Unrestricted Gifts: Helping Your Donors Break Through the Myths

​The team at the Community Foundation frequently hears from nonprofit professionals about how difficult it is to communicate to donors the value and importance of unrestricted gifts. This is especially the case when you and your colleagues are striving to attract dollars to boost your operating reserve or endowment fund.

Here are five cut-and-paste talking points you can use in your donor communications to help break through the myths that often surround unrestricted giving. 

Myth: A charity can use unrestricted dollars for anything it wants. 

Reality: When a donor makes an unrestricted gift to a charity, it means that the charity has the flexibility to use the funds where they are needed most within the charity’s overall mission. A charity has a legal and ethical responsibility to use all donations–whether unrestricted or restricted–to carry out its charitable purpose. 

Myth: Unrestricted gifts have to be big to make a difference.

Reality: Any size unrestricted donation, whether to a charity’s current programs and operations or to its endowment fund, is meaningful. To fund their missions, charities rely on all levels of donations from a wide variety of donors. Even very small donations help charities build relationships with new donors and expand the circle of awareness. 

Myth: Donations that are restricted to supporting actual programs make the biggest difference.

Reality: A charity is like any other organization, whether for-profit or nonprofit, in that there are critically important expenses required to do its work. Rent, utilities, technology, and insurance aren’t technically “program” expenses, but without these expenses, a charity cannot function. Unrestricted gifts often help support these essential line items in a charity’s budget. 

Myth: It’s hard to see the impact of unrestricted gifts.

Reality: Unrestricted gifts are vital for a charity’s overall sustainability and allow it to carry on year after year. Indeed, a donor who gives an unrestricted gift can look at the entirety of the organization’s impact and know that the gift helped make it all possible. 

Myth: An unrestricted gift is not a “strategic” philanthropic investment.

Reality: Unrestricted gifts are arguably the most strategic type of giving because they demonstrate trust in the charity’s leadership to make the best decisions in carrying out the charity’s mission. An unrestricted gift also sends a signal to other donors that the organization’s leadership and staff are strong, which in turn attracts more support. 

Please reach out to the Community Foundation for more ideas about how you can communicate the value of unrestricted and endowment giving to your donors. We are here to help! 
 
This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.