Trusteeship - November/December 2021 - 14

WHAT YOU DON'T KNOW CAN HURT YOUR INSTITUTION
Questions about how the donor acquired the money should be a part of the decision-making process.
Ideally, vetting should be conducted independently of those whose performance
is evaluated based upon achieving monetary goals.
Gift acceptance policies and procedures should not only consider
the types of gifts given (real property, personal property, cash,
and securities) or the mechanisms for giving (outright, pledge,
planned); they also should include a means to question the donor's
goals and how the gift will be operationalized to meet those goals.
While some goals are ill-intentioned, others may come from good
intentions but result in problematic outcomes. Scholarship giving
is often fraught with unintended consequences. What if a donor
wishes to establish a scholarship for LGBTQ+ students? This seems
like a good idea in theory, but it would present problems in practice.
If the scholarship is for LGBTQ+ students, who determines if the
student identifies as LGBTQ+? What evidence does the student
have to provide? What if the student has not come out to their family?
A seemingly good idea ends up being impracticable. Instead, it
might be better to give a scholarship to a gender studies major who
exhibits leadership in advocating for LGBTQ+ rights.
Gift officers aren't necessarily the right people to assess a gift in
that way; it isn't their expertise nor strength. Gift acceptance policies
should include values statements and criteria outlining acceptable
and unacceptable sources and purposes. Furthermore, the
approval process should involve people knowledgeable about diversity,
equity, and inclusion, as well as experts in antidiscrimination
law and subject matter experts. This measure would be valuable in
managing gifts, creating endowments, and assigning naming rights.
No Magic Eight Ball Can Predict the Future:
Gift Agreements
Gift agreements often project a future of best-case scenarios in
how donors' gifts will produce results. Agreements are written
to address current challenges and in language acceptable for the
times. The crafting and signing of agreements represent joyous
occasions. In these situations, building in language that accounts
for what could go wrong might feel uncomfortable. But it must be
done because the one thing that remains the same is that times
change. Accounting for uncertainty and putting protections in
place for institutions' reputations is vital to any planning
A gift given in perpetuity is one of the most problematic gifts
to manage. Agreements made in 1890, 1920, or even 1950 might
be viewed with alarm and disdain today as society has changed
significantly since, but these agreements may also be exceedingly
difficult to retract legally.
In the past several years, violent protests over monuments that
reflect inappropriate and damaging social messages have erupted. In
Richmond, Virginia, statues honoring the Confederacy fueled some
14 TRUSTEESHIP NOV.DEC.2021
of the most intense arguments, notably the statue depicting Robert
E. Lee. The statue, pedestal, and the land plot on which it was placed
was deeded to the Commonwealth of Virginia in 1890, a much different
time. The deed stated, " The State of Virginia, party of the third
part acting by and through the Governor of the Commonwealth and
pursuant to the terms and provisions of the [1889 Joint Resolution]
executes this instrument in token of her acceptance of the gift and of
her guarantee that she will hold [the Lee Monument and the Circle]
perpetually sacred to the Monumental purpose to which they have
been devoted and that she will faithfully guard it and affectionately
protect it. " When Virginia Governor Ralph Northam ordered it to
be removed along with the other monuments, lawsuits were filed
to have the statue remain. State Supreme Court Justice S. Bernard
Goodwyn ruled on September 2, 2021, that the statue could be
removed, citing the fact that the Commonwealth is not legally obligated
to express a message that runs counter to public policy and
deeming language of the deeds enforceable.
Establishing monuments dedicated to causes, naming things
and places in honor of people, or simply accepting any gift in perpetuity
can be problematic over time because humans are fallible
and often that fallibility is only apparent in retrospect. What an
institution or society in general believes now might not be believed
even five years later. It is crucial to include language in gift agreements
that enables your institution to change, adapt, and grow in
response to new information and ethical standards. It is vital to be
upfront about the unknowns of the future. The institution might
include one or more of the following: If a donor's or honoree's
behaviors put into question the institution's reputation, X would
happen. If the purpose or goals of the gift can or should no longer
be met, X would happen. If a gift's provenance were found to
include evidence of unethical or illegal dealings, X would happen.
Review, Revise, and Repeat
Any one of the aforementioned situations could arise at any institution.
While there may never be public knowledge of some circumstances,
many intuitions hold assets they should not, whether
due to the donor's reputation, source of funds, purpose, or restrictions.
No matter how effective, diligent, and competent an institution's
leaders and staff are today, they can never fully account for
the evolution of thought and the law that occurs with the passage
of time. Gift acceptance and agreements are based upon what one
knows and understands in a particular moment in time. What was
once acceptable may no longer be by current standards. What was
legal years ago may no longer be permitted.

Trusteeship - November/December 2021

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