Gift Agreements Start at the Dining Room Table, Not the Desktop
I spent the early part of my career on the front lines of fund development, having conversations with donors about their motivations, their experiences, and the difference they hoped to make through their philanthropy. Some of those conversations went beautifully, while some were considerably more difficult. Looking back, there are a few situations I wish I'd had the knowledge and experience to handle differently, including one conversation I didn't really have at all.
That single experience helped shape something I now regularly teach to fundraisers and donor relations professionals: The most important work of developing a gift agreement happens long before anyone opens a Word document. It happens over lunch, during donor visits, and around dining room tables, when we explore a donor's intentions and begin discussing what their gift might accomplish. Unfortunately, those are also the moments when we sometimes make commitments that can cause problems years later.
So how do we address the issue? I believe we need to reconsider the role fundraisers play in these conversations, particularly because our responsibility doesn't end when the donor agrees to make the gift.
A Scholarship, an Egg Business, and a Missed Opportunity
Early in my fundraising career, I inherited a donor relationship involving a scholarship established many years earlier. The donor was a gentleman in his 80s who wanted to revise portions of the agreement, which supported students in a particular agricultural discipline who also participated in a specific extracurricular activity and met several additional eligibility requirements.
The trouble was the academic program he wanted to support wasn't nearly as popular at the university as it once had been. When we considered the declining enrollment alongside the scholarship's other eligibility requirements, it became increasingly difficult to administer. The criteria were simply too restrictive, and we needed to find a way to make the scholarship more usable.
But that isn't the part of the experience I remember most.
During one of our conversations, this gentleman shared a remarkable story about how he'd paid for his college education by selling eggs. Imagine that! He had worked to raise the money for his books and tuition, using his resourcefulness and determination to create an educational opportunity for himself. He was understandably proud of what he'd accomplished, and he wanted his scholarship to help someone just like him.
At the time, I recognized that the gift agreement presented practical challenges, but I was also a relatively young fundraiser without much training in navigating this kind of conversation. Instead of helping him reconsider the criteria, I passed the buck and allowed the problem to become someone else's. I eventually left the organization while the revisions were underway, and yes, I appropriately handed off the donor relationship to another fundraiser! Still, I can't help thinking about the opportunity I missed to connect more deeply with this gentleman and help him accomplish what he'd set out to do.
If I could sit across from him today, knowing what I know now, I'd approach the conversation very differently. I'd begin by thanking him for sharing his story and acknowledging the tremendous tenacity and resourcefulness it took to pursue an education under those circumstances. I'd probably make a joke about the price of eggs and the price of tuition not having risen at quite the same rate over the decades. A little levity can go a long way, especially when you're preparing to have a conversation that might otherwise feel uncomfortable.
From there, I'd want to explore whether the circumstances that defined his experience were necessarily the best conditions for helping a student today. After all, each of us follows our own path, and the university and its student population had changed considerably since he'd established the scholarship. The opportunity he wanted to create could still exist without requiring a recipient to follow precisely in his footsteps.
I might suggest prioritizing a student with financial need who participated in that particular extracurricular activity, while giving preference to someone studying the agricultural discipline. That approach would preserve the donor's original intention while allowing the university more flexibility to award the scholarship consistently.
Unfortunately, I didn't know how to approach that conversation at the time, and the experience has stayed with me. I knew there had to be a better way to help fundraisers navigate these situations, particularly when the donor's intentions were admirable, but the resulting criteria made those intentions difficult to fulfill.
RES: A Different Way to Have the Conversation
Several years after this experience with the gentleman who sold eggs, I developed a framework that I now use when teaching fundraisers and donor relations professionals to approach difficult gift conversations. It's called RES: Reframe, Explain on Their Terms, Suggest an Alternative.
The premise is fairly straightforward. We begin with understanding what the donor wants to accomplish, then help them see how the proposed gift structure might support or interfere with that goal. It gives fundraisers a way to approach potentially uncomfortable discussions while maintaining ownership of the donor relationship.
Let's revisit the scholarship I wish I'd handled differently.
