The following policies intend to provide guidance to a charity’s board of directors in accepting gifts in setting standards in evaluating various kinds of gifts. The types of gifts, the limitation/restrictions placed on the gifts and the charity’s administration of the gifts should be considered in accepting gifts.
The members of the board of directors, officers and staff should determine how these points apply to the charity, make changes as needed and operate within these guidelines to best deal with donors and protect the charity.
Gifts should only be accepted if the donor intends to benefit the charity and not seek personal financial gain from the gift.
Gift acceptance policies may be used to preserve relationships with donors, a valuable asset of a charity. Established written policies provide a means for the contact person of the charity to defect the rejection of an offered gift on the policy, not a personal choice. The donor may observe the charity is professional in its operations and maintains a high level of integrity. A gift acceptance policy provides a means of consistency and communication with donors.
The mission statement should be stated to remind everyone of the purposes of gifts must conform to the purposes of the charity.
The charity should primarily only accept unrestricted gifts so the donated items may be used as the organization wishes for its purposes. Donor imposed restrictions should conform to the mission of the charity. One of the recognized restrictions may be endowment for board established purposes. Restrictions that are beyond the mission of the donor or for the private benefit of the donor should be declined.
Donors must retain no control over the gifts. Any offers of gifts, where the donors retain any degree of control should be rejected. The organization must accept only gifts when they have free and unencumbered control to the gifts.
The board of directors should base the policy on the following types of gifts:
Cash – Cash, Certificates of Deposits, money market accounts, payments by credit card or internet.
Publically Traded Securities – Stocks and bonds listed on major exchanges and over-the-counter markets may be accepted as the donor understands the securities will be sold immediately and the proceeds will be invested as the board of director determines in line with the organization’s invested policy. The donor can’t require how the investments are to be made, of the organization may not have full control the donation.
Closely-Held Securities – Interest in Partnership – The board of directors should only accept closely held stock or an interest in a partnership that a full understanding is given in writing that the securities or partnership interest may be sold and the means of the sale in agreed before the items is accepted and that no liability will accompany the items.
Life Insurance – Life insurance policies, with the charity listed as the beneficiary, may be accepted with an understanding that a policy will not be purchased by the charity on the life of the donor or potential beneficiaries of donors.
Real Estate – The board of directors must accept gifts of real estate in writing after securing a qualified appraisal by a licensed appraiser, who is not related by family or business to the donor, and an environmental clearance letter from the Environmental Protection Agency. These documents are to be secured by the donor at their expense. The board of directors should determine that the property may be used for the purposes of the charity.
In-Kind Contributions – Offers of in-kind contributions should only be accepted if the items can be used in the programs of the charity or an agreement is made with the donor the items may be sold to provide cash for the operation of the charity. Acknowledgements of the conations should describe the item, explain how it will benefit the programs of the charity and not state any fair market value of the property. The acknowledgement must contain the clause, “No goods or services were exchanged in receipt of the donations.”
If the in-kind gifts require a substantial carry cost, as a boat, plane or car, for storage, maintenance or insurance, the gift should be evaluated to ensure it is can be marketed promptly.
Donors should be advised to consult with their legal, accounting or other advisers for advice as to how the proposed gift will meets and promotes their charitable and financial planning purposes. The advice should describe that the charity operates within its gift acceptance policy to promote the purposes of the charity.