Alienate Your Major Donor and You'll Lose Money

The CEO sought advice from her board members and business advisors on a critical organizational decision she needed to make, got the advice then promptly ignored it and did what she wanted.

This always amazes me. And it happens way to often. These kinds of power hungry, arrogant leaders of nonprofits are so self-focused that they just cannot receive advice and counsel from those around them. These kinds of people should not be in leadership positions. Sadly, though, many are. And they are hurting the organizations they are charged to care about and steward.

Their damage to the organization and the donor is bad enough on its own. Little do they know, they are also hurting the organization financially in a big way. Here’s how:

More and more high net-worth, high-capacity donors, in addition to giving, want to be involved in providing management and technical advice to the organizations that represent the causes they love. It is a trend of the up and coming younger donors.

In a Bank of America study titled “2016 U.S. Trust Study of High Net Worth Philanthropy,” one data point showed that although the most common volunteer activity is serving on a board, over 40 percent of these good donors wanted to be involved to a greater degree by providing technical services. And here’s the kicker: Those that were allowed to do this gave twice as much per year—on average $78,000 vs. $39,000!

This is so interesting to me. Here’s the CEO feigning interest in the opinions of her board and business advisors, then, upon securing that advice, got puffed up and enamored with her own wisdom on the subject and, not only alienating her advisors, but walking away from a ton of money! This is absolutely crazy.

Now, you might argue that these advisors are not going to immediately decide not to give and you may be right. But just give it a little time, and decision after decision that is managed this way will wear these good donors down to a point that they move on.

I was in a meeting recently with the top leader of a southeastern nonprofit, and one of his board members who was also a very good donor and an important influencer/connector to opinion leaders and donors related to this leader’s nonprofit. I sat there and watched as this leader carefully and expertly minimized the board member and his opinions and then, almost with a sweep of the hand, told the man that while he valued his opinions (uh-huh) “we are going to head down this other direction.”

It was smoothly done, but not lost on this donor. He got the message. And it slightly turned him. I could tell. It turned him away from the nonprofit he so dearly loved.

This is so sad… and so unnecessary.

The reason I am writing about this topic is to (a) make you aware of it if you aren’t already and (b) ask you to help be part of a growing group of professional fundraisers who bring this topic up in the public forums of your nonprofit, as well as the fundraising circles you run in.

Jeff and I believe that as more of us talk about honoring those donors who want to be more involved and the consequences of not honoring them, it will raise awareness on this important topic and, hopefully, start to curtail this damaging behavior.

And the result will be happier and more fulfilled donors who stay with you longer and give more. You can’t beat that!