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Personalized Philanthropy: Crash the Fundraising Matrix

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Using a metaphor of an imprisoning Matrix—the typical development office with its goals and deadlines—Steve Meyers has finally broken through the linguistic and strategic logjam to make sense of connecting donor and charities in a way that will, and already does at some organizations, change the way money is raised.

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Personalized philanthropy is a radical new approach to what we traditionally called planned giving. After decades of “it’s all-about-our-organization fundraising,” charities thought it wise to take into account what donors might need from the gift transaction. For a long time, this meant little more than applying planned giving techniques, many of which provide payments or an income to the donor in exchange for giving up an asset. More recently, and a bit more expansively, the question has grown to include what donors need, not only from a financial perspective, but from a mission perspective—the donor’s mission, not just the charity’s.

But while that’s the better idea, until now it’s been pretty much only an idea. The words donor-focused philanthropy sound nice, but there hasn’t been much to concretely define them or put them to some strategic use.

Steven Meyers has finally broken through the linguistic and strategic logjam to make sense of connecting donor and charities in a way that will, and already does at some organizations, change the way money is raised. It’s not just a new twist to take into account a roller-coaster economy and it’s not just a new gimmick to address what has come to be known as the great generational wealth transfer. Using a metaphor of an imprisoning Matrix—the typical development office with its goals and deadlines—Steve artfully and persuasively works through and explains three concepts: virtual endowments, philanthropic equity gifts, and step-up gifts. Each captures what’s wrong with the current fundraising model and provides a basis for improving it.

This is not to say that fundraisers today are doing a poor job. Quite the contrary: those who work at charities are doing yeoman’s work to make their organizations better as they pursue their missions. But it is also true that development offices can be bureaucratic and, because of inherent limitations, much more could be done. In fact, as donor-focused philanthropy has been a personal cause of mine for many years, I have seen how many organizations limit their ability to raise funds simply because they are not fully engaged with the donor’s needs or desires. But to be engaged, fundraisers need to ask a whole different set of questions. Steve guides us through those questions and helps us make meaning of the responses we are likely to get from donors. Doing that, of course, will enhance donors’ appreciation for the work charities do and, yes, increase their support.

This, Steve calls personalized philanthropy. As he says, “I want to know why all philanthropy is not already personalized philanthropy.” You should ask yourself this question as well.

In Personalized Philanthropy: Crash the Fundraising Matrix, Steven covers:

Chapter One

The Two Cultures of Fundraising: Preparing to Crash Your Fundraising Matrix

Chapter Two

Matrix-Killing Apps of Personalized Philanthropy

Chapter Three

Radically Rethinking Endowment: Powerful Examples in Practice

Chapter Four

Moving Beyond Conventional Solicitation – New Best Practices for Personalized Philanthropy

Chapter Five

Counting, Numbers, Value and the Big Picture

Chapter Six

Being the Change and Making your Own Shift

About the Author

Steven L. Meyers, Author

Steven L. Meyers, Author

Steven L. Meyers, PhD, is Vice President in the Center for Personalized Philanthropy at the American Committee for the Weizmann Institute of Science.

Steve is a primary developer of personalized philanthropy, based on the mantra of “the right gift, for the right purpose, for the right donor.” His innovative donor-focused gift designs, especially a series of arrangements he calls “killer apps,” combine the full spectrum of current and future gifts so that donors can create a lasting legacy with impact and recognition that begins now.

Steve joined the American Committee of the Weizmann Institute of Science in 1995 and now serves as Vice President of its Center of Personalized Philanthropy, as well as a member of its management team and total financial resource development strategy group. He holds a Master’s Degree in Organization and Management from Antioch University and a PhD from the University of Buffalo.

Steven has published in The Journal of Gift Planning and is a contributing author for the Planned Giving Design Center, the Elite Advisor Report of CEG International Group, and eJewish Philanthropy. He speaks frequently at national and regional gift planning conferences on donor-focused giving and “Planned Giving in the Big Picture.”

Steve strongly believes in building a pioneering culture of teamwork and collaboration and most enjoys helping donors realize ways they can help make miracles happen at the Weizmann Institute and other organizations close to their hearts.

Foreword from Doug White

Doug White

Doug White

Donor-focused philanthropy has become a cliché. After decades of “it’s all-about-our-organization fundraising,” charities thought it wise to take into account what donors might need from the gift transaction. For a long time, this meant little more than applying planned giving techniques, many of which provide payments or an income to the donor in exchange for giving up an asset. But those methods, taken from the shelf of the 1969 Tax Act and which, by the way, can be immensely beneficial to both the donor and the charity, are still much more transactional than emotionally comprehensive. More recently, and a bit more expansively, the question has grown to include what donors need, not only from a financial perspective, but from a mission perspective—the donor’s mission, not just the charity’s.

