Philanthropy Roundtable’s Joanne Florino Talks Donor Intent in Planned Giving Today

Philanthropy Roundtable’s Adam Meyerson Distinguished Fellow in Philanthropic Excellence Joanne Florino wrote a feature in the September issue of Planned Giving Today. In the first of a two-part series, Florino examines how organizations can preserve donor intent amid pushback from critics, including supporters of the Accelerated Charitable Efforts (ACE) Act under consideration in the Senate.  For more on this issue, check out these Philanthropy Roundtable resources for donors: “Protecting Your Legacy: A Wise Donor’s Guide to Honoring and Preserving Donor Intent” and Donor Intent Hub.

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 guidebook for donors, ‘Protecting Your Legacy: A Wise Donor’s Guide to Honoring and Preserving Donor Intent.’ The timing was not auspicious. In the midst of both pandemic and social upheaval, philanthropic donors, both individual and institutional alike, were scrambling to respond to basic needs while also facing demands that they apply a social lens to all of their giving and grantmaking. ‘Full speed ahead!’ seemed to be the only directive for philanthropy.

Now in 2021, grantmakers and donors are considering how their giving might evolve today and possibly beyond. They maintained their focus on current and future needs of donees while also confronting the impact of the pandemic and other demands. Steve Moore, executive director of the Murdock Charitable Trust, remarked in a May 2020 interview that even in considering their response to COVID-19 his trustees looked to the intent of their deceased donor Jack Murdock, who created the trust. ‘Mr. Murdock would’ve wanted us to be aggressive,’ they noted. ‘Let’s identify our priorities.’ The trust’s early grantmaking included $15 million in individual and collaborative awards.

Assessing the organization’s reaction and adaptation, Moore referenced the challenges that the crisis posed to those who are committed to stewarding donor intent. ‘We don’t need more uniformity and conformity. We need collaboration, but we also need diversification, investment in distinct areas that people really love. To be honest, there’s been a lot of pressure at foundations to conform, to say, ‘Everybody, do it one way.’ Pledges go around, and people felt obligated to join the parade.’

Donor intent is also under attack in public policy proposals. The 2019 wealth tax proposal of Emmanuel Saez and Gabriel Zucman, for example, urged that the assets of private foundations be taxed “until the time such funds have been spent or moved fully out of the control of the donor.” And the so-called Accelerating Charitable Efforts (ACE) Act, recently co-sponsored by U.S. Senators Angus King (I-ME) and Chuck Grassley (R-IA), would complicate tax benefits and/or impose payout requirements for donors who wish to use donor advised funds (DAFs) over more than 15 years. It would prohibit private foundations from counting DAF gifts toward their required 5 percent payout rate, despite the many valid ways foundation donors utilize DAFs to pursue their chosen missions or maintain anonymity when supporting controversial causes. Finally, the proposed legislation would prohibit counting salaries and expenses of family members in the mandatory distributions of family foundations, many of whom employ family members for the specific purpose of protecting donor intent. 

When donors direct their gifts, they expect their value judgments to be honored, and they react with anger and disappointment when this does not happen. In late 2019, Washington State University published the results of a study to determine the response of donors who learned that gifts made for a specific project had been redirected to another cause. The findings 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 revealed that for thoughtful donors, one worthwhile project doesn’t necessarily equal another and that it is precisely because donors see charities as ‘moral actors’ that failure to honor donor intent results in feelings of betrayal.”

Please continue reading “Protecting Donor Intent: Part 1” at Planned Giving Today (subscription required).