In Search of Alpha Donors
Recently I was visiting with a few other nonprofit execs and we all realized we had become frustrated with the limited options available in Alaska to fund worthy projects. Since the recession, funding from corporations and foundations has significantly declined. Also, headlines foreshadow that funding for the Denali Commission could be in jeopardy. However, the most significant funding options we’ve lost probably are federal earmarks and those large state grants for capital projects. In my opinion, with so many options reduced one that was present in Alaska years ago now needs to be brought back to life.
Ten years ago few Alaska nonprofits practiced what would be considered fund development. Government, foundation and corporate support were so prevalent, little need existed to ask individuals to give. If a nonprofit asked for donations, it was most likely at an event. While events are acceptable as an entry strategy for raising money, they are not the best approach to build sustainable revenue or to fund a large project. Today savvy organizations ask individuals to give in a better way, based on the donor’s commitment to their mission. This has resulted in a rapid growth in philanthropic infrastructure, such as community foundations, which give committed donors a way to make legacy gifts. Many organizations now have a true “Development Director” building their internal capacity to nurture relationships with committed donors. We have come a long way – but we still have much to do to encourage individual giving.
Around the country, individual giving makes up about 20% of all charitable organization income. In Alaska, it’s only about 5%. Institutional donors like foundations and corporations now review individual giving to an organization before deciding about their own support. This is why our largest private donor, the Rasmuson Foundation, intentionally developed their guidelines on board giving. While many foundations review board giving and other local support before making their funding decisions, few are as transparent as Rasmuson. Their goal is to encourage others to give before they invest. They want to see “first donors.”
You may be familiar with the concept of an “alpha female/male” where the most dominant personality in a group asserts itself as the leader. Leadership theories promote that anyone can be a leader, or alpha, given the right situation – and everyone will follow the right leader. Leaders play an important role. They set boundaries, establish vision, and inspire hope. They also, through their leadership, help those they lead feel safe.
In philanthropy, I suggest “alphas” also exist in the form of “alpha donors.” In the past, Alaskans allowed the alpha donors to be corporations, government and foundations. They led, and we gladly followed. However, as I mentioned in last month’s article, The New Reality, times have changed. New alpha donors must assert themselves. They need to assume leadership so the rest of us can feel safe and have someone to follow, especially during these tough times.
And who are these new alpha donors who have the power and ability to fund our dreams? They are the same ones who built Alaska before corporations, foundations and the government – they are us, the people of Alaska. We need to identify those among us who will invest their hard earned dollars for the greater good. We must encourage them to understand that they too can inspire increased philanthropy. They too could be the lead donors for a project they care deeply about.
Traditional fundraising logic holds that while some donors are willing to give the first gift, most want to know that others have given first. It helps them feel “safe.” In Alaska, we need more first donors. We have a few. We hope to inspire a few more to join their rank, and then our sector will have made a giant step toward sustainability.
I want to share examples of Alaska’s lead donors – some you’ll recognize, others may surprise you.
Obviously, Elmer Rasmuson and his mother Jenny are the first that come to mind. Their foundation is our most recognized example of an Alaska alpha donor. I continue to hear people refer to the leadership of the Rasmuson family as the reason for their increased personal giving. However, focusing this discussion on the more affluent misses the fact that one does not have to be rich to be an alpha donor. Philanthropic leaders come from all economic strata, all ages, all races, culture and religions. Let me share a story.
Many years ago I was asked to accompany the Alaska Mental Health Trust Authority on site visits to rural villages. One of those villages had recently experienced a frightening number of youth suicide attempts. The entire village was traumatized. When our delegation arrived, we met with city officials, tribal leaders, teachers and elders – their plea was the same. “We need funding for a teen center so our youth have something positive to do.” They had a compelling case and, of course, the delegation was empathetic to the need. However, among ourselves we wondered what the community leaders had done. Why were they just asking us to help when they may have had the capacity to start helping themselves? The answer – they needed an “alpha donor.”
