A major gift agreement is a legal document that outlines the terms of a significant gift from a donor to a non-profit organization. The agreement ensures that both parties understand the expectations and obligations associated with the gift, including the use of funds, reporting requirements, and recognition of the donor`s contribution.
The purpose of a major gift agreement is to avoid misunderstandings and ensure transparency between the donor and the non-profit organization. The agreement serves as a roadmap for how the gift will be utilized and provides a clear understanding of the expectations for both parties. This document is especially crucial for larger donations, as it outlines the gift`s intent and goals and ensures that the donor`s wishes are honored.
A major gift agreement typically includes the following sections:
1. Gift description: This section specifies the exact gift amount, the purpose of the gift, and any restrictions or limitations on the use of the funds.
2. Payment terms: This section outlines how the gift will be paid, including the payment schedule and any conditions or deadlines associated with the donation.
3. Reporting requirements: A major gift agreement includes reporting requirements that outline how the non-profit organization will update the donor on the use of funds, the progress of the project, and any other relevant information.
4. Recognition and acknowledgement: This section outlines how the donor will be recognized for their gift and any other benefits or privileges associated with the donation.
5. Termination: This section includes the conditions for termination of the agreement by either party and the process for any refunds or unused funds.
In conclusion, a major gift agreement is a crucial document for any non-profit organization that receives significant donations. It helps ensure that the donation is utilized in the manner intended by the donor and provides transparency and accountability for both parties. By formally documenting the expectations and requirements of the gift, a major gift agreement establishes a foundation for a positive and productive relationship between the donor and the non-profit organization.