# The credit crunch and major donors - Link: https://fundraising.co.uk/2008/09/26/credit-crunch-and-major-donors/ - Published: 2008-09-26T11:05:10+01:00 - Author: Howard Lake I’d love to get inside the minds of some of the super rich just now – especially those in the financial sector. What is it that they’re thinking. I’d like to bet that philanthropy is far from top of their mind. So how do we engage with high net worth individuals who are seeing their net worth tumble by the day? Ironically, I think now might be a very good time. These HNWIs are being given a very bad press at the moment and that will only get worse when the inevitable bail out happens. They are going to need to be seen to be putting something back. Gordon Gekko is no longer acceptable – greed is out. ## Advertisement [⌊Posthub advert. You create the campaign. We'll handle the postal journey. Get started at post-hub.co.uk.⌉](https://fundraising.co.uk/ads/posthub-20261007-300x250/) So how can we develop major donor strategies that can tap into this new zeitgeist? I think there are two approaches that can make sense. Firstly, we need to examine the whole area of deffered giving. HNWIs are going to be unwilling to offload shares which are half of their value of a few weeks ago. So why don’t we ask for gifts that are realised when share prices reach a certain point – say 6000 on the FTSE? We’d benefit from that gain along with the HNWIs, but we’d have to share their pain as well. Alternatively, we could ask for share options which we could then sell as and when the price yields a profit. In this case, an HNWI would offer us £100,000 of stock, say, at today’s prices and we could take up that option at any time over the next two years. Obviously, we’d only take up the option if share prices rose significantly and we could make a profit on the difference. HNWIs understand all about share options, so why don’t we use that mechanism? Secondly,I think that charities could encourage groups of HNWIs to come together to share risk in a fundraising venture, providing interst-free loans, for example, to finance fundraising programmes. Their money would be safe (safer than in a bank!) and they could reclaim tax on the interest foregone. This could be something that CAF could lead on perhaps, or individual charities. Even more simply, bringing groups of financiers with similar backgrounds together to support a major project could have more resonance as together they could be seen to be making a real difference to the lives of others – great PR and a step up from usual major donor programmes. Let’s see if we can turn this credit crunch round into something positive for major donor fundraising * **[Investment banker warns "credit crunch will hit charities hard"](https://fundraising.co.uk/2008/10/09/investment-banker-warns-quotcredit-crunch-will-hit-charities-hardquot/)**( 9 October 2008) * **[Adrian Beney sounds note of practical optimism about major donors](https://fundraising.co.uk/2008/10/15/adrian-beney-sounds-note-practical-optimism-about-major-donors/)**( 15 October 2008) * **[Lord Ashcroft to bequeathe 80% of assets to charitable foundation](https://fundraising.co.uk/2008/10/22/lord-ashcroft-bequeathe-80-assets-charitable-foundation/)**( 22 October 2008) ## Comments ### By: Redina Kolaneci - Link: https://fundraising.co.uk/2008/09/26/credit-crunch-and-major-donors/#comment-3286 - Published: 2008-09-29T20:26:27+01:00 Well, I have already got into the minds of some super-rich donors! Not using magic or powers of persuasion but a well researched process called ‘Donor Value Mapping.’ Because when you know what makes your major donor’s tick and what they value about your work it is much easier to find similar people rather than wait for the proverbial super-rich to feel they want to give. And why should we assume that only the super-rich are major donors? Could it be that in these hard times there will be some fundraising heros from unknown quarters making significant gifts to a charity? Just recently, I did an appeal for an international client and when it went out in Australia – one donor, who wasn’t a particularly super-rich person, gave $85,000( Aussie dollars) – the total amount that the charity was asking for in that appeal. Why am I mentioning this here? – Well not to show off my appeal writing skills, because they are not that great, but to point at the fact that the main thrust of the appeal really aligned with that donor’s aspirations and desires. And the accompanying letter he sent showed that he really trusted the charity and was satisfied with the charity’s work in that part of the world. Now we can go on chasing the super-rich and encourage them to become major donors to our causes – but my money is on understanding the aspirations and views of the major donors we already have … listening to how satisfied they are with what the charity accomplishes. And, of course, asking them to increase their gifts and even their personal involvement. What I see time and again is that satisfied major donors don’t stop giving just because the financial markets take a tumble …yes they might give less one year but they surely give more the next when they are truly looked after by the charity… Asking major donors to invest in fundraising ventures? – Certainly an interesting idea but I am not sure how potential or present major donors would respond to that… a lot depends on the level of relationships again – committed friends of the charity might be willing to do that… a lot will depend on the type of the fundraising programme also… if it is new donor acquisition – the investors might be in for a shock 🙂 If it is say fundraising dinners where a few major donors pay for the events – there is a higher chance of success. Brining financiers and charity people together – mixing pin stripped City people with charity CEOs and fundraisers? Bean counters and visionaries? Now that would be something… Redina Kolaneci Senior Fundraising & Stewardship Consultant McConkey/Johnston International UK [http://www.mcconkey-johnston.co.uk](http://www.mcconkey-johnston.co.uk)