By Brad Layland, CEO, The FOCUS Group | Author of Turning Donors into Partners
Key Takeaways
- Stewardship begins before a gift is received, not after.
- Donor intent and proper gift administration must work together to achieve the desired outcome.
- Organizations best serve donors when they help donors navigate complexity rather than simply accept their gifts.
- Trust grows when donors know their resources—and their intentions—will be handled with excellence.
- Generosity deserves stewardship.
Can a donor give away a valuable piece of property, see the community benefit from it, and still lose a $665,000 charitable deduction?
According to a recent Wall Street Journal article about a blunder that cost two donors a $665,000 tax-deductible donation, the answer is yes.
At first glance, it’s a story about tax law. But the more I thought about it, the more I realized it’s really a story about stewardship.
The article describes two brothers who donated a piece of property to a city. Their intent was clear: They wanted the property to serve a public purpose, and ultimately it did. The city received the property, the community benefited, and the brothers gave up ownership of a valuable asset to accomplish something bigger than themselves.
Yet despite the fact that the gift was made and the property transferred, the IRS disallowed approximately $665,000 in charitable deductions because of technical issues surrounding how the gift was documented and received.
The IRS focused on process.
The donors focused on purpose.
And somewhere in between, things fell apart.
Now, before we rush to criticize the IRS, it’s important to acknowledge that rules matter. The charitable deduction exists because Congress wants to encourage charitable giving, but there must also be standards and procedures that prevent abuse. Without those safeguards, the entire system would be vulnerable.
At the same time, it’s difficult to ignore the larger reality. These brothers actually gave the property away. The city actually received it. The public actually benefited from it. The gift actually happened.
What makes this story so interesting is that it highlights a tension that exists throughout philanthropy: the difference between charitable intent and proper stewardship.
As fundraisers and nonprofit leaders, we spend a lot of time talking about stewardship after a gift is made. We talk about thank-you letters, donor recognition, impact reports, and ongoing communication.
Those things matter.
But this story reminds us that stewardship begins much earlier.
Stewardship begins before the gift.
In my work with ministries and nonprofit organizations over the past 25 years, I’ve discovered that many gift-related problems don’t stem from bad intentions. They stem from assumptions. A donor assumes the organization understands the process. The organization assumes the donor has received proper advice. Everyone assumes someone else is paying attention to the details.
Most of the time, those assumptions go unnoticed.
Sometimes they become expensive.
Part of honoring a donor is helping ensure that the gift is completed correctly. It means helping donors navigate complicated processes. It means understanding the rules. It means making sure the donor’s intent is protected, and their generosity is treated with the care it deserves.
In this particular case, the recipient was a city rather than a nonprofit organization. To be fair, most cities are not equipped to receive complex gifts in the same way sophisticated nonprofit organizations are. Municipal governments are designed to provide services and administer public programs. They are not typically staffed with development professionals who understand gift agreements, charitable deductions, appraisals, and donor stewardship.
But that reality doesn’t eliminate the lesson.
When someone entrusts an organization with a gift—whether it is a nonprofit, a university, a church, or even a municipality—the recipient assumes a responsibility that extends beyond simply accepting the asset.
The responsibility is to honor the donor’s intent.
Too often, organizations view fundraising as the process of acquiring resources. The best organizations understand that fundraising is really about helping people accomplish something meaningful with the resources they already have.
That shift changes everything.
When donors become partners rather than transactions, the goal is no longer simply to receive the gift. The goal is to help the donor succeed.
The best fundraising organizations understand that their role isn’t merely to receive gifts. Their role is to help donors accomplish what they hope to accomplish through their giving.
Sometimes that means celebrating a gift.
Sometimes it means slowing down a gift.
Sometimes it means involving attorneys, accountants, appraisers, or other experts.
Real stewardship isn’t measured by how quickly a gift is completed; it’s measured by whether the donor’s intentions are fully realized.
One of the key principles we teach as part of the Taking Donors SeriouslyⓇ fundraising system is that “People give to people they know and trust.” Trust is built when donors believe that an organization will be a good steward of both their resources and their intentions.
The organizations that excel at fundraising understand this. They don’t merely receive gifts. They shepherd gifts. They guide donors through complex decisions. They anticipate problems. They bring in experts when necessary. They protect both the mission and the donor.
The Wall Street Journal story is a reminder that good intentions alone are not enough.
The donors had good intentions.
The city had good intentions.
The IRS was attempting to enforce legitimate rules.
Yet the outcome left everyone frustrated because stewardship failed somewhere along the way.
For those of us in fundraising, that’s the real lesson.
Stewardship is not what happens after a gift is received. It begins the moment a donor expresses a desire to give. This story is a reminder that generosity deserves stewardship.
Donors don’t simply entrust us with assets. They entrust us with hopes, values, and intentions.
The moment someone says, “I’d like to make a gift,” stewardship has already begun.
And when we take donors seriously enough to guide them well, we do more than complete a transaction—we help generosity accomplish everything it was meant to accomplish.
When that happens, everybody wins: the donor, the recipient, and ultimately the community being served.
About the Author
Brad Layland is CEO of The FOCUS Group, a fundraising consulting firm serving more than 150 Christian ministries worldwide. He previously served as Chief Development Officer for Young Life and is the author of Turning Donors into Partners (InterVarsity Press), which debuted as the #1 new release in Philanthropy and Charity on Amazon.
Since acquiring The FOCUS Group in 2012, Brad has helped lead fundraising initiatives for organizations including Dallas Theological Seminary, InterVarsity Christian Fellowship, Union Rescue Mission, The Bowery Mission, and Veritas School. He holds a B.A. in Communications from the University of Florida and an M.A. in Theology from Fuller Theological Seminary.
Brad and his wife Wendy live in St. Augustine, Florida, and have four children.
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