The Four Questions to Ask Yourself Before Making a Significant Gift
For me, fundraising is a natural—almost inevitable—step along the path of my life. I was raised in a tradition of being responsible to the community, which shaped my belief that philanthropy isn’t a separate, walled-off part of your life; it’s something you do throughout it.
I have tried to help causes that are important to me, initially offering my time and talent and later adding financial resources. Fundraising has been an area where I have been able and happy to help, whether that was running Harvard Business School’s first capital campaign or sharing what I’ve learned about effective fundraising (such as in my book, Getting to Giving).
I have learned many lessons about giving and getting, among them the four questions that donors should always ask before giving a significant gift, and that nonprofits should be prepared to answer to get one.
1. Are you doing important work?
Fundraising isn’t a one-way endeavor; it’s about making a match between individuals and causes that have a shared vision. Significant fundraising is about a partnership where both parties contribute to changing the world in a positive way.
The organization seeking funds should have clearly defined its mission and made an effort to understand what you care about. Listen for the elevator pitch—can they explain themselves in a simple, clear, compelling way? Then, expect them to highlight the aspects of their work that are aligned with your interests, in your language. They should have done their research.
2. Are you well managed?
For some potential donors (especially businesspeople), no question is as important as this one. But no one wants to think that their hard-earned money has been wasted.
For some donors, it’s as simple as asking about a firm’s finances and management practices and receiving a transparent response. If you’re concerned about finances, look for a nonprofit with a detailed annual report. If management is more important, ask questions about the company’s governance, leadership team and strategic plan.
A well-run organization will clearly spell out how it delivers value using a sound economic model, effective management and a creative, entrepreneurial approach to growth.
3. Will my gift make a difference?
At this point, you want to be convinced that your donation will make a difference. Obtain a clear explanation of why the organization needs the money and how they will use it in a way that is satisfactory to you.
The plan laid out to you should include performance metrics that can be tracked and related back to you. Although inputs and outputs are fairly easy to measure, the hardest thing to measure is impact—which is what you are probably most interested in. Ask for specific examples, like stories about beneficiaries or quantifiable benchmarks.
4. Will the experience be satisfying?
As a donor, you deserve a simple “thank you” and excellent financial stewardship. You should expect, at minimum, an annual accounting of how your funds were spent in an accurate, easy-to-understand and completely transparent manner.
Being kept up to date on the organization’s accomplishments, plans and challenges and invited to meet the beneficiaries or otherwise engage in its work may also be appreciated.
One generous donor made this observation to me: “I’ve found that there are many more people with resources looking for meaning than people with meaning looking for resources.” Attending to the four questions can help make the match.