A process for developing effective gift documentation: Considerations in working with donors and gift officers

Gift documentation often requires a special blend of talents: negotiating skills, legal acumen and a bit of clairvoyance. The author of a gift agreement has to balance the mission of the institution with the donor’s wishes — two variables that do not always align. Drafting a solid gift agreement also requires a good working knowledge of what an organisation can do within the letter of the law, against a backdrop of a legal landscape that changes almost daily. And finally, an effective gift agreement has to take into account what the future holds for the terms of the agreement, particularly for endowed funds that are meant to last forever. Documenting a gift sets the foundation for an organisation’s relationship with its donors. An effective gift agreement clearly outlines the donor’s intent, managing expectations and setting the terms of the gift’s administration. A badly constructed gift agreement can erode trust and irreparably damage the donor’s relationship with the organisation. In drafting gift documentation, it is crucial to get things right at the very beginning to avoid bad publicity, legal battles and disgruntled donors. This paper describes how to document funds that meet three basic but critical attributes: funds must be legal, possible and practical. This paper also looks at donors’ motivation and offers suggestions on how to guide them into creating funds that will benefit the institution and meet their philanthropic goals. It also lists elements that effective gift agreements must contain to function well.