DONOR RECOGNITION

When donor recognition is considered, development professionals often think in terms of published donor lists, walls of honor in lobbies, and plaques for the donors’ offices. Yet the most appreciated ways to honor donors are often simple and personal benefits, customized to the donor’s needs and interests.

Meaningful Recognition from the Donor’s Point of View

A recent widower and major donor to a Big Ten university retired to Florida before completing his gift to establish a faculty chair in the history department at his alma mater. After the gift was finalized, the development director sent him an acknowledgment letter, complete with the gift valuation and a statement that he had received nothing of significant value in return for his charitable gift. He also received a handwritten note from the chairman of the history department. He was satisfied with the recognition.

Several months after the completion of the gift, the donor received a letter from the president of the university stating that he would be vacationing nearby in February and inviting the donor to lunch during that week. The donor replied in writing that he would be honored to have lunch with the president, and asked if he could bring a friend with him since he no longer drove a car. Three days later, the donor received a phone call.

“The president wants to know if you would like to invite some friends to join you for lunch at the country club with him. There is a round table that can accommodate up to ten people, so invite whomever you like.”

The donor invited eight people from his condominium association, some of whom had prior relationships with the university and some of whom didn’t. The president greeted the donor as a good friend and, during lunch, told everyone about the innovative work of the new chair of the history department, made possible by the donor’s gift. Lunch lasted for two hours, mostly recounting stories about college days in the 1940s. The president was delighted to learn about the earlier era, often asking for additional details. Since then, the donor made two more planned gifts to the university, and three others at that table have made significant gifts as well.

Appropriateness

Set standards for donor recognition, but remember that many endowment donors may “test the waters” with a small gift as they contemplate making a larger gift later. Show special appreciation for first-time gifts, while making sure that the show of appreciation is appropriate to the act. The president of a major university will not be able to have lunch with every $10,000 donor.

Use of Contribution

Communicate to donors how the distributions from their gifts are being used and who has benefited. Show how the donor’s goals have been advanced by the gift. The development officers that accept the duty to keep endowment donors informed about the organization and how their gifts are being used are the most successful at attracting additional support. This kind of personal communication, directly related to the gift, is greatly appreciated and deepens the donor’s relationship with the organization.

Connect the Donor with Those Who Benefit from the Gift

A successful entrepreneur and graduate of a community college established a scholarship endowment at the college in 1999 for marketing students. As the donor discussed his goals for this scholarship with the development director, he stated that he wanted the criteria in selecting recipients to focus on hard work and perseverance rather than academic success or grade point average. The development director made sure that the donor’s criteria were written into the scholarship agreement, and she attended the first meeting of the scholarship selection committee at the college to tell the committee about the donor and his stated criteria.

Each year, after the scholarship committee selects the recipients, the development officer writes to the donor with information about the students’ backgrounds and interests. In May, an annual scholarship reception is held at the college, and the donor is invited to assist the dean of the marketing department in making the scholarship presentations. The donor, the recipients, and the recipients’ families have the opportunity to meet in person. After the reception, the development officer sends the recipients the donor’s contact information and suggests to the recipients that they may want to keep in contact with him. In the five years since the establishment of this scholarship fund, three significant additions have been made to it, and the donor has more than doubled his gifts to the annual fund.

Special Opportunities

Personal interactions and connections are most appreciated—the more personal, the better. Betsy Mangone says that, in general, “stewardship is changing from a process of honoring and recognizing donors as a class, to honoring and recognizing donors as individuals.”

Offer special opportunities to donors to your organization. The options include lunch with the CEO or board chair, backstage tours, picnics with grantees, receptions with the speaker after a lecture, auditing a specific class, or program notes sent before the concert. Make personal introductions to staff members who may be of particular interest to the donor. One donor to the symphony was invited to sit in on auditions, for example. An architect, who had made a significant contribution to the school of architecture from which he graduated, was invited to listen to students’ senior presentations.

Ask donors to submit an article for the organization’s newsletter or magazine about a personal experience or their area of expertise. Ask donors to loan something to the organization—perhaps their home for an event or space in their offices for a meeting. The benefits that donors seem to like best are those that bring them closer to the organization.

Frequency

Recognition should be given frequently and in varied formats. Remember that the goal of recognition is to meet the donor’s expectations. It is not recognition if the donor doesn’t recognize it as such. Send cards or notes to donors on Thanksgiving, their birthdays, or the anniversary of their gifts. Send notes to donors when their names are in the paper or their children perform in the school play. Precede a mailing with a phone call, or follow the mailing with a phone call. Stay in touch by telephone or e-mail. Invite the donor to functions, events, activities, and annual meetings—all aimed at keeping the connections strong. Send newsletters, press releases, and newspaper articles about the organization. Take endowment donors to lunch at least annually. Add handwritten notes to form letters. Very few people object to being thanked or thought about too often. As Barbara Ciconte and Jeanne Jacob say in Fundraising Basics,[ii] “It is best to err on the side of too much information than too little.”

