Looking a gift horse in the mouth

How do you determine what kind of gifts you’re going to accept and reject?

If you work in development, this is a question you face on a constant basis. Last month I did a webinar in partnership with Meredith Sossman and PlannedGiving.com tackling this very topic. Evidently, it is a popular one. We had more than 200 people register and those who attended had a lot of excellent questions.

Here are some of the highlights from the webinar and techniques development officers can use to help navigate complex and problematic gifts. If you want more after reading this, you can find the webinar recording at plannedgiving.guru.

Three things every nonprofit needs:
The people on the webinar had to listen to me talk for an hour before we got to this part. But I’m giving it to you right out of the gate. If your organization does not have these three things, make it a priority in 2018.

1. A gift acceptance committee
This is a stated and formal committee that includes executives from the organization and board of trustees. It cannot be up to the development officer to accept or deny complex gifts.

2. Gift acceptance policies
These are written, board approved, and part of the ongoing operation of the institution. When a donor proposes a complicated gift, you have a document you can point to. These are the kind of gifts we accept and don’t accept. If an exception is to be made, the committee has to approve it.

3. Campaign counting guidelines
How do you count various types of gifts as part of an overall campaign? Determining this before the campaign gets underway not only makes your life a lot easier; it is also best practice.

It’s a win-win-win!
Everyone is served better when there are clear, written, board approved guidelines in place. These measures protect and benefit your organization. Win! Ultimately, they serve your donors well. Win! They also are an insurance policy for you as a development officer. Triple win!

Let’s review a couple case studies.
A quick note to smaller nonprofits reading this: If you work with a smaller nonprofit, don’t tune out when you see that I’m talking about relatively large gifts. You can take a zero off some of the assets and the same principles apply.

Case study 1:

Can this combination be blended?
Your organization is nearing the end of the quiet phase of your latest campaign and there is a push to reach a certain number before going public. One of your long-time donors has yet to make a campaign gift. When you meet with her, she says she has been considering what she can do for the campaign. She really wants to name a prominent space in your new building for her late husband. The naming amount for that space is $1 million. She indicates that she can really only afford to give $100,000 per year but also discloses that your organization is in her will for $500,000. She asks if she can pledge $500,000 over five years and pay the balance through her estate. She is 68 years old. How do you respond to her question?

First, we need to acknowledge that this is a very emotional decision. This donor is thinking about how to memorialize herself and her husband. Obviously she has a deep relationship with the charity. We should remember this no matter how we handle the decisions and conversations.

Even though this is a fairly basic gift, it still raises complex questions and gray areas. There are several considerations that come into play as the development officer decides how to respond.

Does your organization accept this kind of gift from this type of donor?
There’s no right or wrong answer. Some organizations count bequests in a campaign, and some don’t. Your gift acceptance committee has to decide what’s best for your organization and consider the precedent you are setting. Many experts recommend not counting a bequest at full face value for anyone under age 70. As an institution, you need to make these decisions ahead of time so you’re prepared to respond to individual donors.

How important is it to your organization that you raise cash for this project?
How you answer this will help you decide whether you can accept your donor’s proposal or if you need to take only outright gifts or long-term pledges.

Is this donor’s participation in this project critical to the success of your campaign?
Sometimes you’ll want to make exceptions if someone is a board member or long-standing volunteer or a leader. How do you make exceptions and who makes those decisions? Consider the trust factor in making exceptions. Is this a long-term loyal donor?

Who else do you need to involve in considering this gift?
It might be a different group of people depending on the gift. The point is to make sure it’s not just the individual development officer or director making the decision. What policies are in place to govern what you as a development officer can and can’t do?

Case study 2:

Maybe put the brakes on this one…
A member of your board of trustees owns a manufacturing company that makes brake pads for cars and trucks. Their plant is closing and the property happens to be near your campus. He has kept ownership of the property in the family name instead of the company. He is a powerful member of your board and is rumored to be your next chairman. He and your president have already had a conversation about his idea to gift the property to your institution, and the president is enthusiastic. As the development officer, how do you handle this?

Key considerations:
This is a clear example how of these kinds of discussions can get ahead of the development officer. Sometimes we have to rewind something that already got started. Sometimes we have to protect or remove the president or CEO from the circumstances or help them through it so political capital is not wasted. This situation is fraught with potential problems. There could be environmental issues at play, ownership issues, and much more. It’s for dicey situations like this you are grateful you have a gift acceptance committee and policies in place so there’s a clear way forward for you.

Just do it!
I realize gift acceptance policies are not the most glamorous task. But I hope these case studies help demonstrate why they’re so critical. As Viken Mikaelian often says, planned giving is a proactive field, and the proactive players are the most successful. Make 2018 the year you get these guidelines in place. Or, if your organization already has policies and a committee, do a quick review to make sure they’re current. I guarantee the first time you encounter a problematic gift situation, you will thank yourself for putting in the work in advance.

 

Stuart Sullivan, Senior Vice President with Graham-Pelton, provides senior level counsel on campaigns, strategic planning, various forms of giving, and management of programs and staff. Stuart has served in executive positions at numerous well-known institutions, including Children’s Hospital of Philadelphia and several top universities. The above article was originally published in Planned Giving Tomorrow.

Contact Stuart directly via email or by calling 1.800.608.7955 ext. 1222.

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