But while that’s the better idea, until now it’s been pretty much only an idea. The words donor-focused philanthropy sound nice, but there hasn’t been much to concretely define them or put them to some strategic use.

Steven Meyers has finally broken through the linguistic and strategic logjam to make sense of connecting donor and charities in a way that will, and already does at some organizations, change the way money is raised. It’s not just a new twist to take into account a roller-coaster economy and it’s not just a new gimmick to address what has come to be known as the great generational wealth transfer. Using a metaphor of an imprisoning Matrix—the typical development office with its goals and deadlines—Steve artfully and persuasively works through and explains three concepts: virtual endowments, philanthropic equity gifts, and step-up gifts. Each captures what’s wrong with the current fundraising model and provides a basis for improving it.

This is not to say that fundraisers today are doing a poor job. Quite the contrary: those who work at charities are doing yeoman’s work to make their organizations better as they pursue their missions. But it is also true that development offices can be bureaucratic and, because of inherent limitations, much more could be done. In fact, as donor-focused philanthropy has been a personal cause of mine for many years, I have seen how many organizations limit their ability to raise funds simply because they are not fully engaged with the donor’s needs or desires. But to be engaged, fundraisers need to ask a whole different set of questions. Steve guides us through those questions and helps us make meaning of the responses we are likely to get from donors. Doing that, of course, will enhance donors’ appreciation for the work charities do and, yes, increase their support.

This, Steve calls personalized philanthropy. As he says, “I want to know why all philanthropy is not already personalized philanthropy.” I do too.

Doug White

Author, Abusing Donor Intent: The Robertson Family’s Epic Lawsuit Against Princeton University
Director, Master of Science Program in Fundraising Management, Columbia University

Review by Stephan Leimberg

Publisher's Note

Our appreciation to Stephan Leimberg for giving CharityChannel Press permission to reprint his review, which was first published in LISI Charitable Planning Newsletter #228 (June 11, 2015) at http://www.leimbergservices.com.

Copyright 2015 Leimberg Information Services, Inc. (LISI).

The author of this groundbreaking book, Steven L. Meyers, PhD, is vice president of The Center for Personalized Philanthropy at the American Committee for the Weizmann Institute of Science.

His book, Personalized Philanthropy: Crash the Fundraising Matrix, may well revolutionize the way charities raise large amounts of money in the future. His outside-the-box mind makes possible the previously unimagined.

I usually bend over a page in a book when I want to come back to (or steal) an idea or concept. When I finished reading this book, almost every page was bent over—most with X’s to high light concepts I wanted to share with others.

Let me put it another way:

THE SMARTEST MAN IN THE WORLD

As I was growing up, my father repeatedly gave me lessons and told me stories that he hoped I’d learn from. Many times, he said to me,

Only a fool learns from his own mistakes

 

and followed that with…

A wise man learns from the mistakes of others!

 

One day he told me of “The Smartest Man in the World.”

“It wasn’t the man who created the cash box nor the man who invented the adding machine. It was the man who put them both together and called it the cash register!”

It got me thinking about the new suitcase I own. How long was it that we moved clothing we were taking on a trip in a trunk and it took two people to grab it by the corners? And then, someone added leather handles. And years later, someone else added two wheels and an expandable handle and called it a suitcase (must have been an inventor attorney—the same person who invented the brief case). And then someone added four wheels! And I always wondered, why did it take so long to make these improvements and why were we so oblivious to what could be a blindingly simple, workable, and elegant solution?

Steven Meyers takes readers interested in innovative philanthropy through this same thought process – shaking us and making us ask —over and over again—”It’s obvious! So why didn’t we see that solution—before?”

Meyers shows us what’s wrong with our philanthropic large gift raising thinking – and empowers us to break out of the tyranny of the traditional. His book should be purchased—and read—over and over—by development officers, would be and current philanthropists—and by every estate and charitable planning attorney, CPA, insurance agent, financial planner, and wealth manager who is willing to work with an open mind and create what Meyers calls “The right gift, for the right purpose, for the right donor.” These are donor-focused (fully engaging with the donor’s needs or desires) integrated, full spectrum holistic gifts.

Meyers three jaw-dropping simple/powerful moving beyond convention concepts of “Virtual Endowments,” “Equity Gifts,” and “Step-Up” gifts are game changers.

Here’s one example:

Most of us, when we purchase a home, don’t have all the cash necessary (or if we do, we may have a better alternative use for it) to plunk down the money and move in. So we obtain a mortgage and pay off the principle over time. We don’t have to wait 20 or 30 years to “move in.”

Meyers suggests that the same principle can be applied to a person who wanted to have a chair in her name, say at Villanova Law School, or have a library room named in her honor at, say at the Library at Fernandina Beach, Florida. Assume she could not—or did not want to—make the outright gift today of (let’s assume, $1,000,000) necessary to establish the endowment.

