PATHWAY TO PHILANTHROPY | PART 4:
Building the Policies, Tools, and Relationships that Make Philanthropy Easier
By Angie Thompson
Nonprofits spend considerable time thinking about how to raise money. We plan campaigns, write grants, seek sponsors, hold events and send appeals.
But there is another question I believe nonprofit leaders and boards should ask:
When someone wants to give, are we prepared to help them?
A donor may want to give appreciated stock instead of writing a check. Someone over age 70½ may want to make a qualified charitable distribution from an IRA. A longtime supporter may want to make a significant gift for a particular program. Another donor may be ready to include the organization in an estate plan.
Those are wonderful conversations to have. But they can quickly become missed opportunities if the donor asks, “How do I do that?” and the organization isn't prepared to respond.
In my development work, I learned that fundraising isn't only about generating donor interest. There also needs to be structure behind the invitation: policies, processes, information and professional relationships that make it easier for someone to act on their generosity.
I think of that as being philanthropy-ready.
Make Giving Easier, Not Harder
Being philanthropy-ready doesn't mean nonprofit staff members should become attorneys, accountants or financial advisors. They shouldn't be providing professional legal, tax or investment advice.
But they should know enough to recognize an opportunity, provide accurate organizational information, follow established policies and know when to bring a qualified professional into the conversation.
That distinction matters.
The Association of Fundraising Professionals' ethical standards emphasize protecting donor interests, honoring donor intent, accurately representing how contributions will be used and encouraging independent professional advice when appropriate.
Those principles should be reflected in the way an organization receives gifts, not simply in its fundraising messages. Being ready to receive philanthropy is part of donor stewardship.
What Does “Philanthropy-Ready” Look Like?
For a small or midsized nonprofit, becoming philanthropy-ready doesn't mean developing the planned-giving department of a university or hospital. It means building the infrastructure appropriate for the organization and the donors it serves.
Start with the ways people are most likely to give.
Can someone easily make a gift online and choose recurring giving? If a donor wants to give appreciated securities, does someone know the process? Can the organization provide the information needed for a qualified charitable distribution or a grant from a donor-advised fund?
If someone wants to include the organization in an estate plan, can you provide the correct legal name, address and tax identification information? Is there a person the donor can contact? Is there a simple Letter of Intent that allows the donor to tell you about the commitment without providing private estate documents?
And when someone offers something outside the ordinary, does the organization know who has the authority to decide whether the gift should be accepted?
These may sound like administrative questions, but they are part of the donor experience. A donor who is ready to do something significant shouldn't encounter unnecessary confusion because the organization hasn't prepared for the conversation.
Sometimes the Right Answer Is “We Need to Look at This”
When someone wants to make a gift, our natural instinct is to say yes. But one lesson from development work is important: not every gift is necessarily a good gift for the organization.
A donor might offer real estate. Before accepting it, the organization may need to know whether there is debt attached to the property, potential environmental liability, taxes, maintenance expenses or other obligations.
Someone may offer artwork, equipment or another valuable asset. Can the organization use it? Can it sell it? Are there restrictions attached to it?
A substantial financial gift can present the same kind of question. What happens if the donor requires the organization to operate a particular program indefinitely, even if community needs or the organization's direction change years from now?
Generosity and complexity can arrive in the same gift.
That's why I believe a gift acceptance policy belongs in the fundraising infrastructure of an organization that wants to grow individual philanthropy. The policy can identify gifts the organization routinely accepts, gifts requiring additional review, who participates in that review and who has final authority to accept or decline them.
A gift acceptance policy doesn't make an organization less donor-friendly. It gives the organization a responsible way to say yes and a process for recognizing when the answer requires more consideration.
Build a Philanthropy Toolbox
I think of these systems collectively as a nonprofit's philanthropy toolbox.
Not every organization needs every tool immediately, and I wouldn't recommend creating complicated systems simply for the sake of having them. The toolbox should develop as the organization's fundraising program and donor relationships develop.
Depending on the organization, that toolbox might include:
- A board-approved gift acceptance policy
- Easy online and recurring giving
- A process for receiving appreciated securities
- Organizational information for qualified charitable distributions and donor-advised fund grants
- A process for reviewing and documenting restricted gifts
- Major-donor identification and stewardship practices
- A Legacy Society and simple Letter of Intent
- Confidential and consistent donor recordkeeping
- Relationships with qualified attorneys, CPAs, community foundations and wealth-management professionals
- Board members who understand their role in opening doors, sharing why they care and thanking donors
But having the tools on paper isn't enough. Someone needs to understand how they work.
Who receives notification when stock arrives? How is the donor identified and thanked? Who records the gift? Who handles a proposed restriction? Who responds when someone asks about legacy giving? What happens when a gift falls outside the organization's normal practices?
That operational structure may never appear in a fundraising brochure, but it matters tremendously when a donor is ready to give.
The goal isn't complexity. The goal is readiness.
Build Relationships With Professional Advisors, Too
One of the most useful things I learned during my years in development was that I didn't need to know everything about charitable estate planning or sophisticated gifts. I needed enough knowledge to recognize the opportunity, understand my role and know when the donor needed someone with different expertise.
That made relationships with professional advisors an important part of development work.
