The first best practice is to ensure that all risks associated with a major gift are documented. All conversations and interactions related to the procurement and use of the gift must be included in the documentation. Phone calls, meetings, even casual conversations need to documented. Records need to be kept on all discussions. Verbal agreements are always open to interpretation. Therefore, all agreements need to be put into writing and signed off on by both parties.
There needs to be complete transparency from the donor about their wishes for the donation. Likewise, the receiving organization should be completely transparent about their plans to fulfill the donor’s wishes. This means that organizations need to develop strict internal policies and procedures around how this information is recorded. A centralized location should be established for information storage. Major gift officers managing donor relationships through personal spreadsheets needs to become a thing of the past.
Below are several benefits to having a centralized location for major gift documentation.
→ If a major gift officer leaves their organization, the documentation left behind will enable someone else at the organization to step in and pick up where the departing person left off. Without this information, the organization essentially has to build their relationship with a prospect or donor all over again. The result is a stall in the gift process, and most likely the loss of a gift.
→ Keeping detailed records of interactions with major gift prospects also creates a timeline that can be referenced later. The timeline can be analyzed to identify interactions that yield the most positive responses from prospects. These interactions can then be made standard practices during the major gift process.
→ Having a timeline of interactions can be particularly useful when dealing with bequests that are being challenged by surviving family members. Being able to show an established relationship with the deceased can help to alleviate any concerns that the organization had taken advantage of the deceased during the latter stages of life.
The second best practice is to specify the donor’s wishes under changing circumstances. For example, what happens if changes occur that make the objectives of the major gift obsolete? Does the wording of the gift agreement allow the organization to reallocate the major gift in those situations? Without addressing these questions in the gift agreement, an organization can find themselves looking at a lawsuit if they change the allocation of the gift.
All gift agreements should include ethics clauses which state what action might be taken to protect the reputation of the nonprofit or the donor in the event that the reputation of either party comes into question. For example, can the organization reserve the right to take the name of a donor off of a building if the donor is convicted of a crime? Or, can the donor recoup all or part of their donation if the organization is guilty of certain improprieties? The key factor here is that an ethics clause should be designed to protect both the organization and the donor.
Ultimately for most nonprofits, major gifts play an important part in the organization’s ability to reach their goals and continue their mission. By properly documenting the gift acquisition process and including protective language within the gift agreement, a nonprofit can prevent major headaches and enjoy their major gifts as they should.
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