Charitable Giving

GIFT ACCEPTANCE POLICIES

Why You Need Gift Acceptance Policies How Thoughtful Planning about Non-Cash Gifts Can Improve Your Donor Relationships

Why We Don’t!! Many nonprofit organizations don’t believe their fundraising programs are sophisticated enough to require a gift acceptance policy, especially those whose funding is primarily based on memberships, annual gifts, and special events. But it’s only a matter of time before a donor offers you a remote desert property, a share in a race-horse, or another unexpected gift. A well crafted policy can help you replace an awkward rejection with a structured discussion and eventual gift that is both meaningful to the donor and appropriate to further your mission.

all gifts are not equal! Have you ever answered your office phone and received an offer of a donated timeshare? Has a well-meaning volunteer approached you with a new and exciting way to promote future gifts through a life insurance program? If not, let me assure you that it’s only a matter of time until a scenario like this happens. And if it already has, you may have hesitated to commit an answer and then struggled over the consequences of rejecting or accepting it. All gifts are not equal in their financial value to your organization, nor are they equal in value and impact from one nonprofit to the next. A gift acceptance policy that clearly sets forth your organizational position on non-cash and deferred gifts not only provides you a road map but also removes the development team from the decision-making process and puts it squarely with the board of directors or trustees, where it belongs.

When first considering gift acceptance policies, you should start with an inventory of the types of gifts you currently accept, coupled with gifts that have already been offered but that you have turned down. Add to your list gifts that you are considering accepting in the future. With this in hand, you are ready to start the process of formulating your organization’s gift acceptance policies.

Policies allow staff to maintain consistency and standards What should the policies include? First – A statement on the organization’s mission and purpose of the gift policies

Guidelines on when to use outside legal counsel; A list of the types of gifts that can be accepted on behalf of the organization by staff and the types of gifts that require approval from the Trust Management Committee chief executive or chief financial officer; a description of the types of gift restrictions that are acceptable; a listing of the types of planned gift vehicles accepted; a description of the form of gifts accepted;

A statement regarding the organization’s role in gift administration; A statement regarding the disposition of gifts accepted; A statement regarding the organization’s role in gift administration; A statement regarding the responsible party for legal and professional fees to complete the gift; A statement of appropriate reporting, counting, and valuation of gifts on the nonprofit books; Regular review and changes to the policies.

French for "as near as possible French for "as near as possible." The name of a rule employed in the construction of such instruments as trusts and wills, by which the intention of the person who executes the instrument is effectuated as nearly as possible when circumstances make it impossible or illegal to give literal effect to the document. Cy pres

A court also has the power under the cy pres doctrine to order trust funds to be applied to a charitable purpose other than the one specifically named by a settlor when it was the settlor's intention to benefit charity in general and it has become impossible, inexpedient, or impractical to accomplish his or her specific purpose. Since a Charitable Trust can be perpetual, many become obsolete due to changing social, political, economic, or other conditions. A trust established in 1790 to combat yellow fever would, for example, be of little or no practical value now, since that disease has been virtually eradicated as a result of advances in medicine. When cy pres is applied, the court reasons that the settlor would have wanted his or her general charitable purposes implemented despite the changing conditions. Cy pres

Definition: A fund that is made up of gifts and bequests that are subject to a requirement that the principal be maintained intact and invested to create a source of income for an organization. Donors may set up an endowment to fund a specific interest; and a nonprofit's governing body may set up an endowment. In any case, an endowment requires that the principal remain intact in perpetuity, or for a defined period of time, or until sufficient assets have been accumulated to achieve a designated purpose. ENDOWMENTS

An endowment in perpetuity is a fund that is restricted An endowment in perpetuity is a fund that is restricted. Only the interest from the fund can be spent, not the principal that anchors the endowment. Usually, only a portion of the interest or earnings from the endowment (typically 5%) are spent on an annual basis in order to assure that the original funds will grow over time. Professional money managers often oversee endowment funds, investing the money in stocks, bonds, and other instruments. ENDOWMENTS

ENDOWMENTS What Are the Advantages to an Endowment? Stability is the main reason to have an endowment. Small and new nonprofits often only think about the current fiscal year or the next payroll. It is important to get out of that financial trap as soon as possible. An endowment helps diversify your organization's income and reduces your dependency. That you have an endowment can be enormously comforting for donors too...the idea that you plan to be around for a long time. You can also offer donors the option of providing a gift that will keep on giving well into the future, and/or the opportunity to fund the needs of the moment such as operating and program funding. ENDOWMENTS

ENDOWMENTS What Are the Disadvantages of an Endowment? You might be criticized for having an endowment or for having too large of an endowment. Some well-known universities have come under attack recently for growing huge endowments while claiming not to have funds for other uses. Small nonprofits are sometimes criticized for not spending every dime on current needs. (End Time Thought) Even funders such as foundations might slight an organization that already has money. That is unfortunate since it only encourages financially shaky management, but you should take these biases into consideration as you think about setting up an endowment. ENDOWMENTS