Donor Intent: When a Gift Comes With Strings Attached

Who doesn't love receiving a major gift? Especially when your nonprofit has been working hard to meet fundraising goals and expand programs.

But what happens when a donor offers a substantial contribution with restrictions that conflict with your organization's mission or values?

Sometimes, the best fundraising decision is to decline a gift.

When a $100,000 Gift Comes With Conditions

A nonprofit was approached by a potential donor who wanted to make a $100,000 contribution. The organization was thrilled about the possibility of receiving such a generous gift.

But there was a problem.

The donor wanted to place certain restrictions on the contribution that went against the nonprofit's values. Plus the donor wanted to have control over exactly how the gift would be used so the nonprofit would have to get permission for all expenses.

The organization faced a difficult decision. Accepting the gift would provide significant financial support, but agreeing to the donor's conditions would compromise the organization's principles.

Fortunately, the nonprofit had a gift acceptance policy.

The policy provided clear guidelines for evaluating contributions and determining whether donor restrictions aligned with the organization's mission and values.

Rather than allowing the size of the contribution to drive the decision, leadership had an established framework for evaluating the proposed gift.

The gift acceptance policy helped the organization address the donor's conditions while remaining committed to the nonprofit's values. This is why every nonprofit needs a gift acceptance policy.

AFP and the Ethics of Donor Intent

October is Ethics Awareness Month for the Association of Fundraising Professionals (AFP), which is  an opportunity for fundraising professionals to examine their ethical responsibilities.

AFP's Code of Ethical Standards emphasizes honesty, transparency, responsible stewardship, and respect for donor intent.

Fundraising professionals have an ethical responsibility to ensure contributions are used according to donor intentions and organizational commitments. Honoring a donor’s intent begins before accepting the gift.

When donor restrictions conflict with your nonprofit's mission, accepting the contribution creates an ethical challenge. A large gift should never compromise your organization's values.

Five Reasons Your Nonprofit Needs a Gift Acceptance Policy

A written gift acceptance policy helps nonprofit leadership evaluate contributions and make informed decisions.

Here are five important considerations:

1. Protect your organization's mission and values.

Establish guidelines for accepting contributions and evaluating donor restrictions. Identify conditions your nonprofit will not accept.

2. Provide guidance for difficult decisions.

A written policy gives staff and board members a consistent framework for evaluating gifts, especially when significant financial contributions are involved.

3. Establish clear expectations with donors.

Discuss restrictions, recognition requests, reporting requirements, and other conditions before accepting a contribution.

4. Evaluate the full financial commitment.

Some restricted gifts create ongoing expenses beyond the original contribution. Consider staffing, operating costs, and long-term sustainability.

5. Know when to decline a gift.

Not every contribution is appropriate for your organization. When donor conditions conflict with your mission or values, declining the gift protects your nonprofit's integrity.

Ethical Fundraising Begins With Good Policies

As a fundraising consultant, I encourage nonprofit leaders to establish gift acceptance policies BEFORE facing a difficult donor situation.

A policy should not sit on a shelf collecting dust. Review your guidelines regularly and ensure board members, executive directors, and development staff understand their responsibilities.

During AFP Ethics Awareness Month, take time to review your organization's gift acceptance policy.

Does your nonprofit have clear guidelines for evaluating restricted gifts? Who has authority to accept or decline contributions? Are your policies consistent with your organization's mission and values?

Remember, successful fundraising is about more than raising money. Strong donor relationships require honesty, transparency, and mutual respect.

A $100,000 gift sounds wonderful, but protecting your nonprofit's mission and values is worth far more.

Cheers,

Michelle Crim, CFRE

Dynamic Development Strategies can help. We offer coaching, program design, 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.