Click here to read on Charity Village
by Roxanne Tackie
What? Turn down a gift? You may spend hours developing a relationship with a donor, or if you’re lucky, you may even receive a surprise call from a donor looking to make a substantial investment in your organization. Given how much time and energy it takes to raise funds for your cause, it may seem crazy to turn down money. So why in the world would you do it?
As strange as it may seem, not every donation is beneficial for your organization. For this reason, you should be aware of these 5 reasons that may cause you to decline a donation.
1. It’s impossible to carry out the project without creating an excessive burden for your team. Some donors are eager to give to your organization so you can develop a new program or new service. Or, perhaps your donor would like to offer your organization a gift-in-kind that requires long-term maintenance, such as a vehicle or property. Even if your organization has the expertise to develop the new initiative, consider whether the additional work may put undue pressure on existing staff. If you cannot pull it off realistically while maintaining the integrity of your current initiatives, it may be time to pull the plug on the gift.
2. The donor’s reputation is questionable. Although many donors have good intentions when cutting a cheque to your organization, some may be using the gift as a marketing ploy. When donors make an investment in your mission, they become positively associated with your organization’s good will. For this reason, some donors may use the gift to take away from their own negative public perception. Unfortunately, your association with the donor may create a negative perception of your charity. So if your donor has been involved in corrupt practices or a public scandal, stay away.
3. The gift doesn’t align with your mission. Canada has over 85,000 charities[1] supported by workers that are the absolute best in their field. Each nonprofit is motivated by its own specific mission, whether it be to improve the lives of children in Richmond Hill, encourage recreation and leisure in Winnipeg, or cure disease across the country. It is important for every organization to remember their mission when accepting gifts, so if you are not the expert in whatever project the donor would like to support, you shouldn’t accept the gift. If you do accept the money and cannot complete the project as promised, you risk jeopardizing your credibility with future donors.
4. There are too many conditions attached to the gift. Sometimes large gifts come with other requests from the donor. For example, perhaps the donor would like you to rename a facility in their family name in recognition of the gift. Would this request accompany a large cost associated with signage? Would it cause the board of directors to be at odds with one another? Or perhaps, it would impact your organization’s ability to secure future gifts? Even though the size of the gift may be tempting, if the conditions associated with donation are too sizable, it may be in your organization’s best interest to turn down the money.
5. The gift has complex or legal issues your organization cannot handle. Some gifts may be beneficial to your current programs or services, but come with other consequences. For example, a gift-in-kind of property can lead to requirements such as taxes, licenses, or regular maintenance. When these types of additional costs are too much for your organization to bear or maintain long-term, it may be necessary to decline the gift.
It is best practice for charities to develop a gift acceptance policy that is clear and well-considered. A well-developed policy will allow volunteers and staff to handle donations with consistency, and allow your organization to deal with unusual situations quickly and without the necessity of calling a special board meeting.
Also, it is important to remember that a donor’s offer does not have to be accepted or declined without first having a conversation. Before declining a gift, speak with your donor to see if the terms can be changed to align with your gift acceptance policy. But, if you do need to walk away from a gift, just know that despite how hard it can be to say “no,” your credibility will go a long way in helping you secure future gifts. In the end, your organization will develop relationships with donors whose goals truly align with your mission.
Roxanne Tackie is the Co-Founder of Story Point Consulting where she collaborates with nonprofits, coaching new fundraising professionals and helping small teams get more work done. You can reach her at info@storypoint.ca.
Return to Insights & Events