Donor Intent - ask the hard questions early

Yesterday’s NY Times featured a helpful review of the thinking in our field about the relationship of funders and recipient organizations in honoring donor intent. It is always good to see colleagues Melissa Berman and Lisa Philips quoted, with their typical good judgment. The article summarized the current status of the legal issues and best practices regarding the right of the non-profit to interpret the intention of a funder, and the rights of the funder to make a subsequent claim on the organization. Well worth a read.

The article understated two very key components of this question which require further discussion:

Often, the dilemma of donor intent is that the funder has not adequately thought through what will be adequately gratifying about the gift. After all, just getting to a decision to fund a project is hard enough. A long-term gift often has no shortage of technical matters to work through – how much to give, when, etc. The recipient organization will try to anticipate what kind of recognition to give, an occasional source of tension, but surely of attention. A long term or endowment gift will inevitably yield an enthusiastic response built on the most optimistic read of what can be accomplished with the new funds. In this context, it is often hard to ask the funder to take a breath to ask a very straightforward question: what will make you pleased in 10 years or 20 years? What will make you displeased?

To my mind, it is the responsibility of the funder to think these things through prior to making a gift. The recipient organization can surely challenge these preferences, say no, or ask to renegotiate. That organization should assuredly affirm its values, priorities, practices and ethics – and clarify which of these are non-negotiable. [In an executive position I held some years ago, our policy was not to accept any capital/facility gift without an endowment component. It was hairy when we risked losing very large commitments but in the long run, it was the right policy and got better gifts because of it.] But to put the recipient organization in the position to have to second-guess what might be satisfying to the funder is wrong. It has been my experience that, when these questions are asked, they often make the funder uncomfortable, but yield a better and more satisfying grant.

The second issue that was not fully addressed by this article was donor intent for multi-generational giving vehicles such as foundations or donor advised funds. There is such a wide swath between “controlling from the grave” and providing no direction that the 2nd, 3rd and 4th generations often find themselves reacting to too strict guidelines or those that simply don’t exist. In my experience, so much time is spent addressing these questions when the control of philanthropic vehicles shifts to these generations that it is clear that opportunities have been lost. The issue here is not the tension between recipient organizations and funders but rather the ambiguous relationship and expectations between generations. If the guidelines are too strict, it functionally disenfranchises the future – why bother if there is no choice? And if the guidelines are non-existent, so much time is spent competing for who most authentically represents the family legacy.

Just as in the first case, the time spent clarifying these expectations early in the process obviates tensions later on, so the same should be true here. It is here where those of us on the philanthropy advisor side earn our fees. I am sure that Melissa Berman and Lisa Philips would concur that when we do our work well, we are not only helping funders give well, wisely, and strategically, we are also helping them help their families, heirs, and trustees be able to do equally effective philanthropy for years to come.