Thanking a Friend
(Added 12/15/15)
A past member of our university board is very close to one of our major donors. The donor is widowed and elderly, but has the capacity to make her own decisions. The two have been friends since well before the former board member began her service. The donor has established several gift annuities, some for herself but others for friends and family members. She has also made provisions for us in her estate plans. As you can see, she is very generous to her friends, as well as to us. Last week the donor said she would like to donate $100,000 to establish a gift annuity with the former board member as the income beneficiary in appreciation for her volunteer contributions over the years. My boss and I are uncomfortable with this. Even though we have no policy for board members, our policy for employees does not allow them to accept gifts from donors. It seems reasonable that we apply the same standards for board members – current or former. Your thoughts on this?
This reminds me of a case - my own, when I was a director of development. A donor, without my knowledge, wrote me into her will. When she died, I received a small but important amount of money. On the one hand, the school where I worked was why I knew her; on the other, donors should be able to give to whomever they choose; thus, in the classic tradition of ethical dilemmas, I faced two conflicting “right” values.
That's a little how I see it here (except I was an employee and therefore gave the money, quietly, to the school – although I felt free to pass it along to any organization at my discretion). But only a little.
If the former board member, who undoubtedly served in an unpaid position, had never been affiliated with the university, I presume – as you have done this more than once already, and it is something not uncommon at charities – that you would have no problem putting together a gift annuity that the donor funds and that pays her friend. If that is so, it seems that the awkward point for you and your boss is that the annuitant was once on the board. I would understand the concern that a donor might be trying to influence the governance decisions of a currently serving board member – and I agree that a policy on this point would be a good idea – but that is not the case here. Furthermore, you say their friendship pre-dates the time when the board member began her service. It may feel like there's a conflict of interest or some private inurement in there somewhere, but I looked for something and couldn't find it. To me, not permitting someone to thank a long-time friend who is no longer in a position of influence seems like a harsh penalty. After all, in an odd way, the reason would pretty much be that the friend served in a pro-bono capacity to help a charity.
Besides, why would the university think it has any say at all over the transaction? Neither party is beholden – either through employment or volunteer service – to the organization.
I'd permit the gift annuity to be written with her as the donor and the former board member as the annuitant. (Picking a tiny nit, I say "annuitant" as opposed to "income beneficiary" when it comes to gift annuities; also, "payments" and not "income.”)