R: Reframe
The first step is identify the donor's underlying motivation and reflect it back to them. In my conversation with the gentleman who sold eggs, I might have said:
What I'm hearing is that your education was transformative, and you want to provide that same opportunity to a student who might otherwise struggle to afford it.
Notice that I haven't brought up the gift agreement or its restrictions. I'm acknowledging the donor's experience and making sure I understand what matters most to him. Too often, we move directly to the requested criteria without spending enough time understanding why the donor believes those particular requirements are important. This gives us the opportunity to confirm what we're actually trying to accomplish together before we start discussing what needs to change.
E: Explain on Their Terms
Once we've established that shared understanding, we explain the practical concern in language that relates to the donor's intended outcome. Rather than leading with institutional policy or administrative requirements, I'd explain what those requirements could mean for the students he hopes to help.
We have fewer students studying this particular discipline than we did when you established the scholarship. When we combine that requirement with the other criteria, there may be years when we don't have an eligible student. That could mean your scholarship goes unawarded, even while students who need financial assistance are struggling to pay for their education.
This is where the conversation can become particularly valuable. I'm explaining why the agreement, as written, might prevent him from accomplishing his own goal. I'm also treating him as a partner who deserves to understand the implications of the decisions we're making together.
There’s no need to quote institutional policy, suggest that his preferences are unreasonable, or ask him to speak with my supervisor. Instead, I've given him information that can help us make a better decision about the future of his scholarship.
S: Suggest an Alternative
Finally, we offer a practical solution that respects the donor's intentions while allowing the organization to administer the gift responsibly.
Would you be open to prioritizing students with financial need who participate in this extracurricular activity, while giving preference to students pursuing that agricultural discipline? That would allow us to preserve what's important to you while giving the university greater flexibility to award the scholarship each year.
The donor wants to make a difference, and we want the gift to make a difference. RES helps us find a path that serves both interests, giving fundraisers a practical way to navigate these conversations without immediately passing them to somebody else.
The Long-Term Cost of a Short-Term Decision
Whenever I teach this framework, I can hear what some of my fundraising colleagues are thinking: "But Colton, what if I have this conversation and lose the gift?"
It's a legitimate concern, particularly given the demands placed on frontline fundraisers. We have ambitious goals, relationships to maintain, solicitations to advance, and commitments to secure. Few of us relish introducing complications into a conversation that appears to be progressing well, especially when a donor seems ready to make a substantial commitment.
Still, I think we need to talk about the consequences of trading today's happiness for tomorrow's sorrow.
Consider the consequences of a restricted endowed gift. The fundraiser negotiates the agreement, secures the commitment, and celebrates the accomplishment. The donor may fulfill the pledge over four or five years, and depending on the organization's endowment policies, distributions may not begin immediately. Several additional years could pass before someone discovers that the accumulated funds aren't being used because the restrictions make them too difficult to spend.
By that point, the fundraiser who negotiated the original agreement has likely moved on to another role or another organization entirely. Gift obligations can extend well beyond the tenure of the individual who negotiated them, leaving colleagues in donor relations, gift administration, finance, and the departments responsible for spending those funds to address the consequences.
At DRG, we've examined this issue through our work on unspent donor funds. Our 2024 Unspent Funds Survey revealed significant unspent balances across nonprofit organizations. Fund restrictions aren't the only reason charitable funds go unspent– administrative confusion, organizational processes, and spending practices can all contribute. But poorly constructed gift agreements are certainly part of the problem, and the eventual ramifications can be particularly difficult for the donor relationship.
Imagine a donor establishing a scholarship to help students afford college, only to discover years later that the scholarship hasn't been awarded. The gift may have counted toward a fundraising goal when it was closed, but how successful was it in accomplishing what the donor actually intended?
This is also why I think we need to reconsider how we evaluate fundraising performance. Traditional fundraising metrics emphasize meaningful contacts, donor visits, proposals, solicitations, and closed gifts, and those measures certainly have value. But DRG's Founder & Principal, Lynne Wester, has long advocated for adding fund utility to the way we measure fundraiser performance.
A highly usable gift should be recognized as such. Conversely, an unnecessarily restrictive gift that cannot consistently accomplish its intended purpose shouldn't automatically be considered an unqualified success just because of its dollar value. Imagine how our fundraising decisions might change if we rewarded fundraisers for bringing in resources their organizations could actually use, rather than measuring success primarily by the amount of money committed.
