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Always Look A Gift Horse In the Mouth

As horses develop and grow more teeth, their existing teeth begin to change shape and project forward. The condition of a horse’s teeth helps discerning owners determine the age and physical condition of the horse.

The advice given in the oft-used proverb, “don’t look a gift horse in the mouth,” is simple: refrain from assessing the value of a gift lest you offend the giver.

However, in major donor development, it is incumbent upon a nonprofit to take a good look inside the horse’s mouth, as it were, before accepting a gift from a well-meaning donor.

Having to Return a Major Gift

Take the recent case from the University of Alabama Law School. University leadership took a bold step in returning $21.5 million of a $26.5 million pledge ($5 million remained unfulfilled at the time) from the school’s largest donor, Hugh Culverhouse, Jr. The core issues were an ongoing dispute over how the money was to be used, and the donor’s encouragement for students to protest and reconsider attending the university because of a new state law on abortion.

This is not the first time a significant gift to a nonprofit has been returned because of concerns that have arisen after a gift was accepted. Many leaders have had to take equally bold steps to preserve the integrity and character of their institution. While these are among the most difficult decisions for nonprofit leadership, ultimately these decisions are in the best interest of the organization in the long-term.

When I was a development officer for a major university, we were forced to remove the name of a former dean from a conference room when minority students rightfully protested racially divisive comments made by the former dean many years earlier. In retrospect, this situation could have been avoided had there been better gift acceptance and naming opportunity policies in place. Researching givers seeking a naming opportunity is well worth the investment of time and resources.

While leading development for another organization, we raised over $400,000 to launch a new program. Ultimately, we determined the program was not going to be viable for various reasons. We decided to return the gifts and try to explain our lack of thorough planning. While the donors appreciated the return of their money, the opportunity to go back to them for the next project would undoubtedly be met with a degree of skepticism.

Lessons Learned

Two lessons here. First, as development professionals, work closely with program leadership to ensure funding opportunities are thoroughly vetted before presenting them to your donors. Ensure there is organizational commitment to the project before receiving gifts for it.

Second, if there is growing concern that a project might not be viable, proactively communicate with your major donors. Engage them in the problem. Obtaining their weigh-in to the situation will increase the likelihood that they buy-in to the solution.

In any situation where a gift needs to be returned, handling communications correctly, respectfully, and professionally will impact future gifts from other donors, and at the same time uphold the integrity of the institution or organization. The reputation of the institution for the long-term far outweighs the repercussions you may experience for the short-term.

A nonprofit cannot think of every situation that might occur, but having a thoughtful plan in place will help avoid potential problems.

Keep in mind that sometimes–rarely–a gift horse may, in fact, be a Trojan Horse! Always be grateful for every gift, but take some time to “look a gift horse in the mouth.” The reputation of your organization may depend on it.