How to Become a Philanthropist (w/o Going Broke)

Your ideal prospects are people with assets.  Philanthropists give money away.  So far, so good.  The object is to become part of this crowd.  It’s not as difficult as you think.

The logical place to meet these generous HNW individuals is through community organizations, specifically nonprofits.  They come in all shapes and sizes.  The larger ones have a professional fundraising staff, often called the Office of Advancement or the Development Department.  Museums, hospitals and colleges are good local examples.

You have a major advantage.  There’s a general assumption everyone in the financial services industry is either wealthy now or will be shortly.  You probably agree because it was a major motivator getting you to join this industry.  Once you join, they will likely seek you out.

Three Ground Rules

You don’t want to come across as predatory or simply fishing for business.  That isn’t you.  Also, it creates a negative first impression that’s difficult to overcome.   Others came before you, behaved badly and created that stereotype.

Here are three rules you must follow:

  1. Join organizations where you have an interest.  Expertise isn’t required.  Few people joining art museums are art historians.  Passion isn’t required either.  Having a sincere interest or a genuine desire to learn is enough.
  2. Open your wallet.  As a budding philanthropist, you will be giving money in support of the cause.  The amounts can start off small.
  3. Your word is your bond.  Support is often done through pledging or making an advance commitment to attend an event.  Be among the first to send your check in.  The development staff has experience with people who make a commitment to seek credit and recognition, yet need to be chased down when it’s time to collect.

How Becoming a Philanthropist Works

The organization has financial needs.  The development staff sees you as a pathway to reaching their goals.

  1. Choose the right organizations.  You have many interests.  You see many good causes.  You can give to several, but there will be one or two where you see a real possibility of networking with other wealthy donors.
  2. Join at the right level.  Large local nonprofits like museums have tiers of membership.  The higher the tier, the more exclusive the events you are invited to attend.  These are usually free, as a perk of membership.
  3. Attend all those events.  You will see the same faces.  You will see new ones.  Tactfully work the crowd.  Ideally your spouse or partner will also be allowed to attend.
  4. Invite people to lunch.  You will hit it off with some higher level donors.  You share interests in common.  Get contact information, suggest drinks or a meal.  You are building relationships.  No one is treating.  Each person pays their share of the bill.
  5. Attend the gala.  It’s like a trade show.  It’s also another opportunity to rub shoulders with the people you’ve met at those events for higher tier donors.
  6. Preparties and afterparties.  As you become accepted as part of the group, people you’ve met will start to extend invitations for small before and after gatherings.  You might initiate once yourself after a couple of years have gone by.
  7. Donate to the auctions.  You might be a bidder, but you might be someone who donates an item for the live or silent auction.  Week long stays at a vacation house often make it into the live auction.  A bottle of hard to find California wine should get into the silent auction.  Your name will be listed in the program.
  8. Let them trade you up.  The development staff will approach you to renew your annual membership.  You want to stay in place or move forwards, never backwards.  Moving upwards becomes more expensive, but usually gets you into more exclusive events.
  9. Matching funds.  You might be able to defray the cost of your annual membership through your firm’s matching gift program.  This is done discretely with the staff.  Your $ 1,000 annual membership fee might be $ 500 paid by your check and another $500 from your firm, once the organization processes the completed form you handed them.
  10. The firm’s foundation.  The organization will wonder if they can get serious sponsorship from your firm.  There’s likely a foundation in the background.  You can do some research, see a list of the organizations where they’ve made major donations, the criteria and the steps for applying.  The organization’s development department has grant writers.  They know how to go through this process.  Your name will be prominently featured in the application.  Companies prefer supporting organizations where their employees are involved.

You are on your way to becoming a local philanthropist.  It costs money, but perhaps not as much as you thought!

Related: 8 Red Flags That Come Up During Portfolio Reviews