Copyright

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First published by HarperCollinsPublishers 2020

FIRST EDITION

© Lisa Greer 2020

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Epigraphs

‘Transparency is the currency of trust.’

Digital marketing and marketing technology leader Christopher S. Penn

‘Pressure can break pipes or make diamonds.’

Retired National Basketball Association champion Robert Horry

Contents

1  Cover

2  Title Page

3  Copyright

4  Note to Readers

5  Epigraphs

6  Contents

7  PROLOGUE: NO CHOICE BUT TO CHANGE

8 INTRODUCTION: WELCOME TO THE 1%

9  1. PHILANTHROPY IS IN TROUBLE: What Those Hundreds of Billions Are Hiding

10  2. DONORS AND THEIR MOTIVES: The Old Rules Don’t Apply

11  3. FAKE FRIENDS AND UNEQUAL POWER: How to Connect When it’s Complicated

12  4. MONEY TALKS: Authentic Ways to Deal with the ‘Ask’

13  5. INVESTING BEYOND THE DOLLAR: The Risks and Rewards of Donor Participation

14  6. WHAT MONEY CAN’T BUY: Trust, Good Governance, and Better Boards

15  7. GOOD COMMUNICATION: The Real Work of Relationships

16  8. EVENTS FOR A NEW ERA: Because We All Want Something More Meaningful

17  9. GIVING THANKS AND ‘SAVING GIVING’: Welcoming a New Era Together

18  SOURCES AND FURTHER READING

19  ACKNOWLEDGMENTS

20  Praise for Philanthropy Revolution

21  About the Publisher

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PROLOGUE
No Choice but to Change

When I started writing this book, I was driven by the conviction that the bottom would fall out of the world of nonprofits, something I saw happening in eight to twelve years. What I didn’t envision was the crisis that would occur as we approached publication – a global catastrophe so severe that it amplified need in unprecedented ways, and also threatened the charities that would normally respond to this need.

The Coronavirus pandemic still rages as I write this. And while it rages, nonprofits are trying desperately to stay afloat. They’re struggling to make a difference, strategize about an uncertain future, and adapt their fundraising efforts, event calendars, and finances to a new reality. This has happened before. Events such as 9/11 and the Great Recession have profoundly tested the charitable sector before now, raising questions about what’s effective and also accelerating necessary change.

This book, with its practicable combination of tactics and strategy, couldn’t have been better timed. For anyone involved with nonprofits, it charts a way forward – whether you share my concerns about a future sector crisis, or you’re responding to a global emergency, such as COVID-19.

In many ways, the title says it all: Philanthropy Revolution. A global pandemic and the resulting economic crisis simply made the message that much more urgent. This is because the scale of what we’re facing in 2020, as well as its long-term consequences, will force those of us in the ‘helping’ fields to find solutions immediately. We’ll need to implement some of these solutions right away, adopting a triage approach that ensures our nonprofits survive in the short term and our beneficiaries are supported, too. Then we’ll have to rethink the way we do business, which is the point of this book in the first place, in order to protect our charities for decades to come.

The good news is that a revolution in philanthropy needed to happen. That a crisis of this magnitude forced it to happen is devastating, but I urge you to treat the disruption as a move toward change. Our sector was already vulnerable. Its arcane methods were starting to fail, especially with next-gen donors. So, let’s use this moment to shore ourselves up: to adapt, innovate, and ultimately transform our organizations for success and stability in the long term.

In March of 2020, some of America’s foremost experts on fundraising gathered for a Giving USA board meeting. Unsurprisingly, COVID-19 had derailed the agenda, so these experts used their time to consider how the sector should respond. Their main advice? ‘Don’t stop talking to big donors because the world is being shaken. Past experience shows some donors never forgive the charities that don’t reach out in times of need.’

Yes, I have to add … but. For, as this book will show, it’s not just about talking; the important thing is how you go about it. If giving matters more than ever, then donors matter too. And as a donor, I’m about to teach you how to reach out and how to keep reaching out – whether the world is ‘being shaken’ or a new future for the sector is cast.

Let’s create that future together.

INTRODUCTION
Welcome to the 1%

‘We’re seated at the chairman’s table,’ I whispered to Josh, taking his arm as we entered the banquet hall.

This was our first major event at Hillcrest Country Club, a storied place whose members have included Jack Benny, George Burns, Groucho Marx and Sidney Poitier. Josh and I had joined a few weeks before, following a year-long vetting process – just in time, as it turned out, for the Jewish Federation’s annual fundraising dinner.

We were new to the world of philanthropy. In July of 2010, RealD (the 3D projection technology company that Josh and his partner had built from scratch) had its initial public offering on the New York Stock Exchange. We’d gone from living paycheck to paycheck to the 1%, literally overnight.

I still couldn’t quite get my head around the idea that I’d never have to worry about money again. It meant no more clipping coupons for Target or patching together loans to afford college for the kids, and I didn’t know how to retire the somewhat prudent approach that had always been part of my mental wiring.

The one thing I’d taken to – quite naturally, in fact – was giving. Even before Josh and his partners rang the ceremonial bell at the New York Stock Exchange, I’d pledged $1M to my synagogue. Together with Josh, I’d also started the process of endowing a chair at a major hospital. And I’d made a smaller (but still significant) gift on the advice of friends, in this case to the Jewish Federation of Greater Los Angeles, a $50M umbrella organization for social service programs, community advocacy, and Jewish engagement.

Although we’d had little interaction with the Federation before then, we were confident that it did good work. Many in the community had suggested to us that a gift to the Federation was something of a prerequisite for being taken seriously in the world of Jewish philanthropy, and that’s what appeared to have happened. That night at Hillcrest, we felt privileged to be recognized by the organization, having been seated as we were at the table of its top lay leader.

