Earlier this year we blogged about “scouting for major donors” and an annual initiative by Standard Chartered Bank called The Future Wealth Report. This report looks at the behaviour types of what they term the “Futurewealthy” – these individuals can be potential major donors that fundraisers should watch out for.
Another interesting article also discusses targeting the futurewealthy, but calling them instead HENRYs: High Earning, Not Yet Rich. They are the affluent middle class who, for charities, could turn into potential major donors if they are cultivated and stewarded properly. The article looks at this group from a consumer marketing perspective, but for nonprofits it’s useful to note that they are driving by brands, as this article points out. Their numbers and spending (including on charitable causes presumably) are increasing and bucking the trend of their wealthier peers: “While ultra-affluents cut their spending by nearly 30%, HENRYs raised theirs by 11%.”
So how are charities supposed to apply this information from a practical perspective? For one, they can pay more attention to mid-donors, through engagement and solicitation. Research shows this donor group, which falls between major donors and low-level givers, is an increasingly important priority for fundraisers. It’s here that many of the HENRYs will likely reside. There are certainly more of them than major donors: “What HENRYs lack in cash, they make up for in numbers: There are nearly 10 HENRY households for every “ultra-affluent” one.”
Not all mid-donors and HENRYs will convert to major donors, but charities can increase the percentage of those that do by providing top-notch engagement so that they are in a prime position when HENRYS become ultra wealthy. Too often charities put time and money into soliciting donations from people who are already ultra wealthy and well-known philanthropists, thus facing high competition from other causes. But if nonprofits focus more on long-term development of mid-donors/HENRYs then they will be in a perfect position to be considered for major contributions. It’s a long-term strategy, but one that could compliment annual fundraising efforts and pay off big in the future. So, watch out for the HENRYs!