As a nonprofit, donations are vitally important, both from a revenue standpoint and for nurturing donor relationships. But should you accept ALL donations extended to your nonprofit? While the immediate answer may be “Yes, of course”, you may want to reconsider.
Cash Donations:
While offers of cash may automatically be a “Yes”, be careful if the donation comes with a restriction that cannot easily be met. A donation of $1,000 towards the $20,000 cost of a playground is very generous. However, if you are renting the property and the landlord will not allow for a playground to be built, you should let the donor know right away and propose another way the organization could utilize the funds to help the population you serve. This will make the donor feel confident that the funds will be used for a great purpose.
Non-Cash Donations:
Most of the time, non-cash donations are welcome as they fill a need of items the nonprofit would have to purchase themselves otherwise! These could include everything from copy paper, stamps, office furniture, food and drinks for the community, to a van to transport nursing home residents. However, sometimes a non-cash donation can cause more problems and use staff time in resolving how to dispose of it.
Example #1:
A nonprofit accepted a donation of a used car. When the Executive Director arrived the next day, the car had been towed to the nonprofit. It was not a running car and the cost of getting it towed off the property and disposed of was more than the value received. Lesson learned!
Example #2:
A local nonprofit that assists domestic violence victims was contacted by a community member about a large donation of perishable food items. While emergency situations may lead to someone needing food, the nonprofit doesn’t have the proper storage or appliances for preparation. It may be a better fit for this donation to go to a local food bank as the domestic violence nonprofit is not set up to store that volume of perishable food, and they do not have the tools needed to properly prepare the food. The organization may end up spending more time and money to dispose of the food in the long run.
It’s hard to say “No, thank you” to good intentions from the donor, but a written donation acceptance policy describing what you can accept and what you cannot, may help to avoid awkward conversations.
The cost and resources needed to dispose of or sell non-cash donations should be a prime consideration in whether to accept the donation, along with following the mission of your nonprofit.
Contact a member of Gilliam Bell Moser LLP’s Not-for-Profit Niche team at 336-227-6283 for more information.
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