We sat through speeches and chatted with guests, and at about exactly the moment we were starting to relax and enjoy ourselves, we noticed a vinyl folio on the table in front of us. It was pretty innocuous, the sort of thing you’d get your check in at the deli. Someone had produced it, I surmised, while our attention was elsewhere

That someone was the chairman, as it turned out. He must have seen us register that the folio was in front of us, because he immediately stood and made his way to my side.

I opened the folio to see what it contained: a ledger-like printout. Standing over me now, the chairman leaned in. ‘This is last year’s gift,’ he said, pointing to a number on the printout. ‘Of course, your gift this year will reflect a significant increase.’

He handed me a pen.

I remember catching Josh’s eye above our wineglasses. We’d later discuss the fact that we sensed people watching us. Those around us were chatting, milling about, eating dessert or enjoying a coffee – but they were definitely watching. As I’ve explained, I’d made a significant donation to the Federation only a few months before. Now I had to increase it? We hadn’t been told that the gift was annual and nor had anyone from the organization sought us out to identify the extent to which we were aligned with its values and mission.

We were so embarrassed. The club has a two-year probation period (ensuring compliance with its charitable donation policy) that neither of us wanted to breach, so we were also at a loss as to what to do. We asked the chairman if we could enter the same amount as we’d donated previously and left it at that.

But, in the car on the way home, we wondered aloud whether all the other donors out there were accustomed to being strong-armed in this manner, in public.

Was this philanthropy?

Of all the freedoms I anticipated having when our lives were so dramatically altered, the one that excited me the most was the freedom to give. Specifically, to give of our money. Josh and I had envisioned ourselves as active givers who would also be involved with the organizations we funded. We had hopes of addressing Crohn’s disease (which Josh has lived with for decades) and child welfare, as well as advocating for democracy in Israel, among other progressive causes.

Today, Josh and I are the proud supporters of dozens of nonprofits, not only as givers, but also as volunteers and leaders. We both sit on boards and enjoy close relationships with executives and staff across the sector. In the last decade, we’ve also hosted nearly 200 charity events in the home we chose specifically for this purpose. In fact, our giving portfolio is such that I left my career as a businesswoman – in part so that I could give the portfolio the full attention it deserved.

So why this book?

All too often, my interactions with nonprofits have left me feeling that the only thing I’ve got is my money, and that some fundraisers have been taught from the get-go to make their single priority acquiring this money. My sense (not always, but often) is that I’m there to be ‘worked’ and coddled, manipulated into loosening my purse strings. And this has meant that everything I value – the qualities of honesty, transparency, and connection that have always governed my personal relationships, as well my relationships in business – is left at the door.

If this experience were unique to me, I’d probably just take that beautiful model I envisioned, when I sketched out our lives as givers, and put it in a box somewhere. But as you’ll learn in these pages, I’m not alone in the experience. And philanthropy is paying the price.

A Deal with God

Even before the IPO, Josh and I decided that, if everything unfolded as it appeared to be unfolding, we’d each make a major gift to a cause that mattered to us personally.

I’d chosen the synagogue, the Reform congregation where our twins (who were four years old when our lives changed) attended preschool and where I was a vice-president on the board.

The Senior Rabbi had been a source of wisdom and calm for me during the stressful months before the IPO – and believe me, ‘stressful’ is putting it mildly.

The cocktail-party version of the RealD trajectory goes something like this: years ago, Josh became acquainted with film director James Cameron. This was by way of Josh’s early work in digital-entertainment development, production, and marketing. But, in 1996, Josh and James began working on something different – something driven by the possibility that Josh could create the technology for clean and immersive 3D-viewing.

Josh is a self-trained inventor. By almost any measure, he is also a technological genius. Working at first in our garage, he set about creating a brand-new system of screens, projectors, and 3D glasses. Over the next decade, investors got on board and Josh’s technology began hitting theaters in 2005. In 2009, James Cameron’s blockbuster film Avatar, which was produced with RealD technology, showed on 4,000 screens in fifty countries, becoming the highest-grossing movie of all time.

Josh’s technology not only revolutionized 3D, it remains the industry standard today. It would eventually catapult RealD into the global marketplace, leading to its IPO in July of 2010. At that time, the company was valued at $200M. Shortly afterwards, its valuation peaked at $1B.

But getting there – well, it took an awful lot out of Josh, and also out of me.

We married in 2004, and in 2006 had our twins, Jack and Emily. I had kids from previous marriages: Sasha and Darrow were teenagers when I married Josh, and Halley was ten years old. For his part, Josh wasn’t a stranger to success; quite the opposite. He’d co-founded and sold Digital Planet, one of the first companies ever to build entertainment industry websites. But he’d put his assets back into RealD and didn’t earn a salary from the company for many years. I’d left my job as a studio executive before we married to run my own media, entertainment, and technology consulting business, and I supported the family until Josh (following an infusion of investments into RealD just before the IPO) was able to draw an income.

At that point, we were doing fine. We’d purchased a small house and we obviously paid our bills, but we also had to go deeply into debt to cover the costs of the lawyers who would protect our interests and support us during the IPO. Which, I might add, came with no guarantees. We had no idea if we were about to be able to retire in luxury or spend the rest of our lives in monstrous debt.

Josh was also traveling non-stop in the weeks before the IPO (not good, given his Crohn’s disease) and I was working, not to mention taking care of the kids, worrying about Josh and our family’s future, and basically falling apart. So, I did what you do. I made a deal with God.

If we came out okay, I’d do something major for my synagogue.

One of the first calls I made after the successful roadshow (which is the step just before an official IPO) was to the Senior Rabbi at my temple. I told her that we’d be donating $1M to the synagogue’s capital campaign. Needless to say, she was thrilled.

I was, too, until the moment she started grilling me.

The rabbi didn’t question the fact that an IPO was imminent. She didn’t have to – I’d already given her the option to buy some RealD friends-and-family shares, which is common practice in these scenarios. What she questioned instead was the gift, along with my ability (perhaps even my authority) to make a gift of this magnitude happen.

