How Long Is Forever? - Update
A federal judge has ruled that Paul Smith's College cannot be renamed due to a provision in Mr. Smith's will that the name must be retained as is in perpetuity. Thus, the $20 million gift from Mr. and Mrs. Sanford Weill will not be realized.
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How Long Is Forever?
The most recent issue of Doug Lawson’s Philanthropic Trends Digest just landed in my inbox. Doug is my friend and mentor and through his newsletter he keeps me up to date bi-weekly on the world of philanthropy. His message is recreated here:

Dear Friend:
Mrs. Weill and Wall Street billionaire husband, Sanford Weill, have donated millions of dollars to the Paul Smith's College over the years.  Their contributions helped build a new library and a student center, both of which are named for her. Now Mrs. Weill has pledged a $20 million donation, one that the college president, Cathy S. Dove, says is critical to the school's future.  But the gift comes with a controversial requirement.  In accepting the money, the college's board must agree to change the name to Joan Weill-Paul Smith's College.

The college was created with money and land bequeathed by its founder, Phelps Smith, and when Mr. Smith died in 1937, his will directed that the institution be "forever known" as Paul Smith's College of Arts and Sciences. The requirements imposed by both Mr. Smith in his will and by Mrs. Weill in her proposed gift leave the college in a sticky and increasingly common philanthropic situation. When a benefactor's gift includes strings, for how long does the recipient have to adhere to those restrictions?  In other words, how long is forever?

The proposed name change has brought opposition from alumni and neighbors, who say they appreciate Mrs. Weill's generosity but do not understand why the college should change its name.  Some do not think the name change will make much difference in the region and that people are still going to call it Paul Smith's.

Sincerely, Douglas M. Lawson, Ph.D.

Paul Smith’s College isn’t the only nonprofit that has faced this dilemma of how long a donor’s name can stay on a building or room. “Forever” used to mean forever, but apparently not so much anymore.

Most nonprofits will likely never have to decide between turning down a $20 million gift from a long-time donor or changing the name of a college against the stated wishes of its founder. But you may very well come face to face with what to do with the dedicatories you have awarded to generous donors through a capital campaign or just a great gift.

The following scenarios are not all that unlikely:

*You want to sell your building and move to another part of town, but you need to raise money and offer naming opps to those donors in the new building. What happens to the donor dedications in the current building?

*A facility full of dedications is no longer being used because you don’t provide the programs that building was constructed or bought to accommodate.

Less likely, but it could happen:

*You do a renovation and a potential donor who wants his (or her) name on your building offers to pay for the entire cost. . .if you remove the current donor’s name.

All these actually have occurred in my experience. So, what’s the solution? Gift agreements. These agreements between donor and recipient (that’s you) specify what the gift is, what it’s being given for, how it’s going to be used and, very importantly, how it will be acknowledged.

Some examples of info to include: total amount being given; payment schedule; the donor’s intent for how the gift will be used; specifically how the gift will be acknowledged; and more. Both the donor and the recipient nonprofit’s administrator sign the agreements, indicating acceptance of the terms.

There’s no guarantee you won’t have issues, but gift agreements allow everyone to discuss gift terms, agree up front to those terms and signify acceptance. 

When donors and their nonprofits are on the same page, life is good.

P.S. It doesn't hurt to have a gift acceptance policy either.

Give (Some of) Your Billions Back, America!

“How wonderful that no one need wait a single moment to improve the world.” – Anne Frank

Think philanthropy is a recent phenomenon? Think again!

Philanthropy actually emerged in America with the landing of the Pilgrims, who gathered themselves together into “voluntary associations” to care for one another in times of need. And later, the term Commonwealth (as in Commonwealth of Virginia) was employed to mean “a society in which all members contributed to the “common wealth,” or the public good.

Ben Franklin was one of the first - if not the first – American to recruit volunteers to fundraise. The volunteer Continental Army was financed by private donations, and it is even said that George Washington often ended his letters, “Philanthropically yours.”

Historically, philanthropy wasn't always employed for the right reasons: For example, after the Civil War, scientific philanthropists practiced Social Darwinism and believed social problems existed because the poor were less fit for success than the wealthy.

Wars were often the impetus for the creation of organizations (such as aid societies) that, in 1894, were given tax-exempt status as nonprofits, when Congress passed the first of several legislations that would define tax-exempt organizations and private foundations.

And boy, did we Americans run with that idea.  

What a rich history we have as a country in caring for those in need and each other. So rich, in fact, that between 70 and 90 percent of all U.S. households donate to charity in a given year, and the typical household’s annual gifts add up to between two and three thousand dollars.[1] The message is clear: Philanthropy is not just for the wealthy.

So, good job, America! Keep giving some of those billions back! Our country is a better place thanks to you. We have the history to prove it.

