The Science of the Squeeze; Miscellany | On Culture | Chicago Reader

The Science of the Squeeze; Miscellany 

Philanthropy is the lifeblood of nonprofits. You can bet your ass they've given it some thought.

Sign up for our newsletters Subscribe

The Science of the Squeeze

Last week the folks who make their living separating rich people from their money in the name of art gathered in a 13th-floor conference room in the heavily secured Bank of America headquarters on LaSalle Street. The Arts & Business Council of Chicago (a Trojan horse if ever there was one) slipped 105 fund-raisers into this inner sanctum for "Assuring Your Future," a forum that promised to help them pry open the vaults and move more of the city's privately held fortunes to their chronically needy nonprofit organizations. The hunger in the air was palpable as the panel--Campbell & Company fund-raising consultant Edith Falk, Goodman Theatre giving director Dorlisa Martin, and Chicago Opera Theater board president Dorothy Osborn Walton--took their places.

There was no confusion about their target: If you have a few assets, my friend, these people want to talk to you. And the more you have, the more interested they'll be. According to research from the Giving USA Foundation and other sources cited by Falk, nonprofits collected $248 billion in contributions last year, and 83 percent of it came from individuals. While the average American donated about 2 percent of personal income, people with a net worth of more than $1 million anted up nearly half of the total contributions. Most striking: a study by the Indiana University Center on Philanthropy found that single gifts of over $1 million from living donors shot up from 396 in 2003 to 501 last year. Religious institutions got the largest share, 35 percent; education was a distant second at 13 percent, and the arts and the humanities got 5.6 percent, down from 8.4 percent in 1992.

"In the long haul," Falk said, "foundations change their guidelines. Corporations are acquired [and disappear], but individual donors--unless you do something that really annoys them--will continue to support you." And unlike social service organizations, most arts groups don't have to hunt for them: their donors are likely to be their users. Look for them in your audiences, the panelists advised; scan your databases for "hidden gems," then cop those handy donor lists in the back of everybody else's programs. Anybody recruited for your board should know up front they'll be expected to help find and cultivate prospects and to donate themselves. Hey, if they're not giving, why should anyone else?

Once the prospects are corralled, it's time for "tiered cultivation." That means identifying those who are likely to increase their gift over time and moving them up the "giving pyramid." ("You can't spend the same amount of money on a $100 donor who's likely to double their gift over a few years as you would on a $1,000 donor who's likely to increase to $5,000," Falk said.) This requires a dispassionate assessment of human nature. Donors fall into two main groups: the philanthropic, who give for the greater good of the organization, and the entrepreneurial, who give to get specific results and benefits. And on that score we're not just talking tote bags, good seats, and parking: big-ticket donors are likely to be motivated by access and recognition. A savvy fund-raiser throws them an annual party, arranges a private dinner with the artists, stewards a camaraderie-building field trip to the theaters of London with the company's artistic director as guide, and always, always remembers to say thank you.

Nothing should be left to chance. Before meeting with potential major donors, Martin said, a development pro will research their lives and prepare a biography, including the scoop on how much they're capable of giving; determine the best time to approach them, taking into consideration everything else that's going on; set the scene in the most conducive environment; construct a protest-proof rationale for the gift; and recruit a person of influence (usually a peer of the target) to make the pitch. They'll never ever make the mistake of insulting the donor and shortchanging their cause by asking for too little.

Things have been tight lately, but we're on the cusp of something that has fund-raisers salivating: an intergenerational transfer of wealth unlike anything the world has seen before. According to Boston College's Center on Wealth and Philanthropy, total net worth in the United States grew from $7 trillion in 1950 to $38 trillion in 2000. By 2052 much of that wealth will pass on. Most of it will be left to family members and other heirs; $14 trillion will be eaten up by taxes and legal expenses, but $6 trillion will go directly to philanthropy. The demise of the baby boomers and their parents represents a potential orgy of planned giving: develop your target list, the panel said, create your naming opportunities, and make them known to the well-connected lawyers and accountants who will be handmaidens to the handoff.

Eric Holst of Facets Multimedia wondered if this might be a little, um, rude. "You're saying to folks of a certain age that it's about time to start thinking about these things," Holst said. "Am I the only one feeling uncomfortable about that?" But Falk swept his qualms aside: "If your donors are giving to their alma maters, the conversation's already been started," she said. On the other hand, humorous euphemisms are probably best avoided. Martin considered the Curtain Call Club and Arrivederci as possible names for the Goodman's planned-giving group before hitting on her favorite: the Del Close Society, in honor of Close's bequest of his skull to the theater. "I thought everybody in the theater community would love it," she said. Apparently not: donors who have announced that the Goodman will be included in their postmortem plans are members of the Spotlight Society.

Another opportunity to hone these skills, an all-day seminar hosted by the Donors Forum of Chicago on August 11, has sold out at $110-$140 a pop. It'll be repeated October 19.

Miscellany

The Chicago Historical Society announced last week that Gary T. Johnson will take over later this month as president. The position of chief historian has been created for acting president Russell Lewis. Johnson, a practicing attorney with no experience as a museum administrator, was chosen in part for his "solid fund-raising." . . . Former Illinois Film Office second in command Bob Hudgins has surfaced at Resolution Studios on West Fulton, where he'll market soundstage rentals for smaller films and commercials. . . . Olga Stefan, who stepped aside a few years ago as head of Around the Coyote, is the replacement for retiring executive director Arlene Rakoncay at the Chicago Artists' Coalition. . . . As noted by Reader contributor Lynn Becker on his architecture and culture blog (arcchicago.blogspot.com), radio station WFMT, running on autopilot, launched into its 10 PM program at 8:48 last Sunday, then "plunged on, blissfully unaware that over an hour of programming had suddenly vanished."

Art accompanying story in printed newspaper (not available in this archive): photos/Randy Lee Belice.

Comments

Subscribe to this thread:

Add a comment

More by Deanna Isaacs

Agenda Teaser

Performing Arts
Tempel Lipizzans Tempel Farms
June 19
Performing Arts
20,000 Leagues Under the Seas Lookingglass Theatre Company
June 06

Tabbed Event Search

Popular Stories