“What are Trojan Horse Donors?”
Like their namesake, they are donors who have made a very large gift which came with conditions that the nonprofit would not otherwise have accepted or chosen on its own to do, but the gift was too large or the source too important to refuse.
We all know nonprofits, may even be with one, which have yielded to such temptations and have had buyer’s remorse ever since.
But we also know that a great many nonprofits are struggling financially and so are more vulnerable, more inclined to yield to the temptation of solving immediate cash needs in order to survive to fight the good fight in the future, and where the consequences of saying ‘no’ are perceived as life-threatening to the organization.
Making the situation worse if the growing number of donors who are more interested in achieving their personal goals than in supporting the nonprofit in what it does and how it does it.
The latter are genuine philanthropists. The former are something else.
“But is it realistic for me to say ‘no’ to money which my nonprofit desperately needs?”
Admittedly saying ‘no’ or even, as I once did, sending the money back to the donor is really, really hard to do, particularly when so many of your colleagues – board and/or staff – are urging ‘yes’.
“But what options do I have?”
The best option is to adopt “Gift Acceptance Policies” which specify the conditions under which a gift can and cannot be accepted. Such policies customarily address two three topics:
- For what purposes will gifts be accepted – e.g. only those which are mission-related (which is what I recommend), or for purposes which are not consistent with other programs or services.
- What types of gifts will be accepted – e.g. some nonprofits will not accept real estate, or other illiquid assets, or complex deferred gifts.
- What types of donors will not be accepted – e.g. some nonprofits choose not to accept gifts from certain industries.
With those three topics defined and board-approved, a nonprofit is able to say to the donor, “We can only accept gifts which meet our guidelines that state……..” rather than “We have decided we cannot accept your gift because…….”
More importantly, it enables a nonprofit to engage the donor earlier in the process, if possible, and to work with the donor toward a mutually acceptable resolution.
“Where can I learn more about these policies?”
Your local community foundation or state association of nonprofits or local chapter of the Association of Fundraising Professionals is generally good sources of such information.
Also they are discussed in some detail, including what specific purposes and content such policies need to address and how they can be used, in Informed Fundraising: An Introductions and Guide published by BoardSource, of which I was the lead author. It is available from www.boardsource.org.
“Where can I find samples of such policies?”
Excellent examples of Gift Acceptance Policies are readily and freely available from reliable sources including the National Council of Nonprofits and NonprofitLawBlog amid many others. Take a look at several versions as possible models to adept to your organization.
BUT don’t forget to start with the three topics above.
This commentary is copyrighted © 2015 by Ron Wormser.