Strict Gift Annuity Minimums
(Added 7/2/2015)
The minimum gift annuity amount we will accept is $10,000 (it’s been this way for the last four years). Before that, it was $5,000. A $5,000 annuitant – whose gift was made prior to the policy change – called at the end of last year and said she wanted to establish another $5,000 annuity. I was not in the office that day, and in my absence my boss agreed to accept the gift. We will lose money on this one. I said it was wrong to have accepted $5,000 when it is clearly stated and advertised that our minimum is $10,000, and if we make exceptions for one person then it should be across the board. Case in point: I have another annuitant who gifted a $10,000 annuity in 2011. She called last year to tell us she wanted to do an annuity for $7,230, but I told her we had a $10,000 minimum, that my hands were tied. This happened twice with this donor – and my director knew the circumstances. That’s why I was so annoyed when she said yes to this other donor. Who is right here? Again, I look at it as a contract with rules and there should not be exceptions.
Your question exposes the tension arising from two competing “rights” (as opposed to a right versus wrong situation): fairness, where everyone is treated equally and the same, and accommodation, where exceptions are accepted. There is no point to having policies if they are not used. Your organization decided to increase its gift annuity minimum, and if you are like the many other organizations that have done the same, the decision was based on efficiency – the costs to administer and maintain the gift are, in total, less with higher gift transactions than they are with smaller gift transactions.
The question, then, as I see it, is whether an exception to the policy might be legitimate. I get the sense from the way your question was written that part of the problem is that you feel your director made her decision in the absence of a legitimate process. Ethical decision-making is a process, and all perspectives and relevant facts should, without emotion or favor, be welcome for consideration. Consider this: a donor – not a prospect, but a donor – wants to increase her support for your cause. Yet you are telling her she can’t because the increase she proposes isn’t enough. This, to me, is relevant. And to a question of fact: Will you really lose money on the transaction? Or is it more accurate to say that your efficiency will be less because the administrative costs are higher than you would like? That latter question is not meant to presuppose an answer. The concern is valid: it’s not just the costs of the outside administrator and investment team; in a true cost-benefit analysis, the salaries of those internal employees soliciting and stewarding the gift, as well as other overhead, need to be taken into account. There’s an objective result in that financial calculation (for the most part; some of the components might not be so objective), and, to legitimize your position internally and develop an authentic explanation for your donors, you must perform it. You can then consider that objectively derived information when making the subjective decision your question calls for.
If you reject the proposed lesser transactions from donors who made their gifts before the policy change, you need to explain why – as specifically as the donor’s query demands. That process is part of stewardship; in a real way, in this situation, you are still stewarding the first gift. But you also don’t want to be all Inspector Javert about this. Assuming there is no actual financial loss in the transaction, context should account for something. If, based on, but not being a slave to, the cost-benefit calculations, you agree to accept the gift, you are accommodating a person who is doing nothing more than trying to help you further your cause. That sentiment means something. And it has a value.
I’d make the exception in this case. Further, in the search for the desired equity you mention, I might add a provision to the policy so that prior donors can be accommodated.