I’ve spent thirty years meeting with donors from each non-profit institution I serve as a charitable estate planning consultant. Setting up estate plans that contain advanced structures and procedures is the easy part — almost incidental to the process. The most important thing I do is sit, drink coffee, and listen carefully. My most important objective is to simply understand their desires and their hopes, their fears and their frustrations. Over time I have come to realize some interesting things about people and their need to give.
Insight #1: The first insight is the most important because it is a key (or an obstacle) to understanding all the others — that non-profit executives cannot project their own sense of personal need and generosity upon the organization’s wealthy benefactors. Unless fundraisers are cut from that same piece of rare cloth, the perceptions and felt-needs of high-affluent donors are probably very different than those of non-profit executives.
Insight #2: How donors manage the tension between personal needs and the need to give is far more important than their assets or discretionary income.
Insight #3: Though there is a lot of commonality among high net worth individuals, each one is different.
Insight #4: The more affluent the donor and/or the greater their giving capacity, the less likely they are to discuss the deeply felt needs that motivate or hinder their decision to give.
Insight #5: To be successful, you have to stop talking and listen carefully.
THE PSYCHOLOGY OF PERSONAL NEEDS
Whenever the topic of basic human need is addressed, eventually the conversation gets around to psychologist Abraham Maslov (1905-1970). Maslov, a Russian Jewish immigrant, first published his theory on the hierarchy of human needs in a 1943 paper entitled The Theory of Human Motivation. In short, he identified five ascending levels of basic human needs.
1) Physiological Needs such as oxygen, water, food, and sleep.
2) Safety and Security Needs that include a safe, stable environment; protection; job, and retirement security.
3) The Need to Belong, which ranges from being loved to being a part of a group.
4) The Need for Esteem. In its lower form, esteem includes respect from others, status, fame, recognition, etc. In its higher form, esteem means self-respect, confidence, and personal achievement.
5) The Need for Self-Actualization is the need for meaningful accomplishment at one’s fullest potential.
Maslov noticed that these needs were generally fulfilled sequentially. In other words, you quickly forget about food if you can’t breathe. Self-esteem is not a pressing concern if you are starving, and so on. Thus the term “hierarchy of needs.” Certainly, one can achieve belonging, esteem, and meaningful accomplishment without being completely safe or supplied physically. However, the general tendency is that the most basic need is the most pressing need.
The Need to Have and the Need to Give
A sense of charity, generosity, and empathy for others is always in tension with (sometimes at war with) our perception of personal need. Consequently, understanding basic needs as they uniquely apply to wealthy donors can be a first step to understanding their motivation to give — or not to give. The first question donors ask themselves when it comes to making a major gift is how much will be required for their own physical needs, as well as for their own safety and security (i.e., Maslov levels one and two).
Talk to enough people about major gifts and you realize that how much is enough is not always a simple question. Sometimes, the need for safety and security is defined more emotionally than financially. In the most extreme cases, individuals worth fortunes cannot bring themselves to make even the smallest gift. Often it is not that they are unkind or uncaring as some might suppose; but that they simply possess a personal need for security that dominates their thinking. Those concerns might seem irrational to others, but to them the need is very real.
Talk to enough people about major gifts and you realize that how much is enough is not always a simple question.
About twenty years ago I worked with a dear lady who was raised in small mining community in a remote area of the West Virginia. She was considering a charitable estate plan that would increase her current income, generously provide for her son, and greatly reduce her heirs’ estate tax liabilities. At the same time, it would change the future of a charity she really loved. One day I asked her how much she needed to live on for the rest of her life.
“Well, how much do I have?” she asked.
“You have in excess of $14,200,000.”
She slapped her knee and said, “I need it all!”
I replied, “Miss Betty (as everyone called her), you’re ninety-two years old. If you leave all that money in your estate, the federal and state government will get over half of it in taxes.”
Miss Betty, who had no fond affections for taxes or the Internal Revenue Service, didn’t like the idea of paying all that tax. Nonetheless, she still hesitated.
“But Eddie,” she said, “I might have to go to the nursing home.”
I explained that she had enough to buy that nursing home and still have $10 million left over.
