Donor Relations - An Open "Q & A" for VAM's Museum Professionals

The following exchange was originally via email, and I got permission from Sean, Charlotte, and Patrick to post them here. If you have additional feedback on this issue, please comment on this post!

Sean Fearns:
A colleague of mine asked me a question which I said I would in turn survey my fine associates with VAM:
A donor makes a restricted contribution of $X dollars to a museum Y in late 2008/early 2009 to develop an exhibit on a certain topic. It's seed money to get started developing that exhibit, but not nearly enough to come close to mounting the entire exhibit. The museum begins to look for other sponsors to make up the difference. Everyone will recall that this gift came just as the economy started to tank and giving in general is down over the past few years. Museum Y has not raised the rest of the money to build the exhibit in question yet, but continues to activly solicite for the project. Donor has grown impatient and has now asked for their donation back. Does Museum Y give donation $X back to the donor even thought hey are still working to pull together the rest of the funds?

Thanks for any input and examples of policies that your fine institutions use in a case like this.

Charlotte Whitted:
We are in a similar situation over a building. We have some donors who have pledged to the construction of a Farm Heritage Center (about a $4 million project). We have completed the design/development phase and brought the infrastructure up to speed with sewer connection, but are nowhere near ready to begin construction. Our Board voted to defer groundbreaking for up to 5 years.



Once we knew we could not break ground in a timely fashion, we declined to ask the Virginia Tobacco Commission for another extension on the remaining funds they allocated for this building. We sent a letter to show them we were trying to act in good faith and be good stewards of their funds. If we had used it to build a retaining wall or some small part of the building just to draw down the whole allotted amount, it would have been a mistake. We hope this action will serve us in good stead should we need to approach them again later for this or another project.


With the $300,000 grant from Virginia Coalfield Economic Development Authority, we were able to convince them to allow us to repurpose the grant for capital improvements for existing museum assets. This means I am spending $ like crazy over the next couple of years to completed restorations on 2 buildings, convert our physical plant to outdoor bathrooms, install sewer connection, internet, etc. throughout the entire site, replace roofs, lighting, upgrade security, landscaping, convert a caretaker's cottage to a guest accommodation, etc. Some of these projects will become revenue generational upon completion (leasing a building for restaurant/retail space, private facilities rental for another building, cottage rental, etc.). The grant was given originally in the name of Tourism, so making the case that these assets will enhance tourism also was easy.


USDA Rural Development gave us $25,000 for equipment for the Farm Heritage Center, which we also were able to repurpose for equipment at the existing museum facilities. This is earmarked for computers, copier, phones, etc.


The other outstanding pledges and dollars already deposited for the Farm Heritage Center are still valid. We have communicated with the donors and they have agreed to continue paying on their pledges. We have stressed the importance of this so that when the Board determines the time is right for a capital campaign for Farm Heritage Center within the next five years we will have the seed money still, especially for matching grants. All have agreed to this plan. No one has asked for their money back yet? These are county, foundation and individual donations. It will likely mess up their taxes to try to get a refund of their donations at this point. We will update the donors annually with the prospects for groundbreaking. If after five years we decide to abandon plans for the project, we will approach donors about repurposing their donations for an alternative project that will help the museum. If no alternative will suit them, then we will probably refund their donation if they insist. It is better to do that and maintain good relations than to hold it restricted to a project that will likely not come to fruition.


It sounds like the difficulty in the scenario Sean presents is the donor's personal connection to the subject matter of the exhibit, rather than to the museum itself. Was the funding solicited or accepted contingent upon a particular exhibit opening date? Was it solicited with the anticipation of the donor finding other like-minded donors to fund the rest of the cost of mounting it? Are artifacts from the donor involved? Who on the staff or board is close enough to the donor to listen to their frustrations and respond compassionately but clearly about the realities of the funding prospects and needs? Can the donor become more a part of the solution? Can a new realistic timeline be established? Does this exhibit still fit into the museum's strategic plan or meet the museum's mission?

Patrick Farris:

Were this situation occurring at my museum, I would work intensively with the donor to create a timetable acceptable to all parties for the completion of fundraising for and mounting of the exhibit. Should the donor simply and regrettably not wish to continue participation in the project, then I would return the donation - definitely not worth the bad blood and potential bad press to keep the money. I would also worry that, in keeping this donation against the desire of the donor to have it returned, I might poison opportunities to work with other potential donors in the future once word got out.

A final consideration concerning the downturn in the economy (which you noted was beginning roughly when the donation was made); the donor's change in heart and subsequent desire to have said funds returned could have something to do with his/her financial status and needs, which also likely changed with everyone else's. If that is the case then there could be little hope of an agreement, even though the donor may not admit this to be the core reason.

Lin Ezell:
Gift agreements should be crafted to cover unfortunate scenarios, esp helpful for a complex project that is both long-term and dependent on a variety of financing options. One grant we accepted years ago for a project clearly called for construction to begin by a certain year and the funds to be expended within a certain window of time. When construction was delayed, we informed the donor; they reclaimed the funds. Fortunately, and in part because we kept the donor informed annually on our steady progress in raising funds for the project, we reapplied and the funding was restored along with a little extra. If this is a restricted gift and there were expectations on the part of the donor that are not being met--explicit or implied--I would return the gift with a positive message that the project is still important as is the relationship with the donor and the promise that the museum will give the donor the opportunity to reengage in the future. There are lots of ways for everyone to lose in such a situation; while this museum may not be able to make it win-win, they should work hard to salvage the relationship and not give the donor an opportunity to be unhappy and share that unhappiness with others. Better to risk tabling the project for a long while rather than have a tainted donor experience.