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Gift Acceptance Guidelines - ECFA Evangelical Council for

By Terry Phillips,2014-07-10 16:27
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Gift Acceptance Guidelines - ECFA Evangelical Council for ...

     Provided by: Evangelical Council for Financial Accountability

    440 West Jubal Early Drive, Suite 130 ? Winchester, VA 22601

    540-535-0103 ? 800-323-9473 ? Fax: 540-535-0533

    www.ECFA.org ? Email: info@ECFA.org

    Gift Acceptance Guidelines

    Purpose of the Guidelines

    1. To protect the interests of the donor, the charity, or causes named as the

    beneficiary of a gift.

    2. To make certain all gifts to the charity are structured to provide maximum benefits

    to the donor and the named entity.

    3. To encourage interested donors to make gifts without encumbering their own or

    the charity’s financial or other resources.

    4. To optimize opportunities to secure gifts from individuals to causes without

    compromising or endangering the reputation of the charity.

    General Guidelines

    1. No irrevocable gift, whether outright or life-income in character, will be accepted if

    under any reasonable set of circumstances the gift would jeopardize the donor’s

    financial security.

    2. Any gift presented to the charity without the approval of a charity representative

    shall not be received until after it is determined that the intended gift and the

    manner in which it is given is in the best interest of the donor. 3. The Executive Director of the charity shall be apprised of any potential gift or

    bequest to the charity. Each case shall be reviewed on a regular basis by the

    planned giving staff with the Executive Director to ensure proper action,

    accounting, and acknowledgement surrounding each gift.

    4. Donors should always be advised of their own need for legal counsel to assist

    them in the process of making their gift. Charity staff shall avoid becoming involved

    in what can be interpreted as unauthorized practice of law; any suggestions made

    Gift Acceptance Guidelines

    Page 2 of 5

    to a donor by charity staff should be accompanied by encouragement to seek

    advice from the donor’s personal counsel and/or financial advisors.

    5. Every precaution shall be taken by the charity staff to protect the privacy and

    confidentiality of each donor and the donor’s family. Permission must be obtained

    before any public acknowledgement is made of gifts received by the charity. The

    right of anonymity must always be respected.

    6. The charity staff shall attempt to have the Executive Director meet with each

    individual donor prior to or concurrent with the execution of a gift agreement. In the

    case of charitable remainder trusts or other complex arrangements such a meeting

    is mandatory. All complex arrangements must be reviewed by the charity’s

    counsel.

    7. In all cases, any professional advisors such as Attorneys or CPA’s hired by the

    charity must recognize their client is the charity, and that they do not represent the

    donor. Professional advisors for the charity will always seek to work with the

    advisors for the donor.

    8. Gifts shall not be accepted where the mental competency of the donor is in

    question. However this does not preclude a person acting in the capacity of

    Attorney-in-fact from making a gift from the estate of the individual granting the

    Power of Attorney. In this event every consideration shall be given to the donor’s

    charitable giving habits and financial condition to ensure that the gift is in the best

    interest of the donor and is carried out in a prudent manner. The donor’s Power of

    Attorney must specifically grant the power to make charitable gifts.

    9. The charity will provide gifts receipts meeting IRS substantiation requirements for

    property received by the charity as a gift. However, except for gifts of cash and

    publicly traded securities, no value shall be ascribed to any receipt or other form of

    substantiation of a gift received by the charity.

    10. Investment considerations and gift considerations are in all cases to be evaluated

    separately, each on their respective merits. In no event shall the offer of a gift be

    tied in any way to an investment action or decision by the charity.

    11. The charity shall in no way compensate, whether through commissions, finders’

    fees, or other means, any third party for directing a donor to the charity.

    12. All written instruments setting out the description and terms of a gift shall be

    reviewed by legal counsel on behalf of the charity and a written report made to the

    Executive Director on its compliance with applicable laws and regulations as well

    as an explanation of its potential liability to the charity.

    Gift Acceptance Guidelines

    Page 3 of 5

    Types of Gifts

    1. Both current gifts and deferred gifts shall be actively encouraged. Response to

    each type of gift should be prompt without regard to the monetary value or timing

    of the individual gift. The decision to accept or reject any gift, whether current or

    deferred, shall be weighed on the merits of the individual gift, always regarding the

    donor’s intent and financial condition as well as the benefit to the charity’s causes.

