One of the interview questions we always ask donors is whether they feel satisfied with the way in which our client organization solicits, acknowledges, and recognizes their gifts. Responses vary – from people who feel well connected and appreciated to those who only hear from the organization when they are asked for money once a year.

The Montana donors we interviewed each answered the question the same way, and it was an answer we don’t expect these days. The collective response went like this: “We don’t wait to be asked. The need is so great and the organization is so important, we just give as much as we can, as often as we can.”

Back to Anne Frank’s tree. This past week, wind, rain and disease felled this venerable tree that comforted a young girl hiding from the Nazis. Eleven prized cuttings from its branches were sent around the world. The news reminded me of a quote from young Anne that has captured pure generosity for generations: “How wonderful it is that nobody need wait a single moment before starting to improve the world.”

Today more than ever, nonprofit organizations need to build relationships through which they communicate with their donors frequently and meaningfully. What a wonderful thing when those dialogues inspire giving that doesn’t “wait a single moment,” and is offered with the joy Anne Frank felt when she looked out her window.

As you begin a new season of fundraising, what inspiring donor stories do you have to share? Let us know. We’d love to be able to share your stories with a wider audience.

On the surface, the project appears seamless – a plan that promises to change the face of philanthropy in the coming decades. No one can argue with the fact that a handful of mega-gifts can significantly impact overall giving. Giving USA 2010 showed that individual giving held steady in 2009, but only as a result of five gifts from high-net-worth donors totaling nearly $1.6 billion.  Without those gifts, overall giving by individuals in 2009 would have declined by 1.1 percent.  The problem with the Giving Pledge’s promise to change philanthropy, however, is that much of the money will not be transferred for years, and even then may be dispersed at a very slow rate.

Many of the families that have signed on so far have pledged to transfer their wealth after their death. Ron Rosenbaum of Slate magazine criticizes this practice.  “Show us the money if you want the credit,” he writes. “And show it to us now, before you die, not in some distant future where a lot of poor and diseased people will themselves have died for lack of timely aid.” While the pledging parties certainly have the option to transfer their wealth during their lifetime, it’s likely that in those cases the money will be funneled into charitable family foundations – and many of those foundations are only required to make grants totaling five percent of their assets each year. The argument is that it could take decades before the money finally trickles out to the organizations that need it now.

While I certainly agree with the above criticisms, the problem I see with the pledge is the spotlight it shines on the rare mega-gift, and the attention that it takes away from the everyday donor. While the donations made by the über-wealthy are certainly generous, in many cases they are not stretch gifts. Personally, I am far more moved by middle class families that have remained committed to supporting the organizations in their communities even in the face of their own pay-cuts and job losses.

Don’t get me wrong – overall, I think the Giving Pledge is a great project. But it would be sad to see organizations become fixated on claiming their piece of the mega-gift pie when there are so many mid-level donors that have continued to give, even when it hasn’t been easy.

It’s tempting to add a couple of zeros to your next major solicitation and see what happens, isn’t it?  While we all wish we had prospects with that kind of capacity, it does seem to be a positive indication for overall giving in 2010.

Focus groups and an online survey (Hope Consulting conducted the research) tapped the opinions of more than 4,000 individuals, half of whom were from high net worth households. Their methodology, in Hope Consulting’s words, “investigated behaviors, not simply stated preferences” and “forced individuals to make trade-offs to mirror real life decisions and minimize pro-social responses.”  Based on this research, the report develops six different donor segments and provides advice for reaching each one.

The survey’s key findings overturn some conventional wisdom in fundraising:

• Donor demographics, in particular, age and gender, are not reliable predictors of high net worth donors’ actions
• While donors care about the quality and performance of nonprofits, few take the time to research them
• High net worth donors are not behaving differently from other donors

And some less surprising findings:

• Donors, once connected to a nonprofit, are very loyal to it
• Donors feel they are being asked for support too often

The Money for Good project is funded by the Rockefeller Foundation, the Aspen Institute of Development Entrepreneurs, the Metanoia Fund, and the William and Flora Hewlett Foundation. Click here to download the full report.

First, let me start with a perspective on how big philanthropy and the nonprofit sector are. For the past three years, giving in our country has topped $300 billion. The largest foundation in the world (in assets), makes up one percent of total giving in America. Last year approximately 10 percent of all money given was given by individuals to foundations that will invest it and, over time, it will trickle down to charitable programs. While investments in foundations and advised funds has slowed a bit due to the recession, the amount of funds set aside for philanthropic purposes has steadily been growing. The nonprofit sector is today about 10 percent of our overall economy. For more information, review Giving USA at www.givingusa2010.org

If the top billionaires in our country and world committed 50 percent of their fortunes to philanthropy, the ripple effect of others giving more and the increased confidence in results could mean a significant uptick in giving, possibly even doubling in the next generation.

Here’s my perspective on the leading change elements, and I invite your ideas and welcome your counter-comments.

*  Major funders are investing in issues rather than organizations, and channeling their investments through providers with strong track records: This trend has been gaining steady momentum over the past 15 years, and has resulted in a change for federated giving programs, such as United Ways, across the country and has also been adopted for the channeling of government funds into community programs. Individual donors and grant makers have demanded accountability and have stepped up significantly to fund compelling issues with proven results. Nonprofits that are well-positioned as preferred providers, and with the willingness to enter into collaborative partnerships and be rigorous about evaluation, have been the channels for new social impact philanthropy.  The trend has enabled some lesser-known providers to grow significantly, while others with high recognition and large donor bases have been left out.

