Ensure Donor Satisfaction for the Life of a Big Gift

When a wealthy donor sues a charity over a big donation, nonprofit leaders are usually left shaking their heads, wondering what went wrong.

Philanthropy experts say such lawsuits usually indicate a breakdown in communication between wealthy donors and those representing a nonprofit.

“If there’s one key takeaway from these lawsuits, it’s that there’s no substitute for a lot of really good communication, both when the gift is solicited and when terms of the gift are negotiated” and beyond, says John Easley, deputy director and chief philanthropy officer at the Cleveland Museum of Art.

Easley has been working with major donors for four decades and says there is no “one size fits all” approach to talking to wealthy philanthropists about how their money will be spent. But, he notes, you should never let months go by without sharing a progress report.

Regular conversations with your rich donors will help prevent misunderstandings that can arise from big gifts or complex projects. From the time you first get to know a philanthropist until well after the gift agreement is signed, communicate often, says Felicia Murphy-Phillips, senior officer for leadership gifts at Morehouse College.

Murphy-Phillips builds time into her schedule to stay in touch with potential and current donors.

“They don’t go six months without hearing from me,” says Murphy-Phillips. “I’m constantly calling to check in, and I’m sharing information and making sure they don’t have any questions.”

If a donor has a question that she can’t answer, Murphy-Phillips makes a point to find the information and get back to the donor as quickly as possible.

Regular conversations with wealthy donors help Murphy-Phillips stay on top of philanthropists’ concerns; calls, emails, and letters let the donors know they are valued.

Overworked fundraisers may be tempted to forgo close and regular contact with major donors, but such conversations reveal how philanthropists think, what they expect, and whether any dissatisfaction is bubbling up, says Gasby Brown, a fundraising consultant.

Steps to Take

A sound gift agreement manages donors’ expectations and recognizes that it may be necessary to deal with pitfalls that arise, experts say. Take the following steps before you and a donor sign on the dotted line.

• Work closely with donors throughout the initial discussions to establish the criteria for how their donations will be used, to ensure it’s in line with their wishes.
• Share gift guidelines and requirements with your donors, so they understand every aspect of your nonprofit’s gift-acceptance processes.
• Show donors a sample gift agreement to spur questions and discussion about specific details of their own agreements, and be willing to revise as needed until all parties are in agreement.
• Help philanthropists make their expectations clear, and be sure to tell them how long everything is going to take and why, says Murphy-Phillips.”I’ll tell them I want to make sure we’re on the same page, and then I’ll ask them to tell me what they just heard me say and if that sounds right to them,” says Murphy-Phillips. “Sometimes what we say may be misunderstood, so I try to reiterate what we talked about, either verbally or later on in writing.”
• Create a timeline for when and how a donation will be spent. This can go a long way toward avoiding problems down the line, says Brown.This is especially important for major donors who come from corporate or entrepreneurial worlds, where projects may be completed much more quickly. Build space for delays into the timeline to give your nonprofit flexibility and to manage donors’ expectations, says Brown.
• Develop a contingency plan in case organizational needs shift or other institutional challenges crop up, so the gift could be used for other purposes, as agreed on in advance, says Easley.

“I try very hard when working with donors to build in a lot of latitude,” he says. “If the original project the gift was going to support is no longer possible, for whatever reason, I ask the donor if they would be comfortable leaving it up to trustees to decide a secondary purpose, or would they like to name a secondary purpose.”

“By the time you get to the cultivation phase, you should know them well enough to understand their expectations and be able to talk to them about what’s going to happen and when,” says Brown. For the first few years after the gift is made, Murphy-Phillips says, it’s smart to stay in touch with donors and load them up with as many details as possible. Her office sends donors reports that explain how their money is being invested and distributed. For cases in which a donor is endowing scholarships, for example, she makes sure the reports provide information on the students receiving them and what they are accomplishing.

Talking regularly with your donors about their investment in your organization should be a shared responsibility of top leaders, not just the development office, says Easely.

“Donors are looking to have an impact, so particularly with megagifts, how you engage people in that impact and keep them updated on progress is really critical,” he says.