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.
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.
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.
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.
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