Philanthropy Development Programs & Services

Any accountant with a client who is, like me, a graduate of the University of Michigan knows that a year-end gift to our beloved alma mater is a matter of fact. The University of Michigan for years has led our nation’s public educational institutions in the percentage of alumni who give. Other universities may raise more money, but those dollars tend to come from corporations and government grants. Wolverines love their school, whether or not the football team wins a national championship.

As an advisor to families of high net worth, it should not be surprising to you, then, to see that those contributions to the University of Michigan or other fine educational institutions increased dramatically last year. Will they continue to rise again in 2007?

Let’s look first at a report issued earlier this year by Northern Trust, based in Chicago. Their survey “Wealth in America 2007: Findings from a Survey of Millionaire Households” showed that wealthy Americans increased their giving by 20% in 2006. Some of this may be residual giving for the Hurricane Katrina and Asian tsunami disasters that boosted giving at all income levels in 2005 and 2006. This variable aside, let’s look at what report can tell us about your clients.

No one can debate that a 20% boost in one-year giving is exceptional. It would be unrealistic to assume that your clients would continue to increase their giving at that rate. Indeed, only 27 percent of the 1,002 respondents indicated that they would increase their giving in 2007. Although the figures aren’t in for individuals yet, we might use corporate giving to forecast such gifts and corporate giving (according to an article in the August 23, 2007, issue of the Chronicle of Philanthropy) showed only a six percent increase over the previous year. If individual giving follows corporate trends, it’ll be bad news for charities, including my alma mater.

What can charities do to buck this trend, or what should your clients expect from a charity if they are asked to increase their giving in 2007? Let’s take a lesson from the University of Michigan: it’s called Stewardship 101.
For years, I’ve been giving a set amount to Michigan to benefit a scholarship fund that underwrote my entire four year undergraduate education. And for years, I’ve never received any information about how many students received the scholarship, or how much money each of them received, etc. despite my repeated requests for such information. I continued to give the same amount year after year out of a sense of duty and obligation. I asked time and time again for these data and told the University that I would not increase my gift unless and until I got it.

The University didn’t get back to me. They were flunking Stewardship 101 and losing money to help deserving students as a result.

Earlier this year, I got a call from a University of Michigan fundraiser, saying she’d be in the area and she’d like to visit me. I told her that I came out of a fundraising background and that her trip would be in vain if she didn’t do her homework by looking in my file and bringing me the information I’d requested repeatedly for over a decade. When we finally met, she brought me a thick envelope filled with current information about my scholarship fund that answered every one of my questions. She promised I’d get the same package each year from now on. 

I wrote her a check for double my annual gift on the spot. I’m no millionaire, but if I were, I would have skewed the statistics for Northern Trust’s next survey in a big way with that gift!

That fundraiser got an A in Stewardship 101.

When you are sitting with your clients to review the tax implications of their year-end gifts, you might advance the discussion by asking these questions:

• Do you get receipts and thank-you letters from charities you support?
• Does your name appear on honor rolls for giving (or is your anonymity respected, if you wish to be anonymous)?
• Do you receive meaningful reports on the use of your donations?
• Are you given the opportunity to see your contributions at work with visits and other donor-stewardship programs?

If the answers to these questions are all “yes,” for any particular charity, then that group should deserve extra consideration when your client is asked for an increased contribution this year. They’ve learned the lessons they needed to learn in Stewardship 101 and they deserve your client’s support.