Within minutes of our hanging up, the rabbi called me back. She wanted to talk to Josh this time, because she needed to make sure, she told me, that he approved of this donation – and that I wasn’t living in a ‘fantasyland’ or just being impulsive. It seemed to me as if my friend and supporter (frankly, my feminist role model) was calling to confirm with my husband that a financial decision I’d made was credible.

I might have seen this as telling – an early indication that, where large donations are involved, people will often behave in unexpected ways. I learned later that, with this simple call to the rabbi, autonomous ‘me’ had thrown off the system, or at least the system governing major donations. There had been no early qualifying discussion with a development director, no strategy meeting, no lunch with fundraisers and no ‘ask’ for money.

Still, we were very proud a few months later to dedicate The Greer Social Hall at Temple Emanuel in Beverly Hills. All the fuss of the occasion made me think of my grandmother, who used to point out my grandfather’s plaque at the synagogue we visited on High Holidays. And it certainly would have meant a lot to my dad, who died when I was in my twenties.

As for us, it was a little surreal to see our family name on a wall. But it also felt good.

Lisa and Josh Who?

With giving now occupying such an important part of our lives, Josh and I decided that I should sell the egg-donor agency that I’d founded a few years earlier in order to help people who were struggling with fertility issues. Anyway, I was ready. Our lives had suddenly become a lot more complicated, and I wanted to dedicate myself full-time to managing our giving portfolio as well as some of our real-estate investments. In the intervening months, we’d put much of the RealD money into investments so that Josh and I wouldn’t have to work another day in our lives if we so chose – which is laughable in retrospect, since neither of us can sit still for longer than five minutes. We also established trust funds for the kids and, on the advice of friends, set up a Donor Advised Fund at the Jewish Community Foundation.

We were ready to work on Josh’s big gift.

Josh, who grew up in Toronto, was diagnosed with Crohn’s disease as a teenager. He actually taught himself computer programming in high school in order to keep himself busy during the many months he was ill, either stuck at home or in the hospital. He has endured dozens of surgeries and years of pain, and has nurtured a vision, in the process, of building an institute dedicated to Crohn’s research. We reached out to Cedars-Sinai Medical Center (a world-class hospital not far from where we live, and where Josh and our family have been treated for years) and what transpired offered us another clue that we had entered a whole new world.

A friend had opened the door for us by introducing us to the president of the board. Still, when Josh made it known that he wanted to make a major donation for Crohn’s research, we were transferred to a junior development officer. We called several times over the next couple of months, but nobody took us seriously. A full six months after we first made contact, Cedars accepted our money.

A realistic interval for a large institution? Maybe. But with new donors like ourselves, who aren’t accustomed to the delay (and who might not persevere through the silence), it’s a risky way to do business.

What if we had walked?

I did realize later that, to these charities, we were pretty alien. We represented totally unknown entities. We hadn’t progressed through any of the conventional channels of donor cultivation (such as the lunches and pitches and follow-up) and nor were we the product of prospect research. We didn’t also throw numbers around or make demands, and they had no idea how to handle us.

Cedars has one of the most well-conceived and sensitively run development plans I’ve ever seen. That’s what I realize now. The organization has even integrated its early experience with us into its development training, reframing what happened into a teaching moment for fundraisers. And without question, the day we dedicated the Joshua L. and Lisa Z. Greer Chair in Inflammatory Bowel Disease Genetics at Cedars in late 2011 was one for the books.

Even now, Josh and I feel overwhelmed by the idea that we might actually have an impact on a disease that has so profoundly affected his life. Dr. Dermot McGovern, a world expert in the field, assumed the role of Chair, and our donation has allowed him to take risks, explore different approaches, and leverage the initial seed money into additional grants and funding.

Also, the lab’s work has been groundbreaking. It has generated practicable insights into specific genetic variations of Crohn’s disease, resulting in certain customized therapies already entering clinical trial. Happily, we’ve also developed a friendship with Dermot and his wife, and Josh and I both serve on Cedars’ Board of Governors.

But the lesson remains. Until you’ve got a name and a reputation as a donor, you may well find it hard to give your money away. And for a sector that’s desperate to attract support, especially new support, so that its worthy nonprofits succeed, that’s a problem.

Off Script! Off Script!

These early experiences gave us insight into the practices and politics of the sector, but it wasn’t until I started taking meetings on a regular basis that I realized just how out of sync our philanthropic systems were with what I’d always known to be true about human beings.

It took about a year for our names to get out there. This heralded an onslaught of emails and calls, but I noted with interest the fact that, although I let it be known to fundraisers that I handle our family finances, everyone wanted to meet us ‘together.’

I found some solicitations easy to decline. If a charity had nothing to do with my values or interests, I didn’t bother. For the most part, though, I was dying to learn about the wonderful work of the organizations that were contacting me, and I very happily took the meetings – solo, more often than not – to the extent of scheduling several a week. In many ways, it was an education, an immersive ‘master class’ in charitable giving.

The only problem was that many of these meetings, perhaps even most, were disappointing.

I’ll give you an example. A good friend of mine supports an organization dedicated to promoting tolerance and defending civil rights. This friend asked me to meet with the regional and development directors of her organization because these directors claimed to want to honor me at an event recognizing women’s accomplishments.

I’d had nothing whatsoever to do with the organization prior to this news of my honor, and wasn’t even sure that its mission and activities aligned with my interests. I also had yet to learn that this sort of ‘honoring’ almost always involves a donation, a sort of quid pro quo that has you ‘give’ for the ‘honor’ of the honor. We’ll discuss this in detail in Chapter Eight.

Suffice it to say for now that I accepted the invitation to lunch, because it had come by way of a friend. My own parents had once held the organization doing the honoring in high esteem, and anyway, what did I have to lose?

We met at a café I’d recommended in Beverly Hills, and, only moments after the development directors had made their introductions, the fawning started. I looked great, the directors told me. My simple black purse was fantastic. Oh, and they’d heard so very much about me.

