A Gift Acceptance Policy helps schools and colleges navigate complex and sometimes risky donor gifts. A policy helps you consider gifts that may or may not align with your mission, vision, and values. It can help you avoid potential public relations issues, and it helps staff understand how to graciously turn down offers that could carry an unacceptable amount of risk.
The following Sample Gift Acceptance Policy can be used as a starting point for your school's policy, or you may use it to strengthen an existing policy. Work with a locally licensed attorney and CPA when developing your own policy or when making changes to an existing policy. This helps ensure you’re following state and federal laws.
[Name of School]
[Date]
The information in this document identifies the ways [Name of School] accepts gifts from donors (individual and corporate) and serves as a guideline for staff involved with accepting gifts, outside advisors who assist in the gift planning process, and donors wishing to make gifts to [Name of School].
This document provides both a process for gift acceptance and guidance to prospective donors and their advisors. The provisions apply to all gifts received by [Name of School] for any of its initiatives, programs, and services.
[Name of School] may decline any gift or pledge that in any way compromises its reputation, that poses an undue risk, or that does not serve its mission.
GENERAL GIFT ACCEPTANCE GUIDELINES
Our school is dedicated to the highest ethical standards when soliciting and accepting gifts. In keeping with this commitment, our school will adhere to the following specific principles:
1. [Name of School] will accept gifts only for programs and purposes that support the mission, priorities, or interests of the school.
2. [Name of School] will not accept gifts:
3. [Name of School] requires Board approval before accepting the following types of gifts:
“Controversial gift” means a gift that includes or could be construed to include assets generated by a business enterprise this is not missionally aligned or could create reputational harm to the school.
4. [Name of School] will hold all agreements with donors and all information concerning donors and prospective donors in strict confidence, subject to legally authorized and enforceable requests for information by government agencies and courts. [Name of School] will only release information concerning a donor if the donor agrees in writing to the release of such information.
5. [Name of School] will seek the advice of legal counsel when appropriate. All legal documents will be reviewed by legal counsel prior to execution.
6. [Name of School] will not provide legal, financial, or other counsel to or on behalf of donors or prospective donors. All information about potential gifts provided by [Name of School] or its agents is for informational purposes only.
7. [Name of School]'s staff encourages prospective donors to have the terms of all proposed agreements reviewed by their own legal and/or financial advisors.
8. [Name of School] states that it is the donor's responsibility to obtain any necessary appraisals, file appropriate tax returns, and discuss any issues surrounding tax benefits with a licensed CPA or attorney.
9. [Name of School] states that fees for preparation of legal documents, appraisals, tax returns, etc. are not the responsibility of [Name of School]. [Name of School] will generally pay normal fees associated with brokerage services appropriate to the service provided.
10. Prohibited payment of fees include:
11. [Name of School]’s staff will not knowingly inflate the value of a gift above the true fair market value in order to provide a tax advantage to the donor.
USE OF GIFTS AND DONOR INTENT
Unless subject to an agreement between [Name of School] and the donor to restrict the gift for a specific purpose, all gifts will be considered unrestricted and may be used for such purposes as the organization determines to be most appropriate.
[Name of School] may elect to decline a current or planned gift if the donor’s intent or focus is beyond the scope of the School’s mission and/or is not consistent with the School’s funding priorities, or if any restriction would make the gift difficult or impossible to administer.
GENERAL GUIDELINES AND POLICIES WITH RESPECT TO TYPES OF GIFTS
[Name of School] will generally accept the following gifts:
Appraisal Requirements
Gifts of property, other than publicly traded securities, must be accompanied by an appraisal if the estimated value exceeds $5,000 and IRS Form 8283 for [Name of School] to sign. A qualified independent appraiser, who cannot be associated with [Name of School] or with any of its leadership, including the Board, or with the donor or donor’s family or business, must provide the appraisal. When the gift funds a specific recognition opportunity, donors agree to make up any shortfalls upon conversion to cash and the level of recognition the donation requires.
Valuing a Gift
NOTE: All valuations should be based upon IRS Rules & Regulations in effect at the time of the gift.
TYPES OF GIFTS ACCEPTED
Cash and Pledges
[Name of School] will accept gifts in the form of cash, check, or credit card, or other electronic transfer mechanisms, regardless of the amount. Checks shall only be made payable to [Name of School].
A pledge can be made to [Name of School] by an individual, corporation, or foundation. Pledges may be made in single or multiple installments. Gifts intended to be made over several years should be evidenced in writing, together with a written timetable acknowledging how and when the donor intends to make the gift.
Deferred Gifts
[Name of School] encourages and welcomes estate and planned gifts. In working with donors who have an interest in a planned giving vehicle, [Name of School] may use a planned giving consultant for advice, direction, and help in preparing the necessary samples and proposals to encourage the donor to make the gift or facilitate the transfer process.
