Stewardship in Advance, aka Gift Agreements

By Sonja Carter JD

It’s like that old joke, “When does a joke become a ‘dad’ joke? When the punchline is a parent.”

Here’s my variation: “When does a gift agreement become stewardship? When it’s written down.”

Ok it’s not really funny. But it IS true - if it is written correctly. Let’s break that down.

Gift agreements are, at their least important but basic level, a legal agreement between the donor (she who gives the gift) and the donee (the nonprofit that receives the gift). In its most minimalistic form, the document identifies the donor, the donee, the date of the gift, and the amount of the gift. But it can do so much more.

Written properly, the gift agreement provides instructions. And it can be rich with a trove of information:

Who is the legal donor? A person? Two people? Is the donor a donor advised fund? A foundation? A corporation?

What is the purpose of the gift? What if that purpose doesn’t exist anymore? Does the donee have discretion to amend that purpose? Ignore that purpose? What if the purpose doesn’t need additional funding?

When shall the gift be used? Shall the gift be immediately spent, spent over years, invested in an endowment forever (“in perpetuity”), or possibly invested for only a certain period of years?

What does the donor “really” think their gift will do - and is that realistic?

When will the donor’s payments come in? How will those payments come in? Are those payments guaranteed by their estate, or not?

How will the donor be publicly acknowledged? Or will they? Or should someone else get that publicity? How shall that name be acknowledged or used? Is permission needed before publicizing the gift?

If you don’t publicly acknowledge the donor, what level of anonymity do they desire? No mention ever? No mention of the gift amount but listing their name is ok?

How will the donor be thanked? Or should someone else get thanked? How should that thank you look/read?

How should you steward the donor? Do they want updates? Does someone else get those updates? How often are updates desired?

And, a gift agreement can even explain why the donor gave the gift in the first place.

Phew this seems like a lot!

Now you might be asking…” exactly how do I get all that information…. and why bother”?! Isn’t the purpose of fundraising to just get the gifts in, not wrangle legal documents?

The answer to the first question is easy, basic, and important. You talk to your donors!!! You talk about everything so that when the gift agreement is written it is simple, explicit, and everybody knows what to expect. One week or one decade down the line, anyone can pick up the document, read it over, and immediately understand everything they need to know.

If you’re still wondering why you should bother with so much preparation for a simple gift agreement, I urge you to consider a good gift agreement as stewardship-in-advance. When there are no surprises and everybody understands what is going on, you can create and then keep the trust of your donors. Your institution, their institutions, indeed anyone involved now knows what the rules of the game are. So that down the line there will be no misunderstandings, no unfounded and unfair expectations, which means that there will be no hurt feelings, no grievous errors, or bridges burned.

That’s right. The ultimate stewardship of a donor takes place before they make their gift, and that makes sure that the stewardship after the gift will go smoothly and the stage will be set for the next gift. If a “stitch in time, saves nine” then a full and honest conversation before the gift prevents a million awkward ones after.

Sonja Carter, JD previously served as the Senior Campaign Advisor at the Heller Fundraising Group. Sonja's expertise lies in capital campaigns, planned giving, major donor cultivation, solicitation and stewardship.