Restricted Vs. Unrestricted

Janet

(frustrated by the conclusion Bob has drawn)
He wanted to designate his gift to his friend’s favorite program, and if he could have done that, I’m sure we would have got a much bigger donation – and possibly opened up a longer term relation…

Bob

Not that again.  Janet, you know that I can’t give the OK on restricted gifts.  My hands are tied.  Our CFO has clearly said – and the Board has backed him on this – that fundraised revenue is required to close the gap between our budget and the real cost of providing essential services.

Janet

But finance only ever sees numbers on paper.  They aren’t the ones who have to face donors every day, trying to convince them that they’ve put their money in the right place.  How can I build relationships when I can’t even tell donors what their gifts are supporting?

Bob

(gesturing all around)
What do you mean?  Donors have made all this possible and they can see it for themselves.  What about this great building that is the envy of seniors’ centers everywhere?

Janet

That’s the argument for the capital campaign, Bob, which has been over for eight years now.  I can’t keep talking about it endlessly.  Donors need to know what’s going on inside this building.

Bob

They’re welcome here anytime they want to come see for themselves what their money is doing.  Did you take your donor on a tour earlier today?  He would have seen exactly where his money was going.

Janet

No, he has mobility problems.  I don’t think he could have handled a tour.  Besides, it’s my job to describe what donors’ money is doing in ways that make them confident that they’ve supported the right cause.  If I could just talk in more specific terms; give them something to latch onto; then they would have a better picture of what we’re trying to achieve and how they are contributing to our success.

Bob

But you can do that, Janet.  What you say is, “blah, blah, blah…your donation will contribute in a myriad of ways that help seniors live more fulfilling lives and maintain their independence longer.”  This is a much better line anyway, because then every donation is boosting every program we have, not just one or two.  I just know that if we gave donors complete freedom to fund whatever they want, everyone would donate to Pub Night and Learning the Internet and our less popular programs like Seniors Abuse and Vegetarian Cooking would get nothing.  Then I’d have to deal with the program coordinators who’d be complaining about funding inequity.

Janet

But that’s my point, Bob.  I could raise more money for Vegetarian Cooking Classes or the Seniors Abuse Prevention program or whatever you want, if I could just develop a campaign around one or two projects at a time.  People would step up to the plate and fund them if they knew they were a priority for us.

Bob

Look, the Board, the CFO and, frankly, I want – no, need – as much flexibility as possible.  I don’t expect you to know anything about the issues that I have to deal with all day long.  George upstairs spends most of his time in finance moving budget monies around from one area to another just so we can keep our heads above water – and so we can fund your development department, I might add.  (Switching tactics) Look, I’m sorry your donor didn’t give you the big gift you were hoping for this time.  But, you’ve got to get past this one, Janet.  There will be another donor tomorrow, and you’ll do better next time, right?

Janet

(resigned, very quietly)
Right.
(She turns to leave.)

Bob

And, Janet…?

Janet

(turning in the doorway)
Yes?

Bob
Next time, make sure you take ‘em on a tour of the building.  It works every time.  Have a nice night.

© 2008 Cygnus Applied Research, Inc.
All rights reserved.

Showing 13 comments
  • Dorian
    Reply

    Gee…Can I relate! Being in Development is sometimes like being shipwrecked on an island…and no matter how many SOS signals I send…that Donors want to give…but they also want a say on where it goes…no one on my board seems to see the signs…in this economy especially…if we can’t be flexible…and be reflective and responsive to the interests of the donor…we’re sunk!

  • Sydney Reed
    Reply

    I also can relate. We are in a Capital Campaign right now for a renovation and expandsion on two historic buildings on the Main Street of our town to create a wonderful interactive History Museum. When people give more than the existing membership they often think they are helping fund the new Museum when they are donating to the Operations Budget. Then they are surprised when they aren’t listed as Capital Campaign Donors. It is a tough problem and hard to educate the donor to specify where they would like the funds to go without offending them.

  • Patty Rosely
    Reply

    The Cincinnati Playhouse in the Park Development Troupe has just completed the first reading of the script. Look for our names at the Tony Award nominations in the spring. 🙂

    Thanks for this enlightening exercise

  • Anne Wunsch
    Reply

    Every non-profit needs a menu a giving opportunities. The Development officer needs a strong relationship with the business manager and the org’s finance committee so they can be somewhat flexible when learning about a donor’s preferences. I can’t imagine that the development officer did not pick up the phone and identify a staff person who knew this man’s friend and her preferences. Even when all gifts are unrestricted, a portion of the budget probably funds that activity or program. She missed a golden opportunity to cultivate a long term donor. How disappointing for this gentleman.

  • Jennifer
    Reply

    Ok, so what next? How can we convince our directors, boards and CFOs that unrestricted is absolutely necessary? I’m in this same position myself and everyone is pushing back, how do I get it through to them that restructuring the giving (and more work for accounting which is really the issue) is worth it?

  • Daphne
    Reply

    Almost all donors want to restrict their giving. At my institution, we have very few unrestricted gifts. In fact, I would say 97 – 99% of our gifts are restricted. It is an important way for donors to pay tribute to loved ones and others who were important in their lives. Those organizations who only accept unrestricted gifts are hurting themselves and may not survice this current economic crisis.

  • John
    Reply

    As a program director I had a member of a supportive family approach me about funding a specific project. I passed this long, but here was resistence to the idea from the CEO. He feared she would shift her giving to specific projects rather than the generous general support gift she made each year. In the end, she gave her gift to the specific project and then doubled the size of her annual general support gift in gratitude for what we’d done with her directed gift. It’s a lesson I’ve carried with me now that I am in development.

  • Janet
    Reply

    What I love best about my current position is that restricted giving is celebrated and encouraged. It gives joy to donors and college personnel alike. Luckily, 35% of our operating budget is paid by the college. The trick is how to cover the other 65% when investment income is bottoming and unrestricted gifts are rare. I can think of two possible solutions: take a 15% fee off the top of all restricted gifts to pay for foundation operations, or figure out how to express the impact of an unrestricted gift so it’s appealing to donors.

  • Katie
    Reply

    This is also a good reminder that we development folks need to get out of our offices not just to meet donors, but to see the people who use the facilities/programs/opportunities we are raising money for (myself included here). These are the stories donors want to hear about and are connected to – the people.

  • Axel
    Reply

    I am just a donor, but I would not object if told xx% of my restricted gift would go to basic support for the agency as long as xx% did not exceed a reasonable amount, say 10% with 5% being more reasonable. It is just like sales tax. I don’t recall refusing to buy an item because of the tax on it.

  • Betsy
    Reply

    I really like the idea of the percentage for basic support. Donors can understand that without a solid foundation the programs may not have the roots they need to grow in a healthy way. What I’m finding is that large donors like to support the new project, the new building, the new event…and in these times we need general support just to carry on and keep our fees affordable.

  • Ken Ristine
    Reply

    It appears that the board of this organization has given the CFO control of the organization. You can’t blame the CFO for wanting to keep his/her job as simple as possible, which is exactly what this policy does.

    Restricted gifts are just the first donated dollars in towards those program expenses that you have to meet. If the CFO put in a little work it would be easy to track and account for those dollars, thus lessening some of the need for unrestricted money.

  • John E. Saltee
    Reply

    We need to remember the wishes of the donors and not force their funds to be directed where it will be easier for us but as they wish.

Leave a Comment

Recent Posts
Burk Donor Survey

Available Fall 2018

Subscribe to our mailing list to receive a notification when the Report is available.