Build and Grow Lasting Relationships

Doug Allinger, of Allinger and Company, Inc., in Columbus, consults with several retirement communities across the United States. He says that sometimes residents do not want to tell the development officer that they have completed their planned gifts because they enjoy the staff visits and want them to continue. One man told Doug: “Once the planned giving person knows about the gift, that’s the last I’ll see of her.” How sad. Make sure that this is never said about your staff or your organization.

Gifts of Appreciation

Some donors feel strongly that they do not want more “stuff” in their lives. Be sensitive to their wishes. If you want to send a small token gift of thanks, make the gift something of high quality, not expensive, that will remind the donor of the institution.

Public Recognition

Do not assume that everyone wants public recognition—ask the donor first. Some people will appreciate the thought, but not the attention that recognition can engender. People who do not want public recognition or who want to remain anonymous do want to be thanked in appropriate ways and, usually, to be involved with the organization. Just because the donor does not want to be recognized at a public luncheon does not mean that the donor doesn’t want to be taken to lunch.

For donors who do not decline public recognition, list their names in the annual report or publish, both electronically and on paper, an annual Stewardship Report that summarizes the year’s philanthropic record. Include profiles of donors and of the programs and clients that benefit from the endowment funds. A recognition plaque can be hung for a special endowment campaign, or one plaque can be used for all endowment donors, or one plaque can list all planned giving donors while identifying those who gave to the endowment.

FUND UPDATES

Prepare individualized reports for the donors of named endowment funds on the funds’ current status at least annually. These reports should include the fair-market values, realized and unrealized gains or losses, fund earnings, distributions made, and gifts added. Also report on the use of the net assets released. Whose life was made better because of this fund? How was the quality of life in the community improved? If it is a scholarship fund, include biographies of the recipients. Evidence of the impact of their gifts is important information to donors.

The sending of fund reports offers an opportunity to make contact with endowment donors. Enclose a personal letter about new programs at the organization, recent research that has been undertaken at the organization, or changes in the organization’s spending policies.

All endowment donors should receive an annual report on the status of the organization’s endowment and the projects that it supports. This might be done by sending out the organization’s annual report with a special cover letter highlighting the accomplishments of the endowment.

RECOGNITION GROUPS AND EVENTS

Recognition groups and events are used for five primary purposes:

1. Publicly thank donors now for gifts that may not be received for many years in the future.

2. Encourage others to consider their own planned gifts to the organization.

3. Maintain contact with endowment and planned gift donors, thus increasing the likelihood that they consider additional gifts in the future.

4. Provide ongoing opportunities for donors and their family members to participate in the life of the organization.

5. Introduce donors to other donors who have made similar gifts.

Often, the recognition group will sponsor the event or events, but that is not required.

Recognition Groups

About Recognition Groups

If the organization does not have a heritage group or legacy society to recognize those who have made planned gifts to benefit the organization at a time in the future, the endowment building program can be the impetus to start one. If it does have a recognition group, consider separating the endowment donors into a special subgroup or clearly identifying them in listings of members.

Recognition groups can make endowment solicitation easier for some; it may be more comfortable to ask prospective donors to join the legacy society than to make a planned gift. Find an appropriate name for the recognition group, such as the name of an early pioneer, a recognizable aspect of the mission, or the importance of the members and their gifts. For example, the Alzheimer’s Association of Central Ohio decided to call its recognition group the Forget-Me-Not Society. Consider offering a special status, such as “Founding Member” to those who accept membership within a specified period.

Qualifications for Membership

Sometimes organizations establish separate recognition groups for endowment donors, bequest donors, planned gift donors, and so forth. In organizations that are just entering endowment building and planned giving, one recognition group may make more practical sense. The group should be as inclusive as possible of people who have made commitments for future gifts. Verbal confirmation is generally accepted from the donor. Although some people could claim that they have made provisions when they have not, development professionals have found that most donors eventually give organizations much more than was expected or promised. Some organizations require a minimum size gift to qualify for the legacy society, whereas others believe that all planned gift donors should be included, knowing that planned gifts are usually the largest gifts that donors make.

Recognition Events

About the Events

Recognition events usually do not raise funds for the organization. They generate goodwill and support in the future. Be clear about the purpose of every event before its planning begins: to identify new prospects, cultivate existing prospects, or sustain relationships with those who have already given. Make sure that the planning team is clear about the purpose of the event—and that the total event supports that purpose. Invitees should include donors and family members, prospective donors, professional advisors and other appropriate constituents. Staff members may be invited to talk about the ways in which their departments have benefited from the endowment. If possible, include individuals—such as scholarship or staff award recipients—who have benefited directly from the endowment. In advance, ask one or two of the donors to give personal testimonials about their gifts, what motivated them to make their gifts at this time, and how the gifts have enhanced their lives.

