Giving Anonymously
/If you don’t want the public to know about your charitable gift, you can legally and ethically give anonymously. For some people, this is a matter of privacy. And for some, it’s about modesty, humility or religious or cultural tradition. Most donors, though, do not give instructions for their donations to be kept private or they give through mechanisms that shield their identity.
A study by the philanthropic consulting firm Bridgespan Group documented that in a 10-year period, “anonymous gifts have ranged from 3 to 5% of total gifts,” based on data from Indiana University’s Center on Philanthropy.
Why, or why not, give anonymously?
There are compelling reasons commonly cited by donors for making anonymous donations. There are also good reasons, from a larger societal perspective on power and transparency, that giving should be mostly public. Individual circumstances vary, and it is ultimately the donor’s choice.
Modesty, morals and religious beliefs. Among those who seek to protect donor anonymity, these are commonly cited reasons. Modesty and religious beliefs are legitimate reasons for some donors, but surveys have indicated that the reasons below are more prominent concerns for most donors who give anonymously.
Privacy and safety concerns. These have several elements that can overlap. Donors sometimes give to causes that are controversial or outside of their wealthy peers’ expectations of them, so to protect themselves from criticism and attention, they support those causes as quietly as possible. For other donors, simply attaching their names to large, charitable donations raises concerns about being identified as a person of considerable wealth and therefore a potential target for scams, business propositions or even kidnapping.
Avoiding requests for more donations. The reason most often cited by donors for preferring to give anonymously is to avoid being besieged by donation requests, either from their charity of choice or from all the other nonprofit organizations that might obtain their giving history. Every donor has a limited amount of charitable funds available and a limited amount of time to field requests, so wanting to avoid the deluge is understandable. There is, however, a growing body of research indicating that increasing giving transparency tends to decrease the number of wildly unrelated charitable requests and increase the quality of communications from nonprofits doing the type of work that is more closely aligned with the donor’s public giving profile.
Being transparent about your giving to help your chosen nonprofits. Nonprofits like donors to be named because it inspires others to give. When a respected or admired person gives to an organization, the nonprofit can leverage that gift to raise more funds. When people see their friends’ or colleagues’ names on a donor list, it might motivate them to support the organization, too. Simply knowing that there are many people who support an organization can give prospective funders confidence in the nonprofit.
Transparency is good for philanthropy and society. Some anonymous giving can be justified, and ultimately, it is a matter of individual donors choosing what’s right for them. But there are some instances in which the public would be better served by more transparent giving. It’s one thing for a relatively small donor to give anonymously and maintain their privacy. But when someone is making large donations that could affect public policy or have a major impact on many people’s lives, there’s a compelling argument for transparency. That’s why there are increasing calls for legislation and lawsuits seeking to limit donor anonymity. To sustain public confidence in the philanthropic and nonprofit sectors, it’s better for donors to give in transparent ways.
Taking Action
Reflect on the balance between your need or desire for privacy and the value of transparency, or of inspiring others to give. Consider what feels right for you and your situation, but also what might be best for the nonprofit, the cause, or society. You can always ask the nonprofit what would be most helpful to them. They’ll probably have insights about what might be most helpful to the cause and to society, too.
If you do decide it is best for you to give anonymously, here are some tips:
If you are giving directly to the nonprofit (i.e., not through a DAF or another vehicle that can provide anonymity), be clear with nonprofit staff about your expectations regarding anonymity. Do you want to be anonymous in public-facing communications while identifying yourself to the staff or board of the nonprofit? Or do you only want the one staff member you interacted with — or no personnel — to know you made the gift? Make sure all of this is clear to anyone who knows about your contribution. If you are making a substantial donation, you’re probably signing a gift agreement and the terms surrounding your anonymity should be explicitly stated there.
Giving through a DAF can make anonymous giving easier. The check comes from the institution where your DAF is held and you choose whether or not you want your name on the letter they send to the nonprofit. If not, no one at the recipient organization will know you made the grant (unless you tell them), so you don’t have to worry about anyone slipping up and accidentally revealing your name when they shouldn’t.
Giving through an intermediary is another option. There are donor advisor firms like Rockefeller Philanthropy Advisors or Arabella Advisors, as well as law firms and banks, that have nonprofit arms to which you can donate, take the charitable deduction, and which will then direct your funds to the nonprofits you favor, similar to a donor-advised fund. Or you could work with the intermediary if it manages collaborative funds, like Borealis Philanthropy, to combine your funds with others so that your gift to the intermediary is not directly tied to the ultimate charitable recipients.
A family office might provide some anonymity. Some ultra-high-net-worth families with a long history of wealth preservation and giving set up family offices that manage funds and giving for the entire family. Donations from the family fund are not necessarily attributable to a particular individual family member, and are also often cloaked behind layers of corporations and LLCs that further protect individual privacy.
Consider a revocable trust. Many community foundations can help create this kind of giving entity, and the donor can remain anonymous in the giving process.
Use online donation anonymity options. Some giving portals that serve as clearinghouses for charitable donations allow you to make a gift through their website and still maintain your anonymity to the recipient organization (as well as the public). One is Network for Good, a nonprofit that operates like a donor-advised fund, but can move funds with the ease of credit card transitions. Being identified or anonymous is your option with such a platform.
