Understanding a Nonprofit’s Duty to Donors

James Sanzi

The Center for Effective Philanthropy’s (CEP) most recent research report, Crucial Donors: How Major Individual Givers Can Best Support Nonprofits, reveals in its key findings that “relationships matter,” and “understanding is a key component to any kind of strong relationship…” In my work as senior vice president of development at the Rhode Island Foundation (RIF), these findings really resonated with me and led me to think about the complex and varied levels of understanding within the nonprofit-donor relationship.

Crucial Donors goes on to describe what “understanding” means from both the nonprofit and individual donor perspectives, stating that donors are most effective when they are deeply engaged with a nonprofit’s mission, and nonprofits have a responsibility to thoughtfully cultivate personal relationships with donors. As it turns out, the success of these relationships is based, in large part, on how well they understand one another. I believe by firmly grasping the nuances of understanding in this type of relationship, nonprofit leaders can best focus their attention on some of its most important and unique elements.

In relationship building, there is no substitute for the intangible connection that forms when an individual donor and nonprofit leader simply get along. However, unlike personal friendships or relationships with professional colleagues, at some point in the nonprofit-donor relationship, the donor (by definition of the word) will make a gift to the nonprofit, and that monetary gift is a defining element of the relationship. Who the fundraiser or nonprofit leader is, and how they personally project the organization’s leadership, can often play a huge role in acquiring that gift. But the gift is not personal – the gift is to an organization and a cause. This reality makes the nonprofit-donor relationship uniquely different than most other types of professional relationships and therefore must be navigated in distinct ways.

The “likeability” factor along with trust, kindness, respect, responsiveness, and care are present in any good relationship, and certainly in any good nonprofit-donor relationship. So, where might these differences lie? Here are a few key distinctions that nonprofit leaders should keep in mind when working to foster greater shared understanding with their major donors:

  • Professional duty: while any good relationship will have many of the aforementioned characteristics like trust and respect, we are available for our donors because they have chosen to invest their trust in our organizations and money into a cause that we both care about, and it’s our professional duty to honor the intent of that gift.
  • Donor’s finances: the nonprofit is often privy to a donor’s detailed income and asset information, information that would not usually be exchanged in many working relationships. This information allows for the planning of a comprehensive “ask” and ultimate donation, perhaps involving both outright and planned gifts.
  • Donor’s family situation: nonprofit leaders may be engaged in family philanthropy with their major donors. Such planning typically requires the sharing of a donor’s objectives, opportunities, and obstacles that exist among family members. The details and nuances shared about family, as they relate to values and money, are quite personal and must be kept confidential.
  • Donor’s intended legacy: this topic opens the door to a wide range of values as a donor contemplates a time when they are no longer around for their family and friends. Details of great potential opportunities and existing regrets may be shared as the nonprofit leader becomes both a sounding board and guide in converting a donor’s values into a lasting legacy for good.

It’s a privilege to be entrusted with such sensitive information from donors; with this privilege comes the responsibility to protect and make use of the information in a way that honors the donor’s original intent.

Rhode Island Foundation (RIF) has built a strong sense of trust with our donors over the course of its 103-year history. Our most recent Donor Perception Report (DPR), administered by CEP, highlights our donors’ trust and belief in the foundation’s leadership, high levels of community impact, our understanding of the community, and our ability to clearly communicate and execute foundation goals and strategy. In fact, 93 percent of RIF’s donors surveyed in our most recent DPR reported that they are satisfied with RIF’s integrity and trustworthiness.

Earning this trust is the byproduct of well-built relationships driven by the foundation’s duty to report back to donors and engage them in our work. The donors deserve this; in fact, I’d argue that they have “bought” this right through their giving.

Individual donors are the lifeblood of charitable giving, and we, as nonprofit and philanthropic leaders, should not forget what our donors deserve.

James S. Sanzi, JD, is the senior vice president of development at the Rhode Island Foundation.

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