2. Does the Organization Have A Case For Support?
• Is not a legally required document
• It seeks to answer the question: Why should somebody give to your
organization?
• It will provide a common basis for communications to donors and
others.
3. What Is A Gift Acceptance Policy?
• Is also not legally required.
• It is considered a fundraising best practice.
• Is considered an essential education tool for Board of Directors and
staff.
• It should outline required steps in the acceptance process.
4. Why do you need a Gift Acceptance Policy?
• It will set a policy on which gifts you will accept.
• It will also set a policy on which gifts to decline. For example: a gas
station.
• It may also outline when you would decline a gift from a particular
donor. I.e. Jeffrey Epstein.
• The Board and staff need to understand the types of gifts.
• It can protect the Board, staff and donors from misunderstandings
and liability
5. What is the process for creating the policy?
• Board and staff should form a committee to outline desired gifts
• The committee should solicit opinions from other Board, staff and
stakeholders.
• The committee should examine past history of the organization and
other organizations
• Have it reviewed by legal counsel
• It should be approved by the Board of Directors.
6. Important Items To Cover
• Which assets will you accept?
• Which assets will you decline?
• With what assets will the organization do its due diligence, such as
with real estate?
• When is Board of Directors approval required for a gift?
• Where does the money go if donor doesn’t specify?
7. Additional Points To Cover
• What will happen with a restricted gift?
• Donor must get their own legal and tax advice!
• When will the organization provide form 8282?
• When will the organization provide form 8283?
8. Registration with the Illinois Attorney General
• You are not allowed to raise money in Illinois if you haven’t
registered.
• If you have more than $4,000 in charitable assets at any time in the
prior 12 months, you must register.
• It is required by the Illinois Charitable Trust Act. 760 ILCS 55/
9. What if your organization doesn’t register?
• Many organizations do not know or haven’t taken the time to
register.
• Penalties can be severe, including being required to return donations.
• If somebody complains, the organization’s image can be tarnished.
• REPUTATION IS EVERYTHING!
10. Giving a Receipt
• There is no requirement that the charity give a receipt!
• Donors ask so they can claim a tax deduction.
• Must contain certain information to be valid
• Must also be given not later than the deadline for the donor to file.
11. What should be in the receipt?
• A description of the property.
• The value if it is cash.
• A statement that “No goods or services were given in exchange for
the donation.”
• Name of the organization and the FEIN.
• If there is a quid pro quo, the organization must assign a value to the
item given to the donor.
12. Optional provisions for the receipt/letter
• A reminder that the donor must get his own appraisal for the
donation, if required.
• A reminder that the organization may sell the property within 3 years
and would be required to file form 8282
13. What if the organization hired a fundraiser?
• Not for profits frequently hire fundraisers.
• May be for an endowment of building campaign
• Contract must outline what amount goes to the fundraiser and what
percent goes to the organization.
• Fundraiser must register with the Attorney General!
14. Gift Agreements-Why do I need one?
• A gift agreement is a signed agreement that a donor has pledged or
agreed to give certain asset(s).
• Is typically used for larger gifts
• Is especially important for organization that is relying on the donation
for a building or endowment campaign
15. Gift Agreements-What should it contain?
• The agreement must be in writing
• It must contain the name of the donor and the organization.
• It should describe the asset given and if pledged over several years,
the relevant time period.
• It should describe any quid pro quo, such as naming rights the
organization will give to the donor.
16. When is a gift agreement enforceable?
• If the organization is giving something back, it becomes enforceable.
• The quid pro quo can be anything of value, including naming rights.
• What if the donor breaches the agreement?
• You can enforce it, but should you enforce it?
• Factors: Time, expense, possibly bad publicity, failure of the
organization if donation doesn’t come through.
17. When is a gift complete?
• A Gift is usually complete when the donor relinquishes control.
• A check is a completed gift when mailed, as long as it clears in due
course.
• A QCD is considered complete when it arrives at the charity!
18. Fundraising Through Social Enterprise
• Charities are looking for additional sources of revenue.
• Giving in 2019 was down in the first 6 months.
• Earned income can present opportunities.
• Before starting, did the organization have a business plan?
• Has it considered the potential liability?
19. Unrelated Business Income
• Unrelated business: carries on a regular activity with a goal to profit
and the activity is not related to its mission.
• The net profit from such activities is subject to tax at corporate rates.
• In extreme cases, with poor planning, the activity can endanger the
organizations tax exempt status.
20. Summary of fundraising rules
• As with so much that is tax driven, rules get complicated and are not
always clear.
• Nonprofits need to have policies in place that will reduce the risk of
liability and angry donors.
• Charitable giving declined in the first 6 months of 2019. Alternative
revenue will become more important.
21. Case studies
• Your client calls. Their best donor wants to give the organization
their Hummel collection. What do you advise?
• Client calls. Their big fundraiser is in 2 weeks and they have just
learned their tax exempt status is revoked with the IRS. They haven’t
filed a 990 for 3 years. What do you say?
• You want to give a 2 week rental of your Montana vacation home to
the organizations silent auction. How much can you deduct?
Hinweis der Redaktion
Many organizations have never done one.
Is a time consuming but important document to have.
