April 12, 2015; Wall Street Journal, “Journal Reports”
On the supposed lighter side of the nonprofit news comes a story in the Wall Street Journal offering a list of some of the “mistakes” that donors make when contributing. The list seems based on stories the columnist has heard from people in the nonprofit sector. Those of us who work in the nonprofit sector will nod our heads as we read the list, wince and chuckle a bit, and think perhaps there are one or two she left out.
Before we list them, we do want to say that some of these issues can torture small and even larger organizations unless they are addressed forthrightly. We do not believe that these problems are ultimately the donor’s issue. Most organizations should have gift policies that give guidance to staff about what they should accept and with what conditions.
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Mistakes that donors make:
- Offering unwanted gifts. In the story she recounts, the nonprofit had no idea what to do with all those dead animals, but the donor insisted they accept his entire taxidermy collection. The fix is that the charity should have the guts to say “no,” and the donor should ask if the charity can use the gift before it is offered.
- Giving the wrong gift. In the case of a flood, the relief agencies needed ways to provide shelter for the victims, not the used clothing they were besieged with. The fix is for donors to take time to find out what is needed before making the gesture of a donation.
- Asking a lot for a little. There are times when a donor wants to know that their money has had an impact. So, for the grant donation of $2,000 (much appreciated, mind you) they request a detailed 20-page report. As the author notes, it costs more than $2,000 to write that report.
- Micromanaging. A problem peculiar to when donors sponsor an event or a show (although not restricted to that, mind you) is that in return for their generous support, the donor wants undue involvement in choosing the menu.
- Expecting personal favors. The author cites an example of what is essentially blackmail, when an elderly donor expected lawn mowing and shuttles to doctor appointments in return for the bequest he might leave to the charity.
- Making false promises. In the story the author quotes, after hearing a verbal pledge from a donor excited about a new project, an executive director went ahead and made plans to initiate it. But when the time came to collect on the gift, the donor’s mind had changed. The donor should not have made the pledge in the heat of the moment. (What the article does not say, and should, is that the ED should not have counted those chickens before they hatched.) This problem, of course, can rise to monumental levels, as a recent NPQ newswire has documented, with pledges of millions remaining unpaid over years even as the donor’s name graces the wall of some high-profile museum or building. (There are, by the way, also plenty of stories about false promises made to donors.) This is an area where protocols are important.
- Restricting a gift too closely. This is particularly true for small gifts, but any time a gift is restricted to a small portion of the charity’s work, it is a heavy burden for the organization to account for the use of that money. The solution is to trust the organization to do the right thing when you make an unrestricted gift.
- Assuming you know it all. Just because you make a gift does not mean you know everything there is to know about the cause the nonprofit is addressing. The solution is to ask the leaders of the nonprofit what they are experiencing and then if there is anything you can offer that might help, aside from the check you are giving them.
These are all dead-on-the-money observations that encourage donors to work with the nonprofit of their choice when making the gift to make sure it is the right one and can be used to maximum impact. When the gift is made, the donor should get out of the way and let the organization do its work.
This author makes a modest proposal by suggesting two more mistakes:
- Denying administrative costs. Just as there are climate change deniers, so are there people who deny that it costs money to run an organization. Some administrative overhead, such as a portion of the executive’s salary and a portion of the office lease, are legitimate program expenses. The program you support would not exist without them.
- Wanting too much. It is impossible, for example, to eradicate poverty in one year on a gift of $5,000 or even $5 million, so please have reasonable expectations of what the nonprofit can actually accomplish with the donation.
NPQ would welcome any other observations or stories you may have about mistakes donors make.—Rob Meiksins