Wednesday, May 11, 2011

The High Needs Donor

My friend Paige Eubanks-Barrow, one of the wizards of donor relations at Carnegie Mellon University posted this article on her Facebook page yesterday. The article made my brain spin with implications and commentary, below are some of my thoughts. For more, you can come see Paige, myself, and others discuss this issue, among others at the CASE Donor Relations Conference in Austin, TX June 1-3.

As we enter a new era of philanthropy in the 21st century, particularly in post-recession times, donors giving habits and expectations are changing dramatically. They often expect greater levels of transparency and accountability, which is a boon for donor relations professionals as we help to educate fundraisers and other administrators of the importance of stewardship. However, this assertiveness by donors crosses into many grey areas, much like in the story about the billionaire and the endowed chair. The place where this tendency is most evident is that of scholarships. Weekly, donor relations professionals on countless discussion boards, listservs, and emails face the tried, true, and tricky question, "Donor A wants to select or help select their scholarship student. Is this ok?" My answer is always a resounding "NO" citing IRS regulations that then this is no longer a gift anymore.

Despite all advice about how to handle a conversation like this with a donor, I know it is difficult. Having had a great deal of exposure to "high needs" donors over time has taught me that once properly explained, most philanthropists understand, at least after the 2nd or 3rd try... A donor can always put criteria restrictions in the gift agreement, however the most savvy fundraisers know that the more restrictions, the less likely the fund is able to easily be distributed. This applies not only to scholarships and chairs but also to things like research funds, and directed use funds. I believe that this is where good relationship building and donor relations is most key, allowing donors and fundraisers the room to have the "Crucial Conversations" necessary to make both sides happy and feel good about the gift. How do you feel about the article and the new expectations of philanthropists? Please comment below...

Also please don't forget to add your letters to the over 200 submissions in the Great Acknowledgment Swap of 2011 by emailing them to me at
Cheers, Lynne


  1. Lynn, could you link to the IRS regs you cite. That would be extremely useful.

  2. Lynn:

    William F. Buckley cited an example of endowed chairs at Yale being co-opted in his first book, "God and Man at Yale". There was an economics chair in free enterprise at Yale that was held by an avowed Socialist while, or shortly after, Buckley was a student at Yale in the 1950s.

    Part of the key is for both the donor and the institution to avoid compromising on their principles. If a donor is dedicated to a particular curriculum, perhaps their gift should be directed to an institution that promotes that curriculum.