It was flattery of a sort that I’d never experienced, and I had to wonder what these women truly thought about rich ladies like me and our egos. We made small talk after that, and they continued to crow about everything they’d ‘heard.’ More praise here for me and my family. It became clear, however, that they really knew nothing about us. They certainly didn’t know what my charitable interests were or what sorts of things typically motivated me to give.

One thing I know about myself is that I’m good at small talk. It’s a skill I picked up in business. At Universal Studios, I served on the first team of executives responsible for establishing the organization’s web presence. I moved to NBC after that, and later established a media, marketing, and technology consulting firm. So, I understand the formula: small talk and then substance. The point of the small talk is to get to know the client (or in this case, the donor) in a deeper way. Why? Well, you want to build a rapport on the one hand, and you also want to find the connection between the client’s interests and your own. That’s how you know how to ‘ask’ them to buy – or even support – whatever it is that you’ve got on offer.

In retrospect, the sad truth of that lunch meeting is that nothing those development directors said, and not one of the handful of questions they asked, was ever going to yield any insight – at least not regarding my giving. I came away convinced that all they knew, and definitely the only thing they cared about, was that I had money. My being a good match with what they were ‘selling’ was beside the point.

I did ask them some specific questions about the work of their organization, questions that had cropped up for me during my review of their website prior to the meeting. Doing research before a meeting is essential, no matter your business, but my line of enquiry appeared to surprise these professionals. Rather than answer my questions, one or the other would launch into a prepared pitch about why I should offer support.

‘Is the anti-bullying program you mentioned being implemented at the local school?’

They didn’t know. Back to the pitch.

‘Does the organization collaborate with nonprofits doing similar work?’

They couldn’t say. More of the pitch.

They might have offered to get me some answers. Instead, they tried to shoehorn their ‘script’ into the hole that had been left by my questions. To their credit, they did eventually offer to follow up with the information I’d requested, but not without also asking me to commit then and there to being honored. Which, as per the quid pro quo I described earlier, also meant a commitment to give.

Needless to say, I ultimately declined.

An Old-School Approach That’s Pervasive

I sat through dozens and dozens of meetings just like this one in my first years of giving, long meetings characterized by the same old formulaic chumminess, the prepared scripts, and only nominal respect for my input. I began to dread the idea of ‘lunch’ – these meetings typically occurred over lunch – because ‘lunch’ meant that I’d be forfeiting my afternoon for another phony interaction with fundraisers. I wanted to spend time with my kids and devote attention to my investment and giving portfolios. I also hated the disappointment. Yet another bad meeting, I’d think, for an otherwise wonderful cause.

Since I consider my giving a direct expression of my values, it’s always been imperative that I give thoughtfully, with attention to how organizations are run. I’m also an unrepentant ‘fixer’. If someone has a problem, I’ll twist myself in knots just to make things right. In the case of the fundraisers who wanted to ‘honor’ me (as well as with the Hillcrest dinner, the temple, and Cedars), I was eager to help. And not just by way of my wealth.

A lot of this has been personal, but I’ve got a business case to make with this book, which I’ll start to lay out in subsequent chapters. In the meantime, I’m well aware of the challenges that fundraisers face on a daily basis. For one, rich people (that demographic on which the sector depends) can be notoriously difficult. Josh and I dealt with this stigma when we first became wealthy, and some friends of ours grew distant because they were certain we would change.

I get it. But I’ve also encountered so many people of means who are incredibly empathetic, generous with their time and money, and brimming with experience and skill. These are the givers the sector needs, just as it needs all those people with lesser means who have yet to find their way to philanthropy.

The problem is, if it’s too risky to treat donors like people, if the humanity in this exercise has been depleted by revenue targets, or exhausted by the demands of the difficult rich, where does that leave us? Fundraisers have told me time and again that a single, unwitting slight to a donor can jeopardize years of relationship-building, not to mention that donor’s support. Hence all the scripted, superficial, spiritless interactions that are designed to leave no room for error.

Philanthropy is in trouble, as we’ll discuss in the next chapter. And while I agree that there’s no room for error, what that means for me is the ‘revolution’ of the book’s title – a rethink and a redo of our old-school ways and approaches.

I promise to help you through it. I used to wonder if what I was experiencing in the sector would change once I wasn’t so ‘new.’ Maybe, if I met with enough fundraisers and eventually earned their respect, I’d feel better about the system. But what I’ve described in this introduction continues. And the ‘new money’ I represent? It’s given me a lens that is also new. And valuable. It isn’t just about the business experience (although I bring that to bear in these pages), it’s about being ready and willing to question what the ‘old money’ takes for granted.

When you’re a tourist in a foreign country, you see things that the regulars have long stopped noticing. New York pedestrians don’t believe in red lights. Angelenos wave and nod their thanks when they encounter considerate drivers. The French sit adjacent at sidewalk cafés.

I could go on. The point is, you take notice. You do the little wave and slide your chair over. You adapt.

Or else you don’t. In my case, you write a book.

I hope you enjoy it.

ONE
Philanthropy Is in Trouble
What Those Hundreds of Billions Are Hiding

When we first hired our business manager, not long after the IPO, I asked her how the other clients on her roster went about their charitable giving. These were the Hollywood-types and CEOs known by some segments of the financial services industry as ‘High Net Worth Individuals’ or HNWIs.

‘Lisa,’ she said, looking surprised that I had to ask, ‘most of my clients just don’t give.’

My experiences in the years since have confirmed this. I’ve learned that many people with wealth hold on to it. They consider giving but delay, or else park all their money in a Donor Advised Fund. I worry that, just like me, they’ve been put off once too often by the lack of humanity in fundraising, its outmoded approaches to the ask for money, or its pandering style of donor engagement.

