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For a lucky few universities, donations are the grease that helps the wheels of the institution turn. And recently, donations to American higher education have been increasing— 12.5% increase from 2021 to 2022 to be exact.
But sometimes the relationship between the donor and the institution can go awry. The donor may be unhappy with how the gift was used or may bring negative attention to the university. Here are some ways experts suggest universities can create positive, long-term bonds with donors and navigate these unique relationships.
Practice good stewardship
The relationship-building process that occurs after a donation is made is called stewardship, said Bill Stanczykiewicz, director of the Fund Raising School at Indiana University-Purdue University Indianapolis.
Staying in touch with donors and keeping them updated is the right thing for common human dignity.
“Stewardship is maintaining a relationship with a donor in ways that don’t always involve constantly asking for more money,” Stanczykiewicz said. “They provided this financial gift. The right thing to do is to stay in touch with them over time.”
But good stewardship—such as keeping a donor informed about the status or impact of their gift—can also mean a donor is more likely to donate again.
“When we manage our donors properly and appropriately and with such human dignity, then they are more likely to donate from one year to the next, more likely to grow the size of their gifts over time, and more likely to be part of other fundraising activities such as our capital campaigns and our comprehensive campaigns,” Stanczykiewicz said.
Stanczykiewicz said he hears too often from donors who feel the institution is abandoning them between requests for money.
“That’s just a serious mistake that allows a donor to feel taken advantage of,” he said, “to feel that their only interest as a fundraiser was a financial donation.”
Understand your donor
Historically, there was a perception in philanthropy that once a gift was made and the donor was thanked, no further involvement was expected, said Sue Cunningham, president and CEO of the Council for the Advancement and Advancement of Education. But additional involvement is actually very necessary.
Cunningham compares the relationship between institutions and donors to the relationships we have throughout our lives.
“If a relative gives you a sweater for the holidays that they made, the next time you see them, if it’s not summer heat, you can wear it so they know you really value and appreciate the gift,” she said. “And next time they come, make sure they don’t see it in the wastebasket.”
However, we all develop relationships differently. And creating good means understanding the donor’s vision, needs and desires. Some may want to be visible—to have their names on donor lists and academic positions. Others may prefer more privacy and distance.
“People don’t give feelings to things unless they feel them deeply,” Cunningham said. “So what steps along the way would a donor enjoy being involved or engaged in?”
Practice good communication
Cunningham said it’s important for institutions to be clear about what a donor can and cannot expect from their gift. CASE’s Global reporting standards describe it in detail.
For example, if a donor has supported the creation of an academic chair, it is appropriate and good that they be informed of someone who is hired to fill the chair and that the donor be invited to the inaugural lecture. However, the donor should not sit on the jury for that position, the standards say.
Managing these expectations from the start means that problems or tensions are less likely. Many universities choose to have donation deeds or other documents for this purpose.
But communication is often most likely to fail when things don’t go well—for example, when the donor didn’t expect the outcome. But Cunningham said it’s important to overcome the fear of making the donor unhappy in order to communicate well.
“Everyone understands that things don’t always go as planned, but I think there’s sometimes a fear factor that if we tell a donor that it’s not exactly the way it’s being handled, they may not be happy in any way,” she said. he said. “Should we share? My view is absolutely.”
Do your due diligence
Sometimes the relationship turns sour because the donor turns out to be someone the university may not want to associate with.
John Schnatter, founder of Papa John’s Pizza, who lost his CEO title amid a series of scandals that contained reports that he used racist language on a conference call; the Sackler family, who were criticized for their role in the opioid crisis; and Jeffrey Epstein, whose sex crimes made him a household name, are examples of this type of situation, Stanczykiewicz said.
“When fundraisers meet with their potential donors, they certainly want to make sure that the values and philanthropic motivations of the donor are aligned with the values and philanthropic motivations of the school or university,” he said, “and also that there’s nothing about the donor or the employer or the employer’s product , which is contrary to these values.”
Cunningham said donation agreements can also be important in making sure everything is in line.
The CASE reporting standards propose model donation agreement clauses to mitigate some of the reputational risks that may arise over time. The model goodwill clause states that the university may stop using the donor’s name if continuing would adversely affect the reputation, image, mission or integrity of the institution. The institution then has no further obligation towards the donor and is not obliged to return any part of the already paid donation.
Being aware of these issues is “just part of your due diligence as a fundraiser when you get to know the donors,” Stanczykiewicz said. “And it certainly continues throughout the relationship as you conduct your stewardship.
