When a donor supports the mission without strings

As I read this headline in the Star Tribune Unnamed donor gives $1 million to Science Museum of Minnesota, I couldn’t help but smile and think “well done Science Museum!” As philanthropy is ever changing and institutions grapple with budget cuts, donor attrition and corporations wanting to fund specific projects (not just general operations), I am reminded again that the peak of giving for a donor and the nonprofit recipient, is when the mission is why the donor gives. An unrestricted donation demonstrates extreme trust in the organization and how the funds will be handled. “We’re grateful these are flexible dollars that support our mission…It’s getting harder to raise unrestricted dollars that are so critical to running the organization and delivering our mission.”

I’ve spent the past 10+ years in fundraising and I always communicate with our clients the three levels of giving:

  1. A gift to pay the bills: Payroll, keep the organization out of debt, and just to keep the lights on. This is the absolute worst way to raise money, but sometimes organizations end up in tough situations, and they are not ready to close their doors and donors will step up to save the organization. It doesn’t feel good for anyone and certainly does not allow the mission to be executed.
  2. Project giving: What an excellent way to introduce new donors to an organization, fund a project! It’s kind of like dipping your toe in the water, testing a nonprofit to see if you can trust them with your money. But, the institution needs to do a meticulous job at managing expectations. You simply cannot take a $10,000 gift for a project that will cost $100,000. This is a sure way to lose a donor. I recommend you have a limited amount of projects you can market to donors. This will ensure you are sticking with your mission while also not getting off track with a project a single donor wants to take on. Project fundraising also helps you as the nonprofit better understand what projects your donors care about. This is helpful information for your longterm growth.
  3. General operations – No strings attached: Donating just because you support the institution. This type of gift takes time to build, it requires trust in the relationship, trust in how funds are managed and also how the programs are executed. General operating donations allow an organization and its leaders, the people managing the day to day of the mission of the nonprofit, to make the best judgment call on how to spend the money. Project donors who are managed well typically become long term general operating donors.

Nonprofits are always prospecting and looking for new donors. This is your gentle reminder to consistently look at your mission, your “why” for existing, the problem you solve, and how you can engage donors to meet your mission. At the end of the day you want donors to feel good about their gift, and you (the organization) want the flexibility to spend it as you see fit. An unrestricted gift will allow you to strive to meet your mission.

Kristen Sheehan