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As a nonprofit professional operating in the philanthropic world, this headline may have caught your eye recently: Mattel stiffed UCLA on $49-million children’s hospital donation, lawsuit claims. It definitely grabbed our attention.

After our initial ‘yikes’ at the headline, we dove deeper into the article published in the Los Angeles Times to read for ourselves what went wrong, and the story may be a bit more complex than the headline lets on. Even without knowing all the details, it’s clear that somewhere throughout the process there was a breakdown in communication, it got us thinking about the importance of two core fundraising principles that we reinforce with all of our nonprofit partners, especially as they work to delicately handle major donor relations: donor intent and effective donor communications.

Donor Intent

According to Philanthropy Roundtable, “Donor intent is the expression of a donor’s values and mission for his or her philanthropy.” And protecting it “stems from the principle that an original wealth creator’s philanthropic intentions matter and should be honored.”

Many times, especially with sizable gifts, the donor’s intent will be spelled out in a robust gift agreement that clearly outlines timing, modification requirements, recognition, ongoing reporting requirements, and other terms or conditions to ensure that their intentions are honored.

We don’t know for certain if a formal gift agreement like this was drawn up between Mattel and UCLA Health, but if one does exist, this is where Mattel’s donor intent would be clearly spelled out and ideally alleviate any disagreements over the purpose of the gift for both parties. In the article, a Mattel spokesperson states that the company’s gift was intended specifically for the construction of a new tower at the hospital, and says that UCLA Health abandoned these plans. From their perspective, of course, this is why the pledge has not been fulfilled – their donor intent has not been honored.

We think it’s worth noting that since the initial pledge was made by Mattel in 2017, we’ve all witnessed some unprecedented times through a global pandemic, historic inflation rates, and labor shortages, amongst many other factors. So, if it happens to be the case that UCLA Health did intend to still proceed with plans for a new tower, but its plans were simply thrown off track amid all this volatility, then what? That brings us to the next fundraising principle that we believe is crucial for nonprofits to pay attention to.

Effective Donor Communications

Let’s suppose UCLA Health’s standpoint is that they still plan to build the new tower, just on a different timeline than initially proposed, but now are unable to without Mattel’s full pledge in place. Timeline changes, budget increases, and other plan modifications are bound to occur in a world that’s rapidly changing, but the key here is making sure to proactively keep donors in the loop. Effective and consistent donor communications at all levels are crucial, but especially with lead and major donors.

When a major donor trusts your nonprofit with their funds, they don’t just want to receive a monthly newsletter or see your posts on social media every now and then. As a nonprofit leader, it is your responsibility to initiate intentional, personalized conversations with major donors to keep trust and a fruitful, healthy relationship alive.

In this case, if UCLA Health’s scope or timeline of the project began to shift or change somewhere along the way, regular and transparent updates to Mattel would be best practice.

We can’t be certain how this case will unfold but based on our decades of experience in helping nonprofits through capital campaigns, and coaching them through major donor relations along the way, we are confident that these two key principles will arise in their arguments. It’s an interesting case study and a reminder to all nonprofits how important a donor’s intent can be and just how far effective donor communications can take you.

If you want to hear more about the top turn-offs of corporate giving officers, check out the preview of Michelle’s upcoming session at AFP ICON 2024, the world’s #1 fundraising conference.