Managing gifts from high-net-worth donors is not about discouraging generosity, but about stewarding it responsibly.
High-net-worth donors play a vital role in enabling organizations to advance their missions, scale impact, and pursue ambitious initiatives. Charities take incredible steps to align themselves with these donors—not only to recognize the current gift received, but also to position the donor for future gifts. We see this on named buildings, display advertising and event promotion. We lean into these philanthropic leaders because they’re providing the support that is so necessary for the institution. While it’s best practice to do so, additional best practices need to be engaged by any organization securing and then promoting these types of gifts.
Recently there have been some worrying examples from the United States (and here in Canada) that the reputation of both the organization and staff leadership can be called into question when negative information comes into the public domain about those donors. The acceptance and management of gifts from high-profile individuals can introduce distinct reputational, ethical, and governance risks. Given their visibility in the community and the media scrutiny that often accompanies wealth and influence, organizations must approach these relationships with heightened care and foresight.
The risk
One of the primary risks stems from association. Prominent donors may be linked—fairly or unfairly—to controversial business practices, political positions, or personal conduct that can trigger negative publicity. When an organization accepts a significant gift without sufficient diligence, it can inadvertently expose itself to reputational harm that undermines public trust, stakeholder confidence, and donor integrity. In some cases, the long-term costs of such damage may far outweigh the financial value of the gift itself.
What is worrying is that many organizations that are pressed to raise ever-increasing levels of community support take a “ask for forgiveness” approach when securing these gifts. Effective gift management begins with robust due diligence processes. This includes assessing the donor’s public profile, sources of wealth, and any potential conflicts with the organization’s values, mission, or policies. Clear gift acceptance guidelines help ensure consistency, transparency, and defensibility in decision-making, particularly when difficult judgments must be made under public scrutiny.
Equally important is proactive communications planning. Organizations should be prepared to explain why a gift was accepted, how it aligns with the mission, and what safeguards are in place to preserve independence and ethical standards. Defined naming rights policies, ethical review committees, and leadership oversight further reduce risk by ensuring no single individual bears responsibility for high-stakes decisions.
The charity “super power” is the ability to say no
Gifts to charitable organizations, unlike gifts to DAFs or private giving foundations, are received by organizations that have both an ethical and moral imperative to conduct themselves in the highest possible standards and with a view to supporting a very specific charitable mission. Any charity has the incredible power to reject any gift if the person or entity making the gift does not achieve the level of these high standards.
Ultimately, managing gifts from high-net-worth donors is not about discouraging generosity, but about stewarding it responsibly. By balancing opportunity with diligence, organizations can preserve their credibility, maintain public confidence, and ensure that philanthropy strengthens—rather than compromises—their mission and reputation. It is one of the unique value propositions of a charity that sets it aside, and above, those “for profit” options that are not concerned with these important ethical and moral issues
7 things to consider in your charity’s due diligence for receiving major gifts
1. Risk-based tiering: Adopt a tiered due diligence framework that scales review intensity based on the size of the gift. The larger the gift, the more focus that it requires.
2. Reputational screening: Conduct structured reputational due diligence about the donor that might throw up a “red flag.”
3. Source-of-wealth consideration: The same goes for the source of the wealth the gift is coming from.
4. Clear gift acceptance policies: Maintain written policies that define unacceptable sources and conditions including multiple layers of oversight.
5. Documentation and decision rationale: Have a well-documented rationale for acceptance of gits, conditions for those gifts, or refusal of gifts.
6. Communications preparedness: Prepare a brief narrative explaining how the gift advances the mission, why it aligns with values and policies and what safeguards protect independence of the charity.
7. Ongoing monitoring: Due diligence is an ongoing effort for all major gifts. Periodically reassess reputational risks and monitor changes in public profile or circumstances.
Ed Sluga is the President and Co-Founder of PGgrowth. Contact him, 519-760-6964.
