Joanne Florino of the Philanthropy Roundtable talks about donor intent for planned giving today
Philanthropy Roundtable Distinguished Fellow Adam Meyerson for Philanthropic Excellence, Joanne Florino, wrote an article in the September issue of Planned Giving Today. In the first of a two-part series, Florino examines how organizations can preserve donor intent in the face of criticism, including supporters of the Accelerated Charitable Efforts (ACE) law under consideration in the Senate. To learn more about this, check out these resources from the Roundtable on Philanthropy for Donors: “Protecting Your Inheritance: A Wise Donor’s Guide to Honoring and Preserving the Donor’s Intention” and Donor Intent Center.
Below are excerpts from Florino’s “Protecting Donor Intent: Part 1”, published in Planned Giving Today:
“In June 2020, the Philanthropy Roundtable released a new guide for donors,“ Protecting Your Legacy: A Wise Donor’s Guide to Honoring and Preserving Donor Intent. The timing was not right. Amid the pandemic and social upheaval, philanthropic donors, both individual and institutional, scrambled to meet basic needs while also faced with the demand to apply a social lens to all their donations and grants. ‘Full speed!’ seemed to be the only guideline for philanthropy.
In 2021, funders and donors are reflecting on how their giving might evolve today and possibly beyond. They maintained their focus on the current and future needs of the donees while dealing with the impact of the pandemic and other demands. Steve Moore, executive director of the Murdock Charitable Trust, noted in a May 2020 interview that even considering their response to COVID-19, his trustees looked into the intent of their late donor Jack Murdock, who created the trust. ‘Sir. Murdock would have liked us to be aggressive, ”they noted. “Let’s identify our priorities. The trust’s first grants included $ 15 million in individual and collaborative rewards.
Assessing the organization’s response and adaptation, Moore referred to the challenges the crisis has posed for those committed to managing donor intent. “We don’t need more consistency and compliance. We need collaboration, but we also need diversification, investments in separate areas that people really love. To be honest, there’s been a lot of pressure on the foundations to comply, to say, “Everyone, do it one way”. Promises are circulating and people felt compelled to join the parade.
Donor intent is also under attack in public policy proposals. Emmanuel Saez and Gabriel Zucman’s 2019 wealth tax proposal, for example, called for the assets of private foundations to be taxed “until these funds have been spent or are completely out of the control of the donor.” And the so-called Accelerating Charitable Efforts (ACE) law, recently co-sponsored by U.S. Senators Angus King (I-ME) and Chuck Grassley (R-IA), would complicate tax benefits and / or impose payment requirements for donors who wish use Donor Advised Funds (DAF) over 15 years. This would prohibit private foundations from counting DAF donations in their required 5% payment rate, despite the many valid ways in which foundation donors use DAFs to further their chosen missions or to maintain anonymity when supporting controversial causes. . Finally, the bill would prohibit counting salaries and expenses of family members in mandatory distributions from family foundations, many of which employ family members for the specific purpose of protecting donor intent.
When donors direct their giving, they expect their value judgments to be honored and they react with anger and disappointment when that doesn’t happen. In late 2019, Washington State University released the results of a study to determine the response of donors who learned that donations made for a specific project had been redirected to another cause. The conclusions were striking. Donors expressed feelings of betrayal, were less likely to donate to the charity or volunteer again, and were more likely to speak negatively about the organization to others. . The study found that for thoughtful donors, one worthwhile project is not necessarily worth another and that it is precisely because donors view charities as “moral actors” that failure to follow through on the intention of donors leads to a feeling of betrayal. “
Please continue reading “Protecting Donor Intent: Part 1” at Donations planned today (subscription required).