Struggling With Controlling Donors? Read This Post

One of the biggest problems charities have with fundraising consultant Jimmy LaRose is his insistence that donors are their No. 1 customer.

Many nonprofit officials, like doctors and university researchers, would have a problem with that idea. It also wasn’t sitting very well with Theresa Clifton, executive director of the Central Brevard Humane Society, as she listened to Jimmy speak at a conference for local charity officials that we both attended last month in Melbourne, Florida.  

Over lunch, Theresa described her problems with a wealthy donor who has made large gifts and now wants to micromanage how that money is used. 

Other organizations at the conference expressed similar concerns about overreaching donors, and Jimmy said he’d get to that issue later. That afternoon, Hall Powell, another consultant and a colleague of Jimmy’s, offered a solution for dealing with overly controlling donors. 

The key, he said, is having a gift acceptance policy in place for every type of donation, including gifts of cash, stock, real estate, and other valuables. “If you have a donor applying pressure to accept a large gift that compromises your purpose,” Hall said, “the policy can be used to tactfully turn down the gift.” 

He gave three examples from his long fundraising career: In the first, a man wanted to donate a home with an estimated value of $500,000 that turned out to be worth nowhere near that much and in dire need of repairs. In that case, the charity did not have a gift acceptance policy, which led to a difficult, uncomfortable situation.

In the second case, a donor offered a multimillion-dollar gift to a substance abuse program, but demanded changes in how clients’ addictions were treated, which went against the charity’s mission. Because the organization had a gift acceptance policy that required it to adhere to a particular treatment model, Hall said, officials could tactfully decline the gift.

A gift acceptance policy also saved the day for a third charity in which a donor offered a large contribution to name a facility but made several demands in exchange that the nonprofit’s leaders were unwilling to fulfill. In that case, Hall said, a gift acceptance policy and “a heart-to-heart talk” cleared the way for better understanding between the donor and the organization, and the gift was made on terms that the charity could accept.

“How you say 'No' is very important,” Hall said, “but you have to stick to your principles.”

Theresa, the Human Society director with the micromanaging donor, told me later that she realized her organization was responsible for not setting reasonable limits for donors.

“We have procedures for everything else, but we don’t have a policy statement for what the expectation is for donors’ participation in our project,” she said. It could be as simple, she added, “as doing a letter of understanding up front that charities observe the right to use funds as they see fit. That will prevent future misunderstanding.” 

[Editor's note: This is our second post on Jimmy LaRose and his ideas. You can read the first post here.]