The Rise of the Megadonor
and What It Means
for Your Nonprofit

It seems like every week, we read about a substantial donation that has the potential to transform an organization and reorient the debate on national issues. These gifts often come from so-called megadonors. What does the emergence of this new class of donor mean for nonprofits? How – and should – your nonprofit shift to accommodate and embrace this reality?

To be sure, all nonprofits would love to have an ultra-high-net-worth individual take interest in their organization and mission. But with this opportunity comes the need for prudence and planning:

• Consider what this might mean for the independence of your organization’s mission and programs. Significant donors often think of themselves as investors who help steer the organization’s work. Be prepared to balance the donor’s ideas with your existing plans and priorities.
• The megadonor will likely require a high level of stewardship, ideally from an executive director or a peer-level board member. Before the gift is even received, identify someone who is willing to serve as a high-level intermediary between the donor and your nonprofit.
• If the donor wishes to make a pledge, be sure you have the infrastructure and plan in place to ensure it is fulfilled and realized.
• What type of recognition and involvement does the donor expect? Best to have this discussed and agreed upon early in the conversation to avoid any hiccups down the road.

Just as important as sound processes and seamless procedures are big ideas. Megadonors expect to be part of something visionary that disrupts the status quo and makes the world a better place. Leave the general operations pitch at the office; instead, sell the megadonor on a new project that’s thoughtful, exciting, and paradigm-shifting.

Keep in mind the source of the wealth that’s powering these gifts and creating these donors. The emergence of new industries and technologies has resulted in 540 billionaires throughout the United States today. And these donors’ business experiences have shaped their prism of philanthropy (think Zuckerburg, not Carnegie). Nonprofits keen on harnessing the gifts of megadonors should spend time understanding the motivations that drive their prospects and the impact they might expect to see with a gift.

There’s no question we live in an era when the philanthropy of a megadonor can vastly impact an organization and even the fundamentals of an issue. Nonprofits that are cultivating and soliciting these philanthropists should ensure that the organization stays mission-focused while providing their donors the type of stewardship they need for a fruitful, long-term philanthropic relationship.