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by Robert Sharpe
Numerous recent reports in
both the popular and industry
presses have called attention
to the rapid growth of both the
number and dollar amount of anonymous
and private giving to America’s
nonprofits.1 In one of the more noteworthy
instances, an anonymous
donor or group of donors recently
gave a total of nearly $70 million to
more than a dozen colleges on the
condition that the identity of the
donor or donors remain unknown and
that the recipients make no attempt
to discover the source of the gifts.
There is apparently nothing new
about periods of increased interest
in anonymous giving. Similar
trends were reported in the press as
early as 1913.2 A number of possible
explanations exist for the current
growing trend in this type of giving.
Understanding the various possible
motivations behind both anonymous
and private giving can help those
responsible for fund development
accommodate what appears to be an
increasingly important segment of
donors.
First, it is important to distinguish
between truly anonymous
giving and behavior we instead refer
to as private giving. Anonymous giving
is precisely that—a donor makes
a gift and desires that the recipient and all others except a confidential
agent remain unaware
of his or her identity. Private
giving, however, refers to
a donor whose identity is
revealed to the charitable
recipient but not to anyone
outside the charitable organization
or institution through
traditional donor recognition
methods and/or press reports.
In some cases, only a limited
number of top management and/or
volunteers within the recipient nonprofit
are allowed to know about the
gift.
Privacy, please
Let’s take a closer look at
anonymous gifts. A number of very
different reasons underlie donors’
decisions to make gifts in this way. In
some cases, more than one of these
reasons may be working in concert to
motivate an anonymous gift.
1. Religion can play a part in the
desire for anonymity. Many religious
traditions teach that anonymous
giving is more spiritually rewarding
than gifts that are accompanied
by public acclaim. As early as the
twelfth century, for example, the
Jewish philosopher Maimonides
taught that anonymous giving
was among the highest forms of
philanthropy.
2. Others may be shy or naturally
humble and are not comfortable being in the limelight for any reason,
including the acceptance of
recognition for making a significant
charitable gift.
3. Some give anonymously because
they do not want to raise expectations
that they will make a similar
gift in the future. Such donors
may have received an inheritance
or other one-time economic windfall
and do not expect to regularly
repeat the gift. Remaining anonymous
serves to relieve this pressure.
4. Other donors may not want their
family or friends (perhaps including
a spouse) to know they are making
certain charitable gifts. Here, anonymity
may stem from a perceived
disapproval by others of the mission
of the charitable recipient or of the
giving behavior in general.
5. An often-mentioned reason for
anonymous giving, especially in lean
economic times, is the concern by donors that they will be identified as
a source of major philanthropic support
and will be deluged with appeals
from other entities. Board members
and volunteers who understand how
“donor research” is conducted may be
especially prone to this concern.
6. In still other cases, a donor may
have succeeded financially in an
environment in which many of his
or her peers suffered losses. This
donor may believe decorum and good
taste dictate that large gifts be made
anonymously.
7. In some instances, donors don’t
want their gifts to one organization
compared to their gifts to another.
After making relatively modest gifts
or reducing their gifts to some charitable
interests, donors may wish to
conceal larger gifts and/or a decision
to increase their giving to other
organizations.
8. A donor may be concerned that the
publicity surrounding a larger gift
could discourage others from giving
either out of concern that a smaller
gift compares unfavorably or perhaps
that the nonprofit’s needs have been
met.
9. In the case of schools and certain
other types of charitable recipients,
a donor may wish to remain anonymous
out of concern that a gift could
bring unwelcome attention to a child
or other loved one who is a student,
employee, or is otherwise associated
with the institution.
10. Donors involved in politics or
who otherwise lead public lives may
be sensitive to the controversy they
themselves may inspire and therefore
give anonymously to protect the
recipient from the possible backlash
of their own detractors.
11. Lastly, some donors might even
be concerned for the safety of their family, fearing that large, public gifts
could make them targets for kidnapping
or other criminal activity.
While the above list is not
exhaustive, it covers many of the
reasons donors choose to give anonymously.
Donors who permit their
identity to be known to a limited
group within the recipient organization
or institution, but not publicly,
often choose to give “privately” for
many of the same reasons.
How is it done?
Donors have many options when
it comes to giving anonymously. In
some cases they give through an
attorney, fiduciary institution, or
other agent who delivers a cashier’s
check or a check drawn on the third
party’s account. Donor-advised funds
made available through community
foundations, financial services providers,
and other sources can also
be an effective way for a donor to
give anonymously. When properly
structured, gifts can be completed
anonymously while still preserving
tax benefits to which the donor is
entitled.
In other cases donors may use
more sophisticated gift planning
vehicles either alone or in combination
to structure anonymous gifts.
For example, a donor may choose
to create a charitable lead trust
that eventually transfers funds to
heirs after first distributing income
directly to charities on an anonymous
basis or to a donor-advised fund
where the donor then anonymously
advises gifts.
Remember also that anonymous
giving need not necessarily involve
large sums. Change deposited in
a container on a store counter or
dropped in a receptacle at a drive-through
window and gifts added
when paying for purchases are other
examples. Donors who give in these ways not only receive no acknowledgment
of their gift from the
charitable recipient, but they also
forego any tax benefits as these gifts
lack documentation.