Planning for the Event

The planning of the event is an opportunity to involve donors and prospective donors. Remember the basics of event planning such as timing, geographic location, accessibility of facility, and ease of parking. Older people may have special limitations or needs. For example, some older people do not drive a car at night; others may be insecure in new environments. Keep careful records of planning and preparation for the event. It may become an annual tradition.

Event Follow-up

Be sure to capture the contact information for everyone who attends the event. Place them on the mailing list for future communications. Personal notes to donors and prospective donors in attendance from the CEO or board chair show people that their presence was important and appreciated. An alternative is to send each attendee a copy of the annual report with a personal note. If the prospective donor indicated a possible interest in a particular program or project, a personal note from an institutional leader involved with that program is appropriate. If you know the names and addresses of those who could not attend, a personal letter with a copy of the program or some other commemorative material demonstrates to the person that his or her absence was noted.

SPECIAL PROSPECTS AND DONORS

Not all donors or prospective donors are equal. Some deserve and require special treatment.

Current and Former Board Members

Most current board members need education about the value of the endowment, the various vehicles available to them for making their gifts, and their responsibilities in relation to growing the endowment. Personal meetings, one-on-one, permit the board members to ask questions and focus the conversation on their own specific interests and allow the development officer to thank each board member personally, listen carefully for each person’s “hot button,” and respond to any questions or concerns. The development director should hold such visits at least annually.

Former board members often feel distant from the organization that they care about so deeply. Annual personal visits can connect them to organizational advances and trends in the field, while also allowing them to identify and state their own passions and interests about the organization. Invite former board members to participate in organizational activities—including building the endowment—and to attend upcoming events.

Prospective Bequest Donors

The organization’s repeated message to consider a bequest will usually produce self-identified bequest prospects. Respond immediately and make a personal visit. After establishing a rapport with prospective donors, let them know that any information they share with you will be held in confidence, unless they give permission to reveal it to others. Draw from the prospective donors what they want to accomplish through the charitable bequest. Keep detailed records of discussions. Provide sample bequest language stating the full legal name, address, and tax identification number of the organization for prospective donors to share with their attorneys. Be sure that the organization’s attorney has approved the draft language in advance. Both during the process of closing the gift and after the bequest has been completed, invite the donor to participate in the life of the organization—as a volunteer in a specific project of interest, through attendance at appropriate programs and events, and as a committee member.

Develop a system for tracking prospective bequest donors and donors who have finalized their bequest provisions. A coding system should be in place to readily identify this important relationship with the donor to anyone with access to the donor’s records.

Families of Deceased Donors

Spouses and other family members of deceased endowment donors often have strong attachments to the charitable interests of their loved ones. They may want to participate in the organization that was important to the deceased spouse or parent and often appreciate the continuation of communication and involvement. Let’s face it: Donors probably left more money to their family members than they did to the organization. Cultivate and involve those heirs for their own endowment gifts in the future.

At the time of the donor’s death, attend the memorial service if possible and send a letter of condolence. After an appropriate amount of time, at least four to six weeks, send another note, perhaps with a small gift such as a book or a bookmark. Send periodic reports on how the distributions from the endowment are being used, and invite the family members to visit the organization and meet the people being served. Include the remaining spouse in the legacy society, and invite him or her to special events and activities. Send annual reports to all family members.

Life-Income Donors

During the giving process, as described in Chapter 4, provide full disclosure to the donor and the donor’s advisors and family members. When life-income payments are made to the donor, try to include a personal note to the donor—perhaps simply a “thanks again” or general organizational news. If a financial institution is administering these payments for the organization, the development officer can send a separate letter or note, timed to arrive at about the same time that the check is being sent by the financial institution. At least once a year, hand-deliver the check to those donors who do not use direct deposit. When the development directors call to ask for visits to deliver checks, they are rarely turned down.

Life-income donors have made investments in the organization, and they want to know about the status of their investments. Inform donors about the organization and its new programs as well as the value of the anticipated gift. Invite these donors to join the legacy society. Be sure that they are included in all appropriate activities and are on the mailing list

DONOR SERVICES CAUTIONS

Donor Control

In the past, organizations identified prospective donors from their lists of constituents and asked for their financial support. Today, donors identify the charitable organizations with which they want to affiliate and expect the organizations to invest resources into building meaningful relationships. Many prospective donors are increasingly interested in controlling the gift-giving process and personally negotiating gifts. Others want to participate in decisions regarding the use of gifts after they have been given. These new expectations of donors challenge some forms of donor services and increase the skills needed to be effective development officers. Balancing the donor’s desire to remain actively involved with the organization’s established priorities and policies is an art that development officers acquire with experience.