Gift acceptance issues: Dealing with difficult donors and restrictions

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The intense competition for donor dollars creates a difficult enough environment for fundraisers. Unfortunately, certain gift acceptance issues add innumerable obstacles to the already challenging path of finding and retaining donors. The topic was recently explored at a conference, Good at Doing Good: Safeguarding Yourself and Your Charity in a Complex World, organized by the Charity Law Information Program (CLIP), a project of Capacity Builders (a division of OCSA) and supported by the Canada Revenue Agency (CRA).

Malcolm Burrows defined part of the problem as the Benevolence Dilemma. Head of Philanthropic Advisory Services at Scotia Private Client Group, Burrows sees firsthand how the dilemma plays out and explains simply, "There's a mismatch between what the donor needs and what clients need — or think they need." The hope is for organizations to find the right fit, he continues, one that balances their mission with donors' perceived interests. The gift has to fit; it has to feel right for it to work. Though not always easy to discern, for sure, sometimes the answer is evident.

Mission fit

Take what Burrows refers to as Benevolent Ignorance. Donors want to help but they're approaching that desire in the wrong way. They're misguided, he says. Even worse are those donors in the no zone, at the far end of the difficult donor continuum. These are the gifts that don't fit — in any way — with the organization's values and objectives and should be refused outright. "If you have a good sense of your mission, you won't waste time with these," he explains. Oftentimes these no zones are enshrined directly into an organization's policy or constitution, ensuring the decision is made clearer, in the face of any confusion.

Médecins Sans Frontières (MSF) Canada, for instance, has always incorporated the Corporate Giving Code of MSF International into its own. Integral to that code is blacklisting some entire sectors from donating gifts. Most of those listed — including tobacco, arms and weapons manufacturers — make good strategic sense for a medical humanitarian organization, says Rebecca Davies, director of fundraising.

However, MSF Canada and its board of directors didn't agree with all those listed on the no zone. And the resulting discussions between MSF International and its Canadian affiliate played an important role in MSF Canada's modified fundraising strategy. Case in point: automatically declining gifts from all extraction companies and businesses that produce luxury items or wine was an iffy restriction. "Are some business sectors really so problematic that they should be totally ruled out, such as (the then) resource-rich Alberta extraction industry?," asks Davies. "Do the same rules apply for donations received on an ad hoc basis as for those corporate partnerships linked to active support and external communications?"

Hoping to work out a policy that worked more specifically to MSF Canada's reality, they revised the international Code to suit its national circumstances. Their Corporate Giving Policy has since been loosened in some areas dealing with gift acceptance and logo use and provides them more practical guidance for ethical screening, Davies explains. "And now, in 2010, we are raising more money from the corporate sector than we ever thought we could, because our corporate partner program is both on MSF's terms, and respectful to our donors."

Know thyself

According to Burrows, the essential ingredient to finding that balance between organization mission and donors' interests lies with effective internal dialoguing. "Having a good sense of who you are and what you would and wouldn't do is a big part of it," he says, adding that those discussions are important to have on an ongoing basis. In fact, it's that type of dialogue that allowed MSF Canada to differentiate itself from MSF International as mentioned above.

To be sure, the organization is pretty clear as to who they are and who they're not. But that reality lends itself to other donor-related challenges. The single largest issue they face, Davies says, stems from the dominant characteristics of the MSF culture. A first-response, in-out, emergency medical organization working in humanitarian aid, MSF is hard-wired to be predominantly concerned with exit strategies from the minute they enter a conflict zone or disaster area. "Leaving a project is a marker of success for us," she explains, "because the population is out of imminent danger, and we've handed our medical programs over to another agency, maybe the ministry of health or a development organization." Problem is, the in-out mentality is counter-intuitive to good donor care.

And then there's the other dominant characteristic of their internal culture: independence. "MSF is deliberately an outsider agency, always has been, and likely always will need to be to uphold independent access to our patient populations," says Davies. "Independence is the heart and soul of our ability to deliver our mission." But being independent in the field necessitates financial independence, free from government's or large funding institution's agenda, beholden only to universal medical ethics.

The question then becomes how to attract and retain the generosity of Canadian donors while remaining dogmatic in its principles. "It is the ongoing generosity of our loyal supporters alone that enables MSF's emergency medical relief work in the first place," Davies offers, adding, "I question the applicability of adhering rigidly to these principles on the resource development side of our organization; donors want to be engaged for the long term."

Difficult engagement

And another thing, being in a constant state of emergency undermines the possibility of long donor cultivation cycles. "The case for support — humanitarian emergency medical aid — is a moving target and constantly shifting," she says. To complicate matters further, as opposed to traditional cases for support that rely on the tangible or emotional, MSF pursues one that is "cerebral" and "celestial". "Our work is about people, medicine, geo-politics, with themes like sexual and gender-based violence," Davies further explains. "What's headier and bigger than all that? And yet, what's very specific in any of that?"

MSF's case for support is the best and worst selling point for a fundraiser, she adds. The average first-time gift can be quite impressive as a result of its unique narrative but growing it is incredibly difficult. "This is where cerebral becomes celestial," she explains. "The field - all those great inflatable hospitals and mobile clinics where we deliver medicine - might as well be on another planet." After all, even though MSF can effectively measure impact and deliver accountability to donors, their in-and-out strategy doesn't allow them the important opportunity to engage donors emotionally, offering a first-hand and engaging experience. "Good fundraising is about managing relationships with donors to be able to deliver convincing and tangible impact for their investment," says Davies.

What now?

So how does an organization negotiate its strong culture of independence — in action, spirit and mind — and still engage donors? How can MSF grow its fundraising without betraying its guiding principles, promoting universal access to healthcare and relative safety to aid workers?

The board of directors responded to those questions by passing two key fundraising policies. The first, discussed above, was the creation of a more pragmatic gift acceptance policy, particularly in the arena of corporate giving. The second response came in 2008 when MSF Canada challenged the hard-line restriction of donor field visits.

No question, the concerns over those visits were — and still are — legitimate. Certainly there are real risks in putting undue stress on patients and aid workers, not to mention the security risk to the donors themselves. Besides, adds Davies, "there was the assumption that donor field visits would encourage humanitarian tourism, that donors would retract their gifts if they saw something they didn't like, or that they may feel entitled to have some say in the direction of the operations."

But with the costs of MSF operations ever-growing and with donors increasingly discerning over the charities they invest in — and the calls for transparency becoming more vocal — MSF Canada knew something had to change. "Fully engaged donors can also play a significant role to leverage further major gifts," adds Davies. Having the opportunity to see MSF's work firsthand and share their experiences could very possibly help achieve those objectives.

Since that policy passed, two field visits have already been conducted and the results were positive. "Though the issue remains contentious and is constantly debated, its efficacy is beyond reproach," echoes Davies, explaining "After returning from their respective field visits, two Canadian donors made significant gifts and are both right now active with helping to identify other major gift prospects for us and helping us solicit their gifts."

Finding a fit between mission and donor attraction is a continuously evolving process. As Burrows states, "it often takes a lot of discipline; you have to evaluate your time and value and look at opportunity costs." Despite the challenges, it seems MSF Canada has found an impressive balance, one that may even inspire other nonprofits as they wrestle with their own fundraising dilemmas.

Elisa Birnbaum is a freelance journalist, producer and communications consultant living in Toronto. She is also president of Elle Communications and can be reached at: info@ellecommunications.ca.

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