By now, most of America is aware of the $100K donation that was turned down by the Girl Scouts of Western Washington. Their decision to turn down the large donation was a moral one; the donor had given funds with the stipulation that they not be used to support any transgender children. This went against the Girl Scouts proclamation in May that they welcomed any child living “culturally as a girl,” and as a result this Girl Scout chapter felt compelled to turn down the donation, which could have helped a great deal of disadvantaged scouts.

To make up for this loss, Girl Scouts of Western Washington began a crowdfunding campaign on IndieGogo on Monday, and ended up raising twice their goal by Wednesday. Megan Ferland, CEO of Girl Scouts of Western Washington, states that “Girl Scouts is for every girl. It always has been and always will be.” This Girl Scout scenario is a prime example of what a nonprofit should do when handling a gift that contains restrictions. At least, legal resource Nolo.com cites accepting a gift containing unreasonable terms as a reason to not accept a donation.

Declining donations is never an easy step for a nonprofit to take, but is sometimes necessary to decrease nonprofit risks. Moral debates are not the only reason this may happen; a recent article published by TheMuse.com recognizes that turning down a donation seems counterproductive, however recognizes three times that it could be in the nonprofits’ best interest to turn down the donation:

When It’s Not Enough: Many times, a nonprofit may not legally use a donation for any other program other than what the donor intends it to be used for. In these cases, if the amount is not high enough and they’re the only donor interested in funding the program, nonprofits are stuck with funds they cannot use, which is not only a waste of their resources, but a waste to the donor as well.

When It’s Too Much: This one may surprise a lot of nonprofit directors; but consider this scenario. A donor gives a one-time large donation, but chooses a different program to donate to the next year, causing a huge budget fluctuation for your clients’ nonprofit. Other potential donors who see this fluctuation may be turned off and scared away.

When It’s From the Wrong Person: This is rare but it does happen: the person donating is doing so because they are a high-profile donor whose reputation has somehow been damaged, and they wish to repair it by showing they are charitable. Depending on the reason for their bad publicity, this could endanger the reputation of your clients’ organization.

At Charity First, we understand the risks faced by nonprofits of all types, and we are committed to helping you place coverage for your nonprofit clients. Our mission is to provide coverages tailored to meet the unique needs of this market segment. Please contact us today to learn more at (800) 352-2761.