Six Types of Wealthy Donors
(Jan. 12, 2010) A new study identifies six types of high net worth donors and explains what motivates them to give.
The findings of the study, conducted by Barclays Wealth in London, explain how factors such as age, source of wealth, religious or political beliefs are influencing the ways in which high net worth individuals give to charity.
Based on findings from 500 high net worth investors in the U.K. and U.S., the study identifies the following diverse typologies:
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I was quite interested in the study done by Ledbury Research for Barclays Wealth, summarized in the recent edition of eWire.
It is both disrespectful and risky to pigeonhole donors by type. But this study has articulated a number of lifestyle and values factors that go into donor motivation. In my three decades of work with major donors, I've come to the conclusion that, rather than defining a donor by their type, it is more useful to consider the constellation of motivations -- some stronger, some weaker -- that make up each individual's character.
Thus, in Ledbury's terminology, as a Reactive Donor ages, he may develop characteristics of a Professional Philanthropist, while retaining Reactive motivations, overlaid with Cultured Inheritor factors from family roots. In other words, it is more helpful to me to think of a mass spectrometer's analytics than to categorize a complex individual with long life experience in terms of just one set of characteristics.
That said, these are useful categories and descriptions, and I happily shared the article with my staff. It would have been additionally helpful in the summary to be given an idea of how frequently Ledbury thought each category occurred in their sample.
Privileged Youth (motivated by a desire to engage)
Typically younger, and having inherited some or all of their wealth, the Privileged Youth tend to enjoy a comfortable lifestyle yet feel an element of guilt regarding their wealth.
For the Privileged Youth, giving their time and energy to charity is a means of offsetting some of this guilt, and it provides them with a mechanism to give back to those less fortunate than themselves. Furthermore, they have been brought up to believe in the importance of charitable work, and similarly wish to set an example to their own children.
As a group they are well-travelled, heavy internet users, and see themselves as citizens of the world. As a result, they tend to support global causes, especially social welfare causes such as homelessness.
Eco Givers (motivated to save the planet)
This group is typically younger and, of all six groups, the most likely to be female. They live very comfortably but do not believe that children should inherit large amounts of money. They themselves have worked hard for their wealth.
The Eco Givers primarily donate to environmental charities and to disaster relief, being fundamentally concerned that climate change is now reaching the point of no return, and believing that funding causes that alleviate environmental disasters and help slow or reverse the effects of climate change are the most important way for them to help. They also support children's and social welfare charities.
Altruistic Entrepreneurs (motivated by duty to give back)
Altruistic Entrepreneurs are typically middle-aged business owners, with teenage children, who have already experienced several liquidity events. They are entirely self-made and still have strong ties to their roots.
This group strongly believes that the wealthy have a duty to give and to share their wealth, and in particular they support causes that give back to the communities where they grew up. Religious beliefs also play a part in their desire to be philanthropic.
Altruistic Entrepreneurs are very generous, and make few demands on the charities they give to; furthermore, they are the least likely group to cut back on their donations during difficult periods in the economy. They are not a group that needs any public recognition for their donations, and indeed are happy to leave their wealth to be donated and spent after their death.
This group tends to donate across the major causes - spanning education, social welfare, and environment - and aside from their (often quite substantial) financial donations, they are happy to be very active fundraisers.
Reactive Donors (motivated by peer pressure)
Predominantly male, high-earning executives, Reactive Donors tend to give to charity because it is expected amongst their peers, rather than through a moral or social conviction.
This group give very little of their time to charities, and when they do give money it will tend to be in straightforward, low-engagement ways such as monthly direct debit payments from their salary. They believe that corporations and businesses should take a larger share of the responsibility to support causes than individuals.
Though not big donors, when they do give, they are most likely to support health and medical charities, potentially as their own ‘insurance' policy in case they become ill. They are also more likely than other groups to want public recognition for their donations.
Cultured Inheritors (motivated by legacy)
Cultured Inheritors are in their late 50s and 60s, often in semi-retirement, and with young grandchildren. Though they tend to be financially successful in their own right, they have typically also inherited wealth and plan to bequeath much of their wealth to their children and grandchildren.
Religious beliefs are not at the heart of this group's philanthropy, but rather social and moral beliefs. Cultured Inheritors are strongly motivated to give to immediate family and community causes; they are also one of the few groups who retain a strong interest in supporting the arts.
They are generous with their time, both in organizing fundraising events, as well as serving on the boards of particular charities where they can bring their experience and networks to bear.
Professional Philanthropists (religious and political motivations)
As one of the oldest groups, Professional Philanthropists are high-earning executives and business owners who have reached the pinnacle of their careers or recently sold their business interests. Collectively, they are almost exclusively self-made millionaires, who have been extremely successful professionally.
Professional Philanthropists are large donors and will look to support causes both through sizeable one-off donations, as well as by providing their business and commercial experience to their preferred charities. Given their professional background and large contributions, they are more demanding of charities, wanting to see the impact of their donations. They want to know exactly how their money will be spent and encourage charities to be open in terms of the success that their work is achieving.
They tend to donate to education (most often universities) where they hope to give others the opportunities that they never had, as well as to religious causes, supporting their local churches and the broader fundraising activities of their faith. This group is less likely to support global or environmental causes.
About the Report
The white paper Philanthropology: The Evolution of Giving was authored by Ledbury Research on behalf of Barclays Wealth, to understand in more detail the different philanthropic motivations and personalities behind the complex wealthy populations in the U.S. and U.K. Click here for more information.CALL FOR FEEDBACK: What do you think, is this type of information helpful to you as a fundraiser in better connecting with donors? Does it change the way you fundraise when you find out the motivations of groups of donors? Let us know by emailing your thoughts to firstname.lastname@example.org. Please use the subject line "Donor Types".
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