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Nonprofit Q&AA
service of Jeane Vogel and
Fund Raising Innovations For other On-Line Services for nonprofit professionals, visit On-Line Services. Here is this week’s question:My board wants to raise some large gifts by naming rooms in our building, and maybe the whole building, which we own. How can we tell how much we should charge for rooms, such as a conference room, waiting room, etc.? Let me admit from the beginning that I am NOT a fan of naming. I prefer building relationships and connecting donors with the mission, rather than “selling” parts of the nonprofit. In this era of caused-based marketing and sponsorships, we’ve seemed to have lost sight of the spirit of philanthropy, don’t you think? But let’s save that for another time. Let’s look at the pros and cons of naming, and a few general guidelines. First, once you name something, it’s named and it’s hard to change it later unless the donor goes to jail for something really awful. You’re stuck. I know of a nonprofit that is actually thinking of tearing down a 35-year-old named building and building fresh on the same site, partially because they need to get out from under the old name and approach new donors. I am still shaking my head in disbelief at this incredibly bad idea. Choose the amount of the naming gifts very carefully, and DON’T UNDERSELL YOUSELF! Many nonprofit managers are so afraid of large gifts and sell the naming rights very cheap. Keep in mind, that’s probably the largest gift you are going to get from that donor. And the largest gift of the naming campaign will become the largest gift you EVER can get. Here’s a true example that still makes my blood boil whenever I think of the squandered opportunities: an organization is young and needs some quick cash. They can’t seem to get their major donors to gift at the level the organization needs. They are approached by a prospective donor who wants the organization named after him. He names a price, say $500,000. A whole organization! Only $500,000! As you can imagine I advised them to tell the donor that the organization could be named for him, but for no less than $2 million. They were afraid of the big money and thought the donor would walk away. But here was a donor who wanted his name on this particular type of agency. He had the capacity and the interest. There were no other agencies of this type left to be named. The agency held the better hand but the donor had the better poker face. The agency folded. Now, of course, the top gift that the agency can solicit cannot be more than $500,000 because they have nothing left to name at that level or above. And everyone knows what the naming price was. These things get out, even if everyone claims to observe confidentiality. They set a very bad precedent and they cannot turn back the clock. They are stuck. Ok, that said, what are the benefits of naming? Of course naming allows agencies to provide the ultimate recognition to the donor and sometimes your donor absolutely has to see that recognition in a very public way. Naming also can encourage competition among your donors, it can jump-start a stalled campaign, and raise more money for a specific project that soliciting without the naming opportunities. What’s the down side? Agency officers often think that once they secure that big named gift, the donor will be so invested that he or she will continue to make large gifts. Sure, that happens sometimes, but more often the donor feels that he has made a commitment that will last for a while and he shouldn’t be bothered for more money again – he just might want continued recognition. As a general rule, don’t undersell your naming opportunities, chose them carefully, thoroughly examine your agency’s donor history to assess the gift possibilities, and make sure you and your donor are approaching each other with mutual respect. The nonprofit world is not a place for bullies. © 2004 by Jeane Vogel and Fund Raising Innovations
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