[1] Source: Philanthropy Roundtable

"Let's Not Raise Too Much Money!"

I started my blog because I wanted to record (and dissect) some of the things I heard in the course of my day. I quickly deviated from that path with thoughts about lots of other things, but now I’m back to my original idea.

I heard this the other day: “Let’s not raise too much money!” Really? What’s that supposed to mean? I guess it’s possible, if you’re Harvard, to have too much money. After all, a $36.4 billion endowment can appear to be excessive to some people.

On the other side of the coin are the millions of U.S. nonprofits (3/4 with budgets of less than $1 million) striving every day to provide needed programs and services, frequently with inadequate resources.

Quick stat: 
          70% of Americans believe that charities 
         waste money, according to a NYU survey.

The dilemma is, donors have unrealistically low expectations about what it costs to meet your mission. And because nonprofits avoid having that conversation, donors can’t find a reason to invest to 1) strengthen program delivery systems, 2) build organizational infrastructure, 3) acquire cutting edge computer systems, 4) fund positions and training for board and staff, and more. Even when donors are willing, nonprofits are afraid to ask for that type of support. 
It’s not “program-my” enough.

Nonprofits need to begin demonstrating that the impact of their programs and services is what counts, not low overhead, and that achieving impact requires nonprofits to have strong cores. This includes being able to:

·      Effectively measure progress and outcomes of your programs and services

·      Conduct internal assessments that identify capacity challenges and help set capacity building goals

·      Really, engage in anything that drives your nonprofit to improve the way you do things, so that you are more effective and more accountable to those you serve and to your investors.

So, what does all this have to do with raising too much money? A lot, actually. By avoiding the impact discussion, you are leaving a lot of money on the table (money that could be strengthening your organization by adding needed funding to your mission and your infrastructure). And you are keeping a lot of uneducated donors from making the most meaningful investments possible in your organization. 

The 80-20 Rule With a Twist

The 80-20 Rule all development directors and fundraising people know about (and quote often) says that, roughly, 80% of the money is going to come from 20% of the donors.

Well, there’s a new sheriff in town in the form of a report recently released by UBS Wealth Management America. According to this report, 80% of our wealthy donors, even as they are upping donations, aren’t satisfied with what their philanthropy accomplishes. UBS attributes that to the approach for the gift, which donors say is more “spur of the moment,” “random.”

My experience tells me this is the case. We as development professionals are too often notoriously bad at assuming people know how their money is creating value, solving problems, addressing issues, making things better.

Donors, UBS says, are happier with their philanthropy when they have plans in place for themselves and the charities they support.

Another finding: Younger donors align their giving with personal values. This isn’t a new thought. Those who study these things have been saying for years that younger donors think differently than their Baby Boomer parents.

Sameer Aurora, head of client strategy at UBS, says “The older generation’s approach is more traditional and out of a sense of duty. . .and the younger generations see it as much more of a passionate calling. . .embedded and integrated into their day-to-day lives”

How are we factoring this knowledge into our philanthropy efforts?

Some good news from the UBS study: Fifty-two percent of wealthy people plan to leave a big share of their wealth to charity when they die.

How you steward your donors today can increase the likelihood your organization will be remembered by these donors in their wills or through some other planned giving vehicle.

Don’t assume that only those donors who are wealthy are capable of leaving a sizable estate gift. Frequently, the donor who has given you $10 a month for 30 years has the capability – and intention – of leaving your nonprofit a sizable estate gift.

Finally, remember: bequests are revocable at any time before the donor’s passing, even when the intent to make an estate gift has been declared. Continued, meaningful stewardship is essential.

Have You Taken the Challenge?

I’m always amazed by what “goes viral” and what never does.

In the case of the ice bucket challenge, I am both amazed and delighted. Delighted for the ALS Association, an organization fighting one of the most deadly diseases I can imagine. When I have strange aches and pains I think about whether it could be cancer or ALS. (Admit it, you do that too sometimes!) And yes, I read Tuesdays With Morrie and I’m glad I did.

But this isn’t about the ALS Association as much as it is about a quirky, fun challenge that people are glomming onto, and that just happens to be tied to a serious cause. People get to have fun, they make great videos that urge more people to have fun and, thank goodness, they are riding this wave to the very end by making those contributions to the ALS Association.

Not everybody is having all that much fun, however.

There are detractors (some of them nonprofits) out there who think that the donations being made to ALS are ones that would have gone to other charities.

Overall, that’s not how philanthropy works, in the first place. And what we are seeing here anyway is more spontaneous giving, that in-the-moment decision to act that’s based more on gut feeling than contemplation.

I know who’s behind all of this:  our younger generation, those 75 million “echo boomers” or “Gen@ers” who’ll do just about anything if it’s fun and can raise some money for good causes. These folks have true social commitment, no barriers, and they are networkers to the max. When they get ahold of something, look out.

