What Do You Do When There’s No Signed Commitment?
Imagine this situation: A donor makes a verbal promise to include a planned gift for your organization in their will, but they never send you a signed intention form. Then the donor dies. How do you ask the family if the donor’s estate plan included the gift?
This type of situation happens frequently. So frequently, in fact, that the day Ben Case sent us his story about this very situation, I had the exact same conversation with one of our dearest clients Gayle Union of Marine Heritage Foundation. (Gayle was also one of our first clients when she was at The Smithsonian.)
Clearly, it’s not a matter of if this will happen to your nonprofit; it’s a matter of when. That’s why you should include intention forms in marketing literature, and send occasional, gentle reminders to supporters asking them to inform you if they’re planning an estate gift.
But no matter what, there will still be a few donors who will make only a verbal gift commitment. They’ll state their intention, but never sign an intention form.
Surprise! Or Not …
You might find out when that surprise gift arrives in the mail. Or, worse, you might never receive the gift at all: The would-be donor’s family may not know about the promise, or may oppose the gift. A bank or brokerage may not release the gift unless your nonprofit contacts them first (which, of course, is impossible if you don’t know about the gift in the first place).
Every nonprofit should have some type of policy to contend with verbal-only commitments. It could be as simple as keeping those donors’ contact information in a special “verbal promises” file and checking in with them regularly, or a series of more targeted efforts aimed at the completion of gift intention forms.
Another tactic for donors who won’t complete intention forms could be to ask if they’ll provide contact information for an attorney, trustee, and/or executor if the gift is to be left in a will. For beneficiary designations, maybe the donor will provide contact information for the bank or brokerage holding the assets, and a policy or account number to identify the asset.
Stewardship is also key: Nonprofits lose gifts to donor frustration all the time, which is why prompt recognition, thank-you letters and postcards, and annual calls and visits are so important.
Tread Lightly
And, if (when) the worst-case scenario happens, the organization needs to handle the situation delicately. While verbal commitments are sometimes enforceable, it’s an unpleasant process—and getting the lawyers involved might leave an ugly stain that costs your nonprofit’s reputation far more than the value of the gift.
It’s much better to wait an appropriate amount of time and respectfully contact the family and inform them of your donor’s pledge and commitment to your organization. If you’ve been keeping up with stewardship, this will make that task much easier.
Then, if the heirs refuse, you can carefully study the situation and decide on your next steps. Is the size of the intended gift “worth it” to pursue the matter? Were there any witnesses to the verbal promise? Did someone at the nonprofit document it? The burden of proof will fall to your organization—what does your attorney think?
Be Prepared
Here are some other considerations to ponder:
- What happens when the donor passes away? Will the charity and/or the gift officer even know?
- If there is a surviving spouse, will there be a gift triggered through a “second-to-die” policy, or has the surviving spouse either removed that gift and/or not confirmed to the charity that there is still a gift? How do you figure this out?
- When is it appropriate to reach out to other family members, e.g., children, if you know who they are, or can even find them?
Verbal commitments are part and parcel of fundraising. The best way to deal with them is to prepare for the worst, hope for the best, and make stewardship a priority.
