Tips for Writing a Gift Policy

TrustThe following post is adapted from “Put Your Money in Trust: How a Gift-Acceptance Policy Can Guide Your Fundraising, Reduce Your Risk, and Help Steward Your Donors,” by Paul Lagasse, Advancing Philanthropy, v18n3, May-June 2011 (reprinted with permission) You can read the whole article here.

Developing a truly helpful gift acceptance policy involves more than simply downloading a template from the Web and filling in the name of your organization at the top, although an organization doesn’t have to begin from scratch, either. A tailored policy reflects a consensus among not only the executive leadership and board members with financial and tax expertise, but also the development staff and volunteers who will have to implement the policy, says Katherine Swank, J.D., a senior consultant for Blackbaud Analytics in Charleston, S.C. Because of the importance of achieving that consensus, it’s not uncommon for the policy-development process to take 18 months or longer.

Swank says the policy-development team should focus on answering some key questions up front:

  • How much time does the organization have to devote to accepting complicated gift vehicles? Will that process divert people from other important tasks?
  • Does the organization have the human and financial resources and expertise to accept complicated gifts?Should it focus instead on simple gifts?
  • What types of gift vehicles will benefit the revenue stream?
  • Will accepting certain types of gifts put the organization in financial peril?

“The gift acceptance policy should speak to the most common gift types and allow immediate acceptance or rejection,” Swank says. “The process for final acceptance of an unusual gift should be stated in the policies and should never lay with the development officer. Final acceptance should be the responsibility of the chief paid staff person and/or a small board committee that meets ad hoc, and quickly, to decide.”

Swank recommends reexamining a gift acceptance policy yearly to assess its effectiveness and to decide whether to broaden the policy’s scope to accept other types of gifts. Special events are also a good time to review the policy. Pledged gifts, for example, can be addressed and incorporated during preparations for a campaign. Gifts in kind, which are common for special events, and services offered to a nonprofit also can be considered in a gift acceptance policy, although they are more likely to be covered in an organization’s financial accounting rules.

Swank often reminds clients that nonprofits cannot be everything to everyone, and they should not use their gift acceptance policies as an excuse to try. “If you don’t understand a gift or must spend an extraordinary amount of time on gift acceptance or feel pressured to accept a gift, stop” she advises. “Look to your gift acceptance policy and rely on the wisdom you put into place when you weren’t under pressure. Don’t let the fear of accepting or rejecting a gift get in the way. You’re in the business of fulfilling your mission, and that position should govern your decisions.”

Image: iStockPhoto.com

Author: Paul Lagasse

Paul Lagasse provides expert-to-expert communications services to nonprofit, business, and government clients in the metro Baltimore-DC area. Specialties include science and medical writing, technical report editing, and content marketing.