Honoring Donor Intent

Puzzle PiecesOccasionally I get the question – from donors and from fundraising professionals about honoring donor intent, what it means and what recourse donors have if their intent isn’t respected.

Fundraising is a lot like putting together the pieces of a puzzle. We start by developing a full understanding the organization we’re raising money for. This centers primarily around identifying those areas donors can partner with the organization on by providing financial gifts. Then, as we visit with donors we identify their areas of passion. If there’s an overlap (and there often is) we connect the donor with the cause.

But what happens when the intent of the donor isn’t followed? The result can often lead to the courtroom – and the decision is often in the favor of a donor. So not only is there an ethical dilemma, there is very clearly a legal one as well. Here are two articles that speak to specific examples of this as well as a resource from the Association of Fundraising Professionals (AFP) to help provide guidance:

Wall Street Journal Book Review: ‘Abusing Donor Intent’ by Doug White

In “Abusing Donor Intent,” Doug White, who teaches fundraising management at Columbia University, gives a detailed, though sometimes overwrought, account of a case that attracted national attention and highlighted the frustrations that donors feel when they see their money being used for purposes they never intended. After six years, the suit resulted in a settlement that left Princeton with much of the money but gave a share of it to a new foundation controlled by the Robertson family. The whole episode shows the potential dangers of philanthropic generosity, for donors and recipients alike.

New York Times: When a Donation Steers Off Course

When he donated $500,000 in 2005, the country singer Garth Brooks never signed an agreement with Integris Canadian Valley Hospital in his hometown, Yukon, Okla. Mr. Brooks expected the money to be used to build a women’s health center named for his mother, Colleen, who died of cancer in 1999. The hospital, however, claimed that the grant was unrestricted, to be spent as Integris saw fit. By 2009, with no indication that construction on the center would ever start, Mr. Brooks sued for his money back. A jury awarded him a full refund, in addition to another $500,000 in damages.

AFP: Protecting Yourself Against a Donor Lawsuit

To be clear, not every gift poses a potential legal problem.  Those who make annual fund or small, undesignated gifts are hardly going to complain about how the money is used, not as long as they are happy that the charity generally spends its money wisely.  But many donors make restricted gifts—whether outright or endowed—and they often care deeply that the money is being used as agreed.  More important, charities have an obligation to follow the donor’s intentions, if for no other reason than that they need to undertake a moral responsibility to the agreement.

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