This course will provide a comprehensive view of major and principal gift development work for students who seek to build upon their experiences gained in the introductory session. Participants will gain an understanding of the philosophy and strategies implemented in major gift development including prospect identification, how to initially engage a potential major gift donor, the process of cultivation and moves management, effective proposal writing, making a successful ask and on-going donor stewardship. Students will practice fundamental major gift development skills by developing their own prospect strategy, producing essential documents to support the process, and engaging in role playing activity to simulate interaction with prospects and donors.
Structuring, Documenting, and Executing a Major Gift (Part 1)
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Do curso por University of California, Davis
Major and Principal Gifts
classificações
University of California, Davis
classificações
Curso 3 de 4 em Specialization Fundraising and Development
Na lição
Structuring, Documenting, and Executing a Major Gift Through Stewardship
In this module, you will be able to discuss what it means to close a gift so that it is official for your organization. You will be able to draft a gift agreement and ensure it complies with gift acceptance policies. You will be able to develop an appropriate stewardship strategy of your donor.
Conheça os instrutores
Jason WohlmanAssociate Vice Chancellor for University Development
[MUSIC]
The goal of all the previous sections of this course was to bring you to the point
where the prospect said, yes.
In this lesson, we will look at what you do moving forward from that point.
I will lay out how to structure, document, and execute a major gift.
At the end of this lesson, you will be able to analyze a gift agreement,
recall the essential components of a gift agreement, and
practice the process to structure, document, and execute a major gift.
Let's get started with this lesson.
[MUSIC]
Welcome to the sixth and final module in our course on major and
principle gift development.
In the previous module, we explored the structure and
best practices of a successful gift solicitation strategy.
In this module, we started having secured a major gift agreement from a donor.
We still have a few more steps to make it become a reality for
our organization, however.
That involves proper gift documentation, compliance with gift acceptance polices,
and appropriate stewardship of your donor.
After this module, you will be able to analyze and
practice the process to structure, document, and execute a major gift and
access effectiveness of the stewardship program to retain a major gift prospect.
So our prospect said yes, agreeing to make a major gift to our organization.
So what comes next?
Get it in writing.
Establish a gift agreement as quickly as possible.
A gift agreement is a formal document between a donor and a recipient.
The agreement sets out what the gift is, how it will be given, used, and
acknowledged, also how it might be amended in the future.
Gift agreements ensure that the donor and recipient understand the nature and
purpose of a specific gift.
The agreement acts as a reference point for
the administration of a gift, especially in the event of any dispute.
It ensures that the expectations of our donor and recipient can be met over time,
and continue to be met should the original context of the gift change.
Gift agreements are not commonly used.
They're reserved for large gifts given for specific purposes and for
gifts of any size that are accompanied by specific or
complex donor requests as to how they should be used.
The definition of what constitutes a large gift will depend on
the scale of fundraising at your institution or organization.
Any gift agreement should be written with the understanding that the donation
is a philanthropic gift, given over to the control of the recipient institution.
Although the donor can expect the institution to honor his, or her, wishes.
It should not be confused with legal contracts that accompany
sponsorship agreements.
The legal status of a gift agreement may vary from country to country.
Consult a legal professional when drafting a gift agreement template.
A gift agreement should contain the following.
First the names of the party to the agreement, the donor and
the recipient, a start date and an end date where applicable.
The gift amount, or a description if it is a tangible asset such as art work or
equipment.
A gift schedule and mode of giving, for
example, three installments over three years by a bank transfer.
The intended purpose of the gift as specified by the donor.
How the recipient intends to fulfill this purpose.
How the recipient will acknowledge the gift.
It should include any monitoring, reporting, and
stewardship activities the recipient intends to undertake.
It includes any specific undertaking the recipient has agreed to,
such as insuring or investing the gift.
A reciprocal clause detailing what action might be taken to protect the reputation
of either party should the reputation of the donor or
recipient be questioned in the future.
And finally, a place for both parties to sign and date the agreement.
Approach presenting a gift agreement to donors with sensitivity.
Donors may be offended if they receive a document without context.
They may misinterpret it as a contract to ensure that they will
actually make their donation.
Explain to them that a gift agreement simply ensures
that the donor's wishes are properly recorded so
that they maybe fulfilled to the satisfaction of both parties.
How you thank a donor is very important as it influences the whole giving experience.
Express your thanks in a way that is appropriate to the scale, frequency,
and impact of the gift or gifts you received.
Manage donor's expectations, for instance, someone donating $1000 can not expect
the same level of public recognition as someone donating $100 million.
Ensure that everyone is thanked and that no one is forgotten.
