Billionaire Donors Will Ask These 7 Questions Before They Donate
When serving today’s high-end net worth billionaire donor, you can expect them to have some questions before they decide to donate. Jim Lintott, chairman, and co-founder of Sterling Foundation Management spoke at WealthEngine’s Prosper Summit in 2019 to provide us with insight into what questions these billionaires might ask before deciding to donate to your nonprofit.
Approaching billionaires requires a lot of preparation. You get one shot to make your case and create a strong impression. Considering using an executive coach to help you get ready for your meeting.
1. How Can I Make a Difference?
One of the main reasons someone will consider donating is to make a difference. It’s not for their ego enhancement, or tax benefits, though those incentives do exist. Most wealthy donors want to make a difference in the world and genuinely help people.
The donor may or may not know how they want to make a difference. They’re coming to your organization to see how their donation can affect the world.
It’s your job to support potential donors by helping them see how they can make a difference, and help them realize where their passion lies. People usually have a burning desire to do something good.
At Jim’s firm, they came up with a great way to help people find their passion. Often, the families that come in aren’t sure what they want to do. The family is taken into a room where 50 headlines are on display heralding good things that could happen.
These headlines are created after consultation with each family to get to know them and their priorities. Families are asked to take 20-30 minutes and walk around the room to read the headlines. Then, choose three of them they’d like to see come true.
2. What Won’t Happen if You Don’t Get the Money?
This question may seem simple on a surface level, but it’s important to be prepared to answer this question honestly and truthfully. This is necessary for your billionaire donor to understand the importance of their donation.
Put together case studies of projects your charity has worked on that gave positive results and prepare to present them to your potential billionaire donors. The objective is to clearly demonstrate how their money can help and why they should donate to you.
Jim Lintott shared an inspiring story at the WealthEngine Summit, about a family who’s 12-year-old daughter was suffering from epilepsy. The family wanted to make a difference in awareness and research into epilepsy.
The Sterling Foundation Management came up with three projects for the family to consider. The family ended up choosing to participate in all three.
This resource was created to help guide families in their epilepsy journey. It’s a great first step for people who just found out their child has epilepsy. In only three short years, epilepsy.com became the largest epilepsy-related website that distributed information and helped build a community.
Epilepsy Therapy Project
With thorough research, Jim’s firm found that potential new cures for epilepsy weren’t making it to phase two trials. The epilepsy therapy project worked with the pharmaceutical industry to identify ways to move drugs through the testing process and move forward. Six years later, 8 out of the 12 drugs in the epilepsy pipeline were driven by the epilepsy therapy project.
Epilepsy Study Consortium
One of the major issues identified through research was the lack of people available for trials. The Epilepsy Study Consortium project helped find patients to sign up for new drug trials. Before this consortium, it took years to get a trial going.
Through the family’s donation, they created a consortium of research hospitals in New York that kept potential candidates for trial in a usable database. When a new trial was proposed, they were able to shorten the recruiting process from 24 months to 60 days. Now, large companies are willing to focus on epilepsy treatments because the path is easier.
Imagine what the world would look like today if this family hadn’t decided to donate so these organizations could be created. How many more people would have suffered without this family’s generosity? This is the type of picture you need to paint for your potential billionaire donors to emphasize the gravity of their donation.
3. Who Can Give Me Expert Help?
Wealthy people and billionaire donors seek out experts for almost everything, including getting information about donating. If you’re putting together a proposal, be sure to show how you’ve successfully done this before.
It’s okay if you haven’t done this type of project. Be sure to show how you’re going to recruit new talent or how you’re going to educate yourself to provide the best results.
Prepare answers to these three questions so you’re ready when billionaire donors ask if you haven’t worked on a similar project before:
- How are you going to find the expert talent needed to execute this project?
- What are your requirements to make sure the new talent has experience?
- What steps are you going to take to ensure the project will be completed on time?
Jim tells a comical, yet noteworthy story about how his firm was able to help their client redo a university library:
“Recently, we had a client come to us interested in redoing a university library. They had been pitched by the school. We sought out the nation’s three leading experts on technology in libraries, learning in libraries, and the future of libraries.”
Jim explains that finding and contacting these experts was done by a 22-year-old in his firm. Research costs were minimal—“two salads and one sandwich.” The information gathered helped the client recognize the potential and completely reshaped the project.
