GOBEL White Paper: Best Practices in Naming Gift Amounts

BY Ashley Roberts

In communities large and small, new medical facilities are built or rehabilitated regularly to address evolving healthcare needs. For fundraisers, these opportunities for large philanthropic investments are exciting, but also present many questions. Once the fundraising office learns of these new plans – and the eyepopping construction budgets associated with them – it’s time to start crafting a philanthropic strategy to support the project. At the very top of the list is likely to be a naming gift, a way to propel other donors to support your project, and to show the philanthropic community the high level of support for the project.

Scaling your ask to the construction budget of the project is one place to start. But this is a very first step in implementing a successful campaign strategy to support the construction project, and the important work housed within the new building. A well-crafted naming policy based on some simple best practices can lead to the largest possible gift for your institution.

Industry standards

It’s likely the hope of every chief financial officer (and chief development officer!) to match construction costs to a naming gift in full. In reality, a naming gift typically reflects a significant, but not complete, portion of a project’s construction budget. According to Rockefeller Philanthropy Advisor’s analysis, naming gifts for buildings vary widely from 25% to 65% of the total construction costs.

Many factors play a part in such a wide range, and are prudent to keep in mind once you have identified a pool of donors who may be interested in making such a significant contribution.

• Is this amount within a donor’s philanthropic capacity?
• Is your donor pool excited about the project, thus willing to invest more?
• Is timeliness a large factor in the solicitation timeline, or is there a reason you would like to announce a naming gift another time, continuing the excitement about the project within the community?

All of these factors, and others that are more specific to each organization and its donors, will help you determine the correct ask amount.

More is more

When a naming opportunity is a central part of your operations — such as a new main hospital or medical campus – the figure attached should be transformational to your organization to match the transformational nature of such large-scale construction. The Association of Fundraising Professionals suggests that organizations set their goals high. They recommend a naming gift for a landmark construction to be either 50% of the goal for a campaign to support the project, or 20% of the construction costs, whichever is greater. This benchmark reinforces the need to strategically plan your fundraising needs – for the building, supporting equipment and projects, leadership staff, etc. – in order to acquire the largest gift to support your institution’s mission. Without a holistic and strategic campaign plan, and accurate construction costs, your ask amount may not be aspirational enough.

Procedure and documentation

Completing a strategic plan for each individual construction opportunity can be time consuming if your organization does not have established policies and procedures for naming gifts, supported by your leadership and board of trustees. In addition to setting a floor percentage for naming gifts in relation to construction costs, it may be helpful to document what types of assets will be accepted, how long payment schedules of pledges can be, or how much of the gift payments must be made before announcing a named building.

More recently, institutions are also learning from other named spaces, and including time limits on naming gifts in order to allow for the funding of future needs that cannot yet be anticipated.

Whichever guidelines your institution finds helpful, documenting these procedures, and securing the approval of your leadership, will create a fundraising process that works for your organization, and perhaps even encourage your board members to consider themselves as the next naming prospect.

ABOUT GOBEL SUBJECT MATTER EXPERTS: GOBEL Subject Matter Experts are healthcare philanthropy professionals working in some of the top shops in the country, sharing best practices and insights. For more information about GOBEL’s Subject Matter Expert program, or to suggest a topic for coverage, email jmoody@gobelgroup.com.