Ethics In Planned Giving
I recently had a client e-mail me with an interesting philanthropic ethical issue. It seems that a donor had informed the nonprofit that the charity was in the estate plans of said individual. Upon her passing at a very advanced age, the nonprofit was notified by lawyers that there was a change sometime in the last several years regarding the beneficiaries of the estate and that most of the estate was now going to a long-term caregiver who was with the donor day in, day out.
My client asked the question if it was legal. No doubt, they were disappointed with the change. And this is exactly where ethics in our profession come into play.
Of course, the answer is “It depends.”
There is nothing illegal about choosing an individual beneficiary who has been good to or close to an individual who passes away. Much of the time, that’s children. However, in our situation, there were no children and the charity was a main benefactor recently, which meant somewhere not too long ago a change in the estate plans was executed, most likely by the individual/donor who passed away.
The question my client was asking was about undue influence and capacity. As the donor was quite elderly, the question might be asked whether or not the caregiver unduly influenced the donor to make a change to benefit themself. Did the caregiver go above and beyond what would be normal practice for a caregiver regarding potentially influencing a decision like this, basically, by creating an immense amount of self-interest? And at the same time, even if there was no undue influence, the donor was quite elderly. Did she have the mental capacity to understand the change in the decision?
The true answer is that we'll never really know.
In one particular case like this, in my career, I was incredibly close to a very, very large donor. As he grew older, I grew concerned about his mental capacity to make decisions. And the first moment I had that inclination, I not only informed someone else inside the nonprofit in which I worked but also called his children to voice my concerns. And I never asked him for another thing ever again.
I wanted to ask my client whether or not they were in regular communication with this donor. I decided not to throw gasoline on the fire. Stewardship in planned-giving situations is critical. Many of the answers that are unknown here would have been more likely answered if there was regular interaction between this sizable potential donor and someone at the nonprofit.
In the end, all we can do is control our own ethics. I don't know if this situation has any behaviors I would classify as nefarious, but it sure did bring questions up from the front lines of fundraising by my client.
