Posted December 1st, 2014

Gaining Perspective on Gifts

gift boxes

Development staff may be tempted to view a potential gift solely from their own perspective. But a failure to consider the impact a large gift may have on other interested parties—such as the donor’s family, other potential heirs or various programs within the organization—may lead to less than favorable results. Understanding and accommodating various points of view from the outset may save everyone involved from unwelcome surprises later on.

Consider the donor’s perspective

Remember that a donor likely has family, friends or professional advisors who have a potential interest in a gift under consideration. If a gift is too large or is structured in a peculiar fashion, one or more of these parties could be motivated to prevent the gift’s completion. For example, friends or family members may believe they will be adversely affected by the size or timing of a gift, while the donor’s professional advisors, such as an estate planning attorney, bank trust officer or financial consultant, may have a particular interest in the way a gift is structured or how the funds are managed.

The charity’s perspective.

While such considerations may be relatively commonplace, it is crucial to also consider the impact of a particular gift on your institution as a whole. Not every gift is a good gift. Fundraisers should always ask themselves these questions: Will the gift be restricted or unrestricted? Can we credit it in a campaign? Is there a need to involve legal counsel? Will the gift require more work than it is worth? What impact will this gift have on the finance office? On the legal department?

Cooperation is vital.

Suppose a donor has included a provision for your charity in a will or trust. Depending upon the circumstances, such a gift may qualify for inclusion in your planned gift recognition society and be counted as a planned gift expectancy. While the bequest notification originates in the development office, recognition and other issues may dictate that others within the institution be consulted before and after the gift is completed.

For example, the finance office may be required under financial accounting standards to recognize irrevocable deferred gifts as income based on present value and reflect them on the institution’s balance sheet, yet it may be difficult in practice to obtain the necessary information from the donor.

The legal office may want to keep copies of wills and trusts in official document files and review them periodically to make sure there are no troublesome restrictions or provisions. Your legal staff may also be of help in the settlement process and may expedite or otherwise facilitate the transfer of assets to the charity. In other cases, the legal and financial aspects of the gift may be handled by a donor’s advisors or experts in the charity’s development or business office.

At times, colleagues may attempt to exert influence over the development office to give priority in their work to outright gifts or gifts of an irrevocable nature. Each department within an organization has its own agenda, but they should also have the same ultimate goal—to see their institution be the best it can be.

United we stand.

The best results may well be achieved by acknowledging and utilizing the perspectives, and vested interests, of all interested parties. Doing so may involve putting your legal counsel in touch with the donor’s attorney to assist with a legal question. Or your finance office may need to assist the donor’s financial advisor with the transfer and subsequent sale of a gift of stock.

Wise fundraisers do not operate in a vacuum. They understand that pooling resources from development, finance, legal and administrative offices—rather than allowing these departments to be pulled apart—will lead to the greatest success in the long term.

 

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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