Embed gift recognition into stewardship and
the entire fundraising cycle to encourage further giving.
Ensure that the cost of recognition is proportionate to
the value of the contribution being recognized.
Ensure that gift recognition is prompt and delivered by the most appropriate method.
For instance, a widow giving a gift in memory of her husband should not be
thanked in the same way as a young alumnus donating to the annual fund.
Ensure that recognizing gifts does not become overwhelmingly time-consuming.
Ensure that the right people are offering their thanks in recognition of a donation.
For example, a $100 million donor should expect to be thanked
by the institution's leader personally.
Develop gift recognition policies to suit the culture and
circumstances of your organization.
They should start with the definition of a gift.
Other questions that need to be addressed before writing a policy include,
are all gifts assessed on their cash or cash equivalent values?
That is, does a gift of a rare stamp collection merit the same recognition
as a cash gift of $1,000?
At what stage do you account a gift for
recognition purposes, when it is pledged or when the money is in the bank?
A policy should include an explanation of a basic level of
recognition that all donors might expect.
For example, your policy may state that a donor will be sent
a formal receipt in acknowledgment of his or her donation within seven working days.
Often, policies differentiate between the recognition given to
gifts of different values.
The form of recognition is likely to vary in accordance
to the appeal to which the donor is responding.
Donors to the football stadium appeal will expect their donation to be related to
football in some way.
Donors for the library appeal in a different way.
Your institution will probably want to negotiate appropriate
levels of recognition with principle gift donors on an individual basis.
Even so, it is helpful to have some policy guidelines to steer these negotiations.
The policy should define what is meant by a principal gift.
This might be a gift over a certain value or
with the capacity to be transformational for your institution.
In the circumstance of principal gifts,
the issue of naming rights commonly arises.
Any gift recognition policy should have a clause related to naming rights.
Many institutions will have a separate naming policy.
This clause or policy should be developed in consultation with relevant stakeholders
on your campus, such as the marketing and estate development teams.
Consideration should be given to the issues such as duration.
Will the gift be in perpetuity or limited to a number of years?
How will the name be displayed?
This will preferably be in line with the corporate branding guidelines of your
organization.
Whether the name will be included in the marketing materials or on stationary?
Under what circumstances the institution reserves the right to remove the name,
should it become a reputational risk for the institution in the future?
And finally, whether the name can be transferred or
discarded should the entity or building it is attached to cease to exist?
Some donors prefer to remain anonymous.
And your policy should set out how this can be achieved, while still complying
with financial and legal obligations surrounding gift reporting.
When crafting a recognition policy, it is important to ensure that donors receive no
commercial benefit from the recognition you are promising.
Such benefits risk their donation being classified as a sponsorship,
a situation that can have implications both for the donor and the recipient.
For example, suppose an individual donor or
company makes a gift to a golf tournament your organization is hosting.
If they are simply receiving signage and program recognition,
you are fine classifying this as a gift.
However, if the agreement includes other items, such as tournament fees,
dinner costs, and other costs associated with participating in the tournament,
there is a greater likelihood you will need to treat this as a sponsorship and
either forego the charitable deduction or
have it reduced by the value of the benefits received.
It is in the best interest of the institution and its donors,
leaders, volunteers, and other constituents
to publicly define what are counted as gifts and explain how gifts are reported.
Do this in the spirit of transparency, consistency, and accountability.
Transparency is also important if fundraising in the educational context
is to be perceived and respected as a professional and worthy activity.
Primarily, a start-up development officer needs to consider several things.
What constitutes a gift?
Who's responsible for receiving, recording, and processing gifts?
How is the relationship between the development office and
finance office defined?
Who is responsible for developing accurate accounts?
How will issues such as matched funding, foreign currency gifts,
and other given variations be handled?
What is the policy on unfulfilled gift pledges, do you treat them as debts?
What kind of reports do you need for various audiences, your donors,
governing bodies, authorities, annual reports, case annual surveys, and so on?
Does your institution have the necessary expertise or
is an additional recruitment or training required?
Are new bank accounts needed?
How can income be segregated for specific purposes?
How can you integrate different forms of giving and
still keep track of everything between online giving, giving with credit cards,
checks, bank stock transfers, and cash?
How can you reassure donors that they're financial information will be protected?
Credit card compliance is a growing national trend
with specific requirements being issued by banks for regulatory purposes.
These issues should be addressed at the earliest stages of operation
before significant levels of fundraising have commenced.
Donors need to be confident that the institution can handle their donations
effectively and safely.
Mistakes in gift accounting can lead to serious reputational damage.
Work closely with your accounting team to ensure detailed gift tracking.
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