Gift acceptance policies are rarely adopted at the inception of a nonprofit organization's fundraising program. Early development activities usually focus on cash, and occasionally marketable securities. There is little discussion of, or involvement with, other gift forms. Gift acceptance policies are a product of capital campaigns or planned giving campaigns in which planned giving concepts, such as gifts made from assets, split interest gifts, and deferred gifts are introduced. Once gift acceptance policies are in place, however, they tend to drift to the back of the policy manual where they age unnoticed and no longer provide the intended safeguard. This analysis is designed to help you gain a greater understanding of the details, draft a set of policies, and make, or advise your clients to make, better decisions about gift acceptance.
Gift acceptance policies provide discipline for the nonprofit development program in several ways. First, the policies define the types of assets that are acceptable. Second, policies establish the gift forms that are acceptable. And finally, gift policies define the organization's role in gift administration.
The primary benefit of gift acceptance policies is to maintain discipline in gift acceptance and administration. Discipline prevents the acceptance of gifts that will cost the nonprofit organization time, money, and possibly its reputation, by reminding the organization when to say, "No."
Policies also serve to educate the nonprofit organization's staff and board about critical issues triggered by certain gifts. It is difficult to absorb and appreciate the practical issues associated with acceptance of certain gift forms without working through them and making choices about how to handle them.
The process of adopting the gift administration policy allows the staff and the board to work through the practical issues, such as costs associated with certain gifts, and is a far more valuable educational tool than a seminar or article on the subject. New board members, or those who have never evaluated potential gifts, may at first see the offer of a large boat as an exciting possibility. After a discussion of carrying costs, such as insurance, transport, storage, maintenance, and expenses related to its sale, they will better understand the gift evaluation process.
The process of creating gift policies helps focus and strengthen the gift administration program. Regular review ensures that the development staff and the board bring up and answer questions critical to the planned gift program's integrity. It ensures that legal counsel is sought prior to the emergence of legal issues and that professional assistance is identified as a resource prior to the attempted resolution of problems.
The adoption process is also a good way to introduce planning ideas to board members who have not been receptive to brochures or other attempts at education. A better understanding of the gift acceptance process frequently produces new gifts. Rarely do board members go through the process without generating questions relating to their personal assets and opportunities. Invariably, there is a new gift of an asset not previously considered or a gift in a form not previously understood.
And finally, the process gives the board a chance to make decisions about policy without the distraction of a pending gift to blind its collective judgment. Experience shows that it is hard for a planned giving officer or board to form the word "no" once the gift, however unattractive, is sitting on the table.
To be effective, policies must be in place before the organization begins to consider acceptance of specific gifts. Some organizations prefer the "make-policy-as-needed" approach because the decision-makers believe that it preserves flexibility and discretion in policy making. More often this approach leads to poor decisions for several reasons.
First, decisions based on case-by-case scenarios breed inconsistency. The results reflect the personal opinions of board members, not consistent policy. Most nonprofit boards change annually. While some board members remain from year to year, the full group always changes over a three- to five-year period. Since each of us brings different personal experience and attitudes to the table when making decisions, judgments change as the committee changes.
Second, the glittering appeal of the potential gift can cloud good judgment. It is difficult to make a list of potential problems and issues while you stare at the gift. The tendency of the planned giving or development officer is to do everything possible to accept the asset.
Third, without established policy a nonprofit may send mixed signals to potential donors. Suppose the planned giving officer receives what can only be described as a wretched gift, and thanks the donor profusely. Later, after sorting through the issues, he/she finds that the gift must be rejected. The donor is left to wonder why the initial excitement changed to a disapproving "no." A better way to handle gift acceptance is to tell a donor that the organization appreciates the gift, but its policies require a review of certain assets to ensure proper handling. A timely review, even with a resulting "no" is easier to understand.
It is important to note that a good set of policies and checklists will also prevent donors from making mistakes. Too often a donor's accountant or attorney is not familiar with details such as the related use rules, the valuation requirements, or pre-arranged sale issues. Raising questions in the gift acceptance process may save a donor from disappointment when the time comes to file his or her income tax return.
Developing gift acceptance policies should be a collaborative process involving the planned giving staff, the organization's director or president, the board's committee responsible for oversight, and the professional advisory committee or advisor. The combined insight of this group provides the broadest perspective and guidance on the issues. Simply adopting another institution's gift policies, without understanding the issues and without tailoring them to fit your organization, will not provide protection. Once again, the greatest value of the process is the education board and staff members receive in gift evaluation.
Gift acceptance policies, once developed, should be approved and adopted by the board of directors. The date of this approval should be attached to the policies.
After adoption, the gift acceptance policies should be reviewed annually. This review is an important process in which the policies are dusted off and reread, and forgotten items reinstated in memory. Review also allows fine-tuning or amendment to the policies in the event that changed circumstances allow the organization to accept new gifts, or to restrict or expand the manner in which current gift forms are handled.
All of that said, policies should provide for a way to make exceptions to the rules, although such exceptions should be rare. Design a review process for deviation that requires the approval of the planned giving director, the executive committee and the agency executive director. Make sure that any action that runs counter to the gift policy is well supported and well reasoned.
In addition to drafting policy, the nonprofit must ensure that it has the expertise available to follow through in critical areas. Real estate appraisers, environmental analysts, property brokers, and legal advisors must be identified before the need arises. Only then can the nonprofit engage professional advice quickly to make a timely analysis without leaving the donor waiting for an answer.
Take a look at the sample policy in Exhibit A as we work through each section. Some policy elements are straightforward and simply provide the context for making decisions. Other areas, such as acceptance of non-marketable gifts, create more liability and will be discussed in greater detail. Throughout this article reference is made to the gift acceptance committee. This term is used generically to denote the board committee responsible for acceptance of gifts. In some organizations this responsibility lies with the executive committee, while in others it may be the finance committee, development committee, or planned giving committee. The segments of the policies are discussed below.
The organization's mission and purpose should be a part of every document generated by and for the nonprofit. It is important to keep the organization's goals in mind when drafting and using the policy. Place the mission statement prominently at the top of the document to remind everyone of the vital role the organization serves.
The purpose of the gift acceptance policies should be clearly stated. In most instances, the purpose is to govern acceptance of gifts and to provide guidance to donors and their professional advisors in completing gifts. Purposes may include more elaborate language related to discharging fiduciary responsibility, protecting the board from third party liability and IRS sanctions, and protecting the nonprofit from unanticipated costs and negative publicity.
The policy should clearly state that the nonprofit will seek the advice of legal counsel when appropriate. The purpose of legal counsel is to provide protection. Legal counsel generally represents an unbudgeted expense, and both the planned giving officer and the gift acceptance committee are generally reluctant to suggest adding expense to the transaction. By stating that counsel will be engaged when appropriate, the policy provides a platform for the use of counsel, while leaving discretion on the final decision to the gift acceptance committee.
Consider these ways to add depth to this section:
The policies should make it clear that the nonprofit will strongly urge and advise the donor to seek independent professional counsel prior to making a gift. It is appropriate here to incorporate the National Committee on Planned Giving (NCPG)'s Model Standards of Practice for the Charitable Gift Planner. Also include as references the National Society of Fund Raising Executives (NSFRE)'s Donor Bill of Rights, and any other document recognizing the importance of independent advice for the donor, and "truth in advertising" in communicating with the donor. Conflicts with donors most often arise when the donor and charity have a long-term, strong relationship rather than when the relationship is new.
Discuss donor conflict issues with the board. Board members may be quick to question the donor's need for outside counsel, and eager to offer documents, advice, and other encouragement to complete the gift. The board will have a better understanding of the issues once those points are explained.
Board and staff conflict of interest issues should also be addressed. Board members may be eager to get involved in fundraising ideas that involve sales of products or services to the organization's donors. Exhibit C provides a sample conflict of interest statement that is recommended as a model or template for a statement signed when beginning board or staff service.
Gift policies are an excellent place to explain the organization's attitude toward restricted gifts. All organizations prefer unrestricted gifts. However, planned giving donors who have a long-term relationship with, and an understanding of the role the organization fills generally have a specific purpose in mind for the gift.
The nonprofit should determine the types of restrictions that can be placed on gifts. These options will range from a rigid policy prohibiting restrictions, to endowment pools for specific purposes, to a broad policy stating that all gifts that fit the organization's mission and purpose will be accepted. All policies, however, should state that gifts that are counter to or beyond the scope of the nonprofit's mission and purpose will be turned down.
It may also be appropriate to include language about specific endowments, chairs or other naming opportunities, and set the dollar limits, pledge restrictions, and other governing principles. Large schools and universities should have more extensive policies to ensure proper communication and consistency. Smaller organizations may be able to manage with a less detailed policy.
It is best to designate a committee to decide whether the restricted gift meets the criteria set forth in the organization's gift policy. A committee can act faster than the full board to accept, reject, or negotiate the purposes of a gift. Ideally this group will be the designated gift acceptance committee-a group with knowledge of both the organization and its gift acceptance policies.
The committee set up to review gifts, or in some cases to make recommendations on acceptance to the Board, must be made up of individuals who know the nonprofit's mission and operation well and have the expertise and experience to make decisions. This committee should be small enough to respond quickly to unusual gift offers and to make timely decisions. The structure suggested in the example policy (Section V, Exhibit A) is most appropriate for large institutions. Smaller charities may prefer to delegate this job to the development committee, the finance committee, or even the executive committee.
A list of the types of planned gifts appears in Section VI of Exhibit A and requires careful attention. Most nonprofits, especially those just embarking on a planned gift program, will not be able to accept all types of gifts because they lack the expertise or the resources to manage the gift or gift form. Look at each gift form as part of the evaluation process, and when you write your nonprofit's gift policy, state clearly the types of gifts that are appropriate for your organization and the types of gifts that are not appropriate.
The most common gift forms include:
Cash. It is difficult to find a downside with cash. And since the NCPG's 1993 Survey of Donors indicated that the majority of bequests were funded with cash, the category should be on the list.
Tangible Personal Property. Tangible personal property includes art, furniture, coin and stamp collections, livestock, jewelry, equipment, cars, boats, clothes, and any other personal property item owned by a donor. The nonprofit must be extremely careful about the receipt of personal property, especially when such property is received in exchange for a gift annuity. The charity will have an obligation to pay an income stream based upon the gift's value on the date of gift. The charity must be able to determine the gift's value and marketability before accepting it or run the risk of creating a negative cash flow transaction (instead of a gift).
The nonprofit's gift acceptance policy must address issues related to the types of property that will be accepted. The review function is best performed by a committee (the less visible the committee, the better) that asks and answers the following questions:
Be sensitive to the special tax issues affecting the donor. A tax deduction for the market value of the gift is allowed when the organization will use the gift (related use). Determine whether the gift will be used by the nonprofit or sold. Gifts donated for auction are considered to be unrelated use items since the gifts are sold and are not used by the nonprofit. The deduction for personal property contributed to a charitable remainder trust or a pooled income fund is limited to cost basis. Personal property that is contributed to a charitable remainder trust or a pooled income fund will not be deductible as long as the donor or a donor's family members receive income from the trust.
Marketable Securities. There are only a few dangers in acceptance of marketable securities, all of which relate to timing. To the extent possible, the following issues should be addressed in the gift policy or on a checklist attached to it.
Closely held securities. Closely held securities are generally defined as securities that are not broadly or publicly traded and include not only debt and equity issues of C and S corporations, but also limited liability companies (LLCs) and limited partnerships (LPs). The definition of "publicly" traded relates to the ability to establish a proven market in which a "willing buyer and a willing seller" set a price or value for the security. The lack of a market to determine what a willing buyer would pay a willing seller affects valuation and liquidity upon receipt. Policies should address how value and marketability are determined prior to acceptance, how restrictions are examined and resolved, and when legal counsel is required prior to acceptance of the gift.
The nonprofit should conduct an adequate review (either internal or external) to determine:
Real estate. Real estate gifts are some of the most dangerous gifts for charity. Not only are there a series of liability issues associated with acceptance, but real estate is also one of the most commonly owned assets. It is a likely gift.
There are two big issues related to the nonprofit acceptance of real estate: Environmental liability and practical issues related to disposition of the property. One of the greatest risks facing owners of real property is environmental liability. The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), enacted in December 1980, created a merciless liability structure for "responsible parties" in the chain of title to an environmentally damaged property. The liability for clean up exists without regard to the actual knowledge of the owner or the material participation of the owner. Costs for removal of the hazardous materials and restoration of the property, including clean up of soil and ground water, can easily run into millions of dollars and far exceed the value of the property involved.
Charities are not immune from the environmental protection laws. The nonprofit organization should have detailed policies that require the environmental review of all anticipated gifts of real property. Sample environmental review forms are attached to this article as Exhibit B. Use this or a similar environmental review process to protect your organization.
The nonprofit must also be cautious when serving as trustee of a charitable remainder trust or charitable lead trust, because exposure may extend beyond the assets of the trust. The few decisions that have been rendered relating to fiduciary responsibility in instances in which the nonprofit might serve as trustee have dictated tough results. The second decision in City of Phoenix v. Garbage Services3 provided some insight into the liability for a fiduciary. In that decision, the court held that:
Recent legislation addressed this liability issue. H.R 3610 contained the "Asset Conservation, Lender Liability and Deposit Insurance Protection Act of 1996," which amended CERCLA to provide that:
"The liability of a fiduciary under any provisions and this Act (CERCLA) for the release or threatened release of a hazardous substance at, from or in connection with a vessel or facility held in a fiduciary capacity shall not exceed the assets held in the fiduciary capacity." 4
However, this protection is not available where the fiduciary's conduct was negligent or created responsibility for the contamination. 5 In essence, the decision in Phoenix was codified.
Experience has shown that most development officers or executive directors will want to find a way to accept a gift of real property. However, sometimes the gift is not appropriate because it will create a problem, or will divert the focus of the nonprofit. And sometimes the gift is not appropriate for the purpose for which it is given. Additionally, as detailed above, sometimes the gift is costly.
A practical review of the property begins with an analysis by a real estate committee or gift acceptance committee that considers the following issues:
Depending on the responses to these questions, the nonprofit must then examine the form of the charitable gift and ask additional questions detailed below.
Many issues should be considered by both the donor and charity before funding a charitable remainder trust (CRT) with real property. Questions to raise are:
Pooled income funds. Real estate is generally a poor choice for funding a pooled income fund. The pooled income fund distributes net income to the donors who hold units. Real estate is generally non-income producing and may incur expenses (charged to income) prior to sale. Therefore, a gift of real estate is likely to reduce the income stream for all participants. Many organizations have policies that prevent the contribution of a gift of real estate to a pooled income fund.
Charitable gift annuities. If real property is contributed in exchange for a gift annuity, and the property does not produce income or produces insufficient income, the receiving organization must have the resources to pay the income stream in the period before the property is sold. And it must be certain that the value on which the annuity is based is fair and reasonable. If a nonprofit accepts a gift of real property for a gift annuity, it must be certain it can sell the property quickly for the established value. Many organizations will not accept real property in exchange for charitable gift annuities because of these uncertainties.
Deferred charitable gift annuities. The analysis is somewhat different when real property is contributed in exchange for a deferred gift annuity. A deferred gift annuity generates payments at some point in the future, meaning that the nonprofit will have some time to sell the property in order to make those payments. However, the nonprofit should still make sure the property can be sold without much delay, and that the value used to establish the annuity is fair and reasonable.
Remainder interests in property. The issues related to remainder interests in property include economic responsibilities during the term of the life interest, as well as review of conduct and control of the property during the term of the life interest. In some instances the charity may not know of the remainder interest gift. In others, the charity will be actively involved in the solicitation. When involved, the charity should ensure maximum protection from environmental liability by remaining continuously in touch with the donor and the condition of the property throughout the life term.
Oil, Gas, and Mineral Interests. Organizations located in active mineral interest states, such as Texas, may encounter opportunities for gifts of oil, gas, or mineral interests. Severed interests can be represented by surface rights, or the interest in the minerals alone. These interests are generally owned as working interests or as fractional partnerships. They are difficult to sell and unpredictable in income generation.
If your organization is unfamiliar with these interests you may not choose to get involved in accepting this gift form. If you do have the expertise to manage or sell these gifts, consider setting minimum gift sizes so that your administrative office is not burdened with a paper chase that generates minimum income.
Have the form of the interest reviewed to insure that you are not accepting unrelated business taxable income property, which is generated by some forms of oil, gas, and mineral ownership. In addition there are special issues with oil and gas that relate to valuation and whether such interests are a form of non-qualified partial interest property. The IRS published a private letter ruling in 1984 that approved a charitable deduction of an oil and gas interest. (Private letter rulings cannot be relied upon, but indicate attitude of the IRS.)
Bargain Sales. A bargain sale can be an effective gift tool in some circumstances. The bargain sale most often involves gifts of real property, meaning that the policies should reflect that bargain sales of real estate undergo the same evaluation required for outright gifts. In most instances, the gift acceptance committee should make the final decision on a bargain sale since acceptance should depend on whether the bargain sale is in the best interest of the organization. Factors for consideration include:
Remember that the bargain sale has a special impact on the donor as well since it triggers special rules applicable to basis. These rules require the donor to allocate the basis in the property in a pro rata fashion between the gift and sale portions of the transactions.
Life Insurance. Life insurance can be a valuable part of a planned giving program because of the special donor niches it can reach. There are two ways that outright gifts of life insurance are used in planned giving: The transfer to charity of an older policy that the donor no longer needs; or the transfer of funds to charity to purchase a policy on the life of the donor. In the first instance, the policy represents a non-income producing item that makes an excellent gift because it does not impact the donor's lifestyle. In the second instance, the life insurance policy represents a way to leverage the value of the gift to charity. A series of small premium payments can create a large endowment gift at death. This section of the gift acceptance policy deals solely with the irrevocable transfer of an existing insurance policy.
The nonprofit must have guidelines that spell out action to take on the receipt of an insurance policy. If the policy is a term policy and premium payments must be made to keep the policy in place, the nonprofit must have the cash flow to make those payments. There are few circumstances in which nonprofits should accept term policies.
If the policy is a whole life policy, premium payments may also be due. Is it in the best interest of the nonprofit to make those payments? Experience shows that there is not a standard answer to this question. Rather, the nonprofit should have a committee or group that reviews the policy and makes a decision on a case-by-case basis. Alternatives include:
Charitable Gift Annuities. Charitable gift annuities require the most thought of all. The organization must clearly understand the liability created in issuing the annuity. The nonprofit must register in states where gift annuities are offered and disclose the appropriate financial information. And the organization must invest the assets in accordance with the laws, to cash flow the annuity payments and to protect the nonprofit from negative cash flow over the life of the annuitant.
The gift acceptance policy should include:
Trustee Appointments. While organizations may choose to accept charitable remainder trusts, they may choose not to serve as trustee. Where charities do serve as trustee, they should ensure that:
As a general rule, the charity should not accept appointment as the trustee of a charitable lead trust. In every instance, there is a non-charitable beneficiary at the end of term who may or may not be appreciative of the investment management role and investment decisions made during the trust term.
Pooled income funds are not specifically included on this list. Organizations that maintain pooled income funds should specify initial minimum gift sizes, minimum gift sizes for additions, and restrictions on the type of property that may be contributed. Tax exempt bonds are prohibited by statute. It is generally appropriate to restrict gifts to cash and taxable securities.
Retirement Plan Beneficiary Designations, Bequests, and Life Insurance Beneficiary Designations. Donors should be encouraged to name your nonprofit as beneficiary of retirement plan designations, life insurance designations, and estate bequests. Educate your donors about how to properly name your organization and encourage them to work with you to plan gifts for special purposes. There is little that your gift acceptance policies can regulate on these forms of gifts since these gifts do not require the approval of, or acceptance by, the charity.
Weird Charitable Gifts. As an afterthought, consider the following types of property and how they might be processed by your organization.
The policy should state clearly who is responsible for appraisals required for the donor's tax return (the donor), and when, if ever, exceptions to this policy can be made. Policies should also list situations in which the charity will obtain an independent appraisal. Some charities also require that the donor pay for the charity's confirming appraisal.
Legal fees for completion of the gift are the responsibility of the donor; it is helpful to have this statement incorporated in the gift acceptance policy. In the event that the nonprofit provides for an exception, the exception rules should address the conditions under which the nonprofit will pay those fees, how the conflict of interest issues will be avoided, and how the payment of fees will be reported for tax purposes.
There are three points at which gift valuation is important. The first is the valuation of the gift for tax purposes. These rules are clearly established in the Internal Revenue Code. The second is the valuation of the gift for gift credit purposes. Some gifts are recorded at the donor's date of gift value, while others are recorded net of sales costs. The third is the value of the gift on the organization's books, governed in most instances by the Financial Accounting Standards Board (FASB) rules. The most important point is that the valuation on the nonprofit development records and books should be consistently calculated. Discuss these issues at the outset so that records reflect "apples to apples" results over time.
Few organizations focus on the filing requirements for Forms 8282 and 8283. It is helpful to include a statement delegating this duty to a particular office or individual by title and to include copies of the forms and instructions as an attachment to the policy.
Provide the names of the individuals responsible for acknowledgement, and set a standard for the time in which acknowledgement is to be completed.
The governing body of the nonprofit should adopt changes to the policy. However, the policy should anticipate change and provide a process for amendment.
Attachments providing detail and guidance to the development office are extremely helpful and serve as a guide to procedure. Attachments that are most valuable include:
Review of gift acceptance policies is always a tedious process. Invariably, the committee working to draft the policies looses its focus by the second or third reading, and begins to wonder of the need for such painstaking detail.
At this point, a cautionary tale or two generally provides the incentive to keep moving. Sometimes experience is the best teacher, and learning from the mistakes of others is always less expensive and less painful. There are many cautionary tales to learn from, but the following stories address the need for policies.
Examples of bad personal property gifts are easy to find. Consider the following gifts.
A long-term donor to a college, and a personal friend of the president of the college, contributed a large, orange, clay vessel gift purchased on a trip to South America. The gift was presented with the restriction that it be displayed in the organization's lobby (perhaps to address the related use rules). Although the gift was accepted, the school eventually was forced to go back to the donor to rescind the display agreement. There was no market for the pot, which now sits in a storage closet. The donor has discontinued support of the school.
A high profile alumnus of a Southeastern preparatory school made a gift of a 53-foot Hatteras, delivered via deed of gift and docked in Fort Lauderdale at Pier 77. The prep school began to receive the harbormaster's bills the next month, which included dockage (by the foot), connection fees, and maintenance. In addition, the school was forced to insure the boat (replacement and liability). The sale took two and a half years and netted roughly half of the anticipated value (then reduced by the out-of-pocket costs for the two and a half years).
A long-term donor funded an arts organization campaign pledge (for a named room in the new building) with the gift of a 40-carat emerald ring. Although the appraised cost of the gem was $43,000, the charity received only $19,000 after the out-of-pocket costs to insure, transport, and market the jewel in the wholesale market in New York. Should the room still be named for the donor? Should the donor be asked to contribute the balance?
There are more true tales of woe resulting from gifts of real estate than any single asset. Consider these gifts.
A well-known Midwestern charity received a gift of not one, but two, paint factories in the early 1980s. These gifts soon matured into Environmental Protection Agency Superfund sites. It cost the charity roughly $1 million over the value of the property to settle the joint and several liabilities imposed by CERCLA to extricate itself from the first gift, and somewhat more than that to settle the second gift.
A school foundation received a $50,000 gift of real estate (house and lot) from a new donor to the institution. The property remained on the market for two years, but failed to sell, even after a reduction in price to $25,000, because of a squatter on the property. The property was eventually transferred to the church next door as a gift.
A hospital foundation accepted a $40,000 gift of real estate, non-income producing, in exchange for a gift annuity. At the donor's request, the nonprofit agreed that it would not sell the property for two years. In reviewing this transaction, the first phrase that comes to mind is "tax fraud." The second phrase that comes to mind is "cash flow." The third phrase might be "Directors and Officers Insurance."
Donors can become angry about gift transactions when the tax result is different than anticipated. Consider these examples.
A donor contributed a painting, valued at $35,000 with a basis of $2,500, to a performing arts organization. The charity intended to sell the painting upon receipt, but did not discuss this with the donor. The painting was sold within three months. Although the donor's accountant was aware of the gift, the accountant was not familiar with the related use rules and did not ask whether the painting would be used as a part of the organization's nonprofit operations. The donor's $35,000 deduction withered to $2,500.
A donor, who made significant annual mutual funds gifts to a charity each December, called on December 1 to inform the charity of the current year gift. Shortly thereafter, the mutual fund company sent the planned giving officer some forms needed to open the nonprofit's account. The PGO placed the forms in her "to do" box, and finally completed them on December 30, making personal delivery to the broker representing the fund. The PGO made an entry for the gift on the December gift log, and did not think about the gift again until February, when she received a mutual fund statement showing a transfer of the mutual fund on January 15. Imagine the discussion with the donor.
Once you have policies in place, review them regularly. Associate the review with the first meeting of the gift acceptance committee, professional advisory committee, or development committee each year.
Use the review as an opportunity to educate, to preach, and to probe for potential gift opportunities. Involve the committee and the board through cautionary tales, or solicitation of experiences with other organizations that could have been avoided. Treat them as your most valuable insurance policy.
Do not be afraid to make changes where current policy did not provide protection, produced a bad result, or fell short of providing guidance. Every organization is different. Draft your policies to meet your needs, your problems, and to reflect your values.
Footnotes
Ferguson v. Commissioner, 174 F3d 997 (9th Cir. 1999).back
Ibid.back
City of Phoenix v. Garbage Services, 827 F. Supp. 600 (D. Ariz. 1993).back
CERCLA, § 107(n)(1).back
CERCLA, § 107(n)(3).back
See PLR 8010082 (December 13, 1979) for further info on EE/H bonds.back
Do you have a gift acceptance policy? Most nonprofit organizations do not have such a policy adopted until after the fundraising program is in place. This article by Kathryn W. Miree, Esq. will give the reader a greater understanding of the purpose of, as well as how to draft and adopt, gift acceptance policies.