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Are All Donations Good Donations?

Fundraisers love to receive gifts on behalf of their organizations. As professionals we know there are good gifts like cash and securities, but there are also unacceptable gifts that potentially can be a burden for your organization.


We ask for and accept restricted gifts for particular programs and for capital campaigns. In these two examples we manage the donor’s expectations because we have clearly outlined how the restricted gifts will be used.



Donor’s Intentions

The challenge arises when the donor attempts to dictate their own restrictions. Years ago, I worked at a state university where I solicited donations for scholarships. One donor wished to restrict their gift to a specific category of student. As a state-funded institution, our mandate did not align with their wishes, so we had to decline the gift.


How much control can, or should donors have over how their gifts are used? What if a donor wants your organization to create a new program in honor of their mother? Does the new program align with your mission? Is the donation large enough to cover all the expenses associated with the program and sustain it for a reasonable period of time? If the answers to all of these questions benefit your organization and clients, then the gift requires serious consideration and a binding legal document.


Other times a donor may not understand how their donation does not actually help your nonprofit. Here are a few examples.

  • Donating prom dresses to a hurricane relief drive

  • High volume of items when storage space is limited

  • Fine art that the donor does not want you to sell

  • Out-of-date technology

  • Property in another state with restrictions

  • Cash donation that can only be spent on ______ (fill in the blank) that isn't needed


Gift Policy

Best practice is to have a gift acceptance policy which has been reviewed and approved by your board of directors. A policy will state the criteria for accepting and declining all types of donations: cash, non-cash, real estate, crypto,

and others. This policy should also have a section on returning gifts. See my article HERE for recommendations.


Do you have a morals section in your policy? The reason for this can be explained in one word: Enron. We need to have naming and gift acceptance policies that allow for disassociating with a donor whose activities conflict with our organization’s values.


In summary, not all gifts are good gifts for your organization. Be clear on what you will and will not accept to protect your nonprofit financial standing and reputation and still be donor-centric.


Cheers,


Michelle Crim, CFRE


Dynamic Development Strategies can help. We offer coaching, grant writing, and fundraising services for our nonprofit clients. We specialize in small to mid-size organizations because we understand your challenges. Please contact us for more information.


https://www.dynamicdevelopmentstrategies.com/

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