By Micah J. Malouf
Special Counsel, Schell Bray PLLC
As a fundraising professional, you know a single gift holds the power to transform lives and create lasting change. But the act of giving goes far beyond a mere exchange of funds—it often requires thoughtful planning, a mutual understanding, and a shared vision. Properly documenting this planning, understanding, and vision with the donor plays a pivotal role in ensuring a gift’s success and long-term impact. From an organizational perspective, developing good templates which are both user-and-donor-friendly can go a long way in keeping everyone happy and on the same page.
A well-crafted gift agreement outlines the intentions and expectations of both the Donor and the recipient Donee organization. By explicitly documenting the gift’s purpose, conditions, and desired outcomes (both now and into the future), an agreement establishes a clear framework and setting of expectations. This transparency fosters a shared understanding, reducing the potential for misunderstandings or misaligned expectations down the road. A gift agreement should:
- Help ensure Donor’s goals are clear and broad aspirations should be reduced to clearly defined directives on gift use
- Provide clarity around recognition, if any
- Allow for flexibility in use of the gifted funds over time
- Promote accountability and stewardship on the part of the Donee organization, including any reporting requirements
- Create a roadmap for change, when necessary, and how those decisions are made
It is particularly important to document these objectives with planned gifts to be received after the donor has passed away and can no longer clarify his or her intentions.
Also, change is inevitable and forever is a long time. A gift agreement should embrace this reality and, as appropriate, allow for alternative plans for the gift down the road as things change. Documenting these alternatives on the front end can save the organization lots of time, hassle, and resources later on and avoid having to convince the Attorney General and/or a Judge that a certain gift restriction should be modified.