Fundraising Update

Welcome to Fundraising Update. This week, we look at strategies you can use to find and court supporters with donor-advised funds. Plus, a new report digs into the impact of MacKenzie Scott’s giving.

I’m Rasheeda Childress, senior editor for fundraising at the Chronicle of Philanthropy. If you have ideas, comments, or questions about this newsletter, please write me.

The charity most people know as St. Jude Children’s Research Hospital is one of the largest in the world, raising $2.4 billion in its 2023 fiscal year, according to its most recent 990. Part of the organization’s fundraising strategy involves courting donor-advised fund holders, says CEO Richard Shadyac Jr.

“We’re shifting our strategy more and more to make sure that we meet people where they are,” Shadyac, who is stepping down in March, told me. “Donor-advised funds are incredibly popular. People have already decided that they want to have a donor-advised fund. So you want to meet them there.”

ALSAC/St. Jude Children’s Research Hospital

Many charities know about the promise of donor-advised funds and want to capitalize on it. St. Jude does. Shadyac would not share the total amount St. Jude brings in from DAFs, but did discuss four strategies the organization uses to find and secure these donations.

The easiest of St. Jude’s DAF tactics to replicate is simply telling people they can donate from the accounts. “For every charity, it’s important that you let the world know that you accept donations from donor-advised funds,” Shadyac says. Nonprofits can get the message out on website donation pages and newsletters, as well as through in-person conversations.

St. Jude steps it up a notch in three areas: connecting with financial advisers, data tracking, and messaging. “We engage with lawyers and estate planners and accountants and financial planners,” Shadyac says. This includes going to conferences these professionals attend and carving out relationships with big financial organizations like Fidelity and Schwab. The organization’s goal is to educate the professionals about St. Jude’s efficacy as a charity, showing why it is a good investment for clients looking to do good.

St. Jude also tries to “get as much information as we possibly can,” in order to “be very personalized in our messaging,” Shadyac says. The group tracks who in its donor base has DAFs and who’s expressed interest in them, which allows the organizations to tailor messaging to individual donors, he says.

The charity uses the language of investments and returns when talking to both donors and financial professionals.

“We shouldn’t be saying, ‘Hey, why don’t you give to us from your donor-advised fund?’” Shadyac says. “What we should say is: ‘If you’d like to make an investment into St. Jude Children’s Research Hospital, can we talk about the best ways to make that happen?’”

For more strategies and thoughts from one of St. Jude’s DAF donors, read the rest of my story.

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DAF webinar. If you’re interested in learning more about strategies to find and woo DAF donors, sign up for our webinar, Actionable Insights Into DAF Donors.

I’m hosting the webinar, and we recently had a planning call where we chatted with the speakers about the insights they plan to share. It was fabulous. Dan Heist, the co-founder of the Donor-Advised Fund Research Collaborative, will be there talking about his research on DAF donors, including what motivates them and their giving habits. Trish Davis, vice president of major gifts and planned giving at Susan G. Komen, will talk about marketing and other strategies nonprofits can use to reach DAF donors. For more information or to register, visit the webinar page.

— The publicly known amount philanthropist MacKenzie Scott has given to charities since 2019

Kimberly Lewis couldn’t remember where she’d heard the name MacKenzie Scott when she received a call about a multimillion-dollar gift headed to her East Texas Goodwill branch. When she learned the size of the grant — $5 million with no strings attached — she said she nearly swallowed the phone.

“It was a great pat on the back to say: I see you. I see what you’re doing, and I approve of the work that you’re doing to uplift your community,” said Lewis, recalling that the large donation came during the first year of the Covid pandemic, when “everyone was feeling unseen, unheard, and disconnected.”

In the past five years, MacKenzie Scott has surprised hundreds of nonprofits with $19.2 billion in large, no-strings-attached gifts, sparking an impassioned debate across the philanthropic world. A report released Tuesday by the Center for Effective Philanthropy reveals that Scott’s gifts have been a boon for grantees, reports my colleague Sara Herschander. The grants have enhanced nonprofits’ long-term finances, leadership, and local communities — bucking skepticism about the downsides of unrestricted giving, namely that it could lead organizations down an unsustainable financial path.