She laughed and said, “Well then, I guess I don’t need to keep clipping those coupons.”
Miss Betty stopped clipping coupon but kept the $14,200,000 in her estate — just in case. Shortly after that meeting, she died. Half the money went to taxes. Most of the rest was consumed by legal fees as her family fought over the money. Nothing went to charity.
The unfortunate part of such an extreme situation is not the donations that could have been used to support some cause. If it is a truly worthy cause, others will step forward to help. The unfortunate part is that these individuals miss opportunities to be generous to people they love and to give to causes they believe in, as well as being generous to themselves.
Belonging, Esteem, and Giving
You may have noticed that the most generous and joyful givers are people who have moved on up to another level with regard to fulfilling personal needs. They have achieved enough success (emotionally and financially) that they don’t have to worry as much about their own security. Belonging and esteem (Maslov’s levels three and four) are based more on relationships and their own accomplishments rather than on memberships or conspicuous consumption. More importantly, they put a higher value on relationships with people and organizations that are helping them extend their own values. This is often the driving force underlying their involvement and charitable giving. For them the most important esteem comes from God, self, friends, and family.
Let’s be honest; not all wealthy individuals have high philanthropic intentions, even those with impressive giving resumes. People make relatively painless donations for lots of reasons. Western world materialism has such an extraordinary influence, in part because money and possessions have become the means of fulfilling many of the basic emotional needs, particularly for those whose only peers are also the high affluent. When money and possessions becomes a means of keeping score with others or simply a measurement of personal accomplishment, the question of how much is enough is irrelevant. There is never enough.
Giving and Self-Actualization
At the top of Maslov’s hierarchy of needs is the need for what he called self-actualization. The term generally refers to the need to accomplish something meaningful that would represent the full potential of one’s abilities and resources. This is a driving force behind a lot of non-profit involvement, major gifts, and charitable planning. Donors with a lifetime of accumulated business experience are sometimes frustrated with non-profit executives who merely tolerate their advice in order to get their money. Donors are quick to recognize this, especially those feeling the need to maximize the sum of their resources (experience, networks, and money) to impact the world. For them, that would be self-actualization on behalf of a cause.
Those needs to give are for many of the wealthy as practical and tangible as food and water, and shelter are to a person whose primary unmet needs are physiological.
People at every station in life think about meaning and purpose to some degree. But for those who have pretty much solidified the basic needs for security, belonging, and esteem; meaning, purpose, and legacy become a singular focus. They are long past the idea of trying to achieve these personal goals by simply accumulating material possessions. Many at this place in life talk about the purpose of wealth, about their calling to philanthropy, about stewardship and accountability to God who owns it all. Those ideas and those needs are for many of the wealthy as practical and tangible as food and water, and shelter are to a person whose primary unmet needs are physiological — a psychological and spiritual felt-need that is hard for the average person to understand. They view charitable giving as more than simply helping out those “service types” with their good causes. They are as mission-oriented as the people and organizations they support — if not more. This intense cause-determination is why some donors at this level become frustrated, bored, or impatient with non-profit executives — especially if those donors consider the non-profits (rightly or wrongly) to be dragging their feet.
Their Story; Your Story
After many years and thousands of donor visits, I have come to realize that the donor’s story is as important as the organizational story. Many times, it is more important. Occasionally, it is far more important. How different this is from an approach that assumes the organization’s mission to be so important and its message to be so compelling that it is the sole determining factor in a donor’s giving decision!
The donor’s story is as important as the organizational story. Many times, it is more important.
There is a balance between trying to get donors to understand the organizational story and trying to understand their story. How quickly fund-raisers can recognize and respond to that balance becomes the defining characteristic of their approach to donor relations.
As I said at the beginning, how donors manage the tension between personal needs and the need to give is a far more important factor than their assets or discretionary income.
Consequently, the most effective appeals for donations or personal involvement are wrapped around an awareness of that particular donor’s needs. As a charitable estate planning consultant, I listen to donors’ stories with great interest, looking for ways I can help solve those personal needs and, at the same time, how I can facilitate their need and desire to give. The results have been extraordinary for both donors and the charities.
Eddie Thompson, Ed.D. and Walt Walker