I didn’t take the challenge (I know: no guts, no glory), but I did make a gift 1) because I am having such fun watching all of this play out around the world, and 2) I read the stories on the ALS Association website and watched an awesome (and sad) video on Upworthiest and wanted to be part of a hopeful solution to an awful disease.


Let me know how you feel.

Giving USA Highlights

The 2014 edition of Giving USA is out, and the news is positive. The pre-recession high for giving was recorded at $349.5 billion (2007). For 2013, Giving USA has us at $335.17 billion. Not too shabby.

Sources of Giving

As always, individuals are the greatest source of gifts. In 2013, 80% came from individuals (72% in direct gifts and 8% in planned gifts). Per capita giving by individuals reached $1,016 and average U.S. household giving reached $2,974.

The remaining 20% came from private foundations (15%) and corporations (5%). If you are overly reliant on corporate, foundation and government funding, you will continue to be on shaky ground.

As reported, if total giving continues to grow at current rates, it could take just one or two more years for total giving to return to its peak level of $349.5 billion.

Giving increased in all areas but one: corporate giving declined by an estimated 1.9%

Bequest giving showed the greatest gain at 8.7%. Your most loyal donors at all giving levels are great candidates for deferred giving. If you are not having that conversation with these donors, you should seriously consider doing that.

Recipients of Giving

Education, human services, giving to foundations, health and environment/animals have all surpassed inflation-adjusted pre-recession giving levels, with education showing the greatest growth.

The most significant decline was in giving to religion. I remember when giving to religion exceeded 50% of total giving; in 2013, religion giving was at 31% of total giving. The study attributes this to declining attendance and religious affiliation and increased giving to religious-oriented organizations that are included in the other areas of giving.

If you would like to receive Giving USA 2014 Highlights at no cost, you may download the document here.

Me, a hoarder? No way! Well. . .maybe.

I read somewhere recently that one of my colleagues in the world of nonprofit consulting believes that npo’s in general are hoarders. I know, the first thing that comes to your mind is that TV show, which I have to admit I watch every now and then.

She didn’t really mean to imply that nonprofits are that kind of hoarder. Her point was that we tend to “hoard” good news and information that we should be sharing with donors, prospective donors and other key audiences. In other words, we often don’t communicate effectively enough to make sure our stories are out there and working for us, and that our various audiences are “tuned in” in the ways they should be.

I’m a hoarder of information too, but my hoarding focuses on finding and saving articles, blogs, etc. dedicated to all things nonprofit. I’ve built a huge library on paper and online and I am constantly filtering through it for information for my clients and myself. Recently, I came across an article written several years ago by Jill Rasmussen, another nonprofit consultant.

In her article Jill offered the following things any nonprofit can and should do right now to strengthen communications. I’m paraphrasing more than just a bit, and my own comments are in italics.

1.              Understand who you are. A brand is more than a logo; it comprises all the things that tell your story and make people want to care about you. Most important question you’ll ever answer: “Why should I the donor care?” Do you know the answer? And no, it’s not because you need his or her money.

 2.              Know your key audiences. A key audience is one that can help you meet your mission. Who are those audiences for you? Donor, funder, government official, media, volunteers?

 3.              Prioritize your audiences. Which key audiences are most important? Prioritize those. Get to know them and what you want from them. And it’s not always money.

 4.              Create key messages. Your talking points must articulate what you want each audience to do and, more importantly, what’s in it for them. Write these down and share them with folks who will communicate on your behalf.

 5.              Then, talk to them. Yes, talk. Ask questions, listen, respond and get conversations going. You should get in a rhythm of talking 40% of the time and listening 60%. That's not easy for most of us, but it's worth it.

 6.              Engage the staff and board. Share the work. Get board members, staff and key volunteers involved. Even donors can help meet your communication objectives.

 7.              Work as a team. Everyone singing from the same song sheet, understanding his or her role and making the most of communications opportunities.

 8.              Evaluate, evaluate, evaluate. It will be important to evaluate successes and challenges, share experiences (good and not so good) and use the feedback to improve areas that could use help.

 And, my suggestion: Write a communications plan, similar to your fundraising plan, coordinate the two, update as needed and make everything work together for the good of the whole.

Model communications plans can easily be found online, as can examples of fundraising plans (tons of templates, too). These plans not only help keep you on track, they also bring others into your planning and implementation (and help them understand just where you’re headed), creating a team approach to successful communications, donor development and fundraising.

If you would like, I can send you some of what I have collected in the way of templates, policies, models, etc. Just e-mail me. Oh, and as always, if you disagree with me or think I’ve left something out, let me know.

The Two-Word Board Member Job Description

Two words: Show Up.

