Understanding Donor Intent and How to Honor It

Imagine for a minute that your old college has asked you for a donation to help renovate a lecture hall. Having fond memories of your post-secondary years and wishing to help improve the experience of current and future students, you happily make the gift. A few months later, you find out that the lecture hall was never renovated and that your money was instead used to fund alumni engagement events. How would this make you feel?

Our bet is that you’d be pretty upset, as would most other donors, regardless of their gift amount and the type of organization they support.

The reason has to do with donor intent.

If you’re responsible for fundraising at your organization and you don’t already pay careful attention to honoring donor intent, this article is for you. We’ll go over what donor intent is, why it’s important, how to honor it, and what happens when it’s not honored.

Let’s take a look.

What Is Donor Intent?

Donor intent is the purpose of a gift—it’s where the donor wants the funds to be directed and what kind of impact they expect to see. Donor intent accompanies every gift, regardless of whether or not it was explicitly stated.

For example, a donor may make a small one-time donation to your organization without specifying where they’d like the funds to go, but there’s still an expectation that you will spend the funds in a way that benefits the organization.

More often than not, organizations execute fundraising campaigns to raise money for a specific cause. If the organization is an animal shelter, for example, they might ask for money for new medical supplies. In this case, the donors’ intent is that the funds will go towards exactly that.

The most common kind of donor intent, however, accompanies major gifts. Understandably, donors who make substantial gifts often have very particular wishes about how they’d like the money to be spent. These gifts usually require a gift agreement, and breaking its terms can result in legal action.

Why Do Donors Care?

To understand the importance of donor intent, we must understand why people make charitable donations in the first place—they want to have a direct positive effect on something and see that they’re making an impact. Of course, the term “impact” can be subjective and vary from donor to donor, depending on their values and their own experience.

For example, someone who’s survived cancer will likely support a hospital’s oncology department, while someone who’s family member passed away from a heart attack will probably donate to cardiology research. Both donors wish to have a say in how their donations are used because they want the funds to have what they see as the most impact.

It’s important to keep in mind that major donors aren’t the only ones who care about donor intent. If you’re running a fundraising campaign to raise money for animal shelter supplies, the people who donate do so because they see value in this. Perhaps if you had been raising money or something else, you’d receive gifts from a completely different group of donors.

Regardless of the size of the gift, donor intent plays a massive role in making the donation possible, so it should be always treated with integrity and respect.

Why Should You Care?

As an organization accepting donations, it is your responsibility to honor donor intent. Doing so builds trust with your donors, helps them feel appreciated, and makes them feel like they’re creating impact. This, in turn, makes them more likely to be an active member of your community, donate again in the future, and maybe even introduce someone from their circle as a new donor to your organization.

Honoring donor intent is not always easy. Sometimes, donors make substantial gifts towards something that’s not a priority for the organization. Unfortunately, this leaves you with a large sum of money that you can’t use on activities and programs that actually need it.

This is why taking donor intent into consideration should start before the gift is even made. If you feel that the donor’s proposed gift designation isn’t aligned with your organization’s priorities, it’s okay to have an honest conversation about it and see if you can steer them in the right direction.

The easiest route to take is to encourage donors to give to a general, unrestricted fund. Donors would then simply have to trust that you’re allocating their money in a way that supports the organization’s greatest needs and priorities. While this is ideal for the organization, it’s not as meaningful for donors, especially those who make substantial donations. As a fundraiser, it’s your responsibility to find a balance between fulfilling the organization’s needs and creating a meaningful experience for the donors.

Using Donor Stewardship to Honor Donor Intent

Every good fundraiser knows that the work doesn’t end once the gift is secured. In fact, post-gift stewardship is arguably the most important stage in the donor cycle — it’s what creates long-lasting and meaningful relationships with donors and leads to repeat donations.

Donor stewardship is also the stage where you get an opportunity to show whether or not you’ve honored the donor’s intent.

Assuming that you have, there are a number of things you can do to demonstrate this and make sure the donor feels appreciated and properly thanked.

Soon after the gift is made, communicate your plans on how the money will be spent. Continue to keep in touch and regularly offer progress updates. Remember to stay transparent and give as much information as possible about how the money is being used.

Once you have concrete impact to show, be sure to present it in a stewardship report, a letter form a beneficiary, a story in your newsletter, or other stewardship materials.

What Are the Risks of Ignoring Donor Intent?

Unless it’s absolutely impossible to honor the donor’s intent, funds should always be used in the exact way that the donor intended. Failure to do so will lead to a loss of trust from the donor and quite possibly an end to their involvement with your organization.

When it comes to major gifts, these situations rarely stay out of the public eye, so failing to fulfill a donor’s intent can also lead to other lost donors, lost volunteers and supporters, and a poor reputation in the community.

In some cases, especially when a gift agreement was signed by both parties, the donor can take legal action and the organization can be asked to return the donation.

What Should You Do When You Can’t Honor Donor Intent?

If you face a situation where it’s simply not possible to honor the donor’s intent — maybe the program they funded is no longer relevant to your organization’s goals, for example — it’s important to communicate this to the donor and ask for their permission and help in coming up with an alternate plan. Be sure to express your gratitude for the donation and help them feel involved in deciding where the money should go instead.

Ideally, the above situation should be a last resort. To avoid it altogether, never accept gifts if you feel that fulfilling the donor’s intent may become an issue in the future. Have an honest conversation with them before the gift is made and offer your guidance on where their money will have the most impact.

Even if their preferred gift designation is perfectly feasible, it’s not a bad idea to discuss and put in writing what would happen if you cannot fulfill it. Most donors are perfectly happy to choose a second or even a third option, just in case.

If the gift designation you can’t fulfill comes as a legacy gift, you can get in touch with the donor’s family and an attorney to discuss your options.

Wrap-Up

When you pay careful attention to donor intent, you protect your relationship with your donors. It may seem tedious and awkward at times to have this conversation with them, but it’s well worth the effort and will result in a much more meaningful experience for everyone involved.