2022’s Megadonors Signal a Change in Philanthropic Trends
A major story that emerged from the midterm elections was how much money megadonors donated to large campaigns in 2022. The Brennan Center reported that 100 megadonors outspent everyone else in the last election cycle. Unsurprisingly, these donations illustrate how the roster of uber wealthy megadonors are expanding in America, even if at a marginal rate.
However, donating to politics isn’t the only area where megadonors have influence. The Chronicle of Philanthropy’s ranking of the top donors in 2022 showcases the usual names in philanthropy, including Bill Gates at the top position with Michael Bloomberg and Warren Buffet ranking at third and fourth place respectively. As in previous years, a large portion of 2022’s largest donors comprise finance and tech executives. However, 2022’s list includes 26 new donors, many of whom lack Wall Street credentials, a national profile or even a Silicon Valley zip code. Instead, they include a professional musician, a founder of grocery store chains and a Utah farming and ranching family.
The incoming of new philanthropic donors into the mist highlights the country’s skyrocketing wealth. According to Credit Suisse, there are 140,000 Americans who have wealth that exceeds $50 million which is quadruple that of a decade ago. Growth increased during the COVID-19 pandemic with 75 percent more fitting into this wealth bracket. Incredibly, Forbes reported that billionaires are created of one every 17 hours in 2021.
However, the rise of super wealthy donors illustrates another trend in philanthropy; more sophisticated fundraising efforts with the intention to achieve larger donations. Large organizations like Metropolitan Museum of Art, Boston University and the Obama Foundation each garnered about $10 million in donations from super wealthy donors last year. However, smaller organizations like small colleges earned the same.
While the number of multimillionaires increases, fundraisers now believe it’s more difficult to identify them from their donor list. While fundraisers could once estimate the wealth of CEOs by the size of their companies or payroll, the digital landscape of today’s work means only a handful of remote employees can run a large company. When older people made their money years ago, their wealth information rarely gets placed in digital donor databases and wealthy individuals try to safeguard their digital financial records. Often, when individuals have a higher net worth, they tend to have fewer visible assets.
However, many organizations are now using more sophisticated data analytics and prospect research to identify donors who can make a significant impact with larger donations. AI and predictive analytics tools can also help in the search for wealthy donors. However, it’s still of great importance to actually build relationships across all levels of giving to secure robust funding for organizations. In terms of keeping up these relationships, philanthropic organizers believe that small things matter. Quick gift acknowledgements and thank you letters or phone calls can go a long way. It’s also important to track how much donors give and how frequently. Giving data will always offer insight on the best donors for each organization.
In some cases, check-ins and gifts can even help create more philanthropic donations from super wealthy donors. However, it works for smaller-scale donors too. Lacey Nash Miller, a Director of Development at Academy Prep in St. Petersburg, described how she remained in contact with donors through phone calls, email videos and thank you cards from students among other gifts and check-ins. Miller says she has seen wealthy donors donate thousands more dollars due to their healthy relationship. Offering donors to visit the organization can pay off too. It’s a credible way to get to know your donor better and often they can even extend their time to share their knowledge with the experts and their passion in the mission.
As we focus on new trends in philanthropy, the same relationship-building skills will matter more than ever before, but we now have improved data to help build and keep track of more robust donor relationships to secure an even greater impact through large-scale donations.