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How Strong is Your Nonprofit’s Gift Acceptance Policy?

February 06, 2024

Does your organization have an effective gift acceptance policy in place? Nonprofits often receive unexpected major gifts and it’s essential to have a strong policy in place to accept the gifts. Read on.

Attention nonprofit organizations…are you prepared to accept major gifts in 2024? It’s crucial to establish a strong gift acceptance policy.

What is a gift acceptance policy?

A gift acceptance policy is a must for nonprofit organizations. It outlines what charitable donations your organization can and cannot accept, and establishes the procedures your organization must follow upon receiving such donations. The goal of a gift acceptance policy is to ensure that the organization receives donations that align with its mission, values, and strategic objectives while adhering to legal and ethical standards.

Many donors prefer to donate non-cash contributions, meaning anything other than cash, checks, money orders and credit card donations. As you might imagine, non-cash contributions can be unique and uncommon, and are often times things that you do not need/want. Everything from artwork to vehicles to acres of land can be presented to your organization. A gift acceptance policy allows organizations to avoid having to turn down gifts that do not serve their missions or are otherwise too complex to take on.

"It is crucial to establish a strong gift acceptance policy for maintaining ethical standards, preventing conflicts of interest, protecting reputation, legal compliance and aligning with the organization’s mission. Without a strong gift acceptance policy, you can put your organization in a very uncomfortable position when a donor provides a gift that does not fall in line with your mission." Jamie Hansen, CPA, MSNM

Other benefits of gift acceptance policies include:

  • Provides donors transparent access to your standards and procedures
  • Provides your organization with an outlet to disclose your gift review process. For instance, let’s say you accept real estate donations. Your gift acceptance policy can outline what donors should expect in the review process.
  • Helps you avoid unintended tax liabilities
  • Helps staff and volunteers easily understand what gifts can and cannot be accepted
  • Helps you avoid awkward instances of having to use a spur of the moment judgment call

What should a gift acceptance policy address?

Your gift acceptance policy should address the following questions:

  1. What types of gifts will the organization accept?
  2. What kinds of gifts will the organization not accept?
  3. Under what circumstances will gifts be accepted?
  4. How will gifts be recognized and tracked?
  5. How will the organization handle major gifts including, but not limited to, artwork, vehicles, or real estate?
  6. How will the organization determine the value of non-cash gifts?
  7. What are the additional considerations, restrictions and/or agreements that must be in place before accepting gifts like tangible personal property, cryptocurrencies, anonymous gifts, etc.?

In addition, your gift acceptance policy should outline reporting requirements that you must comply with when accepting gifts. This includes form 8282 (Donee Information Return), written acknowledgements and disclosures, form 88283 (noncash charitable contributions) for gifts over $500, and form 990.

Gift acceptance policy example

  1. Friendly Neighbor, Inc. accepts gifts that align with its mission.
  2. Contributions are generally welcomed from individuals, partnerships, corporations, foundations, government agencies, or other entities, without specific restrictions.
  3. As part of its routine fundraising efforts, Friendly Neighbor will receive donations in the form of money, real property, personal property, stock, and in-kind services.
  4. Certain types of donations require prior assessment before acceptance, considering potential special liabilities they may pose for Friendly Neighbor. Examples include gifts of real property, gifts of personal property, and gifts of securities.

Wondering if your policy is strong enough? We can help. Contact us.

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