Recognizing Revocable Commitments

You're not alone. This is a situation where one of the ethical-dilemma constructs – "right vs. right" – is most evident: It is right to celebrate every donor and it is also right to give proper and relative credit as it is due. The fact of the matter is that a person who names you in his or her will has the ability to change the designation. (We're not going down the "irrevocable bequest" route here. Not now.) This means to some people that a bequest intention is meaningless. Why in the world would we want to credit this person with anything? I know of one trustee – a committed donor, you would think – who announced such a promise and then promptly removed the designation when things didn't go her way on the board. Why celebrate nothing more firm that the ego-driven whims of a person's capricious breeze?

But another fact of the matter is, and studies strongly support this, the vast majority of those who commit themselves to a gift through their will make good on their commitment. And what I mean by "vast majority" is deep into 90 percent territory. Does that fact not also account for something when you determine whether or how to publicly acknowledge your supporters? Furthermore, even though irrevocable gifts are just that, their ultimate value can be skewed by a high payout rate, poor investments or a troubled economy. It's quite possible that an irrevocable gift might very well provide less than a revocable one.

Calculating the value of any deferred gift, when you think of it, is a guessing game. (Although that may be a strange way to view those complex remainder value calculations, that's what it boils down to.) But unless we want to walk away entirely from accepting and monitoring deferred commitments, we must do our best to be fair and practical. So, perhaps this might be seen as a solution without too much confusing nuance: be effusive publicly and hard-nosed privately. While making the distinction in showing your fundraising results between current and deferred commitments, don't make a public fuss over delineating revocable and irrevocable deferred gifts. Your internal files should make that distinction, however, along with others: the present value of the expectancy based on investment expectations (not the IRS calculation); the changing ages of the donors or beneficiaries; and a discount rate that reflects your organization's cost rise or endowment growth, as opposed to the federal mid-term rate. (The CMFR is only the official factor in calculations; it has nothing to do with long-term realities.) That is, play it like a hawk internally and celebrate everyone in public.

In capital campaigns, organizations need to publicly delineate current and deferred gifts. People need to understand what is in the bank, or what will be there within the campaign period, and what is coming down the road at an indefinite time. Still, if all deferred gifts are known not to be included in the current gift totals, why not celebrate all of them – irrevocable and revocable – the same?

So, we have two opposing facts: 1) bequest donors have the ability to change and 2) strong evidence that almost everyone doesn't. The question, therefore, comes to down to values. My highest value, in this case, is to honestly applaud good intentions as much as possible, and let the accountants worry about the details. You value system may be different, but each of us needs to acknowledge what brings us to our conclusions.