Later that day, I met with young leaders from the high school. Their request was the same – they wanted a teen center. But without prompting, they described how they had started to babysit, clean houses and yards, wash trucks and sell cookies – raising $430 to help open a center! They were the alpha donors – and they inspired others to follow, including me. I was able to take their lead gift, this seed money, and within a week secured another $100,000! They opened that center. The need for it was never in question. However, the example set by these young people – their leadership and unwillingness to wait for someone else to solve the problem – inspired the change. While this community continues to have issues, as do many others, it has not experienced another suicide epidemic. The philanthropic leadership of these young people helped improve their community. That is the concept we promote – first steps by many more Alaskans, and they don’t have to be just our rich neighbors.
Another personal story started with one of our volunteers during the time I was executive director at United Way – Vic Mollozzi. Vic and his wife Vicki Williams became inspired to give back to the community that had done so much for them. First they made planned gifts to the United Way and other causes they supported. Then in the next year, they joined the Alexis de Tocqueville Society, United Way’s major giving association.
Before Vic and Vicki’s involvement, the local Tocqueville Society had grown from three members in 1993 to over 30 members in 1998. It was soon after they joined that they became the alpha donors and took United Way’s major giving to a new level. First Vic volunteered with the major gifts committee and then chaired that effort for several years. By 2001, Anchorage had more than doubled its donors who were giving $10,000 a year! Soon after, that number exceeded 100 families giving over $1,000,000 to serve the community. At that point Anchorage had the most Tocqueville donors per capita in the entire country. First Vic and Vicki gave at that level, then they inspired and asked others to give, and then the inevitable result occurred – people followed. While for years they had been involved as volunteers and donors, no one, including them, thought they would evolve into the influential leaders who were compelled to increase major giving in Alaska. They were inspired to lead and are largely responsible for that success.
The last story I want to share is about another major donor – in this case he saw a need and gave. Then he saw another need and gave more! That donor was Dennis Wise, a hometown boy from Fairbanks. He owned a successful plumbing firm, and then moved into real estate development. Like Vic and Vicki, he also shared his abundance with the community he loves. He had a strong compassion for the less fortunate, so he decided to do something to help them. He built a new Fairbanks Community Food Bank on a piece of his own land. A few years later on a nearby plot, he built the Fairbanks Rescue Mission. And a few years after that, just across from the food bank, he built a domestic violence shelter, the Interior Center for Nonviolent Living. He also has been involved in many other local projects, which include a significant donation to remodel the city’s old fire station into a dance school. No one had to help Dennis raise money. No one visited Washington DC. No one asked the oil industry. An Alaskan just saw a need, waited for no one, and gave. Dennis’s acts of generosity became the inspiration for others in the community – he led the way.
Of course, Dennis’s story was possible because he had the ability as well as the desire to do it himself. Vic and Vicki also had capacity, but understood their leadership was needed to encourage others to give – thus building the capacity of our communities to become more philanthropic. While Dennis, Vic and Vicki were leaders, they would have become followers had they heard the story of the youth from that village and their leadership.
That takes me back to my conversation with those nonprofit execs. The option they did not even consider was that they may have a Dennis Wise in their community – that one individual who sees a need and just does what’s required. Or maybe there is a grassroots group of alphas like those kids in the village that had the tenacity to get a job done and inspired others to donate.
Giving can be contagious, but this infection is a good thing. When one of us catches the “giving bug,” we can spread it. When enough Alaskans catch the bug, we can become less dependent on others to do for us what we can and should do for ourselves. Just last month at another organization’s board meeting, I witnessed the birth of a new alpha donor. He’s young, not at all wealthy, but has abundant commitment to the community and issues he holds dear. It’s too early to see how that leader’s example will inspire, but I am sure it will.
When I moved to Alaska in 1992, I met with many who were here before statehood, before Prudhoe Bay, before a powerful delegation in Washington. I asked them what Alaska’s philanthropy was like back then – how did communities support themselves? What I learned inspired and has stayed with me. They described a place were there was little cash, but there was so much commitment that that they were able to found and maintain museums, symphonies, theatres, universities, and youth activities. What was more impressive was the pride in their voices as they reflected on what they had done before big oil or federal earmarks – pride that they could manifest all of that great work on their own.
Like all lessons from history, we learned that this state has a rich legacy of philanthropy. Our new reality is that old reality. Our predecessors knew if they wanted to make something happen, they looked to themselves and each other – and just did it. They did not look to corporations, or foundations, or Washington – they were the first donors. Do you have alpha donors in your organization? Are you the next one?