A beloved member of the community died after a long illness. Her husband and her friends wanted to honor her memory with a fund that would sponsor professional development programs. They turned to the organization on whose board the deceased woman had served for many years and suggested that they would make a gift of $100,000 to start a named fund that would underwrite annual staff training programs.
The organization’s executive director was thrilled…until she learned that the gift came with restrictions. First, the grieving husband would manage the funds. Also, he would have veto power on any programs undertaken in his late wife’s name. Further the friends said that they would like to run two annual fundraisers exclusively for the fund among the supporters of the organization.
Our client, the executive director politely said, “Thank you, but no thank you.” She told the donors that the plan was not in compliance with the organization’s Gift Acceptance Policy. She explained that the board had tasked the foundation committee who employed professional managers to invest the assets of the organization and no individual donor would be permitted to manage any part of gifted assets. Further, the program committee and staff decide what programs to provide.
The Gift Acceptance Policy made all this very clear.
And, if your organization does not have such a statement then you should begin to create one now.
Why do you need a Gift Acceptance Policy?
- …so you will know how to respond no matter what unexpected gift is offered.
- …a reason to pause before you say “yes” or “no, thank you.”
- …time and space to evaluate any donation.
- …if the gift acceptance policy says no to a type of donation, e.g., non-publicly traded securities, it saves time and cost of considering each gift on a case-by-case basis.
- …so you can respond more quickly and more confidently.
- …to tell donors that gift valuations for gifts of tangible property—and the cost for appraisals—are their responsibility
What should a Gift Acceptance Policy Contain
- Introduction—the organization solicits and accepts gifts to fulfill mission
- What are acceptable gifts and conditions?
- Cash
- Checks
- Credit cards
- Pledges
- Publicly traded securities
- Which gifts require Board approval upon due diligence
- Closely held securities
- Real estate
- Life insurance
- Tangible personal property
- What kinds of planned gifts are acceptable?
- Bequests
- Charitable gift annuities
- Deferred gift annuities
- Charitable remainder trusts
- Charitable lead trusts
- Retained life estates
- What are the minimums for named endowment funds?
Above all, as you draft your gift acceptance policy be sure to check with your lawyers and accountants. But, when you write the policy statement, be sure to maintain a friendly tone, avoid legalese, and negative language.
Hopefully, you will never have to decline a gift. With a gift acceptance policy, you will be prepared for any eventuality.
You might wonder if you could regret turning down a contribution. More importantly, with a gift acceptance policy, you will never regret accepting one, either.
If you would like a free, 30-minute consultation to speak about your Gift Acceptance Policy, or anything else, Click here to schedule a time with me.