In the next decade, many of our older donors, all those whose generosity has sustained our charities for years, will begin to pass away. And when this happens, if the sector doubles down by continuing to solicit the ‘young’ using tactics designed for the ‘old,’ our newest donors will walk. Ideally, these new donors will start philanthropies of their own. This is a trend that we’re already seeing with organizations such as Swipe Out Hunger, which we’ll discuss in Chapter Five. But, even if the trend continues, where will it leave all those big nonprofits that have helped to define us – not to mention feed our poor, build our concert halls, care for our sick, and fund our research?

Don’t Be Fooled by $427 Billion

On the surface, fundraising looks like it’s doing just fine.

The USA is home to an estimated 1.6 million nonprofit organizations. According to the latest Giving USA report, Americans are giving record amounts, with charitable donations jumping 5% from 2016 to 2017. As a whole, we gave $427.7 billion to charitable causes in 2018, with about 70% of that amount coming from individual donors, and the rest from foundations, corporations, and bequests. Over the past forty years, giving has held steady at about 2% of GDP, taking dips in recession years, and then recovering.

This can and should be a point of pride. As government continues to slash funding for social services, the arts, and scientific research, philanthropy has stepped into the breach. But these numbers hold a hidden truth. While the dollar amounts are up, household giving is down. Data from the Lilly Family School of Philanthropy at Indiana University, the world’s first and foremost school dedicated to the study and teaching of philanthropy, shows this to be the case across all income brackets, ages, and levels of education. In 2001, for example, 65% of households gave to charity, and that rate has been dropping. Already, in 2015, it had dropped to 55%. This downward trend continues, with the steepest decline noted in more recent years among donors aged fifty-one to sixty, the very people that, arguably, should be ramping up their giving (not only because they’re part of the demographic of older Americans, which according to Business Insider, holds 80% of wealth, but also because most of them are earning still, often at the highest rate of their careers).

That many in the population aren’t earning enough, or are otherwise struggling to make ends meet, is clearly a major factor – income inequality and wealth inequity are among the defining challenges of our time. But people aren’t giving for lots of reasons.

How we feel about religion is one of these reasons. Giving to religious institutions accounts for more than 30% of all giving, and givers who call themselves religious tend to be among the most generous to all institutions, religious or otherwise. But according to a report from the nonpartisan Pew Research Center, religious affiliation is way down in America. And with it, religious giving. In fact, the number of Americans giving to religious causes has declined by about 50% since 1990.

Also upsetting the balance, so far as giving goes, are the young. Our younger generations give and relate to causes differently. They might install solar panels, for example, instead of giving to the Sierra Club. Or they’ll give directly by way of online crowdfunding platforms. As we’ll discuss in later chapters, they definitely prefer start-ups to our charitable giants and they also tend to be eager to experiment, so their loyalties shift more frequently than we’re accustomed to seeing in the givers of old.

Interestingly, though, these generations hold sway. We’re now starting to see that their ways are contagious, attracting new ‘giving converts’ from Generation X and even (I’ll attest to this) among Boomers. The thing is, these generations aren’t very keen on established models. Yes, they’re beginning to give. And they’re definitely engaging in a manner that’s unique enough to inspire donors like me to take notice. But Millennials and Gen Y tend to give to the smaller and scrappier nonprofits. Or, they’ll start their own nonprofits, a few of which we’ll explore in later chapters. In either case, our traditional charities aren’t seeing a lot of their charitable dollars.

An Unsettling Reliance on the Few

The truth about the increase in dollar amounts going to charities is that fewer people are giving more. This might continue to sustain some organizations, but it’s also precarious, as it puts the responsibility for philanthropy into the hands (and subject to the whims) of the mega-rich.

As per the latest US Trust Study of High-Net Worth Philanthropy, 90% of households with incomes of more than $200K or assets of more than $1M (excluding primary homes) donated an average of more than $29K, up 15% from 2015. US households gave more than 1,800 gifts of $1M or more in 2015, worth over $19B – a big jump from previous years.

Philanthropists such as J. K. Rowling (who fell out of the billionaires’ club because she gave so substantially) and Warren Buffett (who encourages the mega-rich to divest of their wealth) might have us believing that system is sound. But it’s deceptive, since the richest among us are really only giving a tiny percentage of their total net worth.

As The Givers author David Callahan concedes, ‘Yes, affluent Americans have been giving more. But they’ve also been earning more, and it’s far from clear that their giving has kept up with their new wealth accumulation. The top 1% has assets of $30 trillion, about a third of all household wealth. But these Americans gave away less than a half of 1% of their total wealth in 2016.’

THE UK ISN’T FARING MUCH BETTER

A Barclays Private Bank report published just last year has found that there are too few major donors outside the US, and the situation is having a significant impact on UK charitable funding.

‘Barriers to Giving: Research into the evolving world of philanthropy’ reports that as many as 47% of multimillionaires outside America donate less than 1% of their annual income to nonprofit causes.

Commissioned in partnership with The Beacon Collab-orative and the Institute of Fundraising, the whitepaper also reports that philanthropic donations amount to just 0.5% of the GDP in the UK, compared with 2.1% in the US.

‘Barriers to Giving’ mentions an ‘us and them’ mentality between the wealthy and charities, the product of little understanding and poor communication. And, significantly, charities’ current methods of ‘engaging’ with high net worth individuals (or HNWIs) are identified as considerable barriers to major giving.

Additionally, the findings tell us that 75% of HNWIs believe philanthropy is a responsibility of those wealthier than themselves, and 42% believe that making extra donations wouldn’t be enough to have a significant impact.

It’s important to consider, too, that the Warren Buffetts of the world are skewing our numbers. Those who give in the billions make up for all the millionaires who only ever part with a couple of thousand dollars. That average of $29K a year in charitable dollars might be acceptable for people at the lower end of what constitutes high-net worth, but the minute you’re looking at your boat and your multiple homes and all the investments you don’t want to part with – it just doesn’t seem right.

