Templates and FAQs for Nonprofits

Present acceptance insurance policies are an important however simply ignored a part of nonprofit administration. You received’t miss them till you want them, and you then’ll want you’d created them earlier!

To keep away from sensitive (and probably damaging) donor relations and authorized conditions, it’s price taking the time to review up on these insurance policies and methods to create them. This fast information covers all of the necessities, plus additional concerns you’ll want to know:

On the lookout for extra methods to enhance your nonprofit’s governing constructions and set your group up for fulfillment? We advocate board self-assessments.

Understanding Nonprofit Present Acceptance Insurance policies

Let’s begin with the basics by reviewing a number of often requested questions on nonprofit present insurance policies.

What’s a present acceptance coverage?

A present acceptance coverage is a bit of or addendum to a nonprofit’s bylaws that clearly defines the varieties of presents it will probably and can’t settle for. These insurance policies most frequently come into play when donors supply to offer uncommon or exceedingly precious in-kind or non-cash presents.

Along with defining acceptable varieties of presents, thorough (and efficient) acceptance insurance policies additionally cowl:

• The circumstances underneath which sure varieties of presents will be accepted
• How sure varieties of in-kind and non-cash presents will probably be liquidated and/or managed
• Who on the nonprofit is liable for reviewing donations that will battle with the acceptance coverage
• Logistical particulars defining how sure presents will acknowledged, tracked, and reported
• Tips in your basic present substantiation course of, which is how and when donors obtain acknowledgment for tax-deductible presents valued over $250

Why do nonprofits create present acceptance insurance policies?

A present acceptance coverage spells out what you may and can’t settle for, giving your fundraisers and donors a concrete set of pointers to reference when difficult conversations come up.

Why is that this necessary? All types of tangible objects, property, and securities get donated to nonprofits, and lots of might include added baggage, akin to compliance necessities, reputational implications, advanced restrictions, and extra prices. This implies there are instances when it’s in your nonprofit’s finest curiosity to show down a present, both as a result of its worth isn’t well worth the added work/price of accepting it or as a result of it would open you as much as new liabilities that aren’t well worth the threat.

Acceptance insurance policies also can set up working pointers for present substantiation and reporting, that are important for sustaining your nonprofit’s authorized compliance.

Plus, you might be required to have a present acceptance coverage in place when reporting some presents to the IRS in your nonprofit’s annual 990 submitting course of. When reporting non-cash presents, your nonprofit could also be required to finish Schedule M (Noncash Contributions) of Type 990 if it has obtained over $25,000 in non-cash presents or obtained sure presents of artwork or comparable property. Schedule M asks whether or not you’ve got a present acceptance coverage in place, and “no” is just not an appropriate reply to this query.

What are the advantages of getting concrete present insurance policies?

Present acceptance insurance policies present a number of key advantages:

• Insurance policies provide you with concrete standards for figuring out in case you ought to or shouldn’t settle for a present with no guesswork wanted.
• Insurance policies make it a lot simpler for fundraisers to show down a present with a easy “Our acceptance coverage prohibits this sort of present,” quite than a protracted or complicated dialog that might harm your relationship with the donor.
• Tips for present reporting and substantiation included in your acceptance coverage assist to make sure that your group absolutely complies with laws by documenting them and assigning possession in a central location.
• As talked about above, present acceptance insurance policies are required as a part of the Type 990 course of, important for sustaining your group’s tax-exempt standing.

How one can Create a Present Acceptance Coverage: 5 Steps

You’re able to replace (or write your first) present acceptance coverage in your group. Nice! Now, what subsequent? We advocate these core steps:

1. Safe buy-in and alignment. Get your group’s management and board on the identical web page concerning the want for a brand new or up to date present acceptance coverage. You want official sign-off and ratification for the coverage addition to take impact, so get a head begin by placing it on everybody’s radar. Recruit one or two people to affix a small committee. When you have a board member with skilled authorized expertise or connections, ask them particularly to affix.
2. Draft your present acceptance coverage. Work together with your staff to draft a coverage in your group. Check out the instance insurance policies and templates under to get began. However make sure to take your time and search authorized enter if wanted. Though nonprofits’ present acceptance insurance policies are sometimes fairly comparable, they need to not be one-size-fits-all. A coverage personalized to your nonprofit’s wants, previous experiences, and anticipated challenges (even when they’re unlikely) at all times gives the very best safety.
3. Assessment and revise as a staff. Collect suggestions out of your staff and one or two different organizational leaders or authorized counsel who haven’t been concerned within the drafting course of. They’ll consider the coverage extra objectively and establish any potential issues or gaps that needs to be addressed within the subsequent draft.
4. Vote and enact your coverage addition. Upon getting a closing model, share it with leaders and the board forward of your subsequent board assembly, and add the coverage to the assembly agenda. Through the assembly, focus on it as a gaggle, decide if any additional modifications are wanted, after which observe your group’s protocol to vote on and enact the coverage addition.
5. Talk the change internally. Add the brand new coverage to your nonprofit’s official bylaws, republish them, and notify your whole inside staff. Ship a fast e mail that hyperlinks to the up to date coverage and explains these key factors:
   • What an acceptance coverage is
   • Why you’ve created or up to date one
   • The way it will assist your nonprofit and particular groups
   • Who to contact with questions

