Should Nonprofits Ever Turn Down Donations?

Nonprofits have a tremendous opportunity to thrive from the donations of organizations and individuals both in their community and beyond. It’s why it may seem counterintuitive to turn down money that could further the cause — regardless of where it came from. However, there are situations where nonprofit leaders might want to refuse the money, especially when the money will cause more trouble than it’s worth.

Moral Objections 

One of the more famous recent cases of a nonprofit turning down a donation is the Girl Scouts denying a donor with a not-so-hidden agenda. The donation was not to be used as the Girl Scout leaders saw fit, but rather to support cisgender children (as opposed to transgender children). The Girl Scouts had already stated that the group welcomed any child who culturally identified a girl, making their denial a moral statement against intolerance.

The Girl Scouts refusal was by no means a simple decision for the group, especially given the fact that it would have helped plenty of disadvantaged Scouts who deserved it. However, the donation violated both the established tenets of the group and presented unreasonable terms for the use of the money.

The Goldilocks Dilemma 

Some nonprofits will also turn down donations because the amount is either too much or not enough. Let’s say a donor gives $1 million to a specific part of your project, one that the donor feels very passionately about. This may sound great in theory, until nonprofit leaders consider what this will mean for their overall budget. If one part of the project is being overfunded and the rest underfunded, it may look like the nonprofit is unable to manage its funds.

Other donors may donate small amounts of money relative to what they want to be accomplished. Donors may want organizations to achieve goals that would need three times as much funding to hit. If a project can’t be sufficiently funded by the donation (and there’s no other funding to draw from), then nonprofit leaders are in the right to say no.

Tips for Working It Out 

In some cases, such as those with staunch moral objections to the cause, it’s unlikely that the two sides will reach a compromise. However, when it comes to donors giving too much or too little, you may be able to work with your donors. Leaders who explain the challenges of their projects may be able to find a middle ground where everyone is happy with the result.

Protecting your nonprofit means thinking ahead and mapping out your next moves. David G. Sayles Insurance Services understands the pressures you face and how to individually tailor your commercial insurance coverage to fit your specific challenges. Contact us today or read more about our nonprofit insurance program to see how we can help.

About David G. Sayles Insurance Services

At David G. Sayles Insurance Services, we strive to protect the investments of business owners like you. Our comprehensive policies are customized for you to provide the exact coverage you need. For more information, contact us today at (800) 439-0292.