Caution: Sudden Wealth Syndrome
Mary wins the lottery. A million dollars. Mary goes on a spending spree. She buys her mom a house. She buys a Lexus for her son. She donates a little to charity. In a matter of months the money’s gone.
Jack wins the lottery. A million dollars. He hands 90% of it over to a financial advisor who invests it for him. Jack is set for life.
Mary isn’t a bad person. She made a choice to prioritize short-term gain over long-term sustainability.
Why am I nattering on about this?
Many nonprofits, especially those involved in social justice, are experiencing an enormous influx of donations because…well you know. One client made budget for the year — in February. As any veteran of the Red Cross or other disaster charities will tell you, many of your new Trump donors will never give again. Or they won’t give until the next crisis. And if you don’t invest effort and money in keeping them, you’ll lose the vast majority within 12 months.
There’s a case to be made for spending this windfall now. Stopping a far-right takeover of the country will take a lot of money. But there’s also a case to be made that prioritizing sustainability will better aid the cause over the longer run. Stopping Trumpism is a marathon, not a sprint.
Many of the organizations we work with are taking no steps to retain or upgrade these new Trump donors.No new fundraising staff. No new stewardship efforts. Some are just re-budgeting to ‘normalize’ the higher giving levels. These organizations are making a choice — Mary’s path — without really thinking about it.
If that was a consciously made choice that’d be fine. But if not, that’s just dumb.