• Introductions and contextual sections that clearly outline what your nonprofit considers a “present”
• Particulars about any present evaluate committees or inside employees positions answerable for reviewing particular varieties of presents and what that course of entails
• Particulars, necessities, and expectations for any present settlement processes that you could be implement to make sure mutual understanding of the insurance policies for big presents above a sure worth threshold
• Actual acceptance standards and processes for presents of money, publicly traded securities, personal securities, cryptocurrency, numerous varieties of in-kind presents, actual property, donor-advised fund grants, numerous varieties of deliberate presents, and extra
• Liquidation timeframes for presents of securities or cryptocurrency
• Whether or not sure varieties of presents will probably be restricted or unrestricted upon donation, plus the method for altering a donation’s restriction standing if desired by the donor
• Explanations of how employer-sponsored matching presents will probably be recorded and substantiated
• Particulars about commonplace present counting and reporting processes

Present Acceptance Coverage Templates

Present acceptance insurance policies are extraordinarily assorted as the entire level is that they need to defend and help your distinctive group. Nevertheless, they do often share a number of widespread parts and particulars that make your employees’s lives simpler and defend your 501(c)(3) standing.

Insurance policies will be easy and brief to cowl your bases or extraordinarily thorough to spell out actual protocols for particular conditions. For reference, listed here are templates for a primary and extra detailed present acceptance coverage:

Present Acceptance Coverage Template – Fundamental

1. [Nonprofit] solicits and accepts presents in keeping with its mission and help its core packages and particular tasks.
2. Donations and different donated types of help are usually accepted from people, companies, foundations, authorities companies, and different companions, topic to the next acceptance limitations:
   1. [Descriptions of limitations, which may include:]
   2. [Specific types of gifts]
   3. [Delivery/pickup of donated items]
   4. [Condition of donated items]
   5. [Proof of ownership or provenance of donated items]
3. Items of Actual Property, Private Property, Securities, and different Property might solely be accepted upon approval of [specific committee within the nonprofit].

This instance clearly states that accepted presents are decided to be in keeping with the mission, adhere to particular limitations, and require approval in some instances. Its final level helps cowl your bases and eliminates the necessity for granular element, however do not neglect to observe by means of with the approval course of.

If a coverage is so unfastened or gentle that it’s forgotten the following time a donor desires to present you a sure kind of donation, you may as nicely not have the coverage in place in any respect!

Present Acceptance Coverage Template – Reasonably Thorough

[Nonprofit] solicits and accepts presents for functions that may assist it additional and fulfill its mission. [Nonprofit] encourages potential donors to hunt the help of private authorized and monetary advisors in issues referring to their presents, together with the ensuing tax and property planning penalties. The next insurance policies govern acceptance of presents made to [Nonprofit].

Objective of the Coverage: The aim of this coverage is to control the acceptance by [Nonprofit] of [all or specific types of gifts], and to supply steerage to potential donors.

Present Assessment Committee: Any present or proposed present that doesn’t adjust to this coverage have to be reviewed and permitted by the [internal committee], which consists of [internal roles that make up the committee]. As indicated under, sure proposed presents might require the approval of the [Board or Executive leadership, if applicable].

Use of Authorized Counsel: [Nonprofit] will search the recommendation of authorized counsel in issues referring to acceptance of presents when applicable. Assessment by counsel is really useful for [common stipulations below]:

1. Items of securities which might be topic to restrictions or buy-sell agreements
2. Paperwork naming [Nonprofit] as trustee or requiring it to behave in any fiduciary capability
3. Items requiring [Nonprofit] to imagine monetary or different obligations
4. Transactions with potential conflicts of curiosity
5. Items of property which may be topic to environmental or different regulatory restrictions

Restrictions on Items: [Nonprofit] is not going to settle for presents that:

1. Would end in [Nonprofit] violating its company constitution
2. Would end in [Nonprofit] dropping its standing as an IRC § 501(c)(3) not-for-profit group
3. Are too troublesome or too costly to manage in relation to their worth
4. Would end in any unacceptable penalties for the group
5. Are for functions exterior [Nonprofit]’s mission.

Choices on the restrictive nature of a present, and its acceptance or refusal, shall be made by the Govt Committee, in session with the Govt Director.

Items Usually Accepted With out Assessment [common examples below]:

• Money. Money presents are acceptable in any kind, together with by examine, cash order, bank card, or on-line… [Provide additional requirements and restrictions for all gift types as needed.]
• Marketable Securities. [Include details about the transfer process, liquidation timeframe, restrictions, approval processes, etc.]
• Bequests and Beneficiary Designations underneath Revocable Trusts, Life Insurance coverage Insurance policies, Industrial Annuities, and Retirement Plans.

