If your organization doesn’t have a Gift Acceptance Policy, first consider why you need one. If such a policy is already in place, consider reviewing it annually with board members and fundraising staff. This routine practice educates new members to the team and affords regular consideration of changes to the policy.
As you draft your policy, incorporate these seven elements:
1) The organization’s mission and purpose. Your guiding principles should frame the decisions to accept—or decline—gifts to the organization.
2) The purpose of this policy. The aim of this policy is not to restrict the organization, but rather to guide decisions and protect the organization’s assets, fundraising staff and donors.
3) Use of legal counsel. Outline circumstances when legal counsel should be consulted, such as reviewing certain gifts, contracts and legal documents, transactions with potential conflicts of interests, etc. Specify when appraisals are required, and who will pay for the appraisal.
4) Consideration of a donor’s conflict of interest. The organization should encourage donors to consult with their professional advisors before making substantial gifts to the organization.
5) Donor restrictions on gifts. What kinds of gift restrictions does the organization allow a donor to impose?
6) Composition of a Gift Acceptance Committee. Inevitably, there may be rare exceptions to the gift acceptance policy or unique gifts which require consideration. Exceptions to the gift policy must be rare, well-supported and reasoned.
A small team of the organization’s financial governors may be named to a review board for consideration of these exceptions. These team members may include the chief financial officer, chief fundraising personnel, chief operations officer and president of the board. When applicable, the team may consult experts such as environmental analysts, property brokers and legal advisors.
7) Types of gifts the organization receives. Small non-profits may not be able to accept all types of gifts, due to expertise in handling the gift or the resources available. Commonly, organizations receive gifts of cash, tangible personal property, marketable securities, real estate, life insurance. There may be reasons why an organization may decline any of these types of gifts. Such reasons for exemption should be outlined in the policy.
In the midst of ongoing responsibilities of cultivating relationships and increasing funds for your organization, developing foundational policies can be overlooked.
If your organization doesn’t have a Gift Acceptance Policy, here’s why you need one:
- Not every gift is a “good” gift. For many non-profit organizations, this basic statement can be difficult to reconcile. There can be a number of reasons a donor’s gift may burden an organization. Consider hidden costs such as taxes, fees and liability coverage to keep the gift; the costs of staff time to manage or care for the gift; and the likely market or environmental factors which may implicate selling the gift. A gift acceptance policy helps an organization from receiving gifts with unexpected costs of the organization’s time, money and exposure to liability.
- A policy guides fundraising staff. When a donor wants to make a gift to the organization, fundraising staff are conditioned to accept it. But if not every gift is a good gift, fundraising staff may see declining a donor’s gift as threatening to the relationship they have worked so diligently to cultivate. A gift acceptance policy defuses the urgency of deciding with a pending gift, affording the fundraising staff to pass along the unusual gift offer to the gift acceptance team for consideration.
- A policy protects the organization. It’s not unusual for gifts to come with unexpected costs such as professional fees, appraisal expenses or other dues. A well-developed policy outlines who will pay for these costs. Detailing very clearly how assets are handled by the organization eliminates misunderstanding from the donor as to what is expected.
If you already have a Gift Acceptance Policy, it’s important to review the document annually with board members and fundraising staff. The policy, meant to guide—not restrict—your team, may require changes unique to your organization’s circumstances, which may restrict or expand types of gifts received. The policy should allow rare exceptions for specific consideration, and should explicitly state how those rare exceptions should be handled.