The Bill and Melinda Gates Foundation’s grantmaking has followed this direction for the past decade. They have prioritized a limited number of issues where they want to create significant and lasting change, and they are investing heavily in promising ideas and proven approaches.  Similar to both venture capital investing and scientific inquiry, they are willing to make mistakes and change course if results are not achieved.

This past week there was a gathering in New York of 400 nonprofit leaders and grantmakers, convened by the Robert Wood Johnson Foundation, to help charities with proven approaches solve social problems and get the funds they need to sharply increase the number of people they serve. Gone are the days when “doing good” or “promising results” was enough to secure significant and ongoing funding.

*  Investors are looking for both financial returns and social impact: The federal government’s Social Innovation Fund and several for-profit private equity firms are making investments to help entrepreneurial nonprofits find the capital funds they need to expand. Some nonprofits, such as Kiva, are directly connecting investors willing to make a loan with program recipients. Others are serving as the “holding entity” for investor loans, and a financial return is expected.  Last week in Seattle, Global Partnerships launched this innovative capital generation vehicle, and many others nonprofits, primarily in the global development arena, are preparing to follow suit. The National Nonprofit Finance Fund and for profit firms, such as Sea Change Capital Partners and Affinity Partners, are looking for creative ways to achieve social impact and financial returns. Gone are the days when nonprofits could get by with strong visions and a weak business plan.

*  Partnerships are essential for growth and even survival: As evidenced by the gathering this past week in New York and Bill Gates and Warren Buffett’s joint appeal to other billionaires to invest in philanthropy, significant wealth is in and will be transferred into foundations that will then have the challenge and opportunity to make smart investment with high social returns. The major foundations across our country are partnering for maximum results, and expect nonprofits to work collaboratively to do the same. Significant investments have been made in evaluating effective grantmaking and it will continue. Nonprofits working in areas identified as top community priorities and with proven results have the opportunity for growth and increased social impact. “Going to scale” can be achieved many ways and partnerships with other providers will likely occur at a faster pace than in the past. Gone are the days when funders (and even loyal individual donors) will have the willingness to invest in “boutique” organizations intent upon survival that lack capacity through their partnerships to create true social impact.

For the third year in a row, giving exceeded $300 billion even though overall giving declined 3.6 percent in current dollars. As expected, giving increased in sectors providing services to those most in need: human services, health, and international affairs.

So now that we know what happened last year, what can we anticipate moving forward?  The folks at Giving USA say that giving will recover, but it will be slow going. We can expect at least a three- to five-year period until giving returns to pre-recession levels. It was a hard year, but not as bad as we thought. The loyalty of the majority of donors should be applauded.

This year, the Giving USA Foundation is generously offering a free copy of the executive summary for anyone interested.  Click here to download it.  To order a copy of the full 2010 Giving USA report, click here.

As part of her outreach to Seattle nonprofits, Maryrose has posted on her blog a number of free resources that area nonprofits can use to conduct prospect research.  Check out her recommendations.

Her website, which provides a wealth of information and links, is definitely worth a few minutes of your time if you want to pick up some great ideas for conducting research or find related articles and resources.

In other arts-related news, TCG Principal Lara Littlefield is leading a session today on creating a major gifts program at the 2010 Cultural Congress (organized by the Washington State Arts Alliance).  You can still register to attend the conference tomorrow on its third and final day by clicking here.

Last year, a representative from my sorority’s foundation contacted me. She was coming to Seattle and wanted to meet me while in she was in town to let me know about this great new program they have. I’ve been a regular, though unspectacular, donor and have always intended to get more involved with the organization, but haven’t. When I met Lauren for coffee, I was surprised at how much research she had done on me. I realize this sounds naïve coming from someone in the industry, but I just thought she wanted to meet and maybe get me to volunteer for something, I didn’t realize that I had been flagged as a donor prospect worthy of a personal visit. I was flattered and so pleased to be considered in this new “young donor go-getter” category, that not only did I make a five-year pledge to the foundation (my largest gift to anyone ever), but I volunteered to plan an event for other young donors in the near future and invite all my alumna friends. Well, would you look at that – now I’m engaged on several levels.

Last week, I received a call from a local children’s theatre asking me to give to their scholarship program. The caller was informed, friendly, and persuasive. He knew that I was a season ticket holder and asked me my opinion on the four plays I’d seen with my son. He also knew that my son had attended winter break camp at the theater and thanked us for getting involved in the education programs – and from there he moved smoothly into explaining why my support of the scholarship program would allow other children access to plays and educational programs. Would I consider a gift of X? I hesitated – it was more than I wanted to give right now. He countered with would I give half today and the remainder in equal payments over the next two months? Could he charge my credit card that they conveniently have on file? Can he send me a voucher for two tickets to their currently showing play to thank me? Well, when you put it that way, yes, yes, and yes. He got his gift when they needed it; I feel good about helping other kids experience live theater, and my boy and I are seeing an extra play this weekend!

I understand there are stats and data to consider and relationships to carefully be cultivated, but if you make your donor feel relevant and special they’ll give to you. It worked on me.