Wednesday, November 17, 2010

Nonprofits: When to tell donors to go to hell

Nonprofits: Don't get shafted!
Sometimes a gift ain't worth the grief
by Stephen L. Goldstein, email:

Forewarned is forearmed: Fundraisers are in the business of raising money. But you should never put yourself or your nonprofit at risk of being taken in by a donor. Everyone salivates at the prospect of any contribution. There's nothing like the thrill of telling your boss that you've landed a major contribution--or announcing one at a board meeting. So naturally, you never want to say No to a gift or discourage a potential donor--except when you have to.

Here are some tips to follow so you don't wind up with the short end of the stick:

1. Never take a verbal promise for any gift, especially if an amount is pledged over time. You must have legally binding documents to support your claims to a funder's contribution. If an amount is to be paid after a donor's death, you will be in major trouble if you haven't dotted ever i and crossed every t in your favor.

2. Never publicize a gift until you have received it in full or until you have an unshakable agreement for it's being paid--and I mean UNSHAKABLE. Resist the temptation to talk about or formally publicize a gift until it has been signed, sealed, and delivered. It is only natural for you to want to shout about receiving a gift--particularly a major one. But don't make the potentially fatal mistake of rushing into publicity.

3. Never accept a gift that costs your nonprofit more than its worth. For example, the restrictions that a donor may place on a contribution or the liabilities that may come with it may make it necessary for you to incur expenses that you would not have had otherwise. A gift of a collection of ancient coins to a historical museum may be interesting but impractial to receive because of prohibitive insurance costs. Sometimes, you must say No.

4. When a donation clearly benefits the donor more than your nonprofit, sometimes a simple NO isn't the answer. If someone tries to pressure you, someone higher up in your organization, or a board member, sometimes, you've got to tell them to go to hell. People who would try to use a nonprofit for their financial advantage don't deserve better.