Developing an Effective Gift Acceptance Policy

Note: Links to our free templates are at the bottom of this long guide.
Also note: This is not legal advice

Introduction

Non-profit organizations and foundations that receive charitable donations should have a comprehensive gift acceptance policy in place. This policy sets out the parameters for how gifts are received, protecting the organization from any potential legal, financial or ethical issues.

The primary purpose of a gift acceptance policy is to ensure that donations are used for their specified purpose and that no conflict of interest or legal issue arises. It needs to be tailored to the specific needs of the non-profit, taking into account its mission, goals and activities as well as any state or federal regulations that may affect it. The policy should outline which types of gifts are acceptable – and which aren’t - as well as outlining how acceptances and acknowledgments will be processed. Confidentiality and donor recognition policies should also be included in the document.

Having this kind of policy can help protect against possible legal issues too; for instance if a donation is accepted from someone with whom there’s a conflict of interest then this could be considered breaching fiduciary duty. There’s also potential financial damage if funds aren’t used properly; without sufficient guidelines organizations may not have access to those funds in future, or worse yet might have to return them if they haven’t been used as intended. It’s therefore essential that donations are tracked carefully through their lifecycle so they can never be misused or misappropriated; something easily achievable by putting an effective gift acceptance policy in place.

Finally, such a document helps address any ethical concerns too; ensuring donations aren’t funnelled off into political activities or providing personal benefit seeks to restore public confidence in the system while preventing any malpractice occurring along the way too.

Gift acceptance policies go beyond just protecting against any legalities though – crucially they show donors how much their contribution is valued by articulating clearly how each donation will help fund vital projects within your organization’s remit now and in future – all whilst helping preserve responsibility among everyone involved at every step along the way too.

Luckily you don’t need an expert on hand (or even an Genie AI account) to craft this kind of document; our team provides step-by-step guidance on developing an effective gift acceptance policy as well as giving access to our community template library where anyone can draft high quality documents quickly with ease! To find out more about why having such a script is important, read on below for further information - then head over today and get started creating your own perfect gift acceptance policy with Genie AI!

Definitions

Gift Acceptance Committee: A group of people, typically including board members, staff members, volunteers, and other stakeholders, who are knowledgeable about the organization’s mission, goals, and needs and are responsible for setting policies and procedures related to accepting donations.

Gift Acceptance Policy: A set of rules and guidelines that an organization establishes to determine which types of gifts it will accept and how those gifts should be processed.

In-Kind Donation: A non-monetary contribution, such as goods or services, that is made to an organization.

Real Estate Gift: A donation of property, such as land or a building, that is made to an organization.

Planned Gift: A donation that is set up to be received in the future, such as a bequest or a charitable trust.

Matching Gift: A donation that is matched by a company or foundation, usually based on the amount of a donation made by an employee or donor.

Donor Recognition Levels: A system established by an organization to recognize donors for their contributions, such as naming a building or creating a donor wall.

Anonymous Gift: A donation that is made without disclosing the donor’s name or contact information.

Gift Donor Database: A system, either physical or electronic, used to store and manage donor data.

Gift Acceptance Procedure: A process established by an organization to determine who is authorized to accept gifts and how those gifts should be acknowledged.

Gift Acceptance Criteria: The criteria established by an organization to determine which gifts will be accepted and which will be declined.

Gift Acceptance Form: A form that is used to collect information on a gift, such as the donor’s name, contact information, donation amount, and gift type.

Gift Acceptance Policy Review Process: A process established by an organization to review the gift acceptance policy on a regular basis and make any necessary changes.

Gift Tracking System: A system, usually electronic, used to track gifts.

Gift Processing System: A system, usually electronic, used to process gifts.

Gift Acknowledgment System: A system, usually electronic, used to generate gift acknowledgements.

Gift Stewardship Program: A program established by an organization to steward donors, such as sending thank you letters, hosting donor events, or providing updates on how their donation is being used.

Gift Reporting System: A system, usually electronic, used to generate gift reports.

