The nature of a charitable gift planner’s work is to come into regular contact with elderly donors. Along with this contact sometimes comes the question of whether the donor has the mental capability to make a gift.
During a presentation at the National Conference on Philanthropic Planning in San Antonio, Texas, Marcia Inger Navrátil and Laura Hansen Dean of The University of Texas at Austin discussed the issues that arise when a donor’s mental capacity becomes an issue.
“Developing relationships with aging donors, however, also means dealing with potential issues of mental capacity,” they wrote in a paper presented at their session. Consequently, gift planners must recognize signs that a donor might lack the mental capacity to make a gift and to develop strategies for dealing with donors and their families if issues of capacity or undue influence ever arise.
Legal capacity is defined as “the mental ability to understand the nature and effects of one’s acts,” they wrote. This, however, is only the starting point for gift officers dealing with issues of capacity: “While a donor might technically meet the definition of legal capacity, a well-intentioned but misguided or over-eager development officer could still overstep the acceptable boundaries and apply undue influence or take advantage of a vulnerable donor,” according to Navrátil and Dean.
The key concept for gift planners to remember is “undue” influence. This is widely accepted to involve some form of coercion or control over an individual that removes their free will or causes them to fail to understand the consequences of their actions.
“The critical concern here is to ensure that that persuasion never rises to the level of coercion or control,” they wrote. “Development officers must always maintain appropriate boundaries with donors to avoid even the appearance of improper influence.”
An ongoing relationship with a donor is “the single best strategy” for assessing a donor’s mental state and avoiding undue influence. Multiple visits over time can help a development officer notice warning signs that might indicate a lack of capacity, such as memory lapses, forgetting meetings or appointments, changes in appearance, lack of hygiene, mood swings or changes in personality.
If development officers suspect a donor might have diminished mental capability, they “should immediately suspend discussion of a charitable gift” until the donor’s capacity can be determined, perhaps through consultations with the donor’s family or professional advisors.
Development officers should also strive to engage the donors in a conversation, especially when discussing the specifics of a gift. “The more an individual can articulate the details and consequences of a gift, the more likely that that person truly understands and appreciates the discussion being made,” they stated.
Another way to avoid potential allegations of undue pressure is to involve a donor’s family members or professional advisors about a gift, although the donor must ultimately make the decision about who to involve.
While a development officer might have to suspend discussions regarding a gift, there is no reason why contact with the donor should be severed, they said. For example, the mental lapse might be due to an imbalance in medications or illness that could be rectified in the future.
Stewardship can continue through occasional visits, letters and emails. They caution that once a week or once-a-month visits could raise suspicions of coercion, however, and instead recommend a regimen of a few visits per year with periodic correspondence in between.
The best prevention against allegations of undue influence is to “keep carefully documented records of all contacts with donors,” including copies of all emails, letters and correspondence.
Nevertheless, a family may still challenge the validity of a charitable gift, resulting in either litigation or other talks about a donor’s estate or gift. However, they state, “when a donor has freely and with good judgment made a gift to charity, not only is the charity entitled to that gift, the charity has a responsibility to honor the donor’s wishes and intentions.”
Michael Patterson is area director, planned giving for the Arthritis Foundation and is based in San Antonio, Texas.