A Conditional Capital Gift with a Match Deadline

The gift is not free money. It requires a $150,000 match within six months while the organization has only 1.4 months of unrestricted cash, and it adds $60,000 in annual operating costs after the renovation. The direct-mail economics are weak at $0.62 per dollar raised, so a short match campaign is unlikely to net the full amount without diverting major-gift capacity. Major gifts are far more efficient at $0.18 per dollar, but asking major donors for a capital match may crowd out operating support during a liquidity squeeze. The naming condition is also a governance issue: the plaque listing only the donor may conflict with the organization's recognition policy and community values, and naming rights should be documented in a gift agreement. My recommendation is not to accept as proposed. The board should counter with a longer match period (18–24 months), a lower match requirement, and donor support for the $60,000 operating increase, possibly through a small endowment or multiyear operating pledge. If the donor refuses, declining is defensible. The test is whether the gift strengthens mission capacity without sacrificing solvency or donor trust.

The strategy should prioritize unrestricted operating support and efficient channels. First, build a 13-week cash-flow forecast and set a minimum operating reserve target so fundraising decisions are tied to liquidity, not just project growth. Second, focus staff and board time on major gifts and lapsed donors, where the cost per dollar is lower and asks can include unrestricted support. Third, segment direct mail: retain only profitable segments, test a monthly-giving program, and stop appeals that lose money after attribution. Fourth, create a clear case for operating support that explains the real cost of programs, including the new center's $60,000 annual expense. Fifth, pursue grants for general operating or capacity where eligible, and avoid using restricted federal funds for the center. Sixth, set a board give/get expectation and use board members to open doors rather than soliciting each other. The board should monitor cost-per-dollar and net revenue by channel, but not use a single ratio as a veto; major gifts can look costly in a single year while building multiyear support. The aim is a diversified base that can absorb a delayed or declined capital gift.

The board should treat the offer as a conditional promise, not immediate revenue. Under common nonprofit accounting, a contribution with a donor-imposed condition-raising the match, spending within one year, and naming the center-is recognized when the conditions are substantially met or explicitly waived. The $150,000 gift and the matching funds should be recorded as net assets with donor restrictions once recognized, then released as renovation costs are incurred. If the match is not met, the board should not book the gift as unrestricted revenue. Naming rights should be documented in a written gift agreement specifying duration, plaque content, and whether the donor's name can be changed if the building is sold. Because the plaque listing only the donor may raise recognition-policy or reputational issues, the board should approve the agreement and disclose the arrangement. Communication to the auditor should include the gift agreement, the condition analysis, the project budget, and the spending timeline. The board should receive a project budget and cash-flow schedule showing how the match will be raised; otherwise it is approving a liability-like commitment without a funding plan.