Dear Nonprofiteer,
I have an ethical dilemma that I need help sorting out. I’m really bothered by this and I want to know 1. if I am seeing this from the wrong perspective and 2. what you would advise doing.
I am a wardrobe stylist and I make custom dress shirts & suits. Fairly often, when approached, I donate gift certificates for custom shirts to silent auctions, which raise a nice amount of money for fund-raising organizations.
Here is the issue: In the Fall of 2009, I donated a gift certificate to a well-known organization that runs after-school and extra-curricular programs for children. I was told that the gift certificate was for the silent auction that coincided with an annual fund-raising event. Obviously, I was told proceeds from this event & auction would go to support the local children’s organization.
Last week, I got a call from the former President of the Board of Directors of this organization. He was really excited to finally have his custom shirts made. The organization had given a gift certificate to him while he was on the board, as a thank you gift for his service.
I was a little fuzzy on the gift certificate details, had completely forgotten that I had donated a certificate to the auction, and couldn’t remember anyone buying a gift certificate as a gift…but went the next day to fit him and thought it would all be clear once I saw the certificate.
I only realized at the end of the 60 minute appointment that HIS gift certificate was the one I had DONATED to raise money for THE KIDS and the facility. It apparently was not auctioned off at all, but was given to a Board member as a gift! (Now, it might not have had any bidders in the auction, but this is sort of unlikely, has never happened yet.)
So now I am out-of-pocket, a lot, for a board member’s gift, as opposed to the organization buying something for him (which is tax-deductible for them!) This is a $700 retail value gift. I feel deceived—this money was for kids, not the board president.
Thoughts? Advice? I’ve heard both sides. Someone from non-profit told me I was stuck, that it was perfectly legal & someone else said that I am not accountable to fulfill this certificate.
I would really appreciate your experience/thoughts on this matter.
Signed, Tailor-Made
Dear Tailor:
1) You are not seeing this from the wrong perspective.
2) But it’s hard to know what to do.
There’s no question about it: if you donated a gift certificate to be auctioned off for the benefit of the agency, you wuz robbed if instead it was used instead as a personal gift to an agency Board member. Nonprofit Board members aren’t supposed to be compensated for their services, though they may be recognized: I would argue that a $700 gift starts to sound more like the former than the latter. (I’m presuming the agency knows the value of the certificate.)
You’re not actually stuck: no one can make you make these shirts, and neither agency nor Board member would be likely to sue you to secure them (or equivalent reimbursement). But you have a business reputation to protect, and so the question is which will cost the least to you: telling the Board member you can’t honor the certificate because it’s not being redeemed according to its terms, or telling the agency you want to be reimbursed for their misuse of your gift.
It’s a matter of strategy: if the Board member is likely to become a regular customer, you’d rather not piss him off by refusing to honor the certificate. (Obviously you can only guess about that, but you’re a savvy person: your guess is probably correct.) If you’re likely never to see him again, then say you CAN’T (not you won’t) honor the certificate because its terms called for it to be auctioned, not given away. If he protests that no such “terms” appear on the face of the certificate, explain that those were your arrangements with the agency, and advise him to return to the agency and explain that its gift is unredeemable. You can say or merely imply that what the agency did was exactly like passing counterfeit money: giving him something valueless while pretending it was valuable. Smile when you say all this, but say it and repeat it as often as necessary to get the guy out of your shop.
If, however, he’s a likely future customer, then your only choice is to go to the agency and tell them what you’ve told the Nonprofiteer: that you were told the certificate was to be auctioned off for the benefit of the agency and it wasn’t; that you were willing to donate to the agency but not to its individual Board members; and that you’d like to be reimbursed for the $700 value of your misused gift. If you want to sound lawyerly (which is all the Nonprofiteer got out of her three years in law school), say that you won’t take the $700 out of the hide of the Board member because he’s an innocent “holder in due course,” that is, someone who was given something worthless while believing in good faith that it had worth. Do all this in person with the Executive Director, and then (unless s/he hands you $700 on the spot) reiterate it in a letter to the entire Board.
Getting the $700 out of the agency won’t be easy: they know you’re as unlikely to sue them as they are to sue you. But if they fail to cooperate, do two things: include in the aforementioned letter a statement that you will never donate goods, services or money to the agency again; and include an express or implied intention to make the agency’s misdeed public. You can say, “and I intend to post this on my Facebook page,” or “and I intend to tell alll my business colleagues to do likewise [withhold support] or “I intend to mention this to my friend the New York Times reporter;” or you can simply say, “I know the agency’s reputation for uprightness and am sure you would not wish to have it stained by any accidental misuse of a donation,” and let them infer that the stain on its reputation will come from you.
If the agency offers you refund of half the price or more, take it and walk away. If not, make the shirts for the Board member and do them so brilliantly that he’ll be on your doorstep demanding more–for which you can overcharge him with a clear conscience.
What a shame you’ve had this experience–it seems to validate the old saying, “No good deed goes unpunished.” But plenty of other charities will use your gift correctly, so please try not to be embittered.