The report is the culmination of a three-year survey of 813 grantees and 243 foundation leaders. It comes at a time when nonprofits across the country, including many of Scott’s grantees — about 45 percent of which focus on social-justice issues — are coping with uncertainty over federal funding and the backlash against DEI-related initiatives.

“This data is, in some ways, a call to action” for foundations and donors, many of which stepped up their giving in the aftermath of the pandemic but are still plotting their response to the current turmoil, said Elisha Smith Arrillaga, vice president of research at the Center for Effective Philanthropy and a co-author of the report. “The data shows this type of grant making works. We need to do more of it, and we need to do more of it soon so that nonprofits have the resources they need, especially at a moment like this.”

The Center for Effective Philanthropy report highlighted five effects of Scott’s large, unrestricted grants: Grantees fare better financially, the no-strings funding approach had few drawbacks, the gifts were a confidence boost — and burnout balm — for nonprofit leaders, the grants resulted in positive ripple effects for local communities, and foundation leaders are more skeptical of Scott’s approach.

For more details on the findings, read Sara’s entire article.

• Study suggests a strategy to increase donations and reduce donor fatigue. When nonprofits use multiple strategies during their online fundraising campaigns, such as thanking donors for their support, telling the public about their missions, and conveying how they are helping people, they receive more donations than if they stick to only one kind of post.
  
  This is according to new research from Abhishek Bhati, an assistant professor of political science at Bowling Green State University, who wrote about her research in an article that is part of our partnership with The Conversation.

  The research analyzes data from 752 nonprofits that participated in Omaha Gives, an online 24-hour fundraising event in 2015 and 2020. Bhati says using the strategy in the study — writing different kinds of posts — could help nonprofits beyond simply getting more donations. Bhati suspects that it may also reduce donor fatigue. That is, it could make it less likely that donors will become so overwhelmed by the repetition of the same requests that they stop supporting a group they used to fund.

  For more on Bhati’s research, read the entire piece.

Daniel and Patricia Jorndt gave Morehouse College $5 million to establish and endow the Marion E. Williams scholarship, which will help financially-struggling students majoring in business and STEM fields. The scholarship is named for Daniel Jorndt’s first boss, the late Des Moines pharmacist Marion E. Williams.

Daniel Jorndt is a retired CEO of the drugstore giant Walgreens. He said in a news release that he credits his success to the many life lessons he learned as a young man while working at Williams’s neighborhood pharmacy in Des Moines in the late 1950s and early 1960s while attending pharmacy school. Neither man attended Morehouse.

For other notable gifts this week, read my colleague Maria Di Mento’s Gifts Roundup column. To learn about other big donations, see our database of gifts of $1 million or more, which is updated regularly and has data going back to 2000.

Advice for New Fundraisers From Folks Who Have Been There — Recently. Learning to deal with nerves and rejection are two of the biggest challenges new fundraisers face, according to colleagues with several years’ experience.

What Fundraisers Can Learn From Jerry Falwell and the Conservative Movement (Opinion). The Moral Majority’s long-game strategy offers a framework for fundraisers seeking sustainable success, regardless of their politics.

Liberal donors pulling back. Liberal donors to politicians and left-leaning nonprofits are holding off on contributions, according to the New York Times.

The paper reports that small-dollar online donations that were plentiful in the first Trump administration have “slowed to a trickle as shaken liberal voters withhold their donations. Charitable foundations that have long supported causes like voting rights, L.G.B.T.Q. equality and immigrants’ rights are pulling back, devoting time to prepare for expected investigations from the Republican-led Congress.”

The impact is being felt across liberal cause areas. GLSEN, a group dedicated to protecting L.G.B.T.Q. students, laid off 25 people last month. “No one is giving until they see a plan for how we are going to better navigate this unprecedented situation and stop acting like this is a normal administration,” Alexandra Acker-Lyons, a political consultant who is close to Silicon Valley donors, told the newspaper. (New York Times)