Too often in my almost-23 years of serving nonprofits, I have fretted over, worried about, tried to change boards whose members may be in the room, but have never really “shown up” in their minds or hearts. After a lot of angst, I finally conceded that I can’t change that dynamic; only individual board members can decide whether they are actually there or just taking up space.

So I offer a few suggestions for truly “showing up” and a few other “ups” that will make the board experience good for the member and for the nonprofit.

First, Show Up: Choose to be truly present, in board meetings and in the community. Represent your organization with pride and purpose. As a board member, seize the opportunity to add value to your organization. Be future-focused, always thinking ahead. Participate in providing the leadership that will carry the organization forward toward its vision. A high-performing board begins with you.

How do you do this? Some suggestions. . .

Gear Up: Prepare in advance for each board meeting. Review the financials, note questions and comments you have. Read the minutes of each meeting and know the issues. Ask for information you need and didn’t get. Don’t get information in advance of board meetings? Two words of advice: Demand it. It’s your job to be prepared.

Stand Up: Be an advocate for your organization and its mission. You are (officially) a board member for one or two hours a month at the most; you are a “fan” of your organization 24 hours a day, 365 days a year. Your personal enthusiasm can be contagious; find ways to spread the “good news” about your nonprofit. (A two-word hint: Elevator Speech.)

Speak Up: Participate in board meeting discussions and debates about issues. Listen to others and consider their viewpoints. Focus on the needs of the organization and help others do the same. Make decisions that are in the organization’s best interests (rather than, for instance, decisions that cost the least or require the least amount of work).

Follow Up: Board membership comes with specific responsibilities, as well as opportunities to make a real difference. Jump at the chance to add value to the organization through your work on its behalf. And take the time to assess your personal worth as a board member and the overall effectiveness of the board. (Two-Minute Exercise: Honestly answer these four questions: 1. Do I continue to be strongly interested in the mission of the organization? 2. Do I continue to provide effective support and assistance? 3. Will my continuing membership strengthen the Board and the caliber of the Board? 4. Do I continue to feel personally rewarded for my service?)

Lift Up: Your community relies on you and on your organization to provide needed services. Often, provision of these services means your organization must participate in fundraising. Look at that as yet another opportunity to make a difference and achieve your mission. There is a lot you can contribute without having to “make the dreaded ask.”

Shore Up: Make your own financial contribution. Think about it: if you are not willing to give, why should anyone else be?

Last Up: From beginning to end, always act with the best interests of your organization as your first and only priority. 

Guest Blog: So I got a check from a DAF!  Now what?

In Jane’s last blog, she told you about Donor Advised Funds (DAFs) and shared some information about community foundations.  How appropriate, as today I had a “teaching moment” with a staff person who was not clear on how a DAF gift was to be treated.

So, let’s go through the logistics and the recordkeeping, and most importantly, the stewardship of a DAF gift.

I received a letter today from The Community Foundation with a check drawn on their bank account.  You may have seen these: “ I am pleased to enclose a gift of $10,000,000 from the John and Mary Smith Donor Advised Fund…”

Yea for you, but now what?

When a check comes from a DAF, The Community Foundation is the donor.  Yes, it is money the Smiths used to establish the DAF, but it’s not technically theirs anymore.  So you post the gift to the Community Foundation in your database.  Pretty easy.  But what about John and Mary? Shouldn't they get some credit?

Of course they should, but since you can’t double-count the gift, you’ll want to “soft” credit the Smiths’ record in your database.  All good donor databases have this feature. Both transactions are actually connected in the database – so you can see the trail of activity but they reflect as one.

I think the next step is where we all get tripped up.  And that’s in stewardship and receipting.

Since the Smiths were instrumental in this gift, they need to be thanked for directing this gift to you.  They get a thank you, but not a tax receipt.  The Smiths already got a tax deduction when they established the DAF and The Community Foundation sent them a tax receipt that satisfies the IRS.  But you still must thank the Smiths since they are your primary relationship and you want to steward them to encourage additional giving and a stronger relationship. 

Do you have to send a receipt to The Community Foundation?  Yes. First and foremost, you are required to properly receipt all gifts at certain levels in certain circumstances (see IRS Publication 1771). 

While The Community Foundation doesn’t necessarily think they need to be thanked, they do!  That stewardship might just be the catalyst the next time they have some extra money to give away and your organization comes to mind!  It’s that little investment in time that pays off later in the relationship.

Sounds like a lot of work, but let’s face it: stewardship is key to donor engagement and retention.  It’s not something that happens overnight and every cultivation step helps. Competition is fierce out there for donor dollars and a simple thank you is, unbelievably, something that many nonprofits overlook.

Donna Rex is President of Beaches Habitat for Humanity, Inc.  She is a donor-centered fundraiser with extensive experience in strategic planning, reflective practice, facilitation, fiscal budgeting and financial management as a corporate and private banker, consultant and nonprofit executive.