the relationship purely a professional one at all times. It should always be clear to the donor that the fundraiser is working for the benefit of the larger philanthropic world.

As a representative of the organization, the fundraiser - even in helping to cultivate a donor's giving in general - has an obligation to keep the institution's needs in front of the donor. In those instances where the relationship between the fundraiser and the donor does not generate an immediate gift to the institution, the trust engendered in the development of that relationship could lead to an eventual donation.

The Women's Philanthropy Institute often counsels development officers to encourage their donors' overall giving at the same time they are developing and enhancing their own institution's relationship with the donor, according to Andrea Kaminski, the institute's executive director. In honoring the donor's other philanthropic commitments, the fundraiser's organization also benefits.

In providing this type of assistance, fundraisers are building donor trust. Such trust in financial relationships can lead to institutional loyalty, as demonstrated in a study conducted in 1998 by accounting and consulting firm Deloitte and Touche. Interviews with affluent women (those with personal incomes of at least $100,000), ages 25 to 65, found that women seek financial advisors who will provide them with education and guidance about smart investing within the context of a professional relationship that elicits one-on-one contact, immediate resolution of problems, and simplification of their financial matters. This kind of attention becomes the foundation for trust and long-term allegiance to the advising institution.

Operating in a public service model of philanthropy with its emphasis on donor discernment challenges traditional thinking about fundraising. Taking the model to its extreme would have fundraisers sever their organizational ties and develop independent practices to serve donors. In fact, such donor services are growing.

Short of abandoning the current model of fundraising, however, the nonprofit sector would be better served to find consensus around a model in which all parties - fundraisers, their organizations, and donors acknowledge the mutual benefits of a practice that lifts the philanthropic tide for all.

Eugene R. Tempel is executive director of the Center on Philanthropy at Indiana University in Indianapolis.