My overwhelming sense is that many who have the privilege of occupying this space, people who frankly look a little like me: they’re not giving what they should. I could go on for days about the reasons why (and I will, in subsequent chapters) and I’ve already made the point in these pages that purposeful giving takes time. Some people hire philanthropic advisors when they don’t have the time, or they set up foundations that others can run – and good for them for doing so. It’s the ones who plan to give eventually, or who decide to let their kids sort it out when they inherit; these are the folks we need to get on board.

We’ll look in detail at what motivates donors in Chapter Two. It’s enough to say for now that those who lack motivation are missing out. Despite my issues with the sector, seeing our money help others has been one of the greatest joys of my life. So very often, I get to be living proof of the studies (ubiquitous these days) that tout the physical and psychological benefits of giving for the giver.

Unfortunately, I’ve also become acquainted with some ugly truths. For one, I’m convinced that people aren’t giving as much because the process of giving is fundamentally flawed, unproductive, and often downright unpleasant. It’s probably been flawed forever. But our donors have changed where the system hasn’t, and the disconnect is apparent – it’s even expressed by donors when they’re surveyed. So, the question is this: if today’s fundraising tactics actually preclude connection, instead of fostering it, will people continue to give?

It’s Not Just Me

I’m about a decade in, philanthropically speaking, and my sense of wonder has become one of alarm. But, again, I’m an unrepentant fixer, and when I started questioning accepted practices in fundraising, I also started talking to friends and colleagues. I asked the nonprofit professionals I now knew, as well as other donors, to be candid about their experiences.

I needed to first understand if I was an outlier. Was I overeager? Too intent on connection? Too focused on business? Too interested in truth?

No, as it turns out. I wasn’t. I’ve spoken since to dozens and dozens of philanthropists and development professionals, and nearly all of them corroborate my experiences.

Part of the issue is what I was getting at earlier. The sector is profiling donors (and interacting with them, too) based on criteria that are no longer relevant. Or at least not relevant in the main. When we had our IPO, for example, stockbrokers and real-estate agents found us and approached us immediately. It took most charitable organizations a good year to do the same – and we’d already made significant gifts!

I’ve heard similar stories from others, those who don’t fit the mold of your typical giver. I’ve talked to Asian American philanthropists who constantly get overlooked, despite the fact that they give in the arena of hundreds of thousands of charitable dollars, if not more. In my home state of California, Chinese Americans gave more than $50 million in major gifts in 2017 to UC Berkeley, UC San Francisco, UCLA and UC Irvine. In fact, donations from Chinese Americans accounted for 1.2% of all major US philanthropic gifts between 2008 and 2014 – a percentage that was roughly proportional at the time to their population of about 4 million.

Often discounted, too, are women philanthropists and donors of color, with the latter group so lacking in recognition that a movement was initiated almost a decade ago to designate August as Black Philanthropy Month. The idea was to draw attention to centuries of generosity among people of color – a donor population that many nonprofits continue to ignore.

Young people don’t fare much better. My older kids have joined a funding network called Resource Generation, where young people with wealth take the time to really consider where they give, and how their giving can be part of a more equitable system. I’ve spoken to my kids’ peers, however, about how often thoughtful Millennials like themselves are relegated to ‘junior seats’ on boards. They’re courted and coddled (often patronizingly so) and their volunteerism is welcome, as is their money. But do they get a voice? Not often enough.

When I took on our giving portfolio, I was shocked at the number of professionals who insisted that Josh (surely the holder of our purse strings, in their arcane world) come along on our lunches. Some of them even tried to go around me to get to him. Many of my girlfriends have comparable stories, and they’ve shared their feelings of frustration about sexism in the sector in general. It’s about all those ladies’ luncheons in the middle of the workday, the chaperoning husbands, and the old-school fluff – just thinking about it makes my skin crawl.

As for the phony relationships, I figured out quickly (though not quickly enough) that nearly any time I received an invite from a fundraiser – for breakfast, lunch, a cocktail or a playdate with kids – I would get pitched. It exhausted me: trying to figure out which of these dates were social and which were business. Of course, fundraising is built on relationships. A power imbalance exists within these relationships (we’ll look at this in Chapter Three) and that makes them challenging. But why are we pretending we’re ‘besties’? Why can’t we just be straightforward?

FUNDRAISERS AREN’T HAPPY EITHER

On average, a development director will spend just eighteen months at any given organization. Some studies put that tenure at sixteen months and suggest that the vacated positions are hard to fill. There are many reasons for this. The high demand for qualified talent, for example, means that good people get headhunted. And a major issue is under-resourcing: these professionals often get little support from their organizations and nothing in the way of career development, all while managing serious expectations related to revenue, and a whole lot of pressure to connect personally with donors.

A recent survey conducted for the Chronicle of Philanthropy and the Association of Fundraising Professionals revealed that 51% of fundraisers said they’ll leave their current nonprofit with the next two years, while 30% said they’ll leave fundraising altogether. A full 55% of them felt underappreciated often and (maybe worst of all) 21% agreed that the negatives outweighed the positives when it came to their jobs in fundraising.

Development directors of organizations large and small spoke to me with great candor about the pressure they feel to develop close ‘relationships’ with donors. They told me that sometimes (perhaps even often) the connection is real. When it isn’t real, however, or when it hasn’t had time to show itself yet, these professionals have to feign friendship – even if they share little in common with the donor, or worse, the donor treats them like crap.

You start to see (or I did, anyway) why fundraisers might put their guard up, not realizing that being clear and professional – as opposed to unclear or artificially personal – is so much easier on donors. It lets donors know where we stand.

My friend Peter, who comes from a philanthropic family and has been in the game for years, told me he almost always feels he’s got a target on his back. He’s used to it and continues to give, but he’s also become really cynical. He wonders why he stays with it.

