May 26, 2008
Donors' Rights Versus Charity Independence
Hildy Gottlieb, a nonprofit consultant, is angry.
“Nothing gets my teeth gnashing like the discussion of donor rights and
donor accountability,” she writes on her blog, Creating the Future.
While the nonprofit world appears to be embracing the notion of donors as investors who charities ultimately answer to, Ms. Gottlieb, a lifelong community activist, says the concept “sounds good at face value, but it is a logic that goes beyond being just seriously flawed (which it is). It is a concept that is hazardous to the ability of community organizations to create visionary improvement to the quality of life in our communities.”
“The questions ‘To whom are we accountable? And for what?’ are about more than just dollars and donors. These questions are at the heart of everything community organizations are able to accomplish. And the reason for that is simple: We accomplish what we hold ourselves accountable for,” she writes.
Prompted by a discussion on the Tactical Philanthropy blog about whether donors should be given the right to vote for the board members, Ms. Gottlieb poke holes in the donor-as-king view in a six-part series on her blog.
For example, in what she calls her “Bill Gates vs. my grandmother” argument, she asks does donor accountability mean “the organization is more accountable to the person who writes a $1-million check than to the person who gives $10? Are we then really talking about a sliding scale of accountability, where the organization is accountable to each and every donor, in direct proportion to the level of his/her gift?”
What do you think of Ms. Gottlieb’s concerns? What do you think of allowing donors to vote for board members? Click on the comments link below this post to share your thoughts.
— Ian Wilhelm
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I share her frustrations. The “tyranny of the donors” is something that I have blogged about (and gotten in trouble for, as a result!), and it is definitely a serious point for all non-profits to considers.
When I think of this topic, two contrasting arguments come to my mind:
1. In a for-profit company, majority shareholders wield much more influence than people with just a few shares. It’s not a precise analogy, but I think it therefore makes sense that a $1 million donor would wield more influence than a $10 donor. That’s just the economics of philanthropy.
2. The revolution will not be funded.
(Just Google this and you will see what I mean)
Jeremy Gregg, Editor
The Raiser’s Razor
http://theraiser.blogspot.com/
— Jeremy Gregg May 26, 10:44 PM #
One of the walls the nonprofit sector sometimes runs into is wall of pressure to be more like businesses. Jeremy to your first point, I think we may just have to change the wheel. Nonprofits can be like businesses but we can’t hold onto the ideals that have keep holding us back. The business sector is changing faster than we are.
I agree with Hildy, we have to straighten out the mess of accountability.
No matter how much the donor gives, shouldn’t all nonprofits be accountable to their mission first?
— Tera Wozniak May 27, 02:17 PM #
A gift is a gift is a gift.
Or is it?
To me, the phrase “donors’ rights” is an oxymoron. A genuine donor has no rights. When you make a gift, you lose control of what is given.
Or….don’t you?
I know this philosphical hard line doesn’t fit with the realities of everyday life in nonprofit organizations that are struggling to meet the demands of their missions. But the alternative is, I think, worse.
Donors should choose organizations they trust to do work they want to see done. And then get out of the way.
Shouldn’t they?
— Putnam Barber May 27, 04:29 PM #
I agree with what Tera was mentioning about nonprofits being accountable to their mission first. This is, after all, the whole reason why the charity is created and in existence. Furthermore, one of the fundamental purposes of having staff, a CEO or executive director and its board is to move the vision forward of and continue to mold that charity. Input from outside support should be just that – support. If donors want to get involve, then find ways to involve them in supporting the direction of the charity (not finding ways for them to change it).
— Ken D. Grunke May 27, 05:22 PM #
I write grants for the construction of affordable housing. Every grant brings with it alot of money, and alot of scrutiny. Donor representatives are allowed to sit in on decision making sessions, and the subsequent use of the grant is monitored and audited for many, many years to come. Why should any other grant or donation be different? If you accept money based upon your representation of what you will use the money for, you should be ready to prove you have done what you said you would at any time. Most low donors don’t bother to follow up, but if larger donors want proof of what you did, and you expect to get more money from them in the future, you had better be ready to open your conference room doors, along with your books. Otherwise, why should they give you their money?
— Pitt Cairn May 27, 10:15 PM #
The integrity of the charity is at stake when we accept donations for “off-mission” projects. We should be accountable to any donor as to any promises or representations we make in order to get the donation. We should be accountable to any donor as to how we spend our money. We should be accountable to ourselves, our trustees and our mission in order to not put the charity in the position of accepting a donation for something that we either do not intend to do, or which is outside our stated mission.
— Gary Redding May 28, 10:34 AM #
I realize this is somewhat off point, but many nonprofits have a “pennywise and pound foolish” attitude about doing business that hampers their efficiency and effectiveness. I believe that if more nonprofits would invest in professionalizing their management and operations, they could better fufill their donors’ wishes. Nonprofits have a fiduciary responsibility to put as much of each donor’s gift as possible toward supporting their mission. Nonprofits should be focused on spending less money on glossy annual reports, fancy fundraisers and logo-covered thank you gifts and more on planting a tree or digging a latrine. Every $25 gift I’ve ever donated has been consumed by the cost of follow up mailings to persuade me to renew my support. This wasteful fundraising model needs to change.
— Ellen Kempler May 28, 11:31 AM #
One of the biggest blunders of the nonprofit world in the past 50 years is the excessive emphasis donating gifts that are restriced to “program” dollars. The nonprofit sector has trained donors to not give them unrestricted funds, and now they complain incessently about how hard it is to get unrestricted funds.
Give to the charities you think have a chance, and let the visionaries be visionaries. Is this “market driven?” – I don’t know and I don’t care — there’s a quote by Henry Ford that is appropriate – “If I had given the people what they wanted – I would have invented a faster horse.”
If the charity does not meet your expectations, do not continue to give to them in the future. That part of the equation is “market” driven.
Bill Huddleston
CFC Expert
www.cfcfundraising.com
703-560-1825
BillHuddleston@verizon.net
The Combined Federal Campaign (CFC) is the world’s largest source of unrestricted funds – $1 billion in the past 5 years.
How much did your non-profit receive?
— Bill Huddleston May 29, 02:37 PM #
Donors’ rights versus charity independence sounds like a battle for control. The charity and the donor should find the relationship mutually agreeable or they should not work together.
Charities which successfully communicate their mission and vision earn the right to receive gifts and use them according to their need. By building a close relationship with the donor, both parties know what is needed and how the support will be used.
If the donor does not agree to the use of the gift, they can find another organization or as some have done, start their own nonprofit. Likewise, if the charity would be forced to change their mission or abandon their view of the future based on the nature of the gift, they should have the right to refuse it. A well crafted Gift Acceptance Policy can protect the mission in addition to preventing gifts of dubious value.
Relationship management is a win-win. A gift of $1,000,000 commands respect because of the impact it will have. Yet the $10 gift is hardly unimportant. A thank you along with a comment about how it will help operations can lead to more significant gifts in the future.
Relationship management is the answer and donor rights are not. Lack of consideration for a charity’s mission and failure to understanding a gift is a gift, sounds more like an ego trip and less like philanthropy.
— Frank K. Simon, Jr. Jun 6, 10:06 AM #