Contents

1. Establishing a Gift Acceptance Committee
2. Identifying the appropriate members
3. Assigning roles and responsibilities
4. Establishing a Gift Acceptance Policy
5. Determining acceptable gift types
6. Establishing donor recognition levels
7. Establishing rules for anonymous gifts
8. Establishing rules for real estate gifts
9. Establishing rules for in-kind gifts
10. Establishing rules for stock gifts
11. Establishing rules for planned gifts
12. Establishing rules for matching gifts
13. Establishing a Gift Donor Database
14. Identifying and gathering donor data
15. Creating a filing system
16. Setting up a database
17. Establishing a Gift Acceptance Procedure
18. Identifying who is authorized to accept gifts
19. Determining the appropriate acknowledgement of gifts
20. Establishing a process for handling disputed gifts
21. Establishing a Gift Acceptance Criteria
22. Establishing criteria for determining what gifts will be accepted
23. Establishing criteria for determining when a gift should be declined
24. Establishing a Gift Acceptance Form
25. Identifying the appropriate information to collect
26. Drafting the form
27. Establishing a Gift Acceptance Policy Review Process
28. Establishing a schedule for review
29. Establishing a process for making changes
30. Establishing a Gift Tracking System
31. Identifying the appropriate software
32. Setting up the system
33. Establishing a Gift Processing System
34. Identifying the appropriate software
35. Setting up the system
36. Establishing a Gift Acknowledgment System
37. Identifying the appropriate software
38. Setting up the system
39. Establishing a Gift Stewardship Program
40. Identifying donor stewardship activities
41. Establishing a schedule for communications
42. Establishing a Gift Reporting System
43. Identifying the appropriate software
44. Setting up the system

Get started

Establishing a Gift Acceptance Committee

• Create a committee to develop and approve the gift acceptance policy.
• Identify potential members from key stakeholders in the organization, including department heads and senior leadership.
• Ensure the committee is made up of individuals with diverse perspectives.
• Establish the committee’s purpose, roles, and responsibilities.
• Schedule regular meetings and set deadlines for policy development.
• Document the committee’s decisions for future reference.

You’ll know you’ve completed this step when you have established the committee, identified potential members, established the committee’s purpose, roles, and responsibilities, scheduled regular meetings and set deadlines for policy development, and documented the committee’s decisions.

Identifying the appropriate members

• Brainstorm potential members of the gift acceptance committee, including representatives from legal, finance, and fundraising departments
• Verify that each proposed member has the authority and expertise to make decisions about the organization’s gift acceptance policy
• Ensure that the proposed members are willing and able to commit to the time necessary to meet and make decisions about the policy
• Once you have identified and confirmed the appropriate members, the gift acceptance committee is ready to be formed
• You’ll know you can check off this step when you have a list of confirmed members of the gift acceptance committee

Assigning roles and responsibilities

• Identify the individuals responsible for developing and implementing the gift acceptance policy.
• Assign roles and responsibilities to each individual including who will make decisions, review and approve gifts, communicate with donors and other stakeholders, and oversee the program.
• Assign a timeline for each individual to complete their assigned tasks related to the gift acceptance policy.
• Create a checklist to ensure each individual is on track with their assigned tasks.
• Check off each task as it is completed.

When you can check this off your list and move on to the next step:

• All roles and responsibilities have been assigned and a timeline and checklist have been created.

Establishing a Gift Acceptance Policy

• Define what a gift is for the purposes of your policy
• Create a policy statement outlining the purpose of accepting gifts
• Establish specific criteria for accepting gifts
• Establish procedures for accepting gifts
• Establish policies for when to decline a gift or return a gift
• Create a process for reviewing and approving the gift acceptance policy
• Establish procedures for monitoring compliance with the gift acceptance policy

You’ll know you can check off Establishing a Gift Acceptance Policy when you have created and approved a policy statement, established criteria and procedures for accepting and declining gifts, and established a process for monitoring compliance.

