How much say should donors get on strategy?
Affordable Housing for All is a regional nonprofit that works to provide low-income families with housing options. It is one year into its new expansion strategy - expand its services to a neighboring town to the West – selected based on both need and feasibility.
A donor approached the Executive Director, Lisa, with the intention of supporting the nonprofit’s expansion at a very significant level. But the support comes with a demand; they must also expand their services to a town nearby, but outside of the expansion plan.
Lisa is conflicted. On one hand, the funds would be more than enough to cover the additional cost and would also help support the nonprofit’s current expansion plan. Also, the nonprofit would be providing a beneficial service to the additional community, even if it wasn’t the nonprofit’s original plan.
Yet, Lisa is concerned that allowing donors to set the strategic priorities of the nonprofit is dangerous and sets a bad precedent. She is also concerned that taking on the additional area could compromise their effectiveness in the other communities.
Should Lisa take the donation? What steps should she take to make a decision?
Discussion Questions
Restricted gifts are common, but generally go to existing programs or ones proposed by the nonprofit. Is creating a new program crossing the line?
If Lisa takes the donation, should she disclose to the board, staff, or the community the nature of the arrangement?