This post is Part 2 in a series about how nonprofit organizations could solve tomorrow’s problems today. Click here for Part 1 and Part 3.
The story is all too common: a nonprofit organization accepts a well-intentioned gift only to discover hidden costs. It may be a physical item like a building or vehicle, or a cash donation that comes with requirements for reporting, naming or acknowledgement, or any number of other scenarios.
The best way to prevent these problems is to develop and enforce a Gift Acceptance Policy, and have it removed and approved by the Board of Directors. According to the Association of Fundraising Professionals’ online dictionary, the Gift Acceptance Policy outlines “the rules and regulations developed by a donee organization to determine which types of gifts should or should not be accepted.”
As you think about your Gift Acceptance Policy, here are some questions to consider:
- What kinds of gifts might we be offered (even we never have been offered them to date)?
- With that list in hand, ask: What kinds of gifts will we accept? You may not be ready as an organization to accept real estate, timeshares, livestock, coin collections or many other things simply because the time and effort to convert them to cash may exceed your capabilities. (And meanwhile, that herd of goats still needs to be fed!)
- Are there any donors or funders you will not accept gifts from? It may be hard to imagine a donor you would ever turn away, but think again. If your mission is combatting teen smoking, would you take a gift – however well-intentioned – from a tobacco company? If you work with abused children, would you accept a donation from a known pedophile? These may be extreme situations, but your organization may have its own versions of “no way, no how” gifts that accepting would cause you to feel you are compromising your values.
- Will you accept a gift that is restricted, is given as a permanent endowment, or must be held for a period of time for any reason? Each of these comes with its own set of complications which may not be a problem for you – or could be totally overwhelming. Count the cost of accepting them before you are mesmerized by their monetary value.
- What are your restrictions, if any, for acknowledging a gift, including naming opportunities? Will you run an ad to acknowledge a gift? Will you list it in your annual report? Can you promote a business on your website that makes a donation? Will you announce a gift at your annual gala? Knowing any restrictions in advance of negotiating a significant donation means your fundraising staff can be proactive in designing an appropriate acknowledgment strategy.
- Who administers the policy? In other words, who makes the final decision about whether or not to accept a gift? This can be a committee or board and/or staff, or even a single person, but there needs to be someone or some group that ultimately makes the call.
Sometimes the hardest thing about fundraising is knowing when to say “no” to a well-intentioned donation. Gift Acceptance Policies can remove much of the discomfort in a solicitation, and protect your nonprofit from accepting a gift that ends up costing more than you can afford.