Nonprofit Groups Work to Secure Pledges

After numerous awkward incidents in which donors withdrew hundreds of millions of dollars they had promised to charities, many organizations are exploring ways to make pledges more secure, reports The Wall Street Journal.

Instead of a handshake, some groups now ask donors to sign legal contracts. Other organizations have been more persistent in sending out reminder letters and calling donors who miss deadlines for scheduled payments. Some conduct research on potential donors to make sure their finances can match their promises.

But organizations must be careful not to inadvertently drive donors away, the article cautions. Said Peter Lewis, a businessman who made a $101-million promise to Princeton University, “If they don’t trust me, they don’t have to take the money—I can go somewhere else.”

Still, nonprofit groups have been more aggressive about seeking payments they were promised, as a number of court cases demonstrate. And at least a few groups have removed the names of donors from buildings when money failed to show up.

Read The Chronicle of Philanthropy’s report on how nonprofit groups can better manage donor pledges.

(Paid subscriptions are required to view both articles.)