The Landscape of Mega Gifts and Commitments in 2020
We have all heard 2020 was “unprecedented” countless times, and the idiom seems to play out when examining data around philanthropic giving at the $10 million+ level. While 2020 saw Jeff Bezos make an extraordinary $10B gift (pre-pandemic), the Chronicle of Philanthropy’s report on $10 million+ gifts shows the lowest giving at this level since 2012. When you subtract Bezos’ gift from the $17B worth of $10 million+ donations given in 2020, the combined total of giving at this level decreased to an amount not seen since 2015.
What’s unprecedented about these results is that these very large gifts, which are typically made through a combination of assets, are trending in the opposite direction of the markets.
Usually strong markets align with strong giving, and last year also saw an increase in the net worth of the world’s richest people. We’ll have to wait for the Giving USA reports to see whether this counterintuitive result was found at giving levels below $10 million.
Top $10M+ Gifts
Top $10M+ Gifts to Higher Education
Where are these gifts going?
Another interesting change in 2020 is the uptick in designation to “other causes” while designations to all other sectors decline. Likely spurred by the pandemic and racial injustice, giving to “other causes” captured 18 percent of the $10 million+ gifts and commitments made in 2020 — a bigger portion than this segment has received over the last two years combined. The education and health sectors decreased a few percentage points. Nonprofits in the arts, culture, and environment sector saw the biggest decrease in the portion of gifts received at this level – down seven percent since 2019.
“Transformational” is a relative term.
We often use “transformational” as a synonym for these $10 million+ gifts. While they are indeed transformational, you may not need a gift this large to transform your organization or one of its programs. Use “transformational” as an inspirational concept in talking with your potential donors about how you can help them achieve their philanthropic goals. Your prospect pool may not be deep enough to include giving at this level, but you can still offer donors the opportunity to have extraordinary impact in the lives of those you serve.
You never know who’s watching you.
There are many lessons to be learned from MacKenzie Scott’s extraordinary giving in late 2020 She divided her $4 billion across nearly 400 nonprofits. Her donations were not inspired by compelling case statements; they were driven by the reputations and work of the institutions she selected. She and her team researched the organizations, and many of them first heard from her when they were notified of her gift. If someone like MacKenzie Scott came to your web page, looked at your publications, and wondered about your impact, what would they see? Would they be inspired to help you? Consider asking one of your donors, preferably one with high capacity and an inquiring mind, to walk through your public presence with you and tell you what they see through the lens of their philanthropic planning.
Be ready to be transformed.
If you got one of those calls from MacKenzie Scott and learned that you would be receiving a transformational gift, whatever size that may mean for you, would you be ready? Try this exercise: Gather the CEO’s cabinet for a couple of uninterrupted hours. Start with a number ten times the largest gift you’ve gotten in the last five years, and discuss what you would do with an unrestricted gift of that size. Then do the exercise again with ten times the first amount. Blue Sky thinking can be a welcome respite from our daily focus on operations and can help you have transformational conversations with potential donors when they appear.
Ask the right questions.
When exploring possibilities with potential donors, go deep to learn about their core values and aspirations. Don’t just learn that they’re interested in scholarships. Ask them why. If they say they love live performance, ask them why. Some of these prospects may someday have the capacity to give your organization a transformational gift. You want to know what really makes them tick long before that happens so that you can engage them around what matters most to them over the long run, not just today’s needs.
What can we expect in 2021?
There were ten new commitments above $10 million in the first two months of the year. If that pace continues, 2021 would continue the downward trend. But three of these were at the
$100 million level. Might we be seeing a widening of the gap between the biggest of the big gifts and the bulk of giving? This warrants a careful look at Giving USA’s analysis of 2020, and careful listening to our donors about their plans and priorities. Let’s stay in touch and figure this out together.