What does it really feel like for a billionaire to make a million-dollar gift? It's hard for those of us outside the less-than-1% to really relate. In this post, Bill Gotfredson, Associate Director of Prospect Research at Boston Children's Hospital Trust, examines an article that helps us to wrap our heads around these figures.
Through the Donor’s Lens: Gaining Perspective of Great Wealth
By Bill Gotfredson
One of the challenges any fundraisers--research, frontline, or otherwise-- face when working in the business of big philanthropy is first understanding and conceptualizing significant wealth from a donor’s perspective. What does it feel like to give away millions or even tens of millions of dollars? What is the relative value of those millions to someone with billions of dollars? What does it mean for a billionaire to have a “bad year”?
I recently came across an article in Money magazine that I think is quite illuminating to all fundraisers and can help us all better understand great wealth. The article is titled, “Here’s What a Billionaire’s Budget Looks Like Compared to the Average American” (full citation below).
The focus of the article is to create perspective of great wealth by creating a creating a relative unit of measurement that the average American can understand. The article’s author, Andrew Hwang, creates a unit of measurement called the “Joe Buck” (J$). A single Joe Buck(J$) is equal to the average annual salary of a Forbes billionaire member divided against the average salary of a US worker.
In other words:
Now that they have determined a unit of measurement proportional to an average US worker’s salary, Hwang’s theory is that you can then gain relative perspective into the billionaire’s experience when spending money. The new Joe Buck value equals a relative proportion to an average US worker’s perception of cost.
Examples can be illuminating:
Hwang’s model can easily be adapted to lower levels of wealth and estimated compensation but the concept remains the same. There exists a relative cost for every item based on an individual’s wealth, salary, and experience that will invoke different thoughts related to cost. Of course, even if donors see the relative cost to be equal to only a few Joe Bucks, if a donor believes the relative cost does not equal the item’s value, they will walk away. As fundraisers, if we can peek through the donor’s lens and understand their relative cost, we will be better brokers, better stewards, and better partners in philanthropy.
Hwang, Andrew D. "Here’s What a Billionaire’s Budget Looks Like Compared to the Average American." Money. January 2018: http://time.com/money/5116357/heres-what-a-billionaires-budget-looks-like-compared-to-the-average-american
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