The Most Major of Major Gifts

Transformational gifts are fast becoming nonprofits’ equivalent of the Holy Grail. It seems as though not a week passes without news of another extraordinary gift delivered to the doorstep of one of America’s million-plus nonprofit organizations.

In decades past, such gifts most often were directed to a select few institutions of higher education. Harvard, Yale and Princeton, to name a few, were among the beneficiaries. The gifts went toward general college funds, building funds or just toward a university’s endowment.

But contemporary philanthropists, flush with new wealth earned during and subsequent to the dot-com boom of the ’90s, are choosing a wider array of beneficiaries.

For those charities privileged enough to receive a transformational gift, the impact is stunning. A budget deficit might disappear. A brand might suddenly be poised for a turn. Credibility with other donors may zoom to new levels. Certainly, long-term plans for service delivery can be surrounded by a new blanket of financial security and certainty.

Another aspect, however, is that management and the board of directors face the challenge of what to do with the money, and stewardship takes on a new dimension.

At the end of the day, a transformational gift means a dramatic change in a nonprofit organization’s cash flow. The challenge around these gifts is twofold:

1. how to get them; and
2. once you receive one, how to make it work for the long-term benefit of your organization.

Following are some issues you need to keep in mind if your organization is, as it should be, looking toward cultivating transformational gifts.

Proper stewardship
Without stewardship, there likely would not be transformational gifts. That 1 percent of the population that has the capacity to make a very large gift to a charitable organization — the kind of gift that will transform it — usually has an idea about what the money will do and appreciates the kind of impact the gift will have.