Thursday, June 29, 2017
Namings for donors- When is forever not forever?
Recently, there have been many questions in the donor relations community about naming opportunities for donors and whether or not we should include perpetuity or provide term limits for the donors. Every time this comes up for me, I am reminded of the dangerous precedent that NYC's Avery Fisher Hall and Lincoln Center created for us when they re-sold the naming rights to David Geffen even though they had a gift agreement that provided the naming in perpetuity. They paid off the family of Avery Fisher and had the name taken down because they were blinded by the cash that Geffen waved in front of them. It was a gut wrenching episode in donor namings because it further undermined trust they may have in our organizations and the idea of permanence. The TV show "Billions" even based an episode off of one billionaire buying the naming rights out from underneath another family out of spite. So where does that leave you and your donors? Is perpetuity an outdated concept or a changing reality?
Probably the safest thing you can do when naming spaces in recognition of a donor's generosity is to provide term limits. It could be a certain year benchmark like 20 or 50 years but I prefer a clause that follows along the lines of the "utility of the space until the first renovation". This also must be accompanied by allowing the original donor family the first right of refusal on the naming of the space. But what happens if the naming recognition isn't tied to a specific space? When do namings expire and how is that communicated to donors? In other words, your plan must be a sound one and must be communicated with donors clearly in order to avoid donor mistrust.
If a donor believes that once they pass away they cannot trust you or your organization to preserve their legacy, it can undermine your fundraising efforts. That's why unclear policies can lead not only to bad press but also to a decrease in future naming donors mistrusting your intentions and believing that in reality we sell to the highest bidder. Having a comprehensive naming policy is vital to the success of any donor relations program. Morality clauses, naming minimums and term limits are some of the components of these policies. For example, will you allow a donor's name to go up on a building if you have less than 50% of the gift in the door? I would advise against it. I have personally had to take namings down because they never fulfilled their pledge, and I have seen other examples of it as well. The importance of having a donor relations mindset when discussing namings is vital and a good policy is the first step.
What are the challenges you run into surrounding donor namings at your organization? How do you balance the needs of the organization with the best interests of the donor? I would love to hear your thoughts.