President and CEO Magazine http://www.presidentandceomagazine.com/ interviewed me for an article that ran in the April 2012 edition (page 20-21) titled “Donors Aren’t Perfect: Things That Annoy the Charities You Support.” The take-away message was that major donors can sometimes drive an organization’s efforts and funding away from its key mission.
There is little negative that can be said about a person handing you money to do important charitable work. But, my current position as a faculty member and managing start-ups in a university setting, allows for more freedom to comment on donor matters than one generally has when managing a nonprofit.
Most donor contributions hit the mark and can be used by the charity directly on critical mission work. In other cases, a donor may propose funding a new area, helping move the charity into a beneficial new direction increasing efficiency and effectiveness. This article is not about such donors – the majority of charity donors.
This article is about the few donors with an agenda entirely of their own. A donor can seek to push work and fundraising into areas more focused on the donor’s personal agenda than on the organization’s program goals and financial objectives. Board members are often reluctant to challenge donor direction, and executive directors are often reluctant to challenge boards. After all, it’s hard to turn down money.
The magazine reporter’s questions brought to mind several examples. Here’s one.
A well-known (to the board) donor had land and wanted to donate it to the charity, but to receive the donation the charity had to raise funds to build an educational facility on that land, manage the facility, employ teachers, conduct education programs, and so on into the foreseeable future. The donor promised to solicit his friends for donations for construction of the facility (friends who were already regular donors to the charity). The donor contended all the charity had to do was hire and maintain staff, conduct education programs, and maintain the facility. While education was among the missions of the charity, at that time the charity had no plans for new or expanded educational services. Accepting the donor’s gift would mean significant diversion of staff resources to construct the facility, diversion of fundraising efforts, and a long-term commitment of resources to provide educational program and facility maintenance.
How to deal with donors who seek to divert a charity’s resources and mission objectives.
My advice is to have program goals and financial objectives firmly in place, in a “published” plan developed in a transparent fashion for the entire organization. Then stick to the plan. New donor ideas should be welcome, and plans can be adapted by open processes quickly where new direction better advances the mission. (Also see “More about sticking to a plan” below.)
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When the reporter asked how successful I have been in the past dealing with donors having specific agendas, I had to admit, in most (but not all) cases the board and staff did the donors’ bidding. It’s not easy to turn down money, and not easy for staff to turn down the board.
More about sticking to a plan:
An organization’s board and staff should form and adopt a strategic plan (establish the goal), from which an operational plan is developed (establish the objectives to be met and detailed means/methods to meet them), from which a budget is developed. This becomes the organization’s “business plan” as well as the organizational performance plan that can be used to measure progress in accomplishing the mission. Donors should be introduced to the organization’s mission, goals, and objectives early in the stewardship process. This will help them understand the organization has a plan and how the donor may fit into that plan to achieve the mission. Most donors will understand and appreciate a business-like approach to managing the charity. Donations that may force staff, volunteer, and financial resources away from the mission and objectives can be counterproductive.