Posted April 1st, 2012

What to Do When the Donor Dies – Memorial Gifts

In the second installment of this eight-part series, Sharpe Consultant Aviva Shiff Boedecker follows up on last month’s article about what to do first after a donor passes away. Information in this article will help you understand the intentions of those thinking about memorial gifts, advise them about which activities are appropriate and which are problematic, and guide them towards realistic expectations about what your organization can—and cannot—do.

After a donor’s death, you may get an inquiry about establishing a memorial fund. Frequently a family member or friend will express a desire to establish an endowment, scholarship or other specific type of fund in memory of the deceased.

Caution—road may be bumpy

Be very careful. Memorial funds that depend on hoped-for contributions can result in headaches and awkward stewardship problems, so handle discussions about memorial funds carefully from the outset.

If possible, during your initial conversation or correspondence, ask exactly what the proponent of a fund has in mind. The use of words such as “endowment” or “fund” may mean something different to a layperson than to development professionals.

Is there an expectation that the organization will handle the fundraising? Is the family planning to hold fundraising events? Be careful that the public will not receive the impression that the family is authorized to undertake a fundraising campaign on the organization’s behalf. Well-intentioned activities that the charity is unaware of might interfere with other development efforts, create a legal liability, or even compromise the organization’s nonprofit status!

Managing expectations

Sometimes grieving family members anticipate that there will be more and larger contributions in memory of their loved one than might ultimately materialize. Rather than agreeing to set up any particular kind of fund right away, or enumerating the potential obstacles, suggest that the exact use of the money raised be decided after the funds have been contributed. Doing so will allow you to avoid the awkward task of informing family members that there were insufficient gifts for the purpose they had in mind—and may have announced.

As the memorial gifts are received, give family members the names and addresses of those who contributed so they can acknowledge the gifts. Of course, the charity will issue receipts, but more personal letters should come from the family. It may not be either necessary or appropriate to reveal the amount contributed by particular donors.

Gift isn’t a green light

There is a difference of opinion about whether memorial fund donors should be added to an organization’s database for purposes of future cultivation. Unless you have reason to know that a particular donor has an interest in your organization, many believe the best practice is not to do so. Most memorial fund donors who do not have other ties to the charity give only to honor the deceased—not because of their own commitment. Including them in future communications may even be irritating to them and a waste of paper and postage.

Next month: Learn the basics of estate administration, from learning of the bequest to making sure the funds reach your organization or institution.

The publisher of Give & Take is not engaged in rendering legal or tax advisory service. For advice and assistance in specific cases, the services of your own counsel should be obtained. Articles in Give & Take may generally be reprinted for distribution to board members and staff of nonprofit institutions and other non-donor groups. Proper credit must be given. Call for details.

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