Suppose she had given the Villanova Law School or Fernandina Beach Library $1,000,000 today—and the charity had invested it—and withdrawn 5% each year as its “spending rate.” It would have $50,000 a year to spend.

Now suppose, going back to our real life example, the potential donor didn’t give $1,000,000 today—but instead committed to giving annual gifts equal to the spending rate of $1,000,000, i.e., she committed to giving $50,000 a year for the rest of her life. And she simultaneously committed to a “balloon gift” of $1,000,000 at her death (perhaps through assets she owned or maybe even better, funded with life insurance the charity would own on her life and that she would pay for).

In other words we link two gifts ((1) a multiyear pledge for annual gifts based on the life expectancy of the donor in the amount of the spending rate the charity would have used had it received the endowment up front and (2) a separate pledge or contact to include a gift by bequest or life insurance contract of the original endowment amount) under an umbrella plan.

Knowing that this irrevocable combination pledge will accomplish essentially the same overall benefit as an immediate gift of the lump sum, the Law School or Library could recognize and honor the donor today—and the donor would have the immediate pleasure of seeing and realizing with certainly the impact of her gift.

So simple, so elegant, so workable! It’s like putting the cash box and the adding machine together and making a cash register – or putting four wheels and handles on a trunk and making it into a suitcase.

Like so many concepts in this book, you’ll say to yourself, Why didn’t we think of this—before?

Chapters

1: The Two Cultures of Fundraising: Crashing Your Matrix

2: Matrix-Killing Apps of Personalized Philanthropy

3: Radically Rethinking Endowment: Examples

4: Beyond Conventional Solicitation: Personalized Best Practices

5: Counting, Numbers, Value, and The Big Picture

6: Being the Change and Making Your Own Shift

 

Publisher’s Note

Stephen Nill, Publisher

Stephen Nill, Publisher

As the publisher, my normal and preferred place is behind the scenes, supporting the author in the challenging but rewarding journey of creating, polishing, and publishing a book. Steven Meyers, though, asked me to break the mold (or should I say “crash the Matrix”?) of how we do things by sharing my thoughts about this book with you, the reader.

This is no ordinary book, and it’s not just the fact that it’s our first full-color, hardback edition, enabling us to showcase the illustrations created by the author himself. What makes it extraordinary is what it represents: a movement in the field of philanthropy.

When Steven and I first talked about his vision for this book, I instantly grasped its importance. As it happens, before moving into publishing, I spent three-plus decades practicing law and consulting, with a significant part of those years devoted to gift planning and fund development program management. In the early nineties, I was Senior VP of Development at a large nonprofit hospital chain, with only the chain’s CEO and COO above me. Taking advantage of my rank, I quickly rebuilt the fund development program from the ground up, focusing on six- and seven-figure gifts from private donors. We were structuring gifts in creative ways that made a great deal of sense to the donors and, from a long-term viewpoint, the organization. (Oh, how I wish I’d had a time machine so that I could have transported to the future to learn about Steven’s “killer apps,” which he discusses in these pages!)

By my lights, within two years our admittedly unorthodox approach was succeeding. We had attracted a number of donors who were creating large structured gifts, making major pledges, and so on. Most importantly, we were building a kind of momentum that I was sure would continue into the years ahead.

Yet I found it exceedingly hard to quantify our success and justify the program to the board. Sure, there were real numbers that showed some of what was going on, but I was constantly explaining why the bigger picture just wasn’t being represented in the financial statements. The groundwork that was laid had value far into the future, but I struggled to show it. It was as if we were planting a vast apple orchard but could show the value only by the first few apples that were appearing.

“Show me a gift officer at any rank, and I’ll show you someone who is probably trapped, knowingly or not, in the fundraising Matrix—a prisoner to the silos that so many organizations erect.”

—Stephen Nill

One way or another, this scenario plays out at countless organizations, year after year. Even worse, gift officers do not always have the kind of rank inside their organizations that I enjoyed in the setting I just described. Show me a gift officer at any rank, and I’ll show you someone who is probably trapped, knowingly or not, in the fundraising Matrix—a prisoner to the silos that so many organizations erect.

Personalized Philanthropy: Crash the Fundraising Matrix shows us how to crash the fundraising Matrix and finally become empowered to truly focus on the donor’s philanthropic dreams while advancing the organization farther than ever imagined.

Given what’s at stake, if you, gentle reader, are waiting for permission to crash your organization’s fundraising Matrix, don’t. If some in your organization don’t get it, hand them this book and help them break free too.

Stephen Nill

Publisher

About the In the Trenches Series

You’ll know an In the Trenches™ book not just by its cover, but by the author’s fun, upbeat writing style. But don’t be fooled by its down-to-earth approach and ample use of sidebars. In the Trenches books are authoritative and cover what a beginner should know to get started and progress rapidly, and what a more experienced nonprofit-sector practitioner needs to move forward in the subject.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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