Nonprofit organizations typically would not want to turn down the generosity of its donors. However, the reality is that some gifts that may come with “strings attached” that might do more harm than good for the organization. If you have ever found your nonprofit in this situation, it may be time to implement a giftNonprofit Gift-Acceptance Policy acceptance policy. A gift acceptance policy outlines the types of gifts a nonprofit receives, as well as those it will have to politely decline. It is vital to protect the interests of a nonprofit while maintaining strong relationships with donors.  Below are some reminders when drafting this document:

  • Gifts must align with the organization’s values: Nonprofits are expected to uphold their core values and mission statements in all their business endeavors. If accepting a gift would somehow jeopardize the values of an organization, the nonprofit must deny the donation. It is also useful for the organization to explain why they cannot accept the gift. Living out core principles and a mission statement is always the priority.
  • Include which gifts will and will not be accepted:  Some gifts may have a long-term impact or legal obligations that a nonprofit is not prepared to handle.  The gift acceptance policy should state which types of assets the organization will accept or not accept. Additionally, the organization should provide names of the people who have authority within the organization or a third party to make decisions about inquiries regarding more complex gifts.
  • Describe important protocols in this process: While nonprofits do not want to make it too complex to donate, certain steps must be taken at the time the gift is donated. It is necessary for the organization to have firm accounting policies for how to address pledges, non-cash assets, and other common forms of donations. Additionally, organizations must provide donation acknowledgements to the donor. These include a description of the gift, the method in which it was given, who provided the gift, the date it was provided, and the fair value of the gift. Having a thorough process will avoid confusion in the long run.

If you have any questions or concerns about your organization’s gift acceptance policy, please contact the professionals at Gilliam Bell Moser LLP.