Donors should engage their own advisors and legal counsel to ensure the vehicle matches their personal, estate, and philanthropic intent. Donors who choose to honor [Name of School] in this way may be recognized through [Name of School]’s planned giving recognition publications and events.
Bequests
Bequests of all kinds (fixed or percentage, residual, contingent, or testamentary trusts) are welcome, though [Name of School] may decline gifts from the estates of deceased donors if the gift is not acceptable for any reason. [Name of School] will not act as an executor or personal representative of a donor’s estate.
[Name of School] encourages the following planned gifts:
Gifts of Qualified Retirement Plans
[Name of School] encourages gifts of qualified retirement plan assets. Examples of such a plan might be an individual retirement account (IRA), 401(k), 403(b), simplified employer pension plan (SEP), or a profit-sharing plan.
Qualified Charitable Distributions from IRAs
Current law permits a direct tax-free transfer from a qualified IRA to a qualified charity for up to $100,000 each year by anyone over age 70 ½. [Name of School] encourages such gifts. If the gift is unrestricted and intended for annual support, the donor will receive [Name of School] Fund recognition for the gift even though the donor receives no income tax deduction for the transfer. If the donor is age 72, he or she also may not have to recognize the distribution as taxable income and is credited to the donor in lieu of a Required Minimum Distribution. Refer to Internal Revenue Service publication 590-B for specific information about qualified charitable distributions from IRAs.
Gifts from Donor Advised Funds
[Name of School] encourages gifts from a Donor Advised Fund (DAF). A donor advised fund is a separately identified fund or account that is maintained and operated by [Name of School]. Each account fund is composed of contributions made by individual donors. Once the donor makes the contribution, [Name of School] has legal control over it. However, the donor, or the donor's representative, retains advisory privileges with respect to the distribution of funds and the investment of assets in the account. Since the donor received an income tax deduction for the initial transfer to the DAF, he/she receives no further tax deduction for the transfer to [Name of School], but will receive [Name of School] “acknowledgement” in the Annual reports.
Securities and Bonds
[Name of School] encourages gifts of publicly traded stock. Such gifts should be subject to due diligence, and a plan of liquidation should be carefully considered (although [Name of School] refrains from obligating itself to liquidate the stock in a specific way prior to acceptance.
In most instances, [Name of School] will instruct its broker immediately to sell gifts of marketable securities. Exceptions may be made when the security in question is traded thinly and/or when an untimely sale of stock in bulk might adversely affect the price.
Non-publicly traded securities and other properties should be liquidated at the earliest possible time, keeping in mind market impact as well as other conditions and circumstances relating to such gift. [Name of School] can also hold privately held securities for a period of time as an investment if the [Name of School]’s investment counsel recommend. The staff of [Name of School], shall have the ultimate responsibility for instructing its broker to liquidate such assets.
[Name of School] also recognizes that transferring mutual fund shares is a more complicated process than transferring publicly traded stock, and, therefore, will generally only accept gifts of mutual fund shares that exceed $5,000 in value.
Real Estate
[Name of School] will consider gifts of real property, both improved and unimproved (e.g., detached single-family residences, vacation homes, condominiums, apartment buildings, rental property, commercial property, farms, acreage, etc.), only after a thorough review as set forth below. These guidelines apply only to gifts of real estate located in the United States. [Name of School] may consider such gifts located abroad under special circumstances, recognizing that the legal parameters for transferring and owning real estate in countries other than the United States vary considerably.
Prior to accepting a gift of real estate, a representative of [Name of School] will physically visit and inspect the property. This visit may also include consulting real estate professionals familiar with and knowledgeable about the property in question and the real estate market in the area in which the property is located.
Prior to accepting a gift of real estate, [Name of School] will conduct an analysis of the gift transaction with outside professionals, including real estate counsel. The analysis should include the costs of insuring, maintaining, and liquidating the property, as well as the potential revenue stream or sale proceeds derived from the property. This analysis should also determine the maximum exposure [Name of School] might incur and the level of risk that is associated with the receipt, ownership, and eventual sale of the property.
Under normal circumstances, [Name of School] will not accept outright gifts of real property with a present fair market value of less than $100,000.
Download the Sample Real Estate Checklist for Donations
Gifts-In-Kind
[Name of School] may choose to accept gifts-in-kind after a review determines that the school can sell the property or use the property to support its education or research. If [Name of School] sells or disposes of the property within three years of receiving the gift, the school will file IRS Form 8282 and send a copy to the donor.
Posted August 2022
This is sample policy wording only. Your organization is responsible for compliance with all applicable laws. Accordingly, this policy wording should not be used or adopted by your organization without first being reviewed and approved by a licensed attorney in your area. Brotherhood Mutual assumes no liability in preparation and distribution of this sample document.
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