When Do You Say 'No' to a Donor?

If you have been trained correctly as a development professional, you are taught to be donor-centered, provide outstanding customer service and essentially strive to say “yes” to donors.

I mean, just about every blog post that Richard and I write emphasizes in some way how to best serve your donors. We say it over and over again because, as industry professionals, you still don’t have putting donors first ingrained enough in your DNA. You’re getting better, but we still have work to do.

That being said, sometimes you actually have to say "no" to a donor. This is really tough if you’ve been trained properly, especially if there is a large amount of cash dangling in front of you.

So, when do you say "no"?

You say "no," when a donor wants to give a gift that would completely alter your mission.

You say "no," when a donor wants to micro-direct his or her gift and be involved in the implementation of that gift. You say "no," when a donor wants to give a gift and expects that it be used to further the interest of a business partner.

You also say "no" to a funder, whether it be an individual, foundation, corporation or government that, for a small grant, makes you and your team jump through so many hoops that the amount of time spent on obtaining the grant actually outweighs the amount of the grant.

Recently, I heard a story of a donor who wanted to give $5 million to a capital campaign. The CEO was really excited, until the donor put in a number of stipulations before he released the money. The donor wanted to give the gift only if the nonprofit hired a specific company to work on the construction of a new building. While the company did bid on the work, it was not originally the winning bid. There was a lot of pressure from the board to accept the gift and hire the company.

But, the CEO took a stand and said “no” to the donor and to the board. Word leaked out about the situation, and donors and the public backed the CEO. Donors responded by surpassing the campaign goal by more than $25 million.

That situation turned out well, but it doesn’t always work out that way. Conversely, I’ve known CEOs and executive directors who have been fired for standing up to donors who want to use their "gifts" as a quid pro quo and when they have been rejected, use their relationships with boards to remove the "problems," aka CEOs.

While the vast majority of donors have altruistic motivations and want to change the world, there always will be some donors that have other motives. As a nonprofit leader, whether you are a CEO, development director or major gift officer, you have an obligation to discern those motivations—even though it’s tempting to just get the money.

Then, there is the other problem with some potential donations. Recently, I heard from an executive director who applied for a $15,000 grant from a foundation. It took his staff two full days to fill out all the paperwork to apply for the grant. That was just step one. Then, they were informed they made it to the next round. This meant a two-hour phone interview with senior staff and the board chair. Two weeks later, they were informed they made it to the next round. This required the CEO and the board chair of the organization to fly across the country for a four-hour meeting with the foundation. After the meeting, they would hear back from the foundation whether or not they won the grant.

Crazy. So, the executive director said "no" after hearing they would have to fly two people across the country. It was not worth the money or time for a $15,000 grant. I’ve heard too many stories like this one from other executive directors. It’s as if some foundations and individual donors feel they are so self-important that they have to create so many hoops and barriers to ensure the organization is worthy of their donations.

So yes, sometimes you have to say "no" to a donor or a funder. Hopefully, not very often, but as Richard always says, "a 'no' can lead to a 'yes.'" It may not happen with that particular donor, but Richard and I believe that if you have integrity and are doing the right thing, good things will come out of it, and, in the long run, you will be the better for it.