Personal Preferences Can’t Interfere with Gift Acceptance
A while back I wrote an article called “A Gold Strike” about how nonprofits should include “the ask” for gifts of mineral rights on their websites. Shortly afterwards, I received an email from an advancement officer who thought that no “self-respecting non-profit organization should consider a gift of mineral rights, particularly ones involving hydrocarbons.”
Her objections stemmed from personal opposition to hydraulic fracturing. But since she represented an academic institution, I welcomed an exchange of information, since that is the goal of education. Over the next couple of days, the advancement officer and I exchanged several emails about different types of non-cash gifts.
The “Back-Door” Yes
During our exchange, I asked if she would accept Chevron stock. Her answer: “Of course. We accept appreciated stock.” I reminded her that accepting oil company stock is essentially a “back-door” yes to mineral rights. Both represent financial interests in hydrocarbon extraction. The only difference is the form the asset takes. In subsequent conversations, we agreed to read articles from each other’s point of view.
Although we never came back to discussing the articles, it begs the question:
Should personal opinion stand in the way of a major gift to an institution? What would happen if a donor gifted a piece of art and the advancement officer didn’t like the piece? Or what about a major gift from a business made successful by overseas factories when the gift officer is strongly opposed to outsourcing?
The Value of Royalty Income
A revenue stream from mineral royalties can be a significant contribution to a non-profit’s endowment or operating budget. These gifts often provide steady, long-term income that can support an organization’s mission for years or even decades. Royalties can also come from songwriters, playwrights, motion pictures, software, trademarks, patents, and franchises. An advancement officer may have a personal objection or may dislike the particular intellectual property the donor has to offer. However, mineral interests may be the one gift that your donor can give—and it could be their most valuable asset.
Nonprofits Need to Have a Gift Acceptance Policy
When your donors are organizing their estate plans, they often have more than one charitable organization they care about. If you won’t take their non-cash gifts like mineral rights (or their artwork, or real estate, or appreciated securities, or personal property), someone else will. Donors have options, and they will find an organization willing to accept what they have to offer.
Finding Creative Solutions
Advancement officers’ personal beliefs should not get in the way of accepting a gift. But that doesn’t mean those beliefs should be disregarded entirely. There is often more than one way to accept a gift. For example, a recent client requested an evaluation of a gift of mineral interests. The organization accepted the gift and shortly afterwards sold the rights to another group. This solution was a win-win. The donor was able to gift the mineral interests and receive the associated tax benefits, and the non-profit was able to monetize the gift without maintaining long-term ownership of an asset they found objectionable.
Mission First, Personal Opinions Second
Donors and gift officers, like all people, have a variety of economic, religious, political, and ethnic backgrounds. Our motives and philosophies are rarely cut and dry. If a donor wants to support the mission of the organization, and if the gift meets the gift acceptance policy, the gift officer has an obligation to the organization to accept the gift. The mission must come first. Personal preferences, while valid on an individual level, cannot be allowed to diminish the organization’s ability to fulfill its charitable purpose.
Betsy Suppes is a qualified appraiser and petroleum geologist. bsuppes@forgedalegeo.com
