A Letter of Intent (LOI) is a formal document indicating a potential donor's interest in supporting a nonprofit organization. It typically outlines the donor's intent to make a contribution, but it is not a legally binding contract. The LOI usually specifies the purpose of the intended gift, the amount being considered, and any conditions or terms that may apply. This document serves as a preliminary agreement that helps both parties understand the potential funding arrangement, providing a clear basis for further negotiations and discussions. By drafting an LOI, both the nonprofit and the donor can ensure that they are aligned on expectations and objectives before finalizing any commitments or agreements. LOIs are particularly significant in major gift fundraising, where large donations often require more detailed discussions around impact and execution.
While an LOI shows intent and interest in donating, it is not a binding commitment. It lays groundwork for discussions and agreements but does not obligate any party.
The purpose of a Letter of Intent (LOI) is to express a potential donor's commitment to support a nonprofit, highlighting the intended amount and the purpose of the contribution. It serves as a roadmap for future discussions and can clarify expectations between the nonprofit and the donor before a formal agreement is solidified.
No, a Letter of Intent is generally not legally binding. It outlines the intent of the donor to make a contribution but does not legally obligate either party to follow through. However, it can signal serious intent and facilitate further discussions about the donation.
Yes, a Letter of Intent can include specific conditions under which the gift will be made. This may relate to the timing, purpose of the gift, or acknowledgment requirements, helping both the donor and organization align their objectives.