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A study of gifts of $1 million or more reveals that donors of “self-made” wealth made the most gifts at that level and gave the most dollars, according to a study of the Million Dollar List™ released by the Center on Philanthropy at Indiana University.

The study of more than 4,840 gifts of $1 million or more from individuals to charitable organizations that were announced in the news media between January 2000 and September 2007 examines the gift amounts and causes the gifts supported, as well as characteristics of the donors.

Donors of “self-made” wealth (those identified as entrepreneurs, investors or developers) led other types of donors in both the number of gifts made (33 percent) and total dollars given (42 percent) during the time period studied. These donors were more likely to give to foundations than any other cause and more likely than other types of donors to give to foundations. Many donors in this group were also more likely to give to environment, human services, religion and international aid organizations than other types of donors.

“Donors with ‘self-made’ wealth often have business experience and expectations about how organizations use and manage their gifts, and give to types of organizations that typically receive fewer numbers of million-dollar and up gifts,” said William B. Hanrahan, chief executive officer of CCS. “Those nonprofits need to consider donors as partners or investors – not just as funders – and should take that opportunity to engage and involve them accordingly.”

Overall, gifts to foundations accounted for only about two percent of the total number of gifts given, but those gifts accounted for 45 percent of the total dollars given. The median gift to a foundation was just over $37 million. In contrast, the study shows that higher education accounted for nearly 70 percent of the number of gifts given, but received 29 percent of the total dollars. However, higher education received more than two out of every three dollars given when looking only at gifts between $1 million and $50 million.

The study also reveals that million-dollar and up gifts typically are given in response to a request for a specific purpose, whether it be a capital campaign, endowing an activity within the institution or creating a new program or project. All types of nonprofit organizations (healthcare, education, arts, etc.) raised gifts of $1 million or more for those expressed purposes and others, such as for capital expenditures, operating expenses and unrestricted donations.

“This study shows that a variety of charities can present successful cases for support that generate gifts of $1 million or more,” said Hanrahan. “Success lies in nonprofits’ ability to instill confidence that donors’ gifts are secure and that they bring about the desired impact.”

Other key findings of the Million Dollar ListTM study include:

Over the years studied, the median gift was lower for public or K-12 education ($2.3 million) and for human services ($1.3 million), compared with the overall median of $2.8 million and gifts for other purposes.
The median gift amount was virtually the same, whether the donor was a single man, a couple, a single woman or a family.

“This study illuminates important dynamics in the nonprofit sector,” said Patrick M. Rooney, interim executive director for the Center on Philanthropy. “New analysis of these large gifts gives organizations and donors key information that will help to guide planning, benchmarking, and programming. The results have implications for both donors and recipients.”

The median gift amount of gifts at this level did not change between 2000 and early 2007 (after adjusting for inflation), staying at about $2.8 million. In each of the past eight years, half of the gifts on the Million Dollar List™ have been between $1 million and $3 million.

“One very important aspect of working with a prospective million-dollar donor is helping that donor to think big,” said Hanrahan. “This research shows that the median million-dollar gift amount made by all donors hasn’t changed in nearly a decade. Nonprofits can use this information when talking with donors to emphasize the significance of gifts over $3 million - not only in funding a mission, but also setting a new philanthropic expectation - and raising awareness about the impact of multi-million-dollar gifts.”

CCS, a fundraising, development services and nonprofit consulting firm, funded the analysis through the Center’s William B. Hanrahan CCS Fellowship. To read more about the findings of this study of the Million Dollar List™ conducted by the Center on Philanthropy and sponsored by CCS, visit www.ccsfundraising.com/About-Philanthropy/Research

This article is from NPT Instant Fundraising, a publication of The NonProfit Times.