Monday, January 16, 2017

Gift Acceptance Policies

Why does your nonprofit organization need a gift acceptance policy?

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 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 policies and input from legal counsel can be most helpful.

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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