An interesting news article hit my feed last month, based out of New Brunswick. It is a cautionary tale of the importance of getting the terms of a gift in writing. The story, discussing two brother’s who made a gift in memory of their father resonated with me, as their experience with their dad’s palliative care mirrored my own with my mom, who passed away in hospice almost a decade ago. I can’t speak enough to the important role that hospice and other end-of-life organizations provide to our society. Certainly, our family’s experience was exemplary, and we owe a debt to hospice that cannot be repaid.
Hospice and other palliative care organizations exist in a tricky space as fundraising organizations . There is a particularly emotional connection with donors that rarely exists outside of this particular type of charity. These organizations must be cognizant of when and how to ask for a gift from a family that may still be grieving, even months or years later, but also keep in mind that once a gift is made, that the transaction is far from purely financial in the eyes of the donor.
My own experience with this hit hard during the pandemic. The hospice in which mom spent her last days began a 50-50 lottery as a fundraising effort – one of the few ways charities could raise funds during the difficult days when people were not allowed to congregate. Our family has donated to the hospice on multiple occasions since mom’s passing a decade ago, but I found myself feeling a strong a cognitive dissonance in receiving weekly emails from the hospice essentially about gambling. Intellectually, I understood why the hospice would undertake this as a fundraiser, but emotionally, it led to a strong dissonance with the death of my mom. I asked the hospice to remove my email from the lottery list, only to be told it was not possible without having to unsubscribe from all their emails. As you might guess, I asked to be removed from their contact list until such time as they were able to separate donation emails from gambling emails.
Two Brothers with broken hearts
The news article that came to me reminded me of my mom’s journey. Two brothers, Alan and Glenn, were incredibly grateful for the superb care their father received at his long-term-care home during his last days. After his passing, they donated $50,000 to the long-term-care facility. In a verbal agreement with the administration of the home, it was decided that their generous gift would go towards the establishment of a specific room for palliative care at the facility – in essence, a mini hospice environment. The funds would go towards the purchase of a specialized palliative care bed, as well as some facilities for family members.
A year after the room was built, a staff member let Alan and Glenn know that the room had been dismantled. Stunned, the brothers reached out the new administrator at the facility, who informed them that the bed was being used for a non-palliative patient, and that the room itself had been moved to a different location.
As one might imagine, the brothers were disappointed. They asked to see the new room – only to discover that it was essentially empty with nothing but a recliner.
Unfortunately, the brothers soon discovered that there was little that they could do in this situation, as they had only had a verbal arrangement for their donation. Had their been a gift agreement in place, then they could have had the ability to ensure their donation was handled in the way they expected.
The importance of Gift Agreements.
I strongly encourage both donors and charities to take the time to properly formalize the intended purpose of the gift in a gift agreement. Too often I see organizations say “we will work it out after”, or donors go “oh I’m not worried”. At the end of the day, a formal gift agreement ensures all parties have the same understanding, and it can serve to solve disputes in the future.
From the donors perspective, a gift agreement puts parameters on the gift. It should clearly state what the intent of the gift is, and how the charity should apply the donated funds. It should also have some provisions for the future – the New Brunswick story being a prime example of this. Had there been an agreement, it could have spelled out a minimum time frame for the palliative room, and what happens should the room need to be changed in the future. Similarly, if money is left to be used in the long term, an agreement should address what the backup plan is if circumstances change. For example, if you left funds to provide research for a disease, and a cure is found, then your gift agreement should indicate what any residual money would be directed to if the original purpose is no longer valid.
From the charity’s perspective, a gift agreement is important for institutional memory – again, in the New Brunswick case, the leadership of the organization changed, and the new leader had little understanding as to the history of the room. Additionally, it can protect the organization from bad publicity if a donor is upset and takes a case to court, or the court of public opinion. Such an agreement was important a few years ago for the University of British Columba. In that case, a very wealth donor had an agreement for naming rights for the faculty of law. Unfortunately, some higher level law degrees were issued by the Faculty of Graduate studies. The donor had a very public battle with UBC, claiming that those degrees should also have his name on them like those issued by the Faculty of Law. After a protracted legal battle, a judge ruled the UBC had followed the agreement precisely as written – that all degrees of the Faculty of Law would bear the donors name, and that the donor was demanding naming rights that were not, in fact, part of the agreement he signed. The gift agreement was well written and defined exactly UBCs responsibilities.
Not every gift needs an agreement
I’m mainly concerned to see gift agreements in place for larger gifts of $10,000 or more in most situations. Usually smaller gifts are fairly straightforward. That said, there are certain situations where I feel a gift agreement is crucial, regardless of the amount of money involved:
- Setting up the terms of a Donor Advised Fund (DAF). There are a wide variety of DAF structures in Canada, and the donor needs to understand their rights and responsibilities very clearly. In a DAF, the donor receives a receipt as soon as she or he makes the gift, then can determine what charities to send it to later. It is important to know what if any restrictions are in place. Some DAFs have the ability to grant out all money immediately, some require the funds to remain for a time, and others have limits on how much can be sent out at once.
- Donations where the donor has a strong emotional connection, like a hospice or other end-of-life facility. Nothing is a stronger betrayal of a relationship than a verbal promise which is not followed. This is especially important when donating in memory of someone. I once met a gentleman who had donated a significant sum to have a room named in his wife’s memory. The charity had to close that room a few years later, and he told me that “it was like taking her away from me a second time”. He was heartbroken. Had there been a gift agreement, it could have outlined what would happen to the plaque in her honor. He would have been happy to simply have it moved to the most similar facility the organization had.
My own family had a similar experience, where we made a gift in memory of mom. The organization had promised to list her name on their donation board, but took over 18 months to do it. It wasn’t important to us that our gift be recognized, but it stung when we had been told that her name would go up within a month, and it took almost two years.
Documenting your wishes is crucial.
At the end of the day, everyone is better protected with a well written gift agreement. It provides some legal enforceability for the donor, and a certainty for the charity that they are free to use the funds within the limits provided. I wish more organizations made it a hard policy to always require a gift agreement above a certain threshold.
I also wish that charities, especially smaller ones, think carefully about the role emotion plays in a donor’s understanding of a gift and think more carefully about donor communications. Often, something that can be easily solved becomes a big deal once emotions become involved. Unfortunately, in my professional and personal experience, donors will often give, but to another organization in these situations.
That is certainly been my own experience. The hospice that meant so much to my family has still received gifts, but I have given more generously to the building of a new hospice that has just opened in our area in the last few weeks. To me, it allows me to honour my mom without the jarring emotional dissonance.
Alan and Glenn, in the last words of the CBC article echo this as well – they indicate that they would have given elsewhere in retrospect, who would honour their agreed purpose.
There is absolutely no question in my mind that the hospice that helped my mom, and the care home that helped the brothers’ dad are great organizations deserving of support. But, for both of our families, the emotional component has led us to honor our loved one’s in a different way, with a different organization.
And that, at the end of the day, gift agreements can help mitigate emotional impacts for both donor and charities, as well as taking the time to get feedback from to valued members of the community (donors, staff and patients in these two examples) before implementing organizational changes that might have a surprisingly strong emotional impact for everyone involved.
Ryan