The average age of donors is 65, according to the Blackbaud Institute. One in nine people age 65 and older has Alzheimer’s disease, the Alzheimer’s Association estimates. That’s about 6.7 million Americans — and that’s expected to rise to 12.7 million people by 2050.
If you were in a meeting with a prospective donor for a major or planned gift, would you recognize the signs of cognitive impairment? Would you know what to do even if you did detect cognitive decline?
Anthony Pomonis, CFRE, and Tara Adams, co-founders of Cognitive Empowerment Consulting, presented “Cognitive Impairment in Donors: Are You Prepared?” at AFP ICON earlier this month. Their session aimed to equip fundraisers with the tools needed to understand donative capacity, as well as best practices to navigate the ethical and legal challenges around establishing donative capacity.
What Is Donative Capacity?
While testamentary capacity allows a person to change their estate plan, including a will and trust, at any time between the plan’s creation and their death, Adams, who has a law degree from the University of Illinois Urbana-Champaign, argues donative capacity has a higher threshold. For a donor to have donative capacity to give your organization a gift, she said, they must know:
- That they’re making a gift.
- How much they’re giving.
- How much they can give.
- How this gift will impact their finances.
- That the gift is permanent.
“When you have an elderly donor who may be suffering from cognitive impairment issues, this can become a real problem because not only do they have to have an awareness of all five of these elements, they need to know how they all relate to one another in regards to a single gift,” Adams said.
Why Donative Capacity Is Important
In 2015, a philanthropic couple sued a university, claiming breach of contract, fraud, deceit and elder abuse. The Orange County Register, which covered the lawsuit at the time it was filed, noted the alleged donor, James Emmi, was 98 at the time of the lawsuit. His wife, Catherine Emmi, was 84.
James Emmi had previously given to the university, but shot down a $5 million ask due to health and financial concerns, according to reports. At a subsequent meeting, he signed a $12 million pledge, which was 60% of the couple’s estate. The lawsuit, which was filed after he gave $3 million to the university, claimed James Emmi had no recollection of the pledge and that the university’s fundraisers were allegedly aware he was “more susceptible to inducement and confusion.”
The issue was settled out of court. Though exact figures were not disclosed, the university agreed to restructure the gift to create a scholarship fund, according to the Los Angeles Times.
Accepting a gift from a donor with cognitive decline could result in a large gift, but could also result in public relations, legal and trust problems for your organization.
“You can’t rely on a metrics-based review when it comes to this,” Pomonis said. “Sometimes a gift deferred or stepped away from is a huge, invisible win for your institution because you’re not on the front page of the LA Times.”
4 Best Practices to Establish Donative Capacity
To avoid making the same mistake, Pomonis and Adams shared four best practices for how your organization should address situations where there is suspicion or knowledge of cognitive decline with a donor.
1. Do Not Meet With a Donor Individually
If you are concerned about a donor with whom you have a long-standing relationship, it’s important to include decision-makers in the conversation. That may include a spouse, child, other family member, friend or even a power of attorney.
“You’re taking a huge risk if you’re meeting with an individual donor who’s exhibiting the symptoms of cognitive impairment,” Pomonis, also the executive director for advancement at the University of Central Florida, said. “ … They may lack donative capacity, which makes that activity illegal.”
2. Vet a Donor With a Colleague
Some fundraisers may be territorial about their donor caseloads, but having a second opinion can serve as an additional check for the organization.
“The more the merrier because you’re going to have another input on your side of the table — someone who will confirm what you’re looking at or even make observations that are falling outside the net of your work,” he said.
3. Document Facts About Donor Meetings in Your Database
Nonprofits across the sector are struggling with staffing issues in 2023. In the “2023 Leadership Impact Study,” NonProfit PRO found 35% of nonprofit leaders cited staff turnover as a key challenge — and the third largest challenge for nonprofits.
A high staff turnover rate shouldn’t be an excuse for not knowing previous cultivation efforts for the organization’s donors. Ensure future fundraisers aren’t restarting relationships from scratch by providing detailed — and objective — details about previous meetings in your donor database.
Adams, also the director of development at North Carolina State University, advised sticking to the facts and indicated any warning signs for cognitive decline that the fundraiser witnessed. These could include:
- “The donor forgot we had a meeting for the third time.”
- “The donor repeated the same story more than once in a meeting.”
- “The donor got confused about where we were or what time it was.”
- “The donor got very agitated.”
However, avoid diagnosing the donor with any medical conditions.
“It is not our job to diagnose cognitive impairment in donors,” she said. “We do not possess the knowledge or skills necessary to make a medical diagnosis of Alzheimer’s disease, dementia and related cognitive impairment issues, which is why we should simply be reporting on objective facts.”
Another reason to stay clear of mentioning specific medical conditions is the Health Insurance Portability and Accountability Act of 1996, more widely known as HIPAA. This federal law prohibits the disclosure of medical information without an individual’s consent.
Adams noted that most nonprofits do not fall under HIPPA, but organizations with access to medical information, like hospitals, are covered by HIPAA. Either way, she suggested implementing a cautious approach that steers clear of specifically disclosing medical issues and encourages notes that indicate:
- “The spouse [or] the child informed me of an ongoing medical issue.”
- “There is an issue that is going on that is going to increase over time.”
Then suggest next steps, such as:
- “Next steps include always including the spouse in future communications and meetings.”
- “Next steps include getting a copy of the power of attorney or conservatorship paperwork from whomever is holding that power for the donor.”
“You don’t need to be explicitly revealing private medical information,” Adams said. “And yet everyone who is going to be reading that is going to know what is going on and what steps need to be taken next in order to ensure again that everything is being done in the best interest of the donor in this situation.”
4. Do Not Solicit Cognitively Impaired Donors
“We do not solicit the cognitively impaired for gifts — ever,” Pomonis said.
Instead, move them into a stewardship phase. He even suggested adding a non-descript, color-coded flag in your donor database to be risk averse.
Pomonis views fundraising as a noble profession and, as a result, finds it imperative for fundraisers to position themselves as advocates for their donors and not solicit the cognitively impaired under any circumstances.
“It is criminal,” he said. “It is unethical. It is beneath our dignity as professionals to do it.”
