Aspire. Ascend. Achieve
19 Sep

Wrapping Up a Gift Acceptance Policy

When you receive a gift from a contributor, do you immediately feel fortunate and quickly send a thank-you note from your organization? If you do, that’s likely a mistake, because all gifts aren’t created equal. Having a gift acceptance policy to refer to – and using it to decide if you should accept a donation – is important to your organization’s balance sheet, workload and reputation.

Saying “No” to a Gift

While it might be human nature to accept gifts graciously, some nonprofits are turning certain gifts down, citing issues of condition, space limitations and unsuitability to their missions.

A gift policy provides an objective way to decline a gift but still maintain a good relationship with the contributor. A representative of your nonprofit can explain to the donor that previously set policy doesn’t allow your organization to accept the gift – in other words, “it’s nothing personal.”

Moreover, a gift acceptance policy contributes to good governance because it disciplines your organization to weigh the advantages and disadvantages of accepting and administering a gift. Also, the revised IRS Form 990 asks nonprofits receiving more than $25,000 in noncash contributions whether they have a gift acceptance policy. (A policy isn’t legally required, and the form currently solicits no details.)

Finding the Perfect Fit

A strong gift acceptance policy describes what kinds of gifts are acceptable and how they will be managed by your organization. It also should state your organization’s mission, the policy’s purpose, and the types of gifts that should be reviewed by an attorney before they’re accepted. And it should include the role of your nonprofit’s gift acceptance committee, if you have one, and the steps involved in an annual review of your gift policy and who will conduct it.

Mold your policy to fit your nonprofit’s size and characteristics and involve both your staff and your board in the development process.

Judging What You Can Handle

When forming your gift acceptance policy, start with a self-assessment. Your nonprofit must determine its ability to manage each type and form of gift. For example, it may not want to accept gifts of real estate if it isn’t staffed to manage the property or isn’t willing to act as the landlord.

Another example: Tangible personal property, such as furniture or collections, may need insurance, special display cases or off-site storage. This could require your organization to incur substantial out-of-pocket costs for years to come. Ask yourself if your nonprofit has the resources to manage such gifts – and whether it wants to do so.

About the Author

Spire Group, PC Spire Group, PC
Spire Group, PC was formed in 2012 from a merger that united two of the region’s leading full-service CPA and Consulting firms: Carr, Daley, Sullivan & Weir and SGA Group, PC. Together, Spire Group, PC is uniquely positioned to put our proven business expertise and dedication to work for you, offering an even more comprehensive set of solutions.

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