Rob Hofmann had his first on-the-job encounter with dementia when he and a colleague took two of their institution’s longtime donors out to dinner.
Mr. Hofmann, a senior fundraiser at the University of Minnesota’s School of Fine Arts, in Duluth, and the art school’s new dean met with the donors, a couple in their mid-70s, at a Mexican restaurant. Also in attendance: the couple’s new professional caregiver.
The meeting did not go well. The husband, at first uncharacteristically silent, could not remember his favorite dish at the restaurant, even though he had eaten there many times. Then he repeated, several times in a row, a story about a dog he once owned. Later, the man’s wife started choking on her food and had to leave the table, assisted by the caregiver.
“It was pretty stressful,” recalls Mr. Hofmann. “I felt completely unprepared.”
The experience led Mr. Hofmann to seek information on Alzheimer’s disease and other forms of dementia, which he included in a recent how-to presentation for fundraisers. Choking on food, he learned, is one sign of dementia. And if someone tells a story over and over, the listener can avoid creating an embarrassing situation by affirming what the person is saying or by asking a question, rather than pointing out the repetition.
Development professionals, says Mr. Hofmann, are not adequately prepared to deal with the likelihood, as the population ages, that more of their donors will be mentally incapacitated.
“There is nothing I have come across that gives fundraisers what they need,” he says. “Universities and others do not have policies and procedures to deal with this issue. You have to determine at what point the fundraising relationship has to be terminated because they are vulnerable people. It can reflect badly on the institution.”
Organizations need to be particularly vigilant when hiring outside telemarketers or canvassers, who may be more aggressive than in-house fundraisers. Last year the Fundraising Standards Board, a British watchdog group, upheld complaints against GoGen, a telemarketing company, forcing it to make changes in training and monitoring its callers. The company’s work on behalf of a health charity went too far in pressing a woman with obvious dementia to give, the board found.
More damaging and expensive for charities are lawsuits by family members arguing that intellectually frail relatives were pushed, in person, to make huge gifts, says Doug White, a planned-giving lawyer who directs a Columbia University master’s program in fundraising management.
Mr. White should know. In the mid-1990s, he was an expert witness in a case in which the great-niece of an 89-year-old woman filed a lawsuit against several organizations that issued charitable gift annuities to her aunt in exchange for hundreds of thousands of dollars, alleging that the financial well-being of her relative was compromised. Such annuities provide a tax break and guaranteed payments for donors before providing cash for a designated charity when they pass away.
The great-niece did not win her lawsuit, but it dragged on for years, says Mr. White. Such lawsuits, he predicts, will increasingly occur, given the aging population and the fact that too many elderly people lack protections against financial abuse.
Living Alone
Another issue contributing to seniors’ vulnerability, according to Mr. White and other experts, is the fact that aging baby boomers are more likely than previous generations to be divorced and to have children living far away.
More than 5 million Americans have Alzheimer’s disease. That number will balloon to 13.5 million by 2050, a report by AARP projects. One out of every eight people of age 65 or older has Alzheimer’s, and nearly half of people over 85 do. Even if they do not have dementia — an umbrella term that includes but is not limited to Alzheimer’s — more than 20 percent of people of age 71 or older have mild cognitive impairment.
The ability to manage finances is among the first skills to decline with dementia, according to AARP, and studies have found that financial exploitation is the most common form of elder abuse. A 2010 study found that 20 percent of Americans 65 or older — more than 7.3 million people — had made inappropriate investments, been charged unreasonably high fees, or been victimized by outright fraud.
When fundraisers suspect a donor may be suffering from dementia, they should not complete a gift transaction, says Jill Dodd, a San Francisco estate planner and lawyer who also represents many charities.
“If you think a donor doesn’t have capacity, you cannot close a gift,” says Ms. Dodd. “It would be unethical at best.” If fundraisers are working with a mentally incapacitated donor on a previously made pledge, she adds, “you always want to make sure there are two people in the room with you. It would be good to have a child or another party there.”
Ms. Dodd and other seasoned fundraisers say that they have a policy of moving from solicitation to stewardship mode when donors show signs of cognitive impairment. They thank donors and engage them in events but no longer ask for money.
“When you are corresponding with elderly donors about their charitable plans, include an extra copy of the letter to share with family or financial advisers,” recommends Barlow Mann, a Memphis planned-giving consultant.
Often, adds Mr. Mann, charities send such letters after the death of a spouse or another issue prompts donors to review their estate plans and contact a nonprofit named in a will or other plan. “Talking with someone helps them decide what they want to do with their property,” he says.
Arranging a meeting with a lawyer or financial adviser often makes sense for donors in such circumstances. “Maybe they bring your letter and they won’t overlook charity,” Mr. Mann says.
For donors who receive income from a gift annuity or charitable trust, one sign of mental decline is failure to cash checks from their giving vehicles, Mr. Mann notes. Having a friend or relative who can be contacted in the event of such problems added to the donor’s records is one way fundraisers can help protect incapacitated people.
Some fundraisers involve adult children or other family members in working out a mutually agreeable set of circumstances involving elderly donors.
Not doing so can cost charities dearly, as a recent lawsuit in California proves. Earlier this year, James and Catherine Emmi sued Chapman University over an irrevocable pledge agreement that Mr. Emmi signed two years ago for $12 million. The university, the lawsuit alleged, placed undue pressure on Mr. Emmi to sign the agreement without his wife’s consent. The university quickly settled the lawsuit; the details were not disclosed.
To avoid such problems, Mr. Hofmann at the University of Minnesota, for example, contacted the son of a wealthy widow in her 90s and crafted an agreement in which the university will call the woman’s son if she ever decides to make a gift of $1 million or more.
“Gifts of $10,000 or $20,000 are fine,” Mr. Hofmann says of the woman and her son, who has power of attorney over his mother’s financial affairs. “The widow continues to write checks because it makes her feel good, but we manage this in a professional way.”
Problematic Gift Arrangements
Charities should never have their own legal or financial experts draw up a bequest or other charitable gift for elderly donors, says Mr. White, the Columbia University planned-giving expert. They should instead receive independent advice, he says.
Donors sometimes ask charities to handle such gift arrangements for them, thinking it will save time and money. But that can backfire by making it appear that the group used undue influence to bring about a gift, says Mr. White.
He recalls one case in which a donor’s family successfully challenged an $800,000 charitable trust executed by a lawyer who was a member of the church that would have benefited from the trust.
When a vulnerable person doesn’t have relatives who can assist with his or her philanthropy, fundraisers must reach out on the donor’s behalf to Adult Protective Services or another agency that helps seniors, says Catherine Madison, a neurologist at the Ray Dolby Brain Health Center, in San Francisco.
“You want to protect the individual; it is very important,” says Dr. Madison, who led a recent session on dementia issues at an international fundraising conference. Development officers, she adds, are among the first professionals to notice signs of dementia such as stacks of unopened mail, a disheveled appearance, or disorientation.
That why fundraisers are key players in the struggle to protect aging people from financial and other forms of abuse, says Dr. Madison. “The philanthropic community,” she adds, “needs to jump to the front of this train.”