Just before year-end 2020, Mackenzie Scott (former wife of Amazon CEO Jeff Bezos) made some major waves in the philanthropic world.
A “tsunami” might be a better way to describe it.
She announced that after months of research, she had given $4.16 Billion to nonprofits in the wake of the COVID-19 pandemic, providing “immediate support to people suffering the economic effects of the crisis. They took a data-driven approach to identifying organizations with strong leadership teams and results, with special attention to those operating in communities facing high projected food insecurity, high measures of racial inequity, high local poverty rates, and low access to philanthropic capital,” she wrote in a blog post on December 15.
The Minneapolis Star Tribune reported that one of the 384 grants went to the Greater Minnesota Housing Fund, which received $7 million to build affordable housing. The previous record for the largest gift from one person to the GMHH was $500. Safe to say the Scott gift shattered that record!
In my two decades working with nonprofits and their donors, I can’t tell you how many times I’ve seen a well-meaning, significant gift become a source for stress at a nonprofit. So the Scott gift makes me wonder: as you think about the nonprofit where you work, or an organization that you love and support…
Would they be ready to accept a $7 million gift?
Is the vision big enough, and do donors have confidence that the organization would be able to strategically, thoughtfully, put a significant gift to work to have a positive, long-term impact?
A solid Gift Acceptance Policy is the first step, and it can encourage more giving!
Here are a few things to consider as you putting together a Gift Acceptance Policy. Done well, this document will cast a vision for long-term sustainability and inspire generosity in your donors:
- Determine where the policy should “live.” Does the organization have bylaws or a handbook where this type of information should be housed? Does a board or lead team need to approve it? Is there a lawyer contracted by the organization, or a volunteer with legal experience, who would be willing to give it a once-over? If changes need to be made in the future, make a clear plan for how those changes will be proposed, ratified, and implemented.
- Many donors want to establish estate gifts, which may not come to fruition for decades! While they love and trust the organization’s leadership now, they might be leery of how the organization will change and shift over time. A gift acceptance policy, first and foremost, should give a general structure for how gifts will be handled, no matter who’s in leadership down the road. Will a set percentage of every gift over a certain dollar amount be set aside for outreach and expansion? For operating expenses?
- Does, or should, the organization have an endowment or foundation? This can be a very beneficial way to build funding for the long-term. If this exists, or you decide to set one up, a policy should include specific parameters for how often, and for what purposes, funds might be taken out of the endowment/foundation. Does the withdrawal need to be matched by new giving, so that the principal value remains consistent? Will a certain percentage of the fund’s earnings be taken out each year for a specific purpose, or to support day-to-day expenses?
- Do you have “buckets” that donors can give to? If you don’t, people may start to dream up their own initiatives toward which to direct a gift. (It’s why many churches have defunct bell tower funds and obsolete pew cushion funds!) Identify a few key areas of programming that will remain consistent for the long-term, but are specific enough to match up with donors’ passions. (I.e. staff development, new programs, capital projects)
- Include a basic plan for how to talk about a gift once it’s received and used. Seeing how major gifts impact the organization instills confidence in leadership and inspires other giving.
There’s a lot to think about, but we’re here to help! Reach out to our team to ask questions, set up a consultation, or get help creating a gift acceptance policy or launching a legacy planning program.
About the Author: Jenny is a graduate of the Metropolitan State College of Denver’s Personal Financial Program, where she received her Certificate in Personal Financial Planning. She’s in her third decade advising nonprofits and educating donors on the best ways to maximize their legacy potential. When she’s not on the road visiting clients or hanging out with her granddaughter, you can find Jenny at the movies (with popcorn, extra butter), curled up with a suspense/crime novel, or enjoying a good glass of wine with those she loves.