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Making Things Easier With a Gift Acceptance Policy

Not-for-profit organizations are always appreciative of gifts and donations made by people, foundations and corporations that support their mission. These contributions not only help with budgeting and expenses but they can be used as a public endorsement of the organization’s work.

Yet, it’s possible that these donations can create problems and become more trouble than they’re worth – literally and figuratively. Establishing a formal gift acceptance policy can alleviate some of those problems.

In fact, Schedule M of Form 990 specifically asks, “Does the Organization have a gift acceptance policy that requires the review of any non-standard contributions?” These are any contributions that would not directly be expected to satisfy the not-for-profit’s core mission, such as stock in a closely-held business or rare and unusual items.

For example, suppose a donor wanted to give an organization a piece of real estate. But after accepting the gift, it’s discovered that there’s a leaky underground storage tank on the property that has contaminated a nearby stream… and that the cost of the environmental cleanup and future inspections might be hundreds of thousands of dollars.

Or suppose someone wanted to donate perishable food items to a not-for-profit that assists domestic violence victims. However, the organization doesn’t have the proper storage facilities for the food or the equipment needed for preparation.

A gift acceptance policy should include the following:

  • A statement that the not-for-profit will only solicit and accept donations that are in line with its mission
  • A statement that the not-for-profit must review any in-kind donations of real and personal property prior to acceptance
  • Acknowledgement of which governing body at the organization will review the potential gift (e.g., the board of directors or executive committee)

While it’s hard for a not-for-profit to decline a gift from a well-meaning donor, it is better to be able to explain a decision with a clear policy than to be faced with awkward conversations and bad feelings.

Let the professionals at Dembo Jones help you draft a formal gift acceptance policy.  Contact us today to get started on creating the policy that will work best for your organization.