Donor Intent Statements: Why purpose do they serve?

Donor Intent Statements: Why purpose do they serve?

Page three of the DonorsTrust donor-advised fund application features a unique box. In it, new clients are asked to, “describe your charitable principles, interests, and goals so that DonorsTrust may better preserve your donor intent.”

Preserving donor intent for liberty-minded donors forms the core of DonorsTrust’s mission. That is why it is the first question we need answered when establishing a new relationship.

These donor intent statements vary as widely as do our clients. Some are single sentence declarations of a keen interest in free enterprise or a particular issue set. Others, particularly those meant to govern bequest giving, are much longer, articulating a commitment to the principles of liberty, devotion to particular groups, and a specific vision for building out a charitable legacy.

Whether or not you use a donor-advised fund, your own giving could benefit from taking a few moments to discern your own donor intent. Here are a few reasons why.

It grounds your current giving

Casual givers may not dwell much on the driving purpose behind their giving. It’s even rarer that they take the time to write it down. But for those ready to be more strategic in their giving, initiating a donor intent statement is the first step to focus their guiding ideas.

Having your intent spelled out also affords you the mental space to make the hardest decisions in philanthropy – saying no to worthy projects. The key to strategic philanthropy is to focus on those areas where you believe you can make the most difference, and sometimes that means declining to engage so you can more effectively manage giving to your core interests.

It opens doors to new giving opportunities

For donors who appreciate learning about new giving opportunities from trusted advisors, a written donor intent statement can be a tool to help those advisors connect the dots of your giving.

At DonorsTrust, we often hear about new and worthwhile giving opportunities. If a donor has helped us to understand their giving priorities, we can more readily engage in a conversation with our clients about other groups that might be worthy additions to their philanthropic portfolio, if such recommendations are of interest.

Similarly, if a client asks us if a particular organization would be a worthy recipient of a grant from his or her fund, we can offer an opinion that is guided what the client his or herself has already told us about their giving.

It puts guardrails in place for future generations

Arguably the most crucial reason we ask for a donor intent statement is to serve as a guide to DonorsTrust and to whomever is designated to steward a client’s account after death. We’ve talked before of the challenges future stewards face when attempting to discern a donor’s charitable intentions from fuzzy statements – when such guideposts exist at all. Future generations may drift from what you want no matter what, but if there is nothing to guide the giving, it is a virtual certainty.

You may have a child, friend, or loved one you to whom you plan to turn over stewardship of your account after you pass away. We certainly allow that at DonorsTrust. As we say in our donor guidebook:

At your discretion, your intent statement may specify the scope of grants your successor advisor may recommend, including that all recommendations be honored, in which case DonorsTrust will limit its review of the request to making sure the grantee falls within the protective boundary of DonorsTrust’s mission statement.

That latter point separates DonorsTrust and other mission-driven donor-advised funds from the commercial funds. Our clients partner with us because our basic rules match the protections they would want for their giving – a focus on liberty-advancing organizations.

The donor intent statement allows us to go beyond those basic principles. I think of the donor intent statement, and DonorsTrust’s preservation of it, as akin to those bowling lanes with the bumpers. DonorsTrust acts as the bumper that keeps future giving from falling into places you would rather it not go, even if someone you entrust with advising your account tries to veer from the lane.

Flexible now, then fixed forever

One of the best aspects of a donor-advised fund is its flexibility to make changes at any time without the need to engage a lawyer. The process of changing one’s intent statement is simple. It needs to be, because your interests may change over time.

As we note in the 8 Steps to Securing Your Donor Intent, you can revisit and amend your intent statement as often as you wish. Then, once you pass on, that statement is fixed – successor advisors nor DonorsTrust can change it after that point.

Whether a few words or a few pages, a donor intent statement offers you a way to defend against future generations drifting from your charitable intentions. For more on steps you can proactively take to define your charitable intent, download a copy of the 8 Steps to Securing Your Donor Intent.

About the Author

Peter Lipsett Peter Lipsett
Peter Lipsett is vice president at DonorsTrust. He also leads DonorsTrust’s Novus Society, a network of donors under 40 committed to growing their philanthropic know-how. He has a dual degree in political science and theater from Davidson College and finally got a practical credential with an MBA from George Mason University.

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