With fall approaching, now is a great time to think about your gift acceptance policy. Why now? Because whether or not your organization’s fiscal year follows the calendar year, you undoubtedly enjoy a surge in donations at year-end. A solid gift acceptance policy can help you to sort through any “unusual” gifts that may be coming your way later this year!
If your organization already has a gift acceptance policy in place, consider taking some time this fall to review and update it. Having a solid policy in place before December can save you headaches down the road.
Why Gift Acceptance Policies Matter
In short, a gift acceptance policy is a written description of the types of gifts your organization accepts, the form in which those gifts may arrive and your organization’s role in gift administration. A gift acceptance policy is a great tool to manage donors’ expectations regarding any assets they might consider gifting to your organization.
A strong, simple set of gift acceptance parameters can help you:
Define acceptable and unacceptable gifts. For example, will you accept gifts of automobiles, real estate, art, or other non-cash gifts? If so, how will you handle these gifts? (Some gifts may result in more hassle or expense than benefit to your organization!)
Evaluate potential gifts. For example, if you accept a piece of art, will you have it appraised for value? Who will conduct the appraisal?
Run a disciplined development operation and educate internal stakeholders on how to execute it well.
Put your ethics on display. Your gift acceptance policy demonstrates your respect of donor intent and how you communicate with donors about their gifts. Aim high!
Communicate timing for how you accept and process gifts. For example, will you acknowledge a donation check dated December 31, 2014 but received in your office on January 5, 2015 as a 2014 donation or a 2015 donation?
What Can Happen If You Don’t Have a Policy
The most disastrous potential outcomes of not having a gift acceptance policy have to do with ethics – real and perceived. A Harris poll conducted a couple of years ago revealed that only 1 in 10 people in the United States believe that charities make ethical use of donated funds. Wow, that’s not a large number of people!
You can address this stigma head-on by creating a thoughtful and thorough gift acceptance policy. Skip creating a policy and you’ll risk incidents of poor communication that lead to suspicion, mistrust, hurt feelings, loss of confidence, bad PR and possibly a decline in donations, especially large ones.
Gift Acceptance Policy Fundamentals
It’s difficult to create a policy while you are fielding the questions and dealing with the issues that very policy is meant to govern. So don’t delay. Draft a simple policy and start shopping it around your organization to the appropriate people to get feedback, buy-in and approval.
To start, you, together with your CEO, your attorney or professional planned giving advisor, and your development committee need to be involved in creating these policies. Eventually your entire board should review and approve them, too. At minimum, your gift acceptance policy should:
State the policy’s purpose.
Identify the types and forms of acceptable gifts.
Define the acceptable restrictions that may be placed on gifts.
Indicate the circumstances in which a donor should seek advice from an attorney or other professional counselor before making a gift.
The Nonprofit Policy Sampler from BoardSource is another great resource. It’s a paid service offering tips on over 70 policy areas including gift acceptance policies, and some sample policies, too. It may be a worthwhile investment if your organization will use it to establish other policies.
A Final Thought…
Sometimes fundraisers shy away from policy creation work. It requires you to stay in your office in front of your computer, alone. You’re not out in the world doing what you do best – telling your organization’s story to potential donors and listening to theirs!
But if you think of policies as part of a foundation of trust and transparency that allows you to build (and maintain!) donor relationships, you can see how important they are. Invest some time here and you, your donors, your development operation and your organization as a whole will reap the benefits later on.
Does your organization have a gift acceptance policy in place? Tell us in the comments box how you went about creating it.
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