Attorneys can help individuals and families with wills, trusts and estate documents. CPAs can advise them about tax considerations. Wealth-management professionals can help clients consider assets, beneficiary designations and charitable strategies within a larger financial plan. Community foundations can also be valuable partners in helping donors and nonprofits navigate charitable opportunities.
The nonprofit brings another kind of expertise to the table: we know the mission.
We know what the organization is trying to accomplish. We can demonstrate impact, listen to what donors care about, help them understand where opportunities exist and show them what their philanthropy could make possible.
Those roles complement one another. The development professional doesn't need to compete with the donor's advisors or try to replace them. In my experience, knowing when to bring other expertise into the conversation made the philanthropic process stronger.
Make It Easy to Begin the Conversation
Not every donor who expresses interest will be ready to make an immediate decision. That's another reason simple tools matter.
A webpage explaining legacy giving can answer basic questions and provide the organization's legal information. A Letter of Intent can allow someone to notify the organization of an estate commitment without providing a will, trust or other private documents. A Legacy Society can recognize that commitment and create opportunities to steward the relationship during the donor's lifetime.
A Monthly Giving Society provides another entry point, allowing someone who already cares about the mission to make support ongoing rather than waiting for the next appeal.
Major-gift development provides another. It gives the organization a reason to spend more time getting to know people who have demonstrated commitment and may have the interest and capacity for greater involvement.
These aren't simply different fundraising products. They are different ways donors can act on what they care about.
Our responsibility is to make those opportunities understandable and accessible, then allow donors to decide which ones fit their interests and circumstances.
The Board Has a Role
Fundraising infrastructure shouldn't belong only to the executive director or development staff. The board has an important role in both the responsibility and the relationships behind philanthropy.
Board members can help establish and approve appropriate gift policies. They can identify people who care about the mission, make introductions and thank donors. They can participate personally in monthly or legacy giving and explain why they made that choice.
They don't need to become professional fundraisers, and they certainly don't need to explain charitable tax strategies or estate-planning vehicles.
One of the most valuable things a board member can say is simply:
“I support this organization because...”
That sentence doesn't require fundraising expertise. It requires personal conviction about the mission, and it can begin a very different kind of conversation.
From Fundraising Activities to a Pathway to Philanthropy
This is the idea connecting this entire series.
Monthly giving, major giving and legacy giving shouldn't exist as three unrelated fundraising programs. They are different opportunities along a pathway to philanthropy.
Someone discovers the organization through an event, a friend, a story or a personal experience and makes a first gift. We thank them and show them what their generosity helped accomplish. They give again.
Perhaps they eventually choose monthly giving because they want to provide consistent support. As the relationship develops, we learn more about what matters to them. Some donors may have both the interest and capacity to make a significant investment in something they care deeply about.
And after years of connection, some may decide they want the work to continue beyond their lifetime.
The important word is may.
Not every donor will travel that entire path, nor should philanthropy be treated as a ladder people are expected to climb. A donor's $25 monthly commitment may be exactly where that person wants to remain, and that generosity deserves to be valued for what it is.
Our responsibility is to create the pathways, build the relationships and allow donors to choose.
But those pathways need somewhere to lead. If a donor becomes ready for a different kind of philanthropic conversation, the organization should be ready, too.
One Thing to Try
At your next board or development meeting, consider putting one question on the table:
If one of our most committed donors called tomorrow and said, “I'd like to do something more significant for your organization. What are my options?” would we know what to tell them?
Then take inventory. What can you already offer? What is missing? What policies or processes need to be developed? What information should be added to the website? Which professional relationships would be helpful? And, just as importantly, who is responsible for making sure the next step happens?
You don't have to build everything at once. Start with the giving opportunities your donors are most likely to need and build from there.
But don't wait until a donor is standing at the door to begin building the pathway. Make it easy for people who care about your mission to act on their generosity.
A Conversation for Your Board
Consider these topics:
- If a donor wanted to make a gift of stock tomorrow, would we know what to do?
- Can donors easily find accurate information about monthly, major and legacy giving opportunities?
- Do we have a gift acceptance policy that tells us which gifts we can accept routinely and which require additional review?
- Do we have clear internal processes for receiving, recording, acknowledging and stewarding gifts?
- Who are the attorneys, CPAs, community-foundation professionals and wealth advisors we can turn to when a donor needs expertise beyond ours?
- Do board members understand how they can participate in donor relationships without being expected to provide technical fundraising advice?
- If a donor wants to deepen their philanthropy, have we created pathways that make the next conversation easy?
Resources & Further Reading
Association of Fundraising Professionals. Code of Ethical Standards and Donor Bill of Rights. AFP provides an ethical framework for fundraising that includes donor intent, confidentiality, responsible stewardship and the appropriate role of independent professional advice.
Bloomerang. Gift-acceptance policy resources and templates addressing the types of gifts organizations may receive, circumstances requiring additional review and procedures for evaluating more complex gifts.
DonorPerfect. Donor-management and major-giving resources addressing prospect identification, relationship management, stewardship and systems for maintaining donor relationships over time.
These resources can provide useful guidance, but policies and procedures should be developed for the particular organization, its governing documents, capabilities and professional guidance.
A Note About Professional Advice
This article is provided for educational purposes and is not intended as legal, tax, financial, investment or estate-planning advice. Charitable giving decisions should be considered in light of each donor's individual circumstances. Donors and nonprofit organizations should consult appropriate qualified professionals when legal, tax, financial or other specialized guidance is needed.