Determining acceptable gift types

• Research gift acceptance policies of similar organizations
• Discuss what types of gifts your organization is comfortable accepting (cash, stocks, bonds, etc.)
• Consider the legal and tax implications of accepting certain types of gifts
• Establish a review process for gifts that fall outside of the established gift policy

Once you’ve researched, discussed, and considered the implications, you can move forward with finalizing your organization’s acceptable gift types.

Establishing donor recognition levels

• Determine a few donor recognition levels that you’d like to have in your gift acceptance policy.
• Decide what benefits each donor recognition level will receive.
• Establish criteria for each donor recognition level, such as the amount of money given, the frequency of donations, or any other criteria applicable to your organization.
• Document the recognition levels and the criteria for each level in your gift acceptance policy.
• Test the policy to ensure that it is effective in recognizing donors appropriately.

Once you have established the donor recognition levels, documented them in the gift acceptance policy, and tested the policy to ensure its effectiveness, you can move on to the next step in developing your policy: Establishing rules for anonymous gifts.

Establishing rules for anonymous gifts

• Clarify if anonymous gifts will be accepted or not
• Determine the level of anonymity that is acceptable - e.g. if the donor can remain anonymous to the public, or just to the organization
• Set a minimum acceptable size for anonymous gifts
• Outline any special requirements for anonymous gifts - e.g. if the donor needs to provide special documentation
• Decide who will have access to information about anonymous gifts - e.g. if only a few people in the organization will be informed

When all of the above steps are completed, you can move on to the next step of establishing rules for real estate gifts.

Establishing rules for real estate gifts

• Establish criteria for accepting real estate gifts, such as requiring the property to be in good condition and free of liens or other encumbrances
• Outline the necessary due diligence that must be conducted prior to acceptance, such as title searches and appraisals
• Determine the process for accepting real estate gifts, including the signature of the donor, board approval and other requirements
• Set forth the expectations for the management and disposition of real estate gifts
• Draft provisions for the return of real estate gifts in certain circumstances
• When you have established these criteria, you can check this off your list and move on to the next step, which is establishing rules for in-kind gifts.

Establishing rules for in-kind gifts

• Identify any restrictions or regulations that affect in-kind gifts in your area
• Determine the value of the in-kind gift and decide whether it can be accepted
• Create a policy on the types of in-kind gifts your organization will accept
• Set guidelines on the use of in-kind gifts
• Establish criteria for the evaluation of in-kind gifts
• Create a process for recording and recognizing in-kind gifts
• Document the procedure for using, storing, and disposing of in-kind gifts

You can check this off your list and move on to the next step when you have completed all of the steps and you have a policy in place for in-kind gifts.

Establishing rules for stock gifts

• Determine whether the organization will accept stock gifts and the process by which they will be accepted.
• Consider the financial implications of accepting stocks.
• Research the regulatory requirements and tax implications of accepting stock gifts.
• Develop a policy outlining the specifics of how stock gifts will be accepted, such as the minimum stock value, how the stocks will be sold, and how the proceeds will be handled.
• Outline the requirements for documenting the acceptance of stock gifts, such as submission of a gift form and accompanying documentation.

How you’ll know when you can check this off your list and move on to the next step:

• When you have developed a policy outlining the specifics of how stock gifts will be accepted, including the minimum stock value, how the stocks will be sold, and how the proceeds will be handled, and have outlined the requirements for documenting the acceptance of stock gifts such as submission of a gift form and accompanying documentation.

Establishing rules for planned gifts

• Establish criteria for reviewing and accepting planned gifts
• Determine the types of planned gifts that will be accepted
• Decide how to handle any restrictions that may be attached to planned gifts
• Establish procedures for documenting and processing planned gifts
• Develop a policy for naming recognition for planned gifts

Once you have completed these steps, you will have established rules for planned gifts and be ready to move on to the next step of establishing rules for matching gifts.

Establishing rules for matching gifts

• Define the criteria for accepting matching gifts and determine who is eligible to receive matching gifts from donors.
• Identify any restrictions or limitations associated with matching gifts and make sure that donors are aware of these criteria.
• Research any matching gift programs offered by corporate employers and determine whether or not your organization qualifies for them.
• Outline the process for submitting matching gift requests and for tracking the progress of those requests.
• Determine the timeline for when matching gifts will be received and when donors should expect to be notified of the results.
• Create a record-keeping system for tracking matching gifts and make sure that donor information is kept confidential.
• When you have established the rules for matching gifts, move on to the next step of establishing a gift donor database.

Establishing a Gift Donor Database

• Create a database for all potential donors
• Input contact information, donation history, and donor preferences into the database
• Ensure that the data is up to date and accurate
• Use the database to track donor activity
• Utilize the database to identify opportunities to engage with donors
• Use the database to generate reports that can be used to track and analyze donor trends
• When the donor database is established and populated with donor data, you can check this step off your list and move onto the next step of identifying and gathering donor data.

Identifying and gathering donor data

• Gather existing donor data from existing databases and records
• Collect contact information, donation amounts, and dates of donations
• Identify donors who have pledged to make donations in the future
• Update donor data as needed to ensure accuracy
• When you have gathered all the necessary donor data, you can move on to the next step of creating a filing system.

Creating a filing system

• Choose a filing system that is easy to understand and use (e.g. alphabetical, chronological, etc.).
• Decide where donor information should be stored (e.g. physical files, digital files, etc.).
• Set up folders for each individual donor and any related documents (e.g. gift agreements, acknowledgments, etc.).
• Make sure that the filing system is secure and accessible to all relevant staff members.
• Label each folder accurately and consistently.
• When the filing system is set up correctly, you can move on to the next step.

Setting up a database

• Determine the type of database you will use (e.g., Excel, Access, etc.)
• Identify the fields that need to be included in the database
• Create a template for entering gift information into the database
• Enter data into the database
• Test the database to ensure accuracy of data entry
• Back up the database regularly

Once you have completed these steps, you can move on to establishing a gift acceptance procedure.

Establishing a Gift Acceptance Procedure

• Create a decision-making process for accepting gifts. Consider how you will evaluate the gift’s purpose and use, the donor’s motivation, and the potential risks.
• Define the criteria for accepting gifts, such as the amount, type, and purpose of the gift.
• Create a timeline for reviewing and responding to gift requests.
• Draft a gift acceptance agreement and make sure it includes details about the donor’s intent, conditions for the gift, and the legal rights and obligations of the organization and donor.
• Have your legal team review the agreement and make any necessary changes.
• Make sure the agreement is signed before the gift is accepted.

When you can check this off your list and move on to the next step:

• Once the decision-making process, criteria, timeline, and gift acceptance agreement are all established, you can move on to the next step of identifying who is authorized to accept the gifts.

Identifying who is authorized to accept gifts

• Identify who in the organization is authorized to accept gifts, such as a senior leader, board member, or a development staff member
• Draft a list of those individuals and their roles in the organization
• Obtain approval for the list from the organization’s board of directors
• Clearly communicate the list to staff and volunteers

Once you have identified who is authorized to accept gifts, you can check this step off your list and move on to the next step.

Determining the appropriate acknowledgement of gifts

• Identify the types of acknowledgments that will be used for different types of gifts
• Establish an appropriate timeline for acknowledging gifts
• Develop a system for tracking gift acknowledgments
• Create a process for verifying that acknowledgments have been sent
• Determine a procedure for handling gift acknowledgments that are returned as undeliverable
• When all of the above steps have been completed, you can move on to establishing a process for handling disputed gifts.

Establishing a process for handling disputed gifts

• Develop a process for handling disputed gifts that can be easily understood and followed by staff and volunteers
• Include details such as who will be responsible for resolving disputes, the timeline for resolution, and communication protocols
• Create a dispute resolution form detailing the steps for resolution and who will be responsible for each step
• Ensure that this resolution process is well-documented and easily accessible to staff and volunteers
• When you have developed a process for handling disputed gifts, you can move on to the next step of establishing a gift acceptance criteria.

Establishing a Gift Acceptance Criteria

• Develop criteria for determining which gifts are accepted
• Consider donor intent, legal requirements, and organizational mission when creating criteria
• Consider any potential conflicts of interest
• Determine whether or not the gift will benefit the organization as a whole
• Set up a timeline for making decisions on gift acceptance
• Establish a process for evaluating large or complex gifts

When these criteria have been developed, you can move on to the next step of establishing a process for determining which gifts will be accepted.

Establishing criteria for determining what gifts will be accepted

• Decide what type of gifts are acceptable, including cash and non-cash gifts, and in-kind gifts
• Decide on minimum and maximum amounts that can be accepted
• Create a list of unacceptable gifts
• Create a list of permissible investments
• Create a list of permissible sponsorships
• Determine the criteria for when a gift must be referred to a committee for approval
• Create a list of criteria for when a gift should be declined

Once you have established the criteria for determining what gifts will be accepted and created the applicable lists, you can move on to the next step: Establishing criteria for determining when a gift should be declined.

Establishing criteria for determining when a gift should be declined

• Review IRS regulations and state laws to determine what gifts may not be accepted
• Develop criteria based on the tax-exempt status of the organization that will guide decisions on when to decline a gift
• Consider factors such as donor intent, potential conflict of interest, or potential negative publicity
• Ensure that criteria can be applied consistently and fairly
• Check with legal counsel to ensure that the criteria are in compliance with all applicable laws and regulations
• Check with the board of directors to ensure that criteria are in line with the organization’s mission
• Once criteria has been established, document and make available to staff for reference
• Check off this step when criteria has been established and documented.

Establishing a Gift Acceptance Form

• Create a document that outlines the gift acceptance form
• Include specific questions about the donor and the proposed gift
• Ensure you are collecting enough information to make an informed decision about the gift
• Review the form for accuracy and ensure it meets legal requirements
• Publish the form and make it accessible to staff and donors
• When the form is complete, you have established a gift acceptance form and can move on to the next step of identifying the appropriate information to collect.

Identifying the appropriate information to collect

• Understand the purpose of the gift acceptance policy and the types of gifts your organization will accept
• Identify the information needed to assess the acceptability of a gift
• Consider the legal and ethical implications of accepting a gift
• Determine what information should be collected from the donor
• List the questions that need to be asked in order to collect the necessary information
• Determine if additional information is needed to assess the acceptability of the gift
• When you have identified the appropriate information to collect, you can move on to drafting the form.

Drafting the form

• Draft a gift acceptance form that outlines the information you need to collect from the donor.
• Include information such as the donor’s contact details, the amount and type of gift, any restrictions or conditions the donor has specified, and a statement of understanding that the gift is irrevocable.
• When you have completed the form, you can check this step off your list and move on to the next step.

Establishing a Gift Acceptance Policy Review Process

• Identify the individuals who will take part in the review process.
• Decide who among the reviewers will have final approval authority.
• Establish a timeline and schedule for the review process.
• Set up a system for tracking the status of reviews (e.g. approval, pending, rejected).
• Develop a procedure for resolving any disagreements among reviewers.
• Track any changes to the policy over time and ensure all reviewers are aware of these changes.
• When all reviews have been completed, make sure that the final version of the policy is distributed to all relevant parties.
• Once the policy is completed, you can check this off your list and move on to the next step.

Establishing a schedule for review

• Decide how often the gift acceptance policy should be reviewed (e.g. annually, bi-annually, etc.)
• Create a timeline for review, including setting deadlines for when the policy should be reviewed and updated
• Ensure that the timeline is communicated to all stakeholders and that they are aware of their roles and responsibilities in the review process
• When the timeline has been completed, check off this step and move on to the next step of establishing a process for making changes.

Establishing a process for making changes

• Set up a clear procedure for making changes to the gift acceptance policy. This should include how to initiate, review, discuss, and approve changes.
• Establish a team to review the policy on a regular basis. This team should include both non-profit staff and board members.
• Identify any potential legal or tax implications of changes to the policy and ensure any changes meet all relevant laws.
• Develop a timeline for the review process and ensure everyone involved is aware of the time