Our instincts would tell us that million dollar gifts surely can’t be given as frequently as they were before the market and economy setbacks. But responsible research isn’t based on instincts. Patrick Rooney, who heads the The Center on Philanthropy at Indiana University—an organization to which I have endowed a chair, serve on the Board, and am told I am one of the largest individual donors—stated recently, “…wealthy donors appear to be thinking very carefully about how much to give and when in this economy.” It is troubling that a revered institution like the Center on Philanthropy at IU states this as truth because of the lack of valid research they have done to make such a statement. Rooney’s basis for this statement is a list of Million Dollar Gifts developed many decades ago by my friend and mentor Art Franztreb, and later by me. This was given to the Center on Philanthropy several years ago by Art and me after Art’s company was acquired by Hartsook Companies, Inc. in the late 90’s. I know firsthand the purpose of this list. It was never intended to give a quarter-by-quarter review of current giving; rather, it provides a quarter-by-quarter view of reported million dollar gifts. Generally that distinction doesn’t matter, but it is huge if you are reporting donor attitude during a specific period of time. Ever give a million dollar gift or get a million dollar gift for your institution? I have done both. And I can tell you that the reporting of the gift was never (that may be too strong a word and though I can’t think of an exception in my 38 years of fundraising, let’s say “seldom”) reported to the news media immediately after the gift was given. My own gift to the Center was agreed to in March, 2006 and wasn’t reported in the Wall Street Journal until October 13, 2006—more than two full quarters later. The Center would say there was a new gift in the fourth quarter of 2006 when in fact it occurred in the first quarter of 2006. To ascribe the economy as a motivation for not giving in the third and fourth quarters of 2008 based on this list is just dead WRONG. It is accurate to say the reporting of those gifts publicly went down in the third and fourth quarter of 2008, but that brings me to my second point. Who reports million dollar gifts to the media? Primarily higher education, some major health care organizations, a few arts groups and gifts made to fund foundations in the donor’s name. How many gifts to the Salvation Army are on that list? How many to the Red Cross? How many to Boys and Girls Clubs? Young Audiences? Local food banks? I’ve made my point. Those million dollar gifts not being reported far outweigh those reported. While the Center adds this disclaimer in the official list, it is never picked up by the media. And it is certainly not understood by organizations seeking million dollar gifts. In addition, much has been made of how gifts given during this period are not being reported because of how those donors might be perceived in this economy. This self conscious behavior is not imagined. It is very real in my company’s practice with our clients. But it doesn’t mean million dollar gifts are not being made. The fact is, this report is not a reasonable or valid tool for measuring million dollar gifts on a quarterly basis. On my authority as one of the people who developed it and gave it to the Center, I will tell you—it was never intended to. So you all know, I have voiced this objection to the Center and asked them not to report on contemporary million dollar gift activity based on this list. We might think this is innocent; after all, we all know million dollar gifts must be down this year, right? Let me tell you the consequences of erroneous public statements from an institution with a trusted perspective. The Center publishes the Giving USA report which tells us how much was raised in a year (a good report). I bet you that one influence for estimating what happened to giving in 2009 and 2008 will be this report from the Center. Fundraisers and board members are being told, “Don’t try for million dollar gifts. The Center on Philanthropy has said you aren’t going to get them anyway!” It will be repeated in conferences, board rooms and the media enough times it will become fact. I enjoy my role on the Board of the Center, I use and apply much of the research that is generated by them and others. But I have also learned what bad research is, and this is a great example. The Center does a great job of reporting well designed and implemented research. However, their use of this kind of inaccurate measurement diminishes public trust in the Center’s research integrity.Go out and get those million dollar gifts. They are still being given away. And when looking the reporting of research, always question the source.
Hartsook President and CEO Matthew J. Beem Earns Ph.D.
Beem family: Joe, Matt, Kate,
Tom (not pictured, Maggie)
(Kansas City) Matt Beem recently earned a doctor of philosophy in organizational behavior and higher education administration from the University of Missouri – Kansas City. He defended his dissertation, Performance-Based Fundraiser Compensation: An Analysis of Preference, Prevalence and Effect, in December 2018.
Beem examined the preference for and prevalence of performance-based compensation and the relationship between it and productivity within the sample population of professional fundraisers. He reviewed the history of fundraiser compensation and prevalence of incentive pay in the nonprofit sector and among professional fundraisers, including its correlation to performance.
The Fundraiser Compensation Survey, an original study, was emailed by the Mid-America Chapter of Fundraising Professionals to more than 3,000 individuals. Findings revealed respondents’ dissatisfaction with the relationship between goal attainment, performance and compensation in their jobs. The study also found significant compensation differences based on respondents’ gender and ethnicity – findings different from research discussed in the literature review.
Beem’s dissertation adds important knowledge about the prevalence of and desire for performance-based compensation within the sample population. It also sheds light on the effect performance-based compensation has on the amount of money fundraisers raise.
Hartsook continues to be available to support nonprofit organizations in compensation plan design for its fundraisers, executive directors, CEOs and other senior leaders.