We’ve all heard news stories involving a donor who expected one thing to happen with his multi-million dollar contribution and the university, hospital or other charity who didn’t honor his request. Or perhaps you’ve had a donor approach you about making a contribution in exchange for recognition that you weren’t sure was such a good idea. My guest this week, Attorney Kristalyn Loson of Venable LLP, and I talk about donor intent and how to think about accepting contributions with strings.
Loson is an associate attorney at Venable, based in Washington, D.C. She focuses her practice on nonprofits and associations and related issues like incorporation and tax-exemption applications; tax-exemption compliance and IRS audits; corporate governance; membership issues; contracts, and charitable solicitation regulation.
The lure of a large contribution, the charisma of a major donor, the desire to make a program financially secure – these can make a transaction very appealing but perhaps also, ethically or financially murky. On this show, Kristalyn describes a few legal cases that provide insight in how to think about donor intent and accepting donations with strings. We also discuss the accounting terms of restricted, unrestricted and temporarily restricted gifts.
If you are open to receiving planned and restricted gifts, then your board and staff must be thoughtful and respectful of donors’ intentions and you probably want to seek legal advice as well. Make sure you can satisfy their needs while honoring your own nonprofit’s reputation and financial well-being.
Enjoy this thought-provoking show!