Not all charitable contributions are created equal. Instead of raising your organization’s profile or bottom line, some gifts create controversy or result in more challenges and expense than they are worth. The development of a formal policy that clearly states your organization’s position on gifts it will accept can eliminate awkward situations with donors and protect your organization’s reputation.
Each nonprofit is unique and you will need to take into account issues specific to your organization when determining what kinds of gifts are appropriate. However, there are several common factors for nonprofits to consider when drafting a gift acceptance policy, especially concerning conditional gifts of property. They include:
Gifts your organization currently accepts, as well as gifts it has declined in the past, should also be evaluated and considered when drafting and implementing the policy. The policy should also define the process of accepting gifts and identify who is responsible for decision making.
An effective gift acceptance policy will help manage donor expectations while providing guidance to board members and staff. It is prudent to engage your organization’s legal counsel in the drafting process. Once drafted, the policy should be formally approved by the Board of Directors.
By Christine Haber, CPA, CFE, Supervising Senior, chaber@legacycpas.com