Opinion: Honoring The Donor’s Hard-Earned Money

January 10, 2017       Robert Hartsook      

Congratulations to Wayne State University for an incredible gift of $40 million, securing a new facility and faculty for its business school from Detroit food and sports moguls Mike and Marian Ilitch. The celebration didn’t last long before the uproar began — because the Illitch’s gift was specific about how the funds were to be used and dispersed.

Congrats to Illitches for not leaving a question about how they wanted their money to be used. While various faculty and other commentators might not like the approach, I guarantee you that Mike and WSU have avoided a future lawsuit over misunderstandings.

Misunderstandings between donors and their charities are occurring more frequently. Duke University thought it was important to be a claimant of about $10 million remaining on a pledge made by a deceased alum. While they eventually withdrew, in my opinion, theirs was a reasonable action. Donor intent is the issue here.

The Illitch family also made a commitment to Wayne State School of Medicine, conditioned on the retention of the head of the medical school. Again, the outcry was, “how dare he demand such a condition!” 

The issue hits close to home for me. After many years of lack of respect for donor intent by my hometown, undergraduate university, I was impressed by the new president, who has since moved on. I offered a gift of $1 million based on the president staying for a period of time. The president accepted it. But — after a celebration had been scheduled, invitations had been sent out to my favorite professor and longtime local friends — the chair of the college foundation rejected my gift because in his opinion, my intent was “not to help the university.” They then proceeded to cancel the announcement event, embarrassing me and the university and of course, ending any opportunity they would ever have for another gift from me.

Afterwards, I began to become paranoid when, during a $20 million building campaign, I offered my law school $500,000 payable over a 10-year period. This gift was rejected by email from the law school dean: “We only accept pledges over five years.” He obviously didn’t get the memo that it was a gift of my money. I wanted to give $500,000 — over 10 years, not five. That was five years ago and last I heard, the school languishes at less than $5 million raised in five years.

Short-sightedness, lack of creativity, and misguided, institutional or personal ego have led to many a fundraising failure. When will fundraisers — and those who have many opinions about how other people should spend their money — learn that giving is a personal endeavor? Donors give for a variety of reasons, in a variety of ways, as the Illitches and many, many others have demonstrated.

It’s time to wake up. It’s the donor’s money. When you give your money away, you can direct how you want to spend it. The beautiful part of a “strings attached” gift is, the institution can always say no. If Wayne State didn’t want to agree to either the business school or medical school gift, they could have rejected it. 

I can’t count the times I have heard a donor say, “I never thought I could make a gift like this.” Often, the large gifts require institutions to stretch their imaginations and step out of their four-sided box to accept these gifts. The donor and the organization should be encouraged to write specific and detailed contracts to make sure the donor’s intent is clear. 

Fundraisers and organizations must understand “you reap what you sow.” They will either be embarrassed and ashamed when they see large gifts go to other institutions. Or, they will flourish as they focus attention on donor intent, values, and assets (now and later) to attract gifts at the highest levels possible

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Robert Hartsook, J.D., Ed.D., is founder and chairman of Hartsook Companies, based in Kansas City, Mo., He was recognized with the naming of the Robert F. Hartsook Chair in Fundraising at the Center on Philanthropy at Indiana University, now the Lilly Family School of Philanthropy.