3 new ways to give: How effective donors are driving change

The last quarter of the year has long been known as Giving Season, a period marked by stepped-up fundraising efforts by nonprofits, and thoughtful charitable giving and year-end financial planning by donors.

This year, several emerging trends are reshaping the charitable landscape—both in how nonprofits seek financial support and the steps major donors are taking to support them and to effect meaningful change.

As a result, for many major donors—individuals, families, businesses—the starting point is to focus on the cause or issue of greatest interest or concern, and to move forward according to these rules of engagement:

• Be bold: Set ambitious, time-specific targets.
• Get the basics right: Create relationships with clear plans for sustaining contact, stewardship and gratitude.
• Create transparency and trust: Use a range of communication channels and financial reporting tools to build and sustain partner and stakeholder relationships.
• Aim for holistic engagement: Go beyond providing financial support and get involved—take board or committee roles; participate in events; lend your expertise in creative ways.

Today, in addition to providing financial support, we see Private Bank clients serving on nonprofit boards, establishing family foundations, and collaborating with staff and leaders of nonprofit organizations on a host of mission-critical efforts and programs.

For their part, organizations are embracing new ideas about how to build public awareness, communicate with stakeholders, deliver services to constituents, and engage more deeply with donors and prospects.

Below are three of the most compelling trends reshaping philanthropy. Your J.P. Morgan team can provide additional guidance and information to help you realize your charitable goals.

1. Big bets

Today, some large funders are consolidating their giving, and are placing so-called big bets (i.e., investing larger, unrestricted grant amounts in a small number of core issue areas) to generate more impactful results. They are taking this focused, more strategic route instead of thinly spreading their funding across many organizations.

Here’s how leaders in the field define this trend:

The Rockefeller Foundation makes a series of big bets, which require a novel solution or application of existing innovation, an alliance of diverse partners to scale the solution, and a method to track and report progress against measurable outcomes.

Bridgespan Group, a global nonprofit, defines big bets as a commitment of $10 million or more to an organization or initiative where the donor cedes control of the funding.

Big bets, however, are not without risks—nor are they suitable for every donor or every organization. For example, securing big-bet gifts can lead a charitable organization to grow too rapidly or to overpromise on what it can reliably deliver. Either outcome can put the overall organization at risk, especially as big-bet grants are rarely repeated.

2. Technological advance

From platforms that manage donors and track communications to digital marketing tools (social media, email, text messages), it has never been easier for nonprofits to communicate directly with supporters—or for donors to draw attention to the causes they support.

One of the defining characteristics of these digital efforts is sophisticated storytelling: the use of compelling and emotionally connected narratives to help a given organization/cause/donor (or celebrity ambassador) stand apart in a crowded field.

Artificial intelligence (AI) has also begun to play a key role in how nonprofits raise money, allowing them to quickly customize fundraising materials, mine databases for prospective donors and their giving potential, and glean facts about companies as potential development partners. 

Case study example: Prizeo, a privately owned internet company based in Los Angeles,¹ is an online fundraising platform that enables nonprofits and their celebrity partners to mobilize fans to raise funds and generate awareness about a particular cause or issue.

The result: Once-in-a-lifetime experiences that are auctioned off in support of a chosen charity. Fans can donate as little as $10 for one entry or give more to increase their chances to win. 

This past summer, Prizeo partnered with City of Hope and the musician Hozier. For a $10 minimum donation, fans could vie for tickets to a private suite at a Hosier show in Forest Hills Stadium (New York). Other giving options, ranging up to $250, were also available and with ancillary benefits.

3. Pooled and collaborative funding

Donor collaborations are emerging as a way for philanthropists to learn, be more strategic and, ultimately, have more impact on the causes they care about. True, collaborating with partners takes work, but by pooling their funds, affinity groups making larger gifts can have a significant impact.

Donor collaboratives take many forms, from exchanging information and coordinating resources to addressing major social or environmental challenges. These efforts often include institutional and family/individual funders, who may have a formal pooled- or aligned-giving partnership or fund.

For the beneficiaries of large gifts, these partnerships are a way to:

• Gain financial support and scale their impacts beyond the reach of a single donor.
• Educate a wider audience about issue areas.
• Share their best practices alongside peers and experts.
• Enhance their negotiating power with grantees.
• Expand and diversify their networks.
• Experiment with new approaches, issues areas or bold ideas, while spreading any related risk across multiple parties.

Partnership also sets the stage for ongoing innovation and invention:

• Meaningful (and frequent) discussions with development and leadership teams can help philanthropists discover new ways to support favored organizations.
• Unexpected learning can take place. For example, an organization may discover an even greater benefit results from a donor’s human, intellectual or social capital than from their financial support.

Case study example: The Stand Together Foundation pools funds from peer donors, and then in partnership with nonprofits and social entrepreneurs helps collectively scale the efforts to break the cycle of poverty in America. Since its inception in 2016, Stand Together has invested nearly $200 million in partner organizations, which are addressing the problems of poverty across 47 states. The foundation’s areas of focus include economic mobility, homelessness, mental health and addiction, criminal justice, healthcare and youth.

We can help

If giving back is essential to you, your J.P. Morgan team can help you articulate your goals and leave your mark, whether to help meet a charity’s short-term needs or to work toward long-term systemic change. Euromoney named J.P. Morgan Private Bank the 2024 World’s Best for Philanthropic Advisory.