Many nonprofits rely on charitable gifts from their benefactors to sustain their operations. Unfortunately, not all not-for-profit organizations are able to receive necessary resources to carry out their mission. In uncertain times, a charitable organization may accept any and all gifts. A gift of $500,000 cash can easily be put to use, but what about a donation of $500,000 in real estate or artwork?
Non-cash donations may come with additional expenses and hardships that the non-profit did not consider at the times the gifts were accepted. When it comes time to sell that $500,000 piece of real estate, sales agent commissions, title insurance, inspections, possible EPA remediation, and repairs to the property can result in thousands of dollars in unforeseen expenses. Developing a formal gift acceptance policy can guide a non-profit organization as to whether a charitable donation should or should not be accepted. A well-written policy can be very helpful to staff, as well as donors.
When developing a gift acceptance policy, consider the following:
A comprehensive gift acceptance policy will provide a guide for both the organization’s staff and donors, as well as mitigate the risk to a non-profit. By clearly documenting what will and will not be accepted, as well as actions that must be taken by the donor, the organization can focus their efforts on donations that further their mission.
Article written by:
Kevin VerHoef, CPA