The Million Pound Chicken and Egg Question: The Effect of 7-Figure Gifts on Philanthropic Income

• In Event: Bequests and Major Giving

Abstract

This paper presents a novel analysis of data collected for a ten-year study tracking gifts of £1 million or more made to UK charities. Published in the annual ‘Million Pound Donor report’ (Breeze 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017), this study has largely focused on tracking trends in the amounts, source and destinations of these biggest gifts. The study also includes c.40 case studies of both those giving and receiving donations of this size, in order to provide insights into the processes by which donors make these significant philanthropic decisions, as well as how nonprofit organisations secure these sought-after gifts, including how they position themselves and build relationships with funders capable of offering this level of support.

Having now collected ten years of data it is possible to take a longitudinal perspective and answer questions about this top-end of charitable giving, which have to date been left unanswered by cross-sectional studies (for example by Edwards 2002; Taylor et al, 2007).

The specific question addressed in this paper is whether, and to what extent, receiving one gift of £1million or more has an effect on receiving future 7-figure gifts. This question derives, in part, from Kelly and Threlfall’s finding in relation to social enterprises that getting their ‘foot in the door’ with large funders is a significant fundraising struggle, and that once secured, such support is ‘the major catalyst’ for future income growth (Kelly and Threlfall, 2016).

This question is also driven by the finding of a ‘Matthew effect’, such that advantage begets further advantage (Rigney, 2010), in various studies of giving and philanthropic support for nonprofits (for example, Komter, 2005; Breeze et al, 2011).

Therefore the hypothesis being tested in this paper is that once an organisation receives its first million pound donation and proves itself capable of handling a donation on that scale, it gains the requisite credibility and is well positioned to receive further donations of that size.

The method used in the paper is secondary analysis of both quantitative and qualitative data that have been collected by the author. It begins with the findings of a re-analysis of ten years of ‘million pound data’, comprising over 2,000 cases, which enables the identification of first and subsequent 7-figure gifts, coupled with re-analysis of the qualitative data in the case studies to identify plausible explanations for identified patterns.

The paper ends with a discussion and implications for practice: if a charity needs to receive a million pound gift before it can ‘prove’ itself capable of receiving gifts of that size, how can this ‘chicken and egg’ riddle be solved?


References in 'Additional information box'

Author

• Beth Breeze, University of Kent