Should Our Not-for-Profit Organization Have a Gift Acceptance Policy?
March 03, 2016
By Julie Floch, CPA
With any new policy implemented at an organization, there are costs and benefits that must be considered. Perhaps driven by a question on Schedule M of the federal Form 990, as to whether an organization has this policy, boards have been considering whether a gift acceptance policy is desirable for organizations they serve.
There is no blanket “correct” answer, but for organizations that either receive, or have the possibility to receive, diverse gifts, this policy is useful in setting parameters as to what is acceptable and practical for the organization. For example, gifts of stock seem desirable, but what if the stock is a company that is inconsistent with the mission of the organization? Should it be accepted anyway? Again, there is no “correct” answer here, but it’s certainly something boards need to consider.
- It sets clear guidance for the board, staff and donors.
- It helps to avoid accepting some gifts that may run counter to the mission of the organization.
- It helps to avoid gifts that are simply not practical for the particular organization (real estate, boats, or other assets that may be costly to manage and/or dispose of).
- It helps to alleviate or at least manage conflicts of interest.
- It creates direct accountability for acceptance of (in)appropriate gifts.
- There are costs associated with implementing any new policy.
- Consulting with legal counsel after drafting such a policy is important to ensure that any legal considerations or pitfalls have been addressed.
- The policy must be monitored and individuals held accountable, all of which are time costs.
- Opportunities for gifts may be declined and careful management of these potential donors must be performed, so as not to discourage other types of gifts.
In summary, an important agenda item for every board should be the consideration of adopting/updating such a policy.