Miriam, a passionate businesswoman and major donor, described how she’d invested in a mentorship project whose focus was young women in business. The organization running the project shut Miriam out of any discussions about the project after she’d made her donation. And it broke her heart, she said, to realize that the fundraisers’ initial interest in her perspective was simply their way of humoring her. They didn’t want her ideas, or even her experience; they only wanted her money.

Alissa, who volunteers each week with at-risk youth, told me she prefers being a ‘volunteer’ to a ‘donor.’ She gets treated better, she says – but why can’t she be both? (Alissa’s ‘favorite’ donor moments, incidentally, involve her being asked to sit on phony ‘strategic’ committees, just so that she’ll give more money.)

Then, too, donors who get meaningfully involved with their volunteerism can sometimes pose a threat – whether real or perceived – to the organizations they serve. My friend Greg ‘caught’ the organization he supported hiding serious financial problems from its board (a board on which he sat) because nobody wanted the fallout from donors. In this case, the put-on-a-happy-face-for-donors approach almost led to an organization’s collapse.

SECTOR STEREOTYPES AND LADIES WHO LUNCH

For most donors and fundraisers, the tired old ways of doing things are taking a significant toll. But there are donors out there who enjoy the evening-gown dinners and the ‘wink-wink’ lunches (where a pair of fundraisers seek to flatter a donor over a choregraphed meal and a ‘script’). Often, these donors belong to the old school; they enjoy the social cachet. They also like being part of a world that won’t surprise them, and that makes them feel good about the money they give. Who can blame them?

The ‘ladies who lunch’ have been around forever. But consider this: the report ‘Women and Million Dollar Giving: Current Landscape and Trends to Watch’ found that in high-net-worth households, 84% of women are the primary decision-maker or joint decision-maker regarding investments. Women were also identified in the report as being twice as likely to view charitable giving as the most satisfying aspect of wealth, and also more likely to value their wealth as a way to create positive change.

What About Trust?

I’m not advocating for the sort of change whose big goal is to make givers happy. This is about the charitable funding of worthy causes. With breakdowns in communication and trust, such as the ones I’ve described, the entire sector is in trouble.

A recent Better Business Bureau study found that, although 73% of donors consider trust in organizations a prerequisite for giving, only 19% report having high levels of trust in philanthropies. The numbers don’t lie: we have a serious problem.

Then there is the fact that, at last count, we’ve got $121B sitting in Donor Advised Funds. That this money isn’t getting out to nonprofits might actually be a trust thing too. Donor Advised Funds (or DAFs, as they’re known) give people many of the benefits of giving – among them, serious tax savings as well as the fulfillment of a moral imperative (assuming such an imperative exists) regarding personal philanthropy. But DAFs provide a place for donors to put their money; they don’t actually require this money to be distributed onward to charities. So, for donors who distrust philanthropies, or those exhausted by the tactics of fundraising, DAFs are a bit of a ‘hall pass.’

Organizations themselves can’t afford to trust that big donors will always sustain them, although they certainly sustain them now. In 2015, the most recent year for which IRS data is available, 51.6% of charitable donations in the USA came from households with annual incomes of $100,000 and above. This was up a good 20% from the early 2000s, when giving (and, importantly, wealth) spread more equitably across the population.

It’s estimated that, in the next thirty years or so, as much as $68 trillion in wealth will pass from the Baby Boomers to our younger generations – namely, Millennials. This is a mind-boggling scenario that I’ll return to in the coming chapters. Suffice it to say for now that this transfer of wealth represents real opportunity for the sector, as well as significant risk. Most major charitable gifts come from donors with long-standing commitments to the organizations they support, donors who have been cultivated by fundraisers for years. So, if nonprofits don’t connect meaningfully with the next generations now, they might be looking at losing them entirely. By the time they get on the bandwagon and actually speak to these younger people, it will very likely be too late.

The research shows that, no matter your age, giving small is what leads to giving big. If you’re going to be a major donor at some point in your lifetime, you invariably start off with lesser gifts. Shouldn’t that make us wonder how exactly the sector’s old-fashioned tactics – which often focus on big gifts at the expense (or offense) of smaller donors – will attract new supporters? My worry is that they won’t. Nonprofits will continue to rely, in the meantime, on their older, wealthier donors and these donors will, to put it bluntly, eventually die.

Then what happens? You already know the answer.

But there is hope, and that’s why we’re here. Millennials especially have become incredibly engaged in the public sphere, and they’re demonstrating commitment to the causes that matter to them in new and exciting ways. They’re also already giving at impressive rates – and those that will inherit through the generational handover haven’t even done so yet.

THE OVERARCHING IMPACT OF NEXT-GENERATION DONORS

Here’s some food for thought from Generation Impact authors Sharna Goldseker and Michael Moody:

‘America’s next generation of major donors, whether young Gen Xers or rising Millennials, will have an outsized impact on society and the planet we share, as people like Andrew Carnegie and John D. Rockefeller did in years past and as people like Bill and Melinda Gates and Warren Buffett are doing now – likely even more impact. [They] will decide which diseases get the most research funding, which environmental organizations launch the biggest awareness campaigns, which new ideas for incubation reform are incubated around the country. And those decisions will impact, directly and daily, our health, our communities, our economies, our culture, and even our climate.’

Now That’s a Meeting

As something of an alien on planet philanthropy, I’m awed by what I’ve seen: incredible generosity on all sides, as well as a whole lot of stuff that doesn’t work and that definitely doesn’t support our causes. Because I care and because I’ve got chutzpah, I’m going to continue to call this stuff out. But I’ll also propose a solution. In the coming chapters, I’ll lay out a more humane approach to fundraising that’s supported by research (my own, and that of others) and validated by what I’ve learned in business. I’ll be asking nonprofits to be more upfront in their communications, more authentic in their relationships, and more transparent in their practices generally. I’ll also insist that those readers who are already philanthropists work hard to create a sector that’s less stratified and more focused on cause and integrity.

