Fundraising Forecasting Beyond the Magic 8 Ball
April 10, 2014
The High Altitude Gardener’s Guide to Board Development
April 30, 2014

5 Ways to Avert Naming Gift Disaster

th-1“A rose by any other name would smell as sweet”?  Not always, Mr. Shakespeare! It’s amazing what can go awry when you change the name of part of your agency — whether it be a physical facility or a program or even a rose garden — in recognition of a charitable gift.

Problems may happen quickly.  Perhaps the donor wants a bigger plaque than anyone else’s, or one that they have their artist cousin design, or one that includes a goofy quote. I’ve personally had to deal with all of these issues and more.

It may take a while for the problems to arise. The donor protests an art exhibit that is shown in the space or insists that a youth outreach program be changed to accommodate their new interest in a particular population.  When the time comes to renovate the space, the donor expresses horror at the design.  Your agency makes a dramatic shift in direction that doesn’t fit with the donor’s ideals.

Or problems can happen years – many, many years – after the gift.  As a Chicagoan, I remember the brouhaha when Northwestern University changed the name of Dyche Stadium to Ryan Field in honor of Patrick Ryan, then chairman of Northwestern’s Board and a major donor.

I suppose Mr. Dyche’s family wasn’t around to put up a fight given that he was an 1882 graduate of Northwestern, but the general public found the ouster of a traditional name in exchange for big cash rather distasteful. It was a minor scandal in the press.

These examples are just the tip of the iceberg.  A naming moment is exciting.  But if you don’t prepare properly, the honeymoon can end with considerable contention.

Here are five ways to protect you and the donor from future dismay:

1.         Create a smart menu of naming options.

Most naming gifts happen in the context of a capital campaign. Before you even think about asking for the first gift, put together a list of naming options, including a description of each space or feature and pricing. Don’t be tempted to name everything. Keep the list clean and classy.

Don’t “sell” your naming opportunities too cheaply! You only have one chance at each naming opportunity. If you set the naming bar low, you hamstring current and future campaigns.

2.         Have a naming policy

Again, before you go down the path of soliciting naming gifts, have a board-approved naming policy in place. Some things it should include are:

– A sunset clause. More and more institutions are limiting namings to 25 or 30 years. This is essentially a gift to your future board, giving them an opportunity to raise money without inheriting huge “blackout” areas. Of course, you should give the donor or the donor’s family the first right to rename the space when the sunset clause kicks in.

– An out clause. The board should have the right to remove the donor’s name if it becomes in some way harmful to the institution.  “Jerry Sandusky Hall” probably isn’t what you’d want at your organization.  Another cause of terminating the naming is, of course, failure to pay the pledge.

– Clarity that the naming does not imply any right by the donor to design or manage the space or anything that happens within it.

The most important part of any policy is articulating how decisions will be made in unexpected and complicated situations and ensuring that the board has the power to act.

3.         Have a recognition protocol

I learned from the school of hard knocks that you want to manage your recognition signage consistently. I’ve had more conversations about font size and the order of names on a list than I care to think about. Get an architect or designer to help you create standard signage based on size of gift. Include in your gift agreements and policies that signage is created by the institution, not the donor.

4.         Write a gift agreement for each donation

While the donor does get a benefit – namely recognition – for their gift, in order for it to be a tax deductible, charitable contribution, the gift must further the mission of the organization. Create a gift agreement that ensures a shared understand of things like recognition, terms of payment, and that fact that it’s not up to the donor what programming happens in the space or what the plaque looks like. Don’t forget to negotiate how the named space or program will be referred to on signage, in media communications, over the phone, etc.

5.         Be responsive to your donors.

So far, I’ve emphasized how to protect the organization. The donor should be supported and protected, too. Donor desires matter, of course.  They matter a lot.  Be prepared to negotiate within reason and have a service-oriented approach, as long as it doesn’t compromise your mission and brand. For example, one of our clients recently negotiated a naming price through a combination of in-kind and cash donation. It worked out well for both the donor and the nonprofit and everyone is happy.

The main rule with a naming gift is this: consider your future board.  How are you restricting their ability to raise money, deliver programming, fulfill mission, protect brand? Everything you do today should be cultivating a future rose garden that will smell sweet regardless of its name.

Please note: this blog is referring to charitable donations for which recognition is provided through naming. Sponsorships, e.g., “Invesco Field,” are a completely different topic, out of the realm of philanthropy, and therefore not addressed. If you’re dealing with named sponsorships, you can always go to the fabulous www.sponsorship.com for info.

2 Comments

  1. Jami Wolken Fassett says:

    Thanks for this great article, Ann! I love the real examples to illustrate your points. It’s so important to remember the big picture and set your organization up for success rather than getting wrapped up in the here and now and keeping one donor happy.

Leave a Reply

Your email address will not be published. Required fields are marked *

Front Range Source