How to proceed
Gifts from anonymous donors
have been a welcome addition to the
income of many charities in recent
months, but such gifts are in many
respects bittersweet.
When gifts are completed anonymously,
the recipient obviously never
has the opportunity to thank the
donor or to fully understand what
motivated the gift and how others
might be similarly moved to give. It
is also not possible for the donor to
serve as an example for others. The
latter circumstance is unfortunately
a corollary of a number of the reasons
for the anonymous or private
gift in the first place.
In the case of an anonymous
gift, there is also no way to report
directly to the donor on how his or
her gift was used or take other steps
to properly steward a relationship.
It is of course possible to announce
anonymous gifts in press releases
and in that way acknowledge gratitude
and the intended use of a gift in
hopes the donor and others will take
note.
Steps can be taken in some
cases to help mitigate the downsides
of anonymous giving. For example,
when a gift is received from an
advised fund or through a third-party
intermediary, request that the
donor’s representative deliver an
expression of thanks. If appropriate,
extend an offer to maintain the
donor’s privacy if he or she would
like to become a “private” donor by
making his or her identity known
only to the charity. In some cases, a
donor may prefer to carry on most correspondence via e-mail rather
than in person or on the telephone.
In the case of a private donor,
take all steps necessary to respect
the donor’s wishes. Put procedures
in place to ensure relevant files and
other records are kept private and
are not available to unauthorized
persons. It may also make sense to
determine whether release of gift
information can be compelled through
a court order so the donor is aware of
that possibility, if it exists.
Also consider communicating
as part of your overall fund-raising
efforts that you understand and are
respectful of the desire for some to
give anonymously or with a lesser
degree of privacy. When promoting
giving societies that offer recognition
for gifts at various levels, consider
including language to the effect that,
if desired, donors can be listed in
those societies as “anonymous” while
still maintaining a behind-the-scenes
relationship with the charitable
recipient.
Many campaigns in recent years
have heavily emphasized naming
opportunities and other public recognition
for both current and deferred
gifts. While public recognition will
continue to motivate a key segment
of donors, when planning campaigns
it may be wise to consider the possible
impact of what appears to be
increased interest in anonymous and
private giving.
Recognizing bequests
When making plans to encourage
bequests and similar gifts that
take place as part of a donor’s overall
estate and financial planning, it is
important to realize that a greater
percentage of these donors may wish
to maintain anonymity than those
who make outright gifts. Keep in
mind the contents of one’s will and
other estate planning documents are
considered to be extremely private by many persons; others may wish
to maintain the flexibility to change
their plans if necessary in the future.
Organizations with the most
experience in planned gift development
know that for a variety of
reasons only a small percentage of
bequest donors, almost never more
than 25% to 30%, will ever notify a
charitable recipient of an intended
bequest. Ivy League institutions
with the most sophisticated planned
giving efforts in place for decades
report, for example, that they know
of only one-fourth to one-third of
bequests in advance. Even after
years of efforts to discover these
expectancies, it is not unusual for
some organizations to know about
less than 15% of estate gifts prior to
their receipt.
It is nevertheless important for
most organizations to have a well-conceived
and properly managed
bequest recognition society. Those
bequest donors who do tell you in
advance about an estate gift will
often be receptive to well-considered
and tasteful efforts to recognize
them. See page 2 to learn more about
how one institution incorporated
a legacy society as an important
component of its fund-development
efforts.
Tracking a planned giving program’s
success by the number of
bequest intentions discovered each
year is, therefore, likely to be inexact.
Different organizations will
experience widely varying degrees
of success in identifying bequests
in advance, even if they ultimately
receive similar numbers of bequests
over time. The nature of the mission,
how donors are acquired and
stewarded over time, and many other
factors affect the number of bequests
discovered in practice.
Bequest recognition society marketing
materials should allow for
anonymity if desired, just as in the case of current giving societies. The
core of marketing efforts should be
aimed at identifying those who fit
the age, giving history, and other
aspects of what experience reveals
to be the profile of an organization’s
typical bequest donor.
Over time the success of a
planned giving program should be
judged not simply by the number of
responses to mailings or the number
of bequest notifications and similar
measures of future intention. In
the final analysis, results should be
measured by the number of persons
who decide to raise a charity to the
level of a family member through
actual inclusion in the final estate
plan—whether or not they seek or
accept recognition for their gifts
during lifetime.
Anonymity in the world of
bequests has been around for a long
time. Anonymity and private giving
in the world of outright gifts
appears to be growing in popularity
in today’s environment and is likely
to be here to stay for a while.
1 See “Anonymous Giving Gains in Popularity as the Recession Deepens,”
Chronicle of Philanthropy, April 30, 2009
2 See “Anonymous Philanthropy Is Greatly Increasing,”
The New York Times, November 23, 1913
Portions of this article were excerpted from
Mr. Sharpe’s presentations in the popular
Sharpe seminar “Integrating Major and
Planned Gifts.”
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