In the process, I hope to convince you that for every disappointing interaction in fundraising, there exists a meaningful alternative that has a bit of a snowball effect: it increases our chances of delivering measurable impact. Not only do I believe this with head and heart, I’ve witnessed it firsthand. And I’ve talked with so many funders and fundraisers whose positive stories are proof. So, as something of an antidote to all the bad news, I’m going to leave you with one last story before we move on to the next chapter. It’s about an experience that keeps Josh and me going, where the sector is concerned, one that occurred very early in our lives as philanthropists.

We’d just moved into the house I described in my introduction, and I extended an invitation to visit to David Levinson. David is the founder and director of Big Sunday, an amazing nonprofit that connects people who want to volunteer or donate with other organizations that need help. We wanted to explore how Josh and I could make a significant impact in supporting our city’s most needy.

Although it was our first meeting with David, it felt like the second or third. Granted, we went into it with huge admiration for Big Sunday’s mission, that of harnessing absolutely everyone’s instinct to give. But David also came informed. This enabled us to zoom through all the stages involved in the getting-to-know-you portion of meetings.

We knew we were aligned. We didn’t need to conform to the metrics that so many organizations require (those six or seven touchpoints of cultivation, for example, which often feel to donors like ‘prescribed’ communications and outreach – snail mail, email, phone call, event – all designed to get us to give).

The three of us just put it all out there. ‘What do you care about?’ David asked.

I loved the directness of his question, and in response we discussed some of the most pressing needs in Los Angeles, where we live. These were many, what with the country still being in the fog at that time of the 2008 recession. Throughout the conversation, David was engaged, informed, and utterly reciprocal. He didn’t pander, and not once did he pretend that we weren’t talking about a gift.

As we were wrapping up, I put forward what I thought was a great idea. ‘David,’ I said, ‘What if Josh and I were to feed every hungry person in Los Angeles for three months? What would it cost?’

He paused. ‘Let me work on that and get back to you.’

A few weeks later he returned to our home for a follow-up meeting. Again, I asked: ‘What would it cost to feed every hungry person in our city for three months?’ I was convinced at that point that my idea was brilliant.

And David’s response? He said, ‘I’m not going to tell you.’

Then he went on. ‘Lisa, it’s irrelevant. It’s a bad idea because it’s not sustainable. You feed everyone for three months and then what? What happens in month four?’

Okay. I was listening.

David sent us a proposal after that, which included a number of workable options. Among them was something we called the ‘End of the Month Club,’ an initiative so named for the way it would address the high demand experienced at the end of each month by food banks, whose clients have used up all their money at that point, and need help to feed their families. The idea was to engage corporations and institutions, as well as volunteers, to ensure that the pantries would be stocked at exactly the point that the food-insecure need them.

We told David we loved the idea. At which point he gave us a number for what it would cost, assured us we could fund the requisite staffing, and we were sold.

What I appreciated about the interaction, and all the more in retrospect, is that David didn’t come with prepackaged ideas, nor did he present a number that he’d determined in advance. We had a real conversation of substance. He took the time to research my idea but also came up with something better. He gave me a figure based on cost, and not our perceived ‘capacity.’ And, because we’d established a real connection, he was able to tell me my idea was lousy. Not only that, I was able to hear him!

And the result? The End of the Month Club, which we continue to fund, has leveraged our initial donation to the extent that it now collects and distributes many hundreds, often thousands, of food items every month. In addition to the food banks of the original proposal, these items go to nonprofits, schools, afterschool programs, senior centers, vets’ centers, and any place else where people are hungry.

Also, the End of the Month Club has kickstarted multiple initiatives for Big Sunday relating to food insecurity, which together have attracted attention from supermarkets, food manufacturers, and other corporations with a desire to help. Every November, as just one example, the organization gives away more than 30,000 items as part of its popular annual Thanksgiving Stuffing Event.

That’s a lot of goodness, and all of it stemming from a single, straightforward, and humane interaction between two rookie donors and a fundraiser.

Putting the Humanity Back into Fundraising

Something special happened when David engaged Josh and me as thinking, feeling people whose reasons for having the conversation in the first place were not all that different from his own. For me, it’s an ideal model.

It also makes certain things clear. If organizations want to stay relevant, they’re going to have to realize that what’s personal in our relationships – it can’t be faked. Donors see through it. And nor can the ‘professional’ be faked. Donors of all ages want more information about the nonprofits they support than they ever have in the past, and with good reason. We’ll delve into nonprofit governance issues in Chapter Five. In the meantime, I suspect nothing I’ve said in this chapter is particularly earth-shattering. Our best philanthropic educators understand that change is necessary, and they’ve got some great advice about how to embrace it. But the clock is ticking, and while some organizations are ready or maybe even living this change already, many others are nowhere near.

In the most cynical recesses of my heart, I wonder if it’s because the sector’s old guard is getting ready to comfortably retire – at just about the same time as our old donors will pass. After all, if these institutional bigwigs can manage to maintain the status quo, at least for now, they won’t have to deal with the hassle (as well as the enormous complexity) of guiding their organizations into the future.

Yes, innovation and change are inherently uncertain. But it’s high time we did this differently, and started teaching it differently, too. There are so many development professionals out there who can’t wait to deliver substantial change to the sector, but who are also very reasonably afraid that, if they don’t make their targets … well, programs get cut, employees get fired; at worse, beneficiaries suffer.

It doesn’t have to be that way. In the coming chapters, I’ll share more of my story, and integrate the wisdom and experiences of my peers: donors, volunteers, nonprofit professionals, and academics from the Lilly Family School of Philanthropy, the College of Civic Life at Tufts University, and elsewhere. I’ll also offer actionable advice that will help chart the way forward for all of us.

Wouldn’t it be great to get to a place where organizations trust donors enough to be transparent, and donors trust organizations enough to let them lead? That place is where we realize that we want the same thing: organizations that are as effective as they are visionary, and outcomes that change the world.

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