680_alotofmoneyIt would appear, on the surface, to be an oxymoron, however it is possible to raise too much money. For the purposes of this discussion, I am defining ‘too much money’ as ‘money that you are unable to spend for the purpose that it was given.’ Let me explain.

This past Friday we began to experience severe flooding here in Colorado. I had the opportunity to see the effects first hand, as my drive from Denver that normally would take 55 minutes took 5 hours due to road closures, bridges washed out, etc. While I was on this trek Friday evening, one of my stellar team members reached out to me to ask “should we start raising money for this disaster?” I am very fortunate to have 4 ambitious staff members who work alongside of me, and each of them has initiative that I value. I responded that we do not want to start raising money for disaster relief at this time because we do not yet know the extent of need, how we would use the money, nor what our costs might be. In other words, we do not want to raise too much money.

In the business of fund raising, it is important to be careful about this issue. There are some ethical lines out there that we do not want to cross. Point 4 of the Donor’s Bill of Rights states that donors have the right:

“To be assured that their gifts will be used for the purposes for which they were given.”

Donor Intent is critical, meaning that we must use dollars in a way that is consistent with how the donor expects that they are going to be used. When we fail to do this, it can cause a lot of problems. A noteworthy example was in 2001. Remember when the American Red Cross collected money for the 9/11 response and attempted to set some aside for use in future disasters? It is not that funding future disasters is not an important thing to do. I applaud their desire to plan ahead and prepare. The problem was that the funding was donated to assist with 9/11 response.

Sometimes the problem can be initiated on the donor side. How many of us have had donors try to give us money but we cannot accept it because of the terms? When there are too many strings on a gift, it is better to simply decline although that sounds counter-intuitive. I was speaking with a colleague here in Greeley just a couple weeks ago. He had to turn away a six-figure gift because of the terms. This issue is why it is so important to have good Gift Acceptance Policies in place at your organization. Such policies will clarify what gifts you can and should accept.

In a small organization it can seem almost unheard of to decline a gift. I will use an over-the-top example to illustrate the concept. Imagine that you are the Director of Development at a small homeless shelter in Fargo, North Dakota. You have a local wealthy donor call you to set an appointment to talk about a large gift to your organization. You gladly set the meeting and await the date. The donor comes in and explains that he visited the Marshall Islands as a kid and really has a heart for the people there. He also cares about homelessness, because his mother was homeless once. Now that the donor has made his fortune, he wants to give back in order to serve the community. He wants to give a gift of $1M to your shelter, and he wants it to be used to provide homeless services to women who have immigrated to Fargo from the Marshall Islands.

We as fundraisers in small organizations all want to accept a million dollar gift. But how many Marshallese women are in North Dakota? Of the number in North Dakota, how many are homeless in Fargo? Having a seven-figure gift on your books that you cannot use is not in anyone’s interest. If the fund raiser is not able to talk the donor into adjusting the terms of the gift, it would be better to decline it because we do not want to raise too much money.

The issue of too much money has the potential to come up when raising money for disaster relief, but another time to be wary is during a capital campaign. If donors give for brick and mortar, the money needs to be used for that project. If there is an overage, it needs to be returned to the donors or you need to get their permission to use it for a different purpose.

We can avoid raising too much money by being ever mindful of the needs in our organization, and the costs of meeting those needs. As ethical fund raisers we owe it to our donors, our organizations, and ourselves to be the best that we can be, ensuring that we balance the needs of our various stakeholders.

Have a great week,

KLM

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