It might encourage us all to spend a little more time getting the agreement right before celebrating the gift.
A Little More Trust, and Fewer Restrictions?
Ask most nonprofit CEOs, executive directors, or fundraising leaders what type of philanthropic support they prefer, and unrestricted funds are likely to be near the top of their list. And it makes sense. Unrestricted gifts allow organizations to direct resources where they're needed most, respond to changing circumstances, and make decisions based on their understanding of institutional priorities.
Yet much of our major gift fundraising activity involves developing increasingly specific restrictions, sometimes to the point where administering the gift becomes far more complicated than it needs to be.
Some restrictions are entirely appropriate. Donors have legitimate philanthropic interests, and we have a responsibility to honor their intent. But, I also think we should consider what drives the desire for so much specificity. In my experience, restrictions can sometimes reflect a lack of trust between a donor and an institution.
I've often noticed that conversations about a donor's first gift can look quite different from those surrounding their third or fourth. As donors become more familiar with an organization, witness their philanthropy at work, and develop confidence in leadership, they may become more comfortable giving the institution flexibility. That isn't universal, and there will always be donors who want their gifts administered in very specific ways regardless of the strength of the relationship; however, I've seen firsthand how trust can change the nature of these conversations over time.
Consider Ken Griffin's historic $3 billion commitment to Carnegie Mellon University, announced in September 2026. The commitment included substantial designated investments, including support for the School of Computer Science, and the development of a new campus in Miami. It also included $500 million in flexible funding for Carnegie Mellon's highest institutional priorities.
That's an extraordinary amount of philanthropic capital entrusted to an institution's judgment. Griffin's commitment demonstrates how a donor can have a clear philanthropic vision while still allowing the organization considerable discretion in how that vision is pursued.
Building that kind of confidence requires accountability, transparency, and stewardship. We help donors understand how their gifts are administered, demonstrate the difference their generosity makes, and communicate candidly about what the organization is accomplishing. Over time, those experiences can reinforce a donor's confidence in the organization's ability to fulfill its commitments.
But this presents an interesting problem for fundraisers. If we avoid difficult conversations about donor restrictions today, we may create the very circumstances that undermine trust in the future.
A scholarship goes unawarded because too few students meet the eligibility requirements. Funds accumulate without being used, and the donor begins questioning the institution's ability to administer the gift. What began as an effort to accommodate the donor's wishes has created an uncomfortable situation for everyone involved.
And the next time that donor considers making a gift, what incentive do they have to give the organization more flexibility? If their previous experience left them questioning the institution’s ability to fulfill its obligations, they may be even more inclined to insist on additional restrictions.
We can end up creating a cycle in which avoiding difficult conversations contributes to disappointing outcomes, which in turn makes future conversations about donor restrictions even harder. In my view, having these discussions early is an important part of building the trust we need to sustain the relationship for years to come.
Stop Making Donor Relations Deliver the Bad News
There's another part of this discussion that matters enormously: the relationship between frontline fundraisers and donor relations professionals.
We approach gift agreements through different lenses, and those perspectives should complement one another. Fundraisers know the donor's history, personal motivations, interests, sensitivities, and expectations. They're often in the best position to understand the philanthropic outcome that matters most to the donor and the conversations that have shaped the proposed gift.
Donor relations professionals bring institutional knowledge, operational considerations, long-term stewardship expertise, and an understanding of how the organization will administer the gift over time. They're accustomed to considering what happens after the agreement is signed, including how the gift will be spent, reported on, and stewarded in the years ahead.
Both perspectives are necessary, and the best agreements benefit from bringing them together early in the process.
Unfortunately, that isn't always how it works. Sometimes fundraisers negotiate what a donor requests, send the proposed agreement to donor relations, and expect their colleagues to figure out whether the institution can actually fulfill those commitments. When problems arise, donor relations professionals may then be asked to explain why an agreement needs to change, even though they weren't part of the conversations that established the donor's expectations.
