Why Clients Decide to Donate Publicly or AnonymouslySubmitted by American Endowment Foundation on January 11th, 2021
Editor Note: This article is a complementary viewpoint to a past AEF Insights article on anonymous giving.
By Ken Nopar, VP-Senior Philanthropic Advisor
Over the past year, many clients have spoken with their advisors about the most appropriate ways to donate to charities that have been in great need of support. One of the questions advisors should ask is whether the clients want to be public with their giving or if they would prefer to make all or some of their grants anonymously. Knowing this information can help the advisors recommend how their clients should give since there are few options other than a donor advised fund (DAF) that can assure their anonymity.
Nearly all charities would prefer to know the identity of their donors so they can properly thank them, but they should understand the reasons behind their anonymous donors’ decisions. In general, anonymous donors don’t want to draw attention to themselves, while public donors want to be thanked and are happy to use their name and stature to encourage others to provide support. Though being able to donate anonymously is appealing to DAF donors, fewer than 5% of DAF grants are anonymous.
Some clients may be unsure about the advantages of donating publicly or anonymously and would welcome the input of their advisors. They may wish to consider the following:
Why Donors Give Publicly
- To openly demonstrate support for a cause and charity they believe in.
- To encourage others to give to the particular charity.
- To enable charities to demonstrate that they have many donors who are willing to be visible in their support, and that some are well-known in the community.
- To indicate to other donors that they have vetted and have confidence in the charity.
- To enable charities to more easily get additional donations as part of a matching challenge or a paddle-raise at an event.
- To lead by example and demonstrate to other friends, family members and colleagues that they, too, should be generous donors to their favorite charities.
- To help their children and heirs understand that philanthropy is important to the family, and that some of the family assets will be given to charity during lifetime and at death (and not all to them!)
- To allow them to demonstrate appreciation for the charity’s efforts to help others, and perhaps even themselves.
- To enable the donors to establish a relationship with the charity and perhaps with other like-minded donors, and to receive invitations to events they may not have been able to attend had they given anonymously.
- To ultimately determine that giving publicly has benefits to the charity and perhaps themselves, even after they had initially donated anonymously.
- To be thanked and appreciated by the charity, other supporters and beneficiaries of the charity’s work, and to receive recognition for the generous contribution.
- To help create their own charitable legacy.
Why Donors Give Anonymously
- So the charity they support does not solicit them for additional or larger donations.
- So other charities, especially those that do similar work, will not solicit them for donations.
- So fellow volunteers or board members don’t figure out that the donor is very wealthy.
- So fellow staff members don’t realize that their colleague is very wealthy. Some work in the sector because they can afford to and they enjoy it, but fear that relationships will change if others ascertain their wealth.
- So they do not have security fears, that a large public donation could make them or their loved ones targets.
- So they can give outside of their stated mission of their private foundation or DAF.
- So family members, friends, colleagues or neighbors will not become aware of their wealth.
- So large public donations do not alter personal or professional relationships.
- So donations to controversial organizations or those not widely endorsed by their community do not affect others’ perceptions of them.
- So charities do not become aware that the donor’s assets are managed by a very high-end institution that may provide an indication that the donor has more assets and can donate more. This may occur when a donor makes a grant from their DAF sponsor that includes the name of their wealth management firm.
The decision to give publicly or anonymously should not be made lightly. While most donors and charities prefer public giving, there are times and situations in which anonymous donations are prudent. Some donors are always public or always anonymous, while others just give occasional anonymous gifts. Others even give a small amount publicly to a charity and give a larger amount anonymously to the same charity.
By discussing the various options, advisors are able to help their clients think through the best ways in which they can have the most impact while still addressing any concerns about giving. In the end, the donors, charities and advisors all benefit from the conversation.
(This article originally appeared in ThinkAdvisor, October 30, 2019)
At American Endowment Foundation, we look forward to helping donors and advisors determine the best strategies for their charitable giving. Please contact us or call at 1-888-966-8170 with any questions.