How do you give your money and what do you want in return? Today’s question for philanthropists is: are you a funder, donor, sponsor, or partner?
The question for nonprofits is: are you seeking gifts, grants, sponsors, or partners?
And for all of us: why does this matter?
Here’s what we believe: language matters. And words reflect the meaning that lies behind our actions. There are different names that are used by people to describe their giving; and there are different names used by nonprofits to describe the people and organizations who give to them. When the words are used with different meanings behind them, then confusion can creep into a relationship leaving both parties wondering, “what’s going on?”
For us, there are distinct differences in the terms listed above. We share our understandings/ meanings for each, and then discuss the implications of what can happen when a “giver” has a different understanding than the “receiver.” There is no value judgement associated with the different terms – they simply represent different financial transactions between an individual or organization/business and a nonprofit.
A donor is a person who gives a gift with no strings attached. The nonprofit recipient can use the funds in any way they choose. Good manners dictate that a thank you be sent to the donor. Fundraising strategists recommend keeping donors informed of your work with the goal of encouraging future donations. When an organization does this type of giving, they can be referred to as a “grantor.”
A funder is typically a foundation or granting agency that provides money for a specific purpose as documented by a grant agreement or funding agreement that is signed by both the funder and the nonprofit. The funder may also give “unrestricted” money that can be used as the nonprofit believes is best. The funder typically wants a report showing that the nonprofit met specific agreed upon benchmarks.
A sponsor is an organization, business, or individual who provides money to a nonprofit in exchange for exposure to the nonprofit’s audience. The sponsor typically expects to receive specific visibility that is tied to the amount of money given. This can include items ranging from listing on a website, to a business representative making remarks at a specific event targeted towards a specific audience.
A partner is engaged with a nonprofit on a project that extends beyond financial support. Partners may help define a strategic direction, anticipated outcomes, and who should be included / excluded amongst other things. A partner has a shared interest in the outcome of the nonprofit’s work and invests with more than money to help support the work.
Our suggestion is to make sure there is clarity about what is expected in the financial exchange. Be clear and that can help eliminate future confusion. You may like the sound of the word “partner,” for instance, but most funders, donors, and sponsors are not partners. They may want to be – and you may want to partner with them – but it involves much more than money.
Copyright 2020 – Mel and Pearl Shaw of Saad&Shaw – Comprehensive Fund Development Services. Let us help you find your way through this unknown time. Video and phone conferencing services always available. Call us at (901) 522-8727. www.saadandshaw.com.