3 Times When You Should Turn Down a Donation (Really)
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Are you raising your eyebrows at this headline, wondering who would ever be so thoughtless (or stupid) to turn down a charitable donation? (And wondering if maybe that money could go to your organization instead?)
Although nonprofits constantly hustle for cash, it’s possible that at some point, a donation will cross your desk that makes you think twice. In nearly every position I’ve held, I’ve been faced with a funding option that I’ve had to seriously discuss with my team. We had to move beyond our usual question of “Who will give us money?” and instead ask, “Is this the right kind of money?” That is, will this donation help further the nonprofit’s mission, or could it potentially harm the organization?
To help you face these inevitable questions and prepare you for those times when you should just say no, here are a few situations to look out for.
1. It’s Not Enough
Over the years, I’ve met with dozens of donors who are only interested in funding new projects. “What do you want to do that you haven’t been able to do yet?” they ask. I give them a few examples and explain how much each will cost. They pick one they’re interested in, and—here’s the catch—suggest fronting only half the needed amount.
Sometimes, that’s fine—if I can figure out a way to use that donation to leverage other funders. Usually, I’ll take a look at my prospects list and start making calls to donors who couldn’t support the whole program, but who might be interested in helping out with a smaller amount. But other times, it turns out that the initial donor is really the only one interested in that particular program. And if I can’t scale down or pilot the program, I’m stuck with a donation I can’t use (that’s right—if someone gives you money for a particular program, you can’t use it for anything else).
In the end, money that I can’t spend on things my organization and community needs isn’t a gift—it’s a bill. I’d rather turn down that money than accept something that’s going to put my staff under pressure to do the impossible.
But Before You Say No
If you can’t convince the donor to give more, ask if he or she is willing to help you find other funders to make up the difference. A donor-to-donor conversation can be much more effective than a nonprofit representative approaching a funder alone. And if that conversation doesn’t work—or the initial donor isn’t willing to make the effort to find other contributors—you’ll have an opportunity to suggest other alternatives.
2. It’s Too Much
I know—you wish you had a donor who would double your nonprofit’s budget this year. But riddle me this: What will happen next year? Is that donor going to give you another gift at the same level? Or will he or she turn to another organization and fund a new program?
Budget fluctuations can be dangerous to an organization—and a giant red flag to other potential donors. If you can’t use this donation to somehow boost your fundraising to keep your budget at a certain level, it could start to look like you’re suffering from financial mismanagement or inconsistent fundraising capacity. That will cost you new donors and may even jeopardize your relationships with current funders.
But Before You Say No
Talk to the donor and see if he or she is willing to spread the money over several years—or even better, to pledge to sustain the money over several years so you can hire staff or invest in necessary equipment (say, a van for your summer camp program or new computers for workforce training) that will help you long-term. In most cases, donors think they’re doing the organization a huge favor by offering so much money, so, it’s up to you to educate them about the nonprofit and how it can benefit most effectively from their kindness.
3. It’s From the Wrong Person
Charity is often used as a marketing ploy, and generally I’m okay with that—but occasionally, it can be a problem. Do you have a donor who’s trying to negate past corruption with big donations? If that person or company is tainted with bad publicity, it could actually affect your organization’s reputation.
Depending on the situation, your acceptance of a gift can be read as political endorsement or, even worse, a bribe. Will it look like you undermined your mission for money? Needless to say, that would ruin your reputation, your future fundraising, and your ability to achieve your mission.
But Before You Say No
Check in with your communications department and any legal counsel the moment you hear about such a donation, so you can learn how to best handle any negative associations. For instance, you might want to release a statement saying that the donation is proof that “we changed someone's mind" about the issue. Or, you might decide to run a campaign asking your regular donors to match this donation, showing that they have a bigger voice and more power in your organization.
Also, talk to the donor about what it means if the organization accepts the gift (i.e., as much as you appreciate this support, the nonprofit will not act as a spokesperson for him or her, nor does the donation absolve him or her of any guilt).
If you’re not comfortable with having that conversation, consider asking these types of funders to do something besides donating money. If they have political clout, ask for their support on passing or rejecting a new law that affects your mission. If they have connections to other donors, see if they can make an introduction. Bring them into the organization, but keep it out of the press or official documents.
As you can see, the most important thing you can do with a gift you’re not sure about is to talk to the donor about it. And if the donor is unwilling to have a conversation with you, don’t accept the money. Draft a polite, but formal, letter stating that you appreciate the donor’s intention, but you cannot accept the gift at this time.
Philanthropic giving at its best is about developing relationships and valuing the people who fulfill a mission and those who benefit from it. Believe me, you will achieve more success with people who understand—and are willing to work with—your circumstances than with those who are only pushing their own agendas.