Items Accepted Topic to Prior Assessment:

Sure types of presents or donated properties will probably be topic to evaluate by [committee, board, and/or executive leadership] previous to acceptance. Examples of presents topic to prior evaluate embrace, however should not restricted to [common examples below]:

• Tangible Private Property. [Details about acceptance requirements, restrictions, approval processes and criteria, etc.]
• Life Insurance coverage.
• Actual Property. 

This instance is extra thorough than the primary and extra clearly defines particular particulars about varieties of presents and the processes and protocols that encompass their acceptance.

However in order for you, your coverage can go even additional! Seek the advice of together with your nonprofit’s authorized counsel to develop a present acceptance coverage tailor-made to your group’s actual wants.

Nevertheless, keep in mind that when you don’t essentially have to get your present acceptance coverage excellent the very first time, you do have to have one in place! You’ll be able to at all times develop or refine it over time by working together with your group’s leaders and authorized counsel.

Extra Concerns to Hold in Thoughts

As you draft or replace your nonprofit’s acceptance coverage, there are extra concerns that you need to take into accout. These will assist to additional defend your group, maximize the coverage’s utility and worth, and guarantee adoption.

• Alter your coverage over time. As famous above, your present acceptance coverage is not set in stone. Drafting an exhaustive coverage isn’t at all times needed, and it may be fairly time-intensive when executed by yourself. If you’ll want to develop a primary one to cowl your bases shortly, go for it. Then, take the time later to seek the advice of with a nonprofit authorized professional, draft a extra thorough model, and get it permitted by your board.
• Embody gift-specific clauses as wanted. It could be simple to outline what your nonprofit considers “presents” and slap a present evaluate committee course of onto the coverage (undoubtedly higher than nothing!), nevertheless it may not serve you nicely in the long term. It’s simple to neglect or neglect unfastened insurance policies, and insurance policies that create extra steps for a number of staff members are prone to be disliked and maybe disregarded over time—not a superb end result. Think about the varieties of presents you at present settle for and need to settle for. For instance, in case your nonprofit desires to deliberately develop its packages for securing deliberate presents or company presents of in-kind items, a coverage playbook will probably be extraordinarily useful for reaching these targets.
• Think about extra varieties of clauses as wanted. Most notably, determine if you wish to embrace variance and morality clauses. The first operate of those clauses is to offer your nonprofit choices for coping with the repercussions of a donor’s poor fame or authorized troubles, permitting your group to separate itself from their identify. An unlucky end result, nevertheless it does occur, so finest to have choices!
  • Variance clauses in present agreements dictate what occurs when the unique phrases of a present can not be met. For instance, if a constructing funded by a donor’s main present is renovated or rebuilt, their identify will probably be faraway from the up to date or new constructing. These clauses also can extra usually ban perpetual public recognition and get rid of any expectations that your nonprofit should show the donor’s identify on outstanding funded buildings or installations in perpetuity.
  • Morality clauses explicitly give your nonprofit the flexibility to distance itself and take away naming if a donor (or the donor’s enterprise practices) not align together with your said values and mission. These will be sensitive to debate with donors, which is why many nonprofits depend on a mixture of variance and morality clauses to supply safety with out offending new donors when present phrases are mentioned.
• Have a plan for utilizing your present acceptance coverage. When your present acceptance coverage is triggered (or a present officer merely encounters an unfamiliar scenario), have a course of and pointers in place for methods to focus on it with donors. First, guarantee your coverage is internally publicized and simply accessible to everybody in your bylaws. Subsequent, actively practice your fundraisers, present officers, accounting staff, and another related employees on the coverage’s contents and applicability. Define particular steps they need to observe to raise uncommon or new points that aren’t coated in your coverage.

Deepening Relationships By means of Non-Money and Company Items

One closing suggestion is to make use of the event of drafting or updating your nonprofit’s present acceptance coverage as a possibility to take into account your present (and splendid) income streams.

These insurance policies are most useful in conditions that contain both non-cash presents or donations made by means of different organizations quite than people. As you’re employed in your acceptance coverage, use it as a springboard to consider what additional development may seem like in your nonprofit. Think about these questions:

• Are you closely reliant on particular person contributions?
• Are you profiting from alternatives to safe non-cash presents or presents from companies and foundations?
• Do you actively discuss various or alternate giving choices with donors?
• Have you ever promoted matching presents to your donors (the best option to construct a company giving stream by far)?
• Do you discover your main and mid-level donors’ company connections to uncover new potential partnerships?

Company giving platforms for nonprofits like 360MatchPro by Double the Donation and software program constructed particularly for deliberate giving, inventory giving, DAFs, and extra will help you construct extra sturdy giving packages that match the robustness of your acceptance insurance policies (and aspirations).

Discover your choices and don’t be afraid to diversify. Overreliance on a single type of income is dangerous for nonprofits, and there are tons of simple methods to diversify your fundraising and give your donors higher, extra versatile experiences. To proceed studying methods to construct a nicely ruled and funded nonprofit, check out these extra sources: