Saturday, April 11, 2015

Tips on Establishing or Revising Your Gift Acceptance Policy

Tips on Gift Acceptance Policies for Your Nonprofit

Norman Olshansky: President
NFP Consulting Resources, Inc.

Decisions related to acceptance of out of the ordinary donations and pledges can be among the most challenging issues nonprofit professionals and leaders have to address, related to fundraising.

Have you experienced any of the following issues?

How do you deal with a donation from someone who is well known and of “ill repute” in the community who has made their fortune from being a slumlord and now is offering you a lead gift to your capital campaign with the proviso that the building be named after him?

How do you avoid accepting a gift of real property that may cost you more in the long run than it is worth due to zoning, structural concerns, carrying expenses, legal or tax issues?

What “strings” attached to gifts related to its use, recognition, investment, etc. are you willing to accept?

What type of assets are you willing to accept? (collectibles, art, autos, boats, jewelry, privately held stock, real estate, etc.)

Are you willing to accept life insurance policies which may require future premium payments?

Are you willing to accept “split interest” gifts?

Do you sell all stock donations immediately, hold them as investments or make decisions on a case by case basis? What guidance is given to those making day to day decisions?

Who in your organization can make a decision not to accept a gift?

How do you recognize testamentary gifts, especially those which may not materialize due to the terms of the gift? What about a testamentary gift where the donor or his/her family is able to change the beneficiary or amounts at a future date?

When there is a need to make an “exception” what process is used to authorize a decision which may not be covered clearly by established policy or practice?

These and similar issues occur more frequently than one might expect as part of the ongoing fundraising and development efforts of nonprofits. The type and frequency of these issues may vary from one nonprofit to another, but all nonprofits engaged in fundraising need to address gift acceptance.

If you do not have a policy in place to establish guidelines, practices and procedures for your staff and volunteers, you are leaving yourself vulnerable to problems, potential conflict with donors and liability to your organization.

There are many sample policies online, from basic to complex, which can be of assistance to you if you do not already have an established policy. If you do have one, it should be reviewed to make sure it covers conditions that could impact your organization. Review of your policies, with input from legal counsel, should be conducted periodically by nonprofits.

I have utilized a basic policy for my clients, who prefer more flexibility by their organization when considering acceptance of gifts.   Some nonprofits have a separate gift acceptance committee while others use their standing executive committee, finance, or fundraising committee to handle gift acceptance issues.
Sample Gift Acceptance Policy
NFP Consulting Resources, Inc.

_______________________, Inc.,  a not for profit 501C3 organization organized under the laws of the State of ____________, encourages the solicitation and acceptance of gifts, grants and donations  for purposes that will help ___________ to further and fulfill its mission. The following policies and guidelines govern acceptance of gifts made to ______or to any of its programs.

Acceptance of any contribution, gift or grant is at the discretion of __________Inc.

Donations will generally be accepted from individuals, partnerships, corporations, foundations, government agencies, or other entities, without limitations.

________ will refrain from providing advice about the tax or other treatment of gifts and will encourage donors to seek guidance from their own professional advisors to assist them in the process of making their donations.

__________ will accept donations of cash or publicly traded securities. Gifts of in-kind services will be accepted at the discretion of the ___________.

Certain other gifts, real property, personal property, in-kind gifts, non-liquid securities, and contributions whose sources are not transparent or whose use is restricted in some manner, must be reviewed by the __________CEO/Executive Director and/or finance committee (which shall serve as the gift acceptance committee), prior to acceptance due to the special circumstances, obligations raised or liabilities they may pose for _________.

__________ will provide acknowledgments to donors meeting IRS substantiation requirements for property received by the charity as a gift. However, except for gifts of cash and publicly traded securities, no value shall be ascribed by ____________to any receipt or other form of substantiation of a gift received.

__________ will respect the intent of the donor relating to gifts for restricted purposes and those relating to the desire to remain anonymous. With respect to anonymous gifts, information about the donor will be restricted to only those staff members with a need to know.

__________ will not compensate, whether through commissions, finders’ fees, or other means, any third party for directing a gift or a donor to _______________.

Revision History
On____________________ the Board of Directors of _______________s adopted this Gift Acceptance Policy.
Among the many online sources, I would recommend David Wheeler Newman’s article if you are interested in developing a more detailed policy.

The CEO/Executive Director should also seek input from fundraising staff and volunteers. The CEO/Executive Director should then engage the Board Chairman for input so that a policy, or revisions to the existing policy, can be taken to the Board of Directors for review and approval.

Do not wait until you have to deal with issues related to a specific gift before you develop gift acceptance policies! Make sure you have an established gift acceptance policy and committee to which staff and/or volunteers can bring unique concerns, which need to be addressed. By planning, thinking and acting smart, you can minimize, if not avoid, many of the problems other nonprofits have faced in the past.


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