Some years ago, a wealthy donor approached GlobalGiving through his private banker. After having launched a series of businesses from Miami to Kinshasa and having amassed a significant fortune, the donor wanted to honor his late wife by supporting university education for women and girls in the poorest of poor communities. From long years of doing business in just such places, this donor had very specific criteria and reporting requirements, meant to hold students and organizations running these scholarship programs accountable.
The subsidy per student had to be no more than $1,000. Students had to be women. Students had to be at the beginning of their university studies and enrolled in business or hard science. Enrollment certificates and report cards were required each semester. Students failing for a semester were no longer eligible. There was as much as $10,000,000 to support such students.
GlobalGiving, with its network of partners around the globe, was in a good position to make a match between this donor and local efforts to educate university women, so we launched programs in Guatemala, Rwanda, Pakistan, Afghanistan, Democratic Republic of Congo, India, Mexico, South Africa, Tajikistan, and Russia.
For a time, the program worked well, and we were able to fund scholarships for hundreds of students who otherwise would not have been able to attend university. Unfortunately, the donor never agreed to sign commitment letters or any other documentation, and funding began to stop as the donor increased reporting expectations, now requiring students to pose for pictures with copies of his memoir, and interrupting funding when reports came in late.
Finally, we were not able to meet these new expectations for a variety of logistical and sometimes cultural and security reasons, and the donor broke off relations with GlobalGiving. An elderly man, the donor then passed away, and the program is now defunct, leaving hundreds of students who had begun studies with the promise of a scholarship without the money needed to continue. Local partners that had made commitments to students were left in various levels of difficulty that we have only recently been able to sort out.
Here is what we learned from this experience.
– Know your donor and make sure expectations are clear and documented.
– Don’t launch a major new initiative with uncertain funding unless you have resources to ensure its continuation with other resources.
– Trust your gut about mercurial personalities.
– Don’t be afraid to say no to big opportunities if they stretch your organization outside your core strengths.
– Take care of your local partners.
I’m surprised the donor didn’t sign any commitment letters to hold him accountable for his end of the agreement, especially for such a large amount. Why was a portion of the promised donation not held in a trust fund of some sort to be used as emergency funding for a year’s worth of education at least to mitigate the risk of 1) the donor changing his mind and sabotaging the program and 2) the donor passing away?
Having learned from this experience, have you implemented a limit to the donation amount past which the donation must be documented and contractually signed upon for ongoing funding?
Hi Reem –
Thanks for the feedback, and your suggestion about requiring a reserve is a good one. I’m nearly positive this donor would not have done it, but his reluctance would have raised a red flag and helped us say no to the opportunity. Going forward, we’re limiting our exposure by not placing ourselves in a position to have to ensure project completion ourselves. Typically we rely on our network of partners to manage the stream of GlobalGiving funding along with their other streams of funding. In this case, we created a program from scratch – a real departure for us, and one we are not likely to repeat without having many more safeguards in place as you suggest. We don’t typically write agreements with donors, as we don’t typically establish expectations of ongoing funding for our on-the-ground partners. Rather, large grants are more typically for a certain discrete purpose, either project-specific or general operating, and we make those expectations clear in our grant agreements and TOCs with our partners.
I would like to know the criteria you base on to choose the countries for starting the project?
I would like to know if there are some students who finished their studies by the help you provided.
If yes, did you think on the way they can help in the progress of the project? I mean the way they could help those who were still studying by providing some money from an income they would get.