When to say “no thank you “to a generous donor.

Are there times when we should not accept a generous offer of a gift? Even if the donation is very large?

Well, the answer is “yes”.

Anytime a donor attempts to place adverse restrictions on a gift that could cause your organization to stray from its mission, then it’s always better to refuse the gift. That takes courage and leadership, but it’s the right thing to do. There is a delicate balancing act that should occur between the organization’s need for funding and the donor’s wish to have an impact on the non-profit.

It’s crucial for any non-profit to follow through on the restrictions of a gift once they have accepted the gift. For example, if the gift was for the creation of a new play, then you better create the play! And if the gift was restricted to an endowment fund, then you better place the gift into the endowment fund.

But what happens when the donor wants to offer a large gift in exchange for some artistic control or influence on the day-to-day operations? Then it may be time to NOT accept the gift. When a donor makes a gift, they are giving up ownership of an asset and transferring that asset (cash, stock, real estate etc) to the non-profit. Once the gift is made, they no longer own the asset. In exchange they may receive certain benefits (special recognition) and one of benefits is the tax deduction as part of the IRS tax code. That’s because they no longer own the asset. Some donor restrictions are beneficial, some are not. Know when to say “no thank you”.

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