Mega donors are changing the nonprofit landscape with massive contributions to help organizations meet mission objectives. But are these major donors more boon or bane?
Charitable giving is on the rise. According to recent research, 84% of Millennials give an average of $481 per year across 3.3 organizations, while 72% of Baby Boomers contribute $1,212 per year across 4.5 organizations. As noted by AFP Global, however, while the total amount given was up 2.7% in 2021, the total number of donors fell by 5.7%.
Mega donors account for the difference. But is their money worth pursuing to meet nonprofit goals?
What is a Mega Donor?
Mega donors make particularly generous contributions to nonprofits, typically in excess of $10 million. Some of the most recognizable major donors worldwide include: MacKenzie Scott, who donated $436 million to Habitat for Humanity, Bill and Melinda Gates, who recently announced a multi-year pledge of $15 billion for the Bill & Melinda Gates Foundation, and Tesla CEO Elon Musk, who donated $5.7 billion to undisclosed charities throughout 2020. Meanwhile, former New York mayor Michael Bloomberg contributed $1.7 billion to nonprofits supporting the arts, environment, and education.
In total, just 10 mega donors accounted for 5% of overall individual giving in 2021—or around $15 billion. It’s no surprise, then, that many nonprofits are looking for ways to pique the interest of these charitable power players.
Boon: Exploring the Benefits of Mega Donors
Mega donors offer several benefits for nonprofits, including increased awareness and long-term funding. Most mega donors aren’t shy about announcing their contributions. While some, such as Elon Musk, keep their giving quiet, many speak out about their donations to give nonprofits a social boost.
This delivers a dual benefit: individuals who follow mega donors on social media channels may be encouraged to give, and other mega donors may follow suit.
While smaller monthly gifts make it possible for nonprofits to build reasonable budgets, large donations can provide more breathing room. For example, a small nonprofit that attracts celebrity attention could see its expenses paid for months or even years with a single mega gift.
Bane: Potential Pitfalls of Mega Donor Support
While big donations can mean more goals achieved, mega donor money also comes with potential pitfalls, like influencing decisions and shifting public perception.
Some gifts may come with conditions. For example, mega donors might ask nonprofits to prioritize a specific project or give them a voice in future decision-making. If donor objectives align with charitable goals, this may be worth considering, but nonprofits must think carefully about these conditions to ensure their mission isn’t compromised. A well-defined gift acceptance policy can aid in these decisions.
Public perception can shift without warning in a world driven by instant access to news and information. Consider if a mega donor makes a high-profile contribution but then goes on to say something controversial on their social media pages. Even if nonprofits are quick to respond, association with the donor in question may cause a drop in contributions over time owing to negative public perception.
Getting Noticed—How to Capture the Attention of Major Donors
If major donor support is on your list of nonprofit priorities, you need a way to get them interested. While some donors may discover your organization as a result of a personal or professional link to nonprofit goals, you have a better chance of getting noticed if you have a plan of action.
First, find a way to capture their attention. Social media campaigns are helpful here; platforms such as Instagram and TikTok allow followers to tag individuals and organizations and can help nonprofit content end up on the social feeds of potential mega donors.
The goal here isn’t to specifically seek out individual donors but rather to create a campaign that’s true to its mission and drives social sharing. Consider the WATERisLIFE campaign that saw individuals in life-threatening situations repeating common #firstworldproblems about the size of their houses or lack of internet access.
Next, make sure you have an idea for them to back. Many mega donors are looking to change the world; they want to know that the money they’re donating is doing more than keeping the lights on. If your C-suite has been considering expanding efforts into new countries or expanding impact with new facilities, these are ideas worth mentioning at mega donor meetings.
Finally, talk about long-term strategy. While a single donation from a major donor could help fund operations for months or years, continued giving is the foundation of sustained success.
Moving Your Nonprofit Forward
Your nonprofit’s passion for the mission to help the world and community is crucial to attracting donors of any size. Established plans and cohesive campaigns fueled by your authentic passion can help move donors and inspire their participation, financial and otherwise.
Meet the Authors
Andy Maffia, CPA
Aldrich CPAs + Advisors
Andy Maffia has more than 15 years of experience in public sector accounting, with a focus on auditing nonprofit organizations, organizations subject to a single audit under the Uniform Guidance, agreed-upon procedures and consulting work, as well as assurance audits for closely-held companies. He currently sits on the board of directors and serves on the... Read more Andy Maffia, CPA
- Nonprofit organizations
- Public sector
- Government entities
- Certified Public Accountant
Jennifer Seifert, CPA
Aldrich CPAs + Advisors LLP
Jennifer Seifert joined Aldrich in 2013 and has five years of experience in public accounting. As a licensed CPA and trusted advisor to nonprofit and governmental organizations, Jennifer effectively manages the engagement process from planning to final reporting. Paired with her MBA, Jennifer utilizes her business expertise to help solve client problems, understand organizational strategies,... Read more Jennifer Seifert, CPA
- Nonprofit organizations
- Government entities
- Audit and assurance services
- Uniform Guidance