When to turn down a gift: 3 red flags

April 11, 2013 Sarah M. Jackson

Let's be clear: NO ONE wants to look a gift horse in the mouth. We work so hard to raise every last penny we can for our nonprofit that it's hard to imagine a time where we'd actually turn down a donation.

Once in a blue moon, though, we really need to say "no" to protect our organization.

Here are three red flags to watch for:

1. Small gift, impossible expectations: Acme Corporation wants to give $250 to your environmentally driven nonprofit. In return, Acme demands that you prominently display their logo on all of your print and web materials; name them the title sponsor of your annual gala; promise to plant 1,000 trees over the next 2 months; and give their VP a seat on your board. On top of that, the person you engage with at Acme calls every other day with questions and requests. I'm exaggerating to make a point here (though I've certainly dealt with donors scarily similar to this scenario). Just remember that if someone approaches you with impossibly high expectations, seriously drains your staff time and resources, and offers you very little in return, it's okay to politely decline their "gift."

2. A match not made in heaven: We've probably all heard of a matching gift, which is when a donor promises to donate a certain amount to your org--but only if you can raise the equivalent amount, or "match," from other donors. This can be a helpful method to increase funds, as the matching gift may inspire others to donate since they'll get more bang for their buck (e.g., if Joe gives $5, the matching donation will essentially double the value of his gift). But not all matches are created equal. Gain a very solid and detailed understanding of the match requirements before you agree to solicit matching funds. How long do you have to raise the match? What happens if you don't raise the full match amount? If the criteria feel nearly impossible to achieve, then let the donor know that and strive to work out a mutually acceptable plan.

3. For-profits that want the "glow" of your brand--without actually helping your brand: If you work with a more prominent nonprofit that has an excellent name recognition and reputation throughout your community, make sure to protect and manage the brand actively. Some businesses desperately want to show their do-gooder side to customers by saying that they support your organization. There is certainly a wonderful opportunity for this type of partnership, in the form of corporate sponsorships or cause marketing. But beware the company that claims they're going to fundraise for you and all you need to do is "co-brand" your logo/website with theirs. Don't let them raise dollars on your behalf willy nilly. Set rules and guidelines around who can use your logo, and when -- and set a minimum fundraising threshhold for them while you're at it. Make sure the company is reputable and ethical. Align your brand with other excellent brands to preserve your stellar reputation and mission.

Have you ever experienced red flags related to a potential gift? Leave a comment to tell us about it!