Pot or no pot? Top 5 considerations for accepting or rejecting gifts from cannabis companies

publication date: May 14, 2018
author/source: Samantha Laprade, CFRE

The cannabis sector is about to put many non-profits into a tizzy.

Are you going to let the opportunity go up in smoke? Or are you going to accept the gift?

As we approach the legalization of recreational marijuana, many large companies in Canada will want to give back to their communities. They will want to sponsor the annual gala, they will want to invest in your capital campaign and they will want to make impact on the important work non-profits are undertaking.

Many non-profit boards early on developed a gift acceptance policy including what types of donations they would permit. Other clauses include companies that would not make the grade. From stock donations to cash gifts to life insurance most gift acceptance policies are very clear on who they accept gifts from and what types of gifts they allow.

A homeless shelter with an addictions program typically has a clause that does not allow their charity to accept gifts from beer and alcohol companies. Similarly, animal rights organizations would never accept a gift from a business selling fur coats. Charities engaging in cancer research would reject any funds from big tobacco.

As leaders in the cannabis sector think about their philanthropic impact, here are five considerations from a non-profit perspective.

1. Donors: Are you prepared to lose donors? Picture it for a minute. It is a sunny September day. Your annual walk event is about to start. Mrs. Ferguson, a donor and walk participant for many years, approaches you and she is visibly upset. She has spotted the large banner of a new sponsor. The sponsor is a local cannabis company who is thrilled to be a part of your big event. Mrs. Ferguson says she is very disappointed you have accepted this gift and she is pulling her long-time support and removing her gift to your organization from her will. If you have made a decision to accept donations and sponsorships from companies legally selling cannabis, prepare key messages for your stakeholders. You will also need to be prepared for pushback from some donors.

2. Board Members: Board members have debated over budgets, governance and the strategic plan. The debate over a revised gift acceptance policy to include or exclude legal marijuana companies will be an interesting one. In some cases, the decision will be cut and dry. Others, not so much. For instance, your organization focuses on assisting cancer patients. Some board members refuse to accept gifts from “these types of places”. Another board member talks about his brother’s battle with cancer. He says his brother’s quality of life has increased due to the use of medical marijuana. This debate is an significant one and it may be an emotional one. Many recreational cannabis companies had their start as medical marijuana businesses.

3. Pot shares: From everything we are hearing from the stock market, capital gains will be a reality for investors with money in the legal marijuana game. Be prepared for the call from a donor that she wishes to gift you her shares in a cannabis company. Although a majority of gift acceptance policies indicate any shares are sold immediately, this may be an area you wish to revisit to ensure all Board members are on the same page. In any case it is prudent to review this policy annually.

4. Attrition: As we all know all too well; donor attrition is at an all-time high. We are losing donors at an alarming rate. The legal recreational cannabis industry will be a new player in town. There are very few opportunities to engage a new industry. Do we embrace them? Or are we turning down gifts that another non-profit down the street is willing to accept?

5. PR: Cheques presentations, speeches from the podium and media attention will be on the radar for many cannabis corporation’s public relations departments. Do you want your Executive Director captured in photos accepting six or seven figure gifts from the local marijuana business? A good discussion to have before your ED is saying “cheese”.

Every organization will find their own way. Finding the right answer will take open discussions, policy re-writes and key messages. Starting this process early is fundamental. The gifts will arrive soon and in some cases, have already been received or denied. As William B. Given Jr. said, “when possible make the decisions now, even if action is in the future. A reviewed decision usually is better than one reached at the last moment.”

Samantha has a passion for connecting donors to the needs of the community. Samantha started to work with Gryphon Fundraising sharing her knowledge of donor database analytics with other non-profits in Canada, the US, and Australia. She continues to work with Gryphon and hundreds of clients worldwide. You can reach Samantha by email at Samantha@gryphonfundraising.com and 613-875-1971, or visit her website Gryphonfundraising.com.

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