Informal agreements

How do you back out of a handshake agreement?

April 5, 2011: 9:16 AM ET

How do you face someone and tell them you simply can't contribute to their cause, make a previously-promised loan, or bankroll a friend's business? Here are a few tips.

By Jodi Glickman, contributor

FORTUNE -- Life has changed for everyone since the beginning of the Great Recession. Today, it's almost hard to remember what it was like to be certain you'd make more money the following year, to know your home value would continue rising, or to consume as though things would never change for the worse, only the better.

For many, we're no longer buying into that fairytale American dream that seemed attainable such a short time ago. Everyone is tightening the belt. And so, I recently found myself in the unenviable position of having to back out of a financial commitment to ReadWorks, a non-profit whose board I sit on.

Pre-recession, I committed to a certain level of fundraising and private donation that was a big number for me. It wasn't unattainable so much as it was aspirational, and I knew I could make it work. I was extremely committed to the organization (I still am) and I was excited by my ability to actually write that check or raise that level of money.

In today's economy, it's a check I simply can't write. Nor have I been able to raise the balance from the once-flush friends and family whose charitable actions I counted on. To be clear, this isn't a legally binding decision -- I'm not bailing on my mortgage nor failing to meet my monthly car payment. It's a moral conundrum rather than a legal one.  Nonetheless, the experience has been painful and I can't imagine I'm alone in facing a financial commitment I can no longer meet.

So what do you when you find yourself in an impossible situation? How do you face someone and tell them you simply can't contribute to their cause, make a previously- promised loan, or bankroll a friend's new business venture? More

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