    2. Any gift subject to a restriction shall be accepted, only after review by the charity’s

    counsel and/or the Board of Trustees. Every effort shall be made to ensure the

    restrictions on the gift do not negate any potential benefit to the intended cause.

    Also the restrictions should not encumber the charity staff with excessive

    additional responsibilities as to make the gift inadvisable.

    3. The charity should not be engaged in the execution of notarial wills. The charity

    may, however, provide gift clauses for inclusion in wills by donors and/or their

    personal counsel.

    4. Gifts of real estate are acceptable only after the following criteria are met:

    a. A personal inspection is conducted by an appropriate charity staff member.

    b. Donor has received a copy of “XYZ Ministry Policies Regarding Real Estate.”

    c. Determination is made that the property has not been utilized in a manner that

    would cause embarrassment to the Ministry.

    d. An appraisal satisfactory to the IRS gift substantiation requirements has been

    completed and the charity and donor have reached an understanding as to the

    valuation of the property.

    e. Debt, insurance, homeowners’ association fees, property taxes and other

    carrying costs have been assessed as to the effect on the advisability of taking

    the gift.

    f. Appropriate steps have been taken to determine if any other liabilities might

    attach to the property such as leases, contracts, or servitudes.

    g. All pertinent information regarding the property is supplied by the donor. This

    would include names of owners and co-owners (and percentage ownership),

    recent tax statements, address and/or legal description, and description of

    current use.

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    h. Donor must convey all his/her undivided interest in the real estate including any

    mineral interests. The IRS will not consider a gift of partial interest and would

    disqualify such a gift from income and estate tax deductions. i. The charity may recover any costs of managing real estate by charging a fee

    that is determined by the schedule set by the Board of Trustees. j. The donor must be willing to bear the costs associated with the gift of real

    estate, such as legal fees, real estate commissions, management fees, and

    appraisals, or have these costs deducted from the sale of the property. k. The Board of Trustees must approve any exception.

    5. Gifts of real estate are ordinarily acceptable only after it has been determined that

    no reasonable possibility exists that the property could be contaminated by toxic waste. An initial personal inspection shall be made by an appropriate charity staff member. This inspection shall include both a physical inspection and an investi-gation of the recent ownership history of the property. If, after inspection, it is determined that there is a substantial likelihood that the property has been

    environmentally impacted, the property may not be accepted. If, after inspection, it is determined that a reasonable possibility exists that the property has been

    environmentally impacted, an inspection must be made by a licensed environ-mental consultant, who must certify, within the context of a Phase 1 Site

    Assessment, that no contamination exists before the property may be accepted. The inspection should be performed in general conformance with the scope of ASTM Practice E1527. The expense of inspection must be borne by the donor

    unless an exception is approved by the Board of Trustees.

    6. Gift annuity contracts are to be entered into by the charity upon approval of the

    Executive Director. In no event shall a gift annuity contract be agreed to which pays an income at a rate in excess of an actuarially prudent rate of return. The charity will invest the gift in a manner that will attempt to protect the integrity of the principle amount given. Gift annuities will not be funded with real estate or other illiquid assets. Donors must be reminded in correspondence or conversation with them and their advisors that a qualified charitable gift annuity is not insurance under the laws of their State.

    7. Gifts of life insurance shall be accepted after examination of funding of the policy

    and the gift substantiation requirements. Charity staff members shall avoid even the appearance of giving an endorsement, either implied or direct, to any life insurance product, company, or agent.

    Gift Acceptance Guidelines

    Page 5 of 5

    8. Where a personal residence is the subject of a gift, it will not be accepted without

    the approval of the Board of Trustees if the right to utilize the residence is vested

    in a person other than the donor. Gifts of personal residences will be subject to the

    charity’s real estate policies and environmental assessment procedures.

    9. Gifts of oil and gas right may be received absent extenuating circumstances such

    as extended liabilities or other conditions making receipt of the gift inadvisable.

    In that regard, each potential oil and gas gift shall be examined by a professional

    advisor with experience in mineral leases for such extenuating circumstances

    which would argue against receipt of the gift. Working interests in oil and gas,

    which entail special problems regarding taxation either to the charity generally or

    to individual trusts which receive the gifts, and may also entail extended liabilities

    for personal, property and environmental damage should not be considered.

____________________________________________________________________________

    This text is provided with the understanding that ECFA is not rendering legal, accounting, or other

    professional advice or service. Professional advice on specific issues should be sought from an

    accountant, lawyer, or other professional.

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