When the String is Pulled: Dealing with High-Maintenance Donors

Philadelphia physician Florence Chapman Child bequeathed $50,000 to Bryn Mawr College in 1957 with the stipulation that the school needed to care for her grandfather clock. She specified that the college “install it in an appropriate place, keep it in proper condition and repair, make no changes in the fundamental appearance, and are not to have it electrified.” Bryn Mawr reported in 2010 that the clock is still cared for and is displayed in the president’s office.

While the request seems quirky, it’s one example of a donor making gifts with strings attached. High-maintenance donors are not new to fundraising, as the 1957 example shows, and are found at all types of charities. Sometimes, their requests are small, like the example of the grandfather clock, but sometimes, they can be huge, such as hiring demands, or even worse.

The most extreme version is the Pearson Family Members Foundation suing the University of Chicago in 2018 as a result of a dispute over a $100 million pledge it used to found a campus institute dedicated to the resolution of global conflict. The foundation, headed by brothers Thomas and Timothy Pearson, alleged the university failed in its duty with the institute in several ways, including hiring an under-qualified institute director and professors. However, this is not the first time the Pearson family has sued over a donation: Thomas Pearson sued Garrett-Evangelical Theological Seminary over misuse of a gift, a suit that was settled out of court.

While most donor requests remain in the middle of these two extremes—from grandfather clock maintenance to million-dollar lawsuits—it can be tricky for organizations to navigate these requests without losing the gift or making a promise that they cannot keep. Below are some suggestions on managing and coping with high-maintenance donors.

Managing Expectations

Problems arise with donors when “advancement staff miss an opportunity to set expectations upfront,” says John Taylor, a consultant who specializes in advancement campaigns. This is true whether you are dealing with a major gift prospect or an annual giving donor. It’s important to remember that “the IRS has issues with donors who retain too much control or influence over their gifts—or use those gifts to leverage ‘favors,’” Taylor says.

Another problem is when newer gift officers are sometimes “too eager to accept a donor’s conditions or stipulations at the time of the gift,” Taylor says. These gift officers may believe the donor is not serious about the conditions, which can get institutions in hot water later.

Getting it in writing

For major gifts, it’s good practice to get any contractual agreements in writing. Before a gift is accepted, the terms of the gift should be clearly written out so everyone knows what they are. For example, a donor should be told when they will be receiving endowment reports. Oftentimes, donors may be told that they will get reports, but the organization fails to tell them when and how they will receive the information, Taylor says. Laying it out in writing before the gift is accepted is a critical strategy for reducing problems. Taylor recommends letting donors know what to expect and when so they will not have to hound gift officers and other staff about their reports.

Moreover, the terms of the gift should be explicitly outlined so if there is a dispute, the donor and the organization can review what was originally agreed.

Dealing with Unusual Asks

Another advantage to putting everything in writing is that organizations are informed of more unusual asks, such as housing a grandfather clock or providing a full-ride scholarship for people named Zolp, and can ensure they are able to fulfill them.

Any request that falls outside standard requests, such as hiring requirements, should be referred to a gift agreement committee, Taylor recommends. Human resources personnel should handle any hiring requests and be signatories to the gift agreement.

If a donor has a request that cannot legally be fulfilled, a gift agreement committee or general counsel should give the final word to stop the request. Taylor says that if something is against IRS rules, donors can be given “chapter and verse.” For instance, the IRS does not permit organizations to give scholarships to anyone related to scholarship committee members and/or the donor. He suggests that gift agreements going back decades may not be in compliance with the current law, and may wish to review them.

The 1970s Zolp scholarship was a full ride to Loyola University Chicago, open to anyone with the last name Zolp who was a Roman Catholic with documents to prove it. However, the scholarship would not be open to anyone in the donor’s family.

Being Proactive

Sometimes, it’s a matter of getting ahead of the problem. Taylor says, “A donor is only high-maintenance if you tell yourself they are.” For instance, Taylor had a donor who gave annually, but would chat for hours. Taylor used to dread the calls until he realized that his donor just needed someone to talk to at his organization.

More importantly, Taylor realized that he needed to beat the donor to the punch and reach out to him first. That way, he could better control the situation and ultimately keep the donor happy. “If they are being high-maintenance, you can be high-maintenance,” Taylor says. By anticipating their needs with a phone call, an advancement officer can create a well-managed relationship.

Analyzing the Relationship

Sometimes, these strategies do not work. Donors may be upset at the final decision from a gift acceptance committee and want to pull out. In the case of a smaller gift, a donor may place too many demands on your staff. For instance, Town and Country reported about donors who complained excessively, including asking why their photos were not included on the gala photographer’s website.

In these cases, nonprofits may wish to assess whether it is worth maintaining the relationship. In the case of the photographs, the charity decided to stop working with the donor after too many similar complaints. And as we have seen with high-profile cases involving gifts from certain infamous individuals or foundations, not every gift should be taken.

Fortunately, these extreme examples are often the exception, not the rule. Ultimately, the best way to handle high-maintenance donors is to keep clear lines of communication, outline in writing the responsibilities, and above all, be proactive.

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