Posts tagged ‘Robert Wahlers’

January 25, 2013

To Sue or Not to Sue Over Unpaid Pledges?

Sometimes, nonprofit organizations sue philanthropists over unpaid pledges. This was recently the case with the Kansas City Art Institute. When a charity pursues this type of legal action, it sends shockwaves throughout the nonprofit and philanthropic sectors.

I do believe there are times when a nonprofit can and should sue a donor. However, this should only be done as an absolute last resort. The three instances when a lawsuit might be acceptable are:

1. The donor dies with an outstanding pledge and an heir challenges the will. In that case, the nonprofit might need to sue the estate to establish its claim and collect.

2. The nonprofit incurs real expense based on the donor’s commitment. For example, based on a pledge agreement, the nonprofit breaks-ground on a new building. The nonprofit might need to sue simply to survive.

3. The donor is about to or has entered bankruptcy. Suing the donor would be a way for the nonprofit to establish its claim. (By the way, I suspect that this fear might be what may have triggered the Art Institute case.)

In any case, suing a donor should only be done after careful consideration and only when all other options have been exhausted.

To sue or not sue over unpaid pledges? That is the question. The answer, offered by Brian M. Sagrestano, JD, CFRE and Robert E. Wahlers, MS, CFRE, is: Avoid the problem in the first place!

Philanthropic Planning Companion coverBrian and Robert are friends of mine. They are both seasoned, wise development professionals who have served on the national board of the Partnership for Philanthropic Planning. I’m pleased that they have offered to share some of their wisdom below as they introduce us to the concept of “concierge stewardship.”

Brian and Robert both generously provided insights and material for my book, Donor-Centered Planned Gift Marketing, for which I won the AFP-Skystone Partners Prize for Research in Fundraising and Philanthropy.

Now, Brian and Robert have written their own book, Philanthropic Planning Companion: The Fundraisers’ and Professional Advisors’ Guide to Charitable Gift Planning, and I’m honored to have been included in their comprehensive volume. The book is part of the AFP/Wiley Fund Development Series.

The official description of the book notes, “For fundraisers and professional advisors alike, The Philanthropic Planning Companion is the one-stop resource you’ll keep by your side to help your donors/clients meet their charitable and personal planning objectives.”

So, do you want to avoid a nightmare at your organization? If so, read on:

 

The Kansas City Art Institute recently sued Larry and Kristina Dodge for failure to pay $4 million on a $5 million pledge that was to be used to pay for construction of a new building, according to The Kansas City Star.

When the Dodges attempted to defend themselves (rather than hire an attorney they indicated that they could not afford), they made procedural errors and a default judgment was entered against them for the full $4 million due on the pledge. According to The Star, the Dodges made three payments on their pledge before their financial situation was impacted by the Great Recession, limiting their ability to fulfill the commitment.

In the article, Larry Dodge is quoted, indicating that he and his wife were in negotiation with the Institute to come up with a payment plan when it unexpectedly filed suit to collect on the pledge.

Regardless of the outcome, the reputations of both the Dodges and the Institute are forever harmed. Prospective donors will think twice before making a major commitment to a charity that would sue them to collect on a pledge. Meantime, the Dodges reputation, despite their many years of generous philanthropy, will be forever tarnished.

We cannot judge the merits of the Art Institute’s action or the ability of the Dodges to pay on their pledge, as we are not privy to all of the facts of the case. However, it raises a much larger issue about charities and pledges.

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October 10, 2012

Special Report: PPP National Conference on Philanthropic Planning Follow-up

The 2012 Partnership for Philanthropic Planning’s National Conference on Philanthropic Planning has come and gone. I thought it was a terrific conference in New Orleans because of the efforts of staff and the volunteers.

Personally, I enjoyed co-facilitating a session, attending other sessions, meeting PPP’s new President/CEO, selling and signing copies of my book (Donor-Centered Planned Gift Marketing), seeing old buddies, and making new friends.

If you weren’t able to attend the conference, or even if you were there, I have some useful information for you:

 

1. Wiley Authors’ Central

Authors Michael J. Rosen, Margaret May Damen, Brian M. Sagrestano

During the conference, publisher John Wiley & Sons hosted a booth for the authors of four of its books. You can download the flyer describing the books here. The flyer also contains QR Codes you can use to download a free copy of the corresponding book’s Table of Contents and first chapter. Below, you’ll find the titles of the four books, which you can click to go to The Nonprofit Bookstore (Amazon) where you can learn more and purchase a discounted copy:

 

2. Council Conversation

In New Orleans, leaders from PPP councils from around the country gathered for the Council Conversation. Philip Purcell, JD (Past President of the Planned Giving Group of Indiana), Barbara Yeager (Director of Operations at PPP), and I (Immediate Past President of PPP of Greater Philadelphia) facilitated the gathering. The program looked at “Tips for Teaching Adult Learners” and two innovative program ideas: World Café and Pecha Kucha.

PPP will be posting the materials from the Council Conversation on its website.

If you would like to discuss having me do a presentation for your group, please contact me.

 

3. New PPP President/CEO

During the conference, Michael Kenyon was introduced as PPP’s new President/CEO. I first wrote about Kenyon when his hiring was announced. In New Orleans, I had the opportunity to speak with him for a few moments. He’s eager to assume the helm of PPP later this month. He’s passionate about the organization and is looking forward to building on its strengths. I wish him well.

 

4. How to Order Session Recordings

If you attended the conference, you know that there were often many sessions of interest being presented at the same time. It was impossible to participate in all of them. If you weren’t in New Orleans, you sadly missed them all.

However, you don’t need to feel too disappointed.

PPP recorded virtually all of the sessions and is making them available in two formats: MP3 ($13 per session) and CD ($15 per session). A complete set of conference MP3 recordings is $199.

For a complete list of recorded sessions and to order recordings online, visit AVEN-Audio Visual Education Network.

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