4. How Do We Measure Results?
Talk is great, but eventually, your potential billionaire donor is going to ask how you measure and track project results. First, create a proxy measurement. If you can’t determine a number to go off of, you’re most likely not trying hard enough.
Use tools like surveys audited results, or attendance records and search for third-party verifiable measurements. This is key to creating long-term relationships.
Jim’s company developed a program in the three rivers area of Nigeria to fight illiteracy. They had the extra benefit of being able to add Basic Aids Education as one of the subjects used to teach people how to read. A review of other studies showed if you can teach adults to read, you can eliminate illiteracy in an area forever.
This makes perfect sense because no parent who knows how to read would allow their child to be illiterate. By measuring before, during, and after, literacy rates in the three rivers area moved from 23% to 85%. This is the type of information your donors are looking for.
5. What Type of Flexibility Can I Expect?
Typically, your potential billionaire donor isn’t going to care about the nuances of your organization, such as whether you’re a nonprofit or for profit. They simply want to make a difference. Potential billionaire donors will want to make sure you’re going to be flexible.
As Jim puts it, “Your [donor] wants to make a difference. We need to think outside of our own organizations. Are there partners we should include? Are there investments we should make?”
Jim tells another story to relate how many charities work on the issue of using charcoal for cooking in third world countries. Charcoal is a concern because it’s bad for your health.
However, it’s not as simple as just providing people with better cooking materials, such as liquefied natural gas. It is necessary to change the market completely.
If you’re in the third world and are impoverished, purchasing 30 cents worth of charcoal is your easiest option for finding cooking fuel. However, you can’t simply purchase 30 cents of liquefied natural gas.
The smallest container available is five gallons. At least, that’s how it used to be.
Now, there’s a company that will provide the tank for free and sells gas as it’s used. This is a for-profit solution to a bottleneck the nonprofit world could not fix.
Don’t get trapped into repeating what you’ve done before. Think outside the box to solve the problem.
The other part of being flexible with donations involves planning. For example, some depression-era givers have the fear that their personal funds will be depleted. They want to help, but they’re afraid of going broke.
Being flexible with how you handle their money can help your organization get money in the future without pressuring people now. Jim’s firm often works with clients to create a
large charitable remainder trust (CRT).
Doing so ensures all donations are earmarked for charitable giving. However, donors can draw from the CRT if circumstances demand it. Using a CRT enables your donor to give with confidence.
6. How Can I Involve My Family?
Most wealthy families and billionaire donors want to keep the money in the family for generations, but they don’t want to simply give their children money. Instead, they want to give those inheritances responsibly to ensure the money is managed effectively.
With an estimated 30 trillion dollars about to be passed from the baby boomer generation to gen-Xers, who will then leave inheritances for millennials, families are considering how they’re going to get the next generation ready to handle their wealth.
A lot of Jim’s clients have parents tell their children, “Why don’t you run the foundation before you run the company?” This practice makes a lot of sense because making decisions is difficult. Reviewing grants and choosing the ones that most align with the foundation’s mission is excellent training for business decision making.
With a grant, you get to actually make a decision. And with most grants, you get to see if your decision was the right one based on the results. This gives children the confidence they need to make the right decisions in the future when they are in charge of the company.
Jim explained he has been fascinated by a trend he has witnessed repeatedly in many wealthy families. The second generation has a propensity to find it difficult to identify their life’s passion.
These children most likely don’t want to compete with the fact that mom and dad were so wildly successful economically. Many succeeding generations have found they can find their own life’s passion through philanthropy.
Jim tells yet another story, this one is about a passionate child of one of their wealthy clients. The child was very concerned about the siblings of cancer patients.
The organization dubbed Sibs for Kids was created. This idea was taken to a children’s hospital, where the concept was explained and an agreement was made to get the funding necessary for set up from the family foundation. Being able to witness younger generations find a passion is one of the more rewarding benefits that come with working with your donors to help them realize the extent of the good their donations can do.
7. What Tax Deductions Can I Expect?
As Jim mentioned earlier, tax deductions aren’t the main reason why a wealthy donor decides to give. However, it’s still an important question you should be prepared to answer at your first meeting. Be sure to explain to them what benefits they can get based on how much they donate.
At the end of the day, it’s important to remember that the wealthy want to help you.
As Jim suggests, “Get to know them, and I mean really know them. Know their backgrounds, know their likes and dislikes, and what really motivates them. Get to know what and why they want to make a difference and help them see that path toward change. Be prepared to change the world together. You will both be glad you did.”