When you can, and should, turn down funding.

June 5, 2019 / Comments (0)

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By Emily Flemming, CFRE | Membership and Resource Development Director

It sounds like a fundraising dream—someone calls you and says, “I want to give your organization a big donation.”

Normally, fundraisers rejoice, thank our donor profusely, and excitedly tell our colleagues.

When an individual contacted MNA to inquire about this kind of situation, she asked a somewhat unexpected question.

“Is it discriminating against the funder if I say ‘no’?”

Turning down funding when it is freely offered feels counterintuitive, but there are many scenarios when a nonprofit can, and should, say “no” to a gift. The terms, values, and conditions under which a nonprofit would reject a gift should be part of your nonprofit’s Gift Acceptance Policy.

While it’s not necessary or recommended to specifically line out every possible funding situation, your Gift Acceptance Policy should provide a few basic standards by which you examine charitable contributions.

Here are a few of the standards that should be in your policy.  Your nonprofit should reflect your inability to accept funding under the following circumstances.

  • If the funding comes with too many restrictions
  • If the funding would jeopardize your tax-exempt status
  • If funding is designated for purposes not in line with the mission of the organization
  • If the offered funds are too difficult or expensive to administer
  • If accepting the gift could damage the reputation of the organization accepting the gift

Nonprofits need to consider what can be inferred about their values when they accept funding from certain groups. For example, should a nonprofit accept funds from the cannabis industry? From a casino? From a person, foundation, or organization with strong political affiliations? Nonprofit leaders and their boards should be prepared to have open conversations about the benefits and consequences of accepting charitable contributions.

Recent stories highlight areas of concern that your current policy may not address—things like sexual harassment of fundraisers, opioid producing organizations, tainted donors, etc. If you and your board haven’t recently reviewed your Gift Acceptance Policy, it may be time to look again with fresh eyes.

In short, it’s not discrimination to refuse a gift—it’s a nonprofit’s right, and obligation, to ensure that they protect the reputation and mission of their organization.

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