How to Reach High-Net-Worth Philanthropists

Even if recent fundraising efforts for your not-for-profit have been underwhelming, one high-net-worth gift can change your year and make it a fundraising triumph. How do you locate extremely affluent people who have charitable intentions?

Who are they?

The majority of people with at least $5 million in assets under professional management consult with wealth management consultants on their charitable giving plan, according to a 2022 BNY Mellon survey. However, 32% of these people have done volunteer work for charities. According to a 2022 research by data analytics firm Wealth-X, Ultra-high-net-worth (UHNW) people (defined as those with at least $30 million in assets) were responsible for giving $85 billion to charity in just 2020.

The majority of UHNW contributors are men, but the proportion of women making significant gifts is rising as more women launch successful enterprises and gain from wealth transfers across generations. According to a survey by data analytics company Wealth-X, the average UHNW philanthropist in North America is 68 years old, and nearly 75% of these donors are “self-made,” meaning they did not inherit their fortune.

According to the report, UHNW donors mostly give to educational institutions, but they also frequently support social service, healthcare, and medical research organizations, as well as arts and cultural institutions. Many UHNW donors, especially those who are younger and self-made, do not run private foundations, which are required to spend at least 5% of their net investment assets annually.

Building relationships

One of the best methods for your nonprofit to connect with rich donors is by developing connections with their financial advisors. These professionals include estate planners as well as advisers to private foundations, family offices, and donor-advised funds (DAFs). Work to tailor your messages to this group of people; for instance, give them materials that are financially smart and send your charity’s most knowledgeable staff members to speak with them.

The charitable giving method with the fastest growth in the US is the DAF. Many people are sitting on significant cash reserves because there are no regulatory restrictions on minimum payouts. However, upcoming regulations and public pressure may compel DAF owners to increase their philanthropic giving.

Include methods for DAFs to support your organization in your marketing and fundraising materials to draw their attention. Try to speak with DAF owners directly if you know their names (Fidelity Charitable reports that 97% of its DAF awards release the donor’s name). Many large contributors desire a personal connection to the charities they fund. They could be given a tour of your facilities, invited to a board meeting, or allowed to see one of your initiatives in action.

Don’t neglect them

You can’t afford to overlook high-net-worth benefactors, even though small contributors are probably essential to your ongoing success. Make sure your marketing materials speak to these potential contributors and that your development team has the skills necessary to convince them and their advisers to support you. Get in touch with us for further details.