Nearly 30 years ago, the executive director of Private Wealth and one of my long-time collaborators, Russ Alan Prince, published a book that would become a seminal resource for cultivating major donors: The Seven Faces of Philanthropy. At the time, there was very little structured research or psychographic segmentation on the wealthiest and most influential donors. Most studies focused on smaller givers, such as those who contribute to United Way campaigns, or delivered qualitative insights on larger donors that stemmed from conversations.
With quantitative analysis and benefit segmentation, the framework of philanthropic personalities shared in Prince’s book helped development professionals quickly understand the primary reasons that philanthropists give, so they could assess whether their organization was the right fit and tailor their outreach and communications for maximum engagement. The framework was widely adopted in the 1990s and is the genesis of today’s sophisticated donor management strategies.
While this type of cluster analysis has been extraordinarily useful to nonprofits, I believe it may also be instructional to donors themselves – helping them zero in on the root of their personal motivations so they can crystallize their strategies, adopt the most effective giving techniques and identify the right grantee partners. Below is a summary of the seven segments of major donors that was introduced by Prince and his co-author, Karen Maru File, in 1994.
#1: The Communitarian
The largest segment of donors at 26.3%, Communitarians tend to focus their charitable efforts on the local area, often with the twin goals of helping their communities prosper and building business relationships so the two activities can reinforce one another.
#2: The Devout
The second largest segment at 20.9%, Devout are primarily motivated to give for religious reasons and virtually all their gifts go to religious institutions.
#3: The Investor
These individuals represent 15.3% of all donors and place an emphasis on giving in a way that allows them to simultaneously achieve their tax, estate planning and philanthropic interests.
#4: The Socialite
These donors use their social networks to determine which non-profits to support and usually focus their efforts on building awareness and raising funds rather than day-to-day operations or field work. Socialites represent 10.8% of all donors and tend to focus on arts, education and religious causes.
#5: The Repayer
Individuals in this segment were typically beneficiaries before they became donors. Most have personal experiences they can point to, such as an illness in the family or being the recipient of a fellowship, that lead them to support causes and organizations out of a sense of loyalty or obligation. Repayers represent 10.2% of all donors and they frequently concentrate their philanthropy on medical causes and academic institutions.
#6: The Altruist
These donors give because they believe it is a moral imperative and because it helps them grow as human beings or evolve spiritually. At 9% of all donors, they often make decisions without the input of advisors and are not usually interested in taking active roles in the nonprofits they support. A greater proportion of Altruists than other segments focus on social causes.
#7: The Dynast
While Dynasts have been significant philanthropists throughout history, at the time of the study they were the smallest segment at just 8.3% of donors. They are unique in that they often have inherited wealth and were raised in an environment that socialized giving, often within a family that emphasized philanthropy and set an expectation for all family members to support nonprofits. Younger Dynasts may choose to support different causes than their parents and grandparents.
While many of these philanthropic personalities and motivations are still visible in today’s charitable giving landscape, much has changed in the past 30 years that could impact the size and dominance of these segments – and how to think about them – moving forward.
As the global high-net-worth population has continued to expand, the tools, technology and constructs that help preserve, grow and deploy significant assets – such as wealth management services, family offices and private foundations – have become more accessible meaning more wealthy philanthropists will make their gifts in a tax-advantaged way, like the Investor segment.
According to a 2021 Pew Research Center poll, about 29% of Americans are unaffiliated with a religion, up from just 16% in 2007. Such a trend may eventually have an impact on mainstream philanthropic motivations and the number of charitable gifts that go to religious institutions.
With the sharp increase in wealth creation and the number of billionaires in recent decades, there is likely to be an emergence of a New Dynast – someone who is motivated to create a legacy for themselves and their family, following in the footsteps of the Original Dynasts without having the family history on which to build.
The rising generations in philanthropy are digital natives who inherently tap into today’s tech and social platforms to champion the causes they care about. According to sparks & honey’s report, Gen Z is “rethinking foundational elements of day-to-day life, from building decentralized networks of emotional support to advocating for greater responsibility from brands to questioning the role they want work, money and relationships to play in their lives.” Their involvement and motivations will shape the future of philanthropy and potentially lead to the emergence of a new segment.
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