Have a Plan Ready for When Big Gifts Surprise You

The arrival of an unexpected gift can be both exhilarating and daunting. Just ask the more than 2,700 nonprofits that have benefited from philanthropist MacKenzie Scott’s largess. By the end of 2025, Scott’s unrestricted grants totaled more than $26.3 billion, according to her Yield Giving website. 

Windfalls are more common than you may think. They come in many forms, such as gifts that are not earmarked for specific purposes, and can result from operating surpluses, the sale of property, or a surprise bequest. No matter the source, a significant influx of money can require a rethinking of financial strategies and governance structures. 

No leader wants to be caught off guard and forced to scramble to ensure a large gift is spent wisely. Creating a windfall policy enables organizations to avoid impulsive decisions and pursue a strategic approach. However, before you start writing a windfall policy, take a look at your investing, fundraising, and governance policies, and make sure they position your organization for growth.

Align your investment and fundraising strategies.

When investment decisions and fundraising priorities work in concert, each reinforces long-term goals rather than pulling the organization in opposite directions. An interconnected strategy gives boards and leaders a shared framework for managing growth responsibly and helps nonprofits make more disciplined choices about growth, risk, and sustainability.

Pete Waldron, president of the Catholic Foundation of Eastern Pennsylvania, advises: “The fastest way to grow an endowment fund is by adding new money and leveraging it against market performance.” He knows this firsthand. During an eight-year period, the foundation delivered 44 percent annualized growth, compounding its assets more than 18-fold. Surely market performance matters, but so do strong capital stewardship, consistent inflows, and a disciplined long-term strategy.

A strong fundraising strategy should include gifts in an endowment, if your organization has one. For example, directing bequests into your endowment helps build it up over time to safeguard your organization’s future.

Ensure your governance policies are shipshape. 

The foundation of good governance is a fiduciary mindset among trustees. According to the CFA Institute, “A strong, well-articulated governance structure provides the mechanism for decision makers to function together effectively. A weak, ill-defined governance structure breeds confusion and acrimony.” 

Whether you are starting an endowment or managing one, make sure your governance policies are sound, then create a policy that outlines how you would handle a windfall gift.

Here are five steps to write a windfall policy.

Once you’ve examined your investment, endowment, and governance policies, you’re ready to draft your windfall policy. It will set thresholds for what constitutes a windfall and typically embodies these critical tasks:

1. Take a financial inventory of short-term and long-term needs. It should encompass how money should be spent, saved, and invested, and it should include expenses for mission-related programs, staffing, and operations, fundraising, facilities and capital needs, outstanding obligations, reserves and risk management, as well as detail any funds designated for investment, endowment, or quasi-endowment purposes. Planning in advance helps ensure that immediate priorities are addressed while also considering future sustainability.

2. Create an investment policy statement (IPS). A sound statement reflects the risk profile and goals of the nonprofit investor — with or without a formal endowment. The chief investment officer role may be internal or outsourced, but in all cases it should make clear who is responsible for asset allocation, portfolio construction, and manager selection. Then hold investment committee meetings  to review performance, address emerging trends, and ensure all voices are heard.
3. Establish clear procedures for managing endowment and quasi-endowment funds. Define roles, responsibilities, and lines of authority among trustees, committees, and advisers. 
4. Convey windfalls to key stakeholders, including trustees, beneficiaries, board members, staff, investment advisers, and consultants. While transparency can boost morale and signal confidence to other donors, publicizing a major gift also risks messaging that financial needs are now reduced. A thoughtful nuanced communications plan that’s mission-focused and audience-specific and conveys careful stewardship and oversight is as important as the spending plan itself.

5. Build a strategic endowment plan (SEP). The SEP is a roadmap for increasing an organization’s endowment; it captures the vision for what the money will accomplish, goals, and strategies for reaching the goals. It brings together diverse stakeholders, unifies the organization around a shared direction, and spells out what success looks like and how it will be evaluated. Waldron of the Catholic Foundation of Eastern Pennsylvania knows well the value of the SEP: “It enables us to stay focused on achieving better results for our partner parishes, schools, and ministries — and includes clear benchmarks and KPIs to monitor our progress.”

An organization can help turn windfalls into lasting legacies by being proactive and taking an integrated approach that addresses immediate needs, builds for the future, and educates its boards and stakeholders.

This information has been obtained from sources believed to be reliable, but its completeness is not guaranteed. Wilmington Trust’s opinions as of the date of this material are subject to change without notice. There is no assurance that any strategy will be successful. Wilmington Trust is a registered service mark used in connection with services offered by certain subsidiaries of M&T Bank Corporation.