I have a friend and colleague, Angela Joens, who is exceptionally skilled at handling these kinds of conversations. She's been brought into donor discussions many times because of this expertise, and that speaks highly of her abilities. But whenever I think about how often talented donor relations professionals are called upon to navigate difficult donor conversations, I also wonder what opportunities fundraisers are missing when they routinely hand those discussions to someone else.
Your donors have built relationships with you. They look to you for information, guidance, and expertise, and there is considerable value in demonstrating your understanding of both their philanthropic interests and the institution's responsibility to fulfill them. When you're able to explain why a proposed restriction creates problems and help identify a workable alternative, you're giving the donor another reason to see you as a trusted philanthropic partner.
Why would you want to give that opportunity away?
Fundraisers need organizational support to do this well, particularly because nobody should expect them to become attorneys or experts in every aspect of gift administration. They do, however, need a working understanding of what is possible, practical, and legal within their organizations, along with a clear sense of when specialist input is required.
Donor relations and gift administration teams can help establish that foundation through clear policies, accessible resources, examples of acceptable gift criteria, and training. Fundraising leadership also has an important role in reinforcing the expectation that these conversations happen early and supporting fundraisers who take the time to have them.
When at its best, this collaboration means clearly unworkable restrictions never reach the drafting stage. Fundraisers recognize when further discussion is necessary, understand the options available, and know which colleagues to consult before returning to the donor.
The gift agreement should record what has already been thoughtfully discussed and agreed upon. It shouldn't serve as a negotiating document or a substitute for those conversations. When everyone understands their role, the fundraiser can return to the donor prepared to discuss options rather than deliver a list of institutional objections.
Bring RES to Your Next Fundraising Meeting
Here's what I'd encourage you to do at your next fundraising team meeting: introduce the RES framework and ask your colleagues what conversations with donors they've been putting off because they haven't quite figured out how to have them.
Maybe it's an endowed scholarship with eligibility requirements so specific that awards are becoming difficult. Perhaps a donor has requested perpetual recognition that your organization cannot guarantee. Or maybe you're developing a new gift and beginning to realize that what the donor wants to accomplish doesn't quite align with what the institution can realistically deliver.
Choose one of those situations and practice the conversation. Have a colleague play the donor while another takes on the role of the fundraiser, working through how to reframe the motivation, explain the practical implications, and suggest an alternative. Then switch roles, introduce objections, and practice how you would respond when the donor isn't immediately receptive to the suggestion.
Bring your donor relations colleagues into the preparation, and ask gift administration or legal counsel for guidance when needed. The more opportunities fundraisers have to practice these conversations and understand their organization's expectations, the better equipped they'll be when a real situation arises.
I also encourage fundraising leaders to make this a regular part of how their teams prepare for donor conversations. We shouldn't expect fundraisers to handle complex discussions well if we've never given them the opportunity to learn and practice an approach.
I wish I'd had that kind of training when I was a young fundraiser sitting across from the gentleman who had sold eggs to pay for his education. I don't know how his scholarship ultimately turned out, but I know I missed an opportunity to deepen that relationship, demonstrate my expertise, and help him reconsider how his generosity could best support students in a very different world.
That's why I continue to share this story, even as it isn't a particularly flattering one. I know there are other fundraisers who have found themselves in similar situations, unsure how to approach a difficult conversation or reluctant to complicate a gift that seems close to completion. They aren't alone, and there are colleagues, frameworks, and institutional resources to help them prepare.
I also hope fundraisers recognize the opportunity that comes with taking responsibility for these conversations. When you explain why you want to get a gift agreement right, and demonstrate that you're thinking beyond the immediate solicitation, you're showing the donor that you care about the long-term outcome of their generosity.
Yes, that may mean taking more time to close the initial gift. But I'd argue that time is well spent if it helps establish a relationship in which the donor trusts your guidance and sees their philanthropy accomplishing what they'd hoped. The next conversation may be easier, the next gift may carry fewer restrictions, and the relationship may ultimately lead to deeper, more transformative philanthropic opportunities.
I'd much rather spend a little more time having the right conversation today than spend years trying to repair the consequences of an agreement that should have been handled differently.
And, I'd prefer to have that conversation at the dining room table, before anyone even thinks of opening a Word document.
Written by Colton Withers
