Gift Acceptance Policies

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Should your nonprofit accept every gift that comes its way? It's hard to say 'no thank you!' to donors, but sometimes...that's the more prudent path.

There are some kinds of gifts (think horses, houses, and hospitals, as just 3 examples) that your nonprofit simply may not want to - or should not - accept. Some gifts may result in more hassle and expense than benefit to the organization. This is where a well-considered "gift acceptance policy" can be a help.

Manage expectations with gift acceptance policies

A written gift acceptance policy can help manage the expectations of donors, and also serve as guidance for board and staff members who are on either the asking, or receiving end, of contributions. The most significant reasons to adopt a gift acceptance policy include:

  • Accepting some types of gifts may run counter to the nonprofit's values - so a gift acceptance policy can be useful to underscore why the nonprofit cannot accept the gift.
  • The nonprofit may simply not be equipped to either dispose of or manage the ongoing requirements of maintaining the value of certain gifts, such as real estate.
  • Having a gift acceptance policy in place is considered a "best practice" by the IRS which asks whether a nonprofit has a “gift acceptance policy” (and requires nonprofits that respond “Yes” to complete Schedule M, as well as report any non-cash contributions/in-kind gifts).

Practice Pointers

  • Consider who the audience will be for your nonprofit’s gift acceptance policy: Will the policy help guide prospective donors who are considering a gift? Or is the policy only intended to provide guidance for staff and board members?  Or both – Some nonprofits adopt a policy but also draft guidelines to help staff and board members put the policy into practice.
  • For maximum financial transparency, consider posting the policy on your nonprofit’s website which helps manage donors’ expectations before they approach your nonprofit with a non-standard gift.
  • If the policy will not be linked from the website, how will it be distributed so that individuals who are considering a gift can be informed about the policy?
  • Consider including in the policy or in guidelines for staff that prior to accepting certain types of gifts, such as real estate, the nonprofit will conduct a review and/or consult with legal counsel – and for other types of gifts, such as cash, no review is required.
  • Should the policy identify circumstances or make reference to the fact that in certain situations donors should seek professional advice prior to making a gift, and that the nonprofit will not provide advice directly to the donor because that would pose a conflict of interests?
  • Consider the usefulness in certain situations of a “gift acceptance committee,” or task force, composed of individuals with appropriate expertise and experience to evaluate gifts and decide whether or not to accept them.
  • If there are specific types of contributions that are or are not acceptable to the nonprofit, it is best to be transparent and name them in the policy.
  • As with all policies – who is accountable? Will the policy be evaluated from time to time, and who should conduct the review?

Resources

For more information about fundraising, we encourage you to review the Council of Nonprofits’ fundraising resources.

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