A gift acceptance policy allows the board to define the parameters and guidelines for eliminating controversial or risky donations. Unwelcome donations might include gifts that:
- don’t relate to the mission of the organization
- don’t cover all the necessary costs of a program or project
- come from a source with which the organization should not be affiliated
- come with too many strings attached
- could cause the organization fail the public support test or otherwise lose its tax-exempt status
- would be too complicated to manage or oversee
A gift acceptance policy should indicate how the organization handles:
- in-kind donations (art, real estate, cars, furniture, unneeded or irrelevant items)
- appreciated and/or closely-held stock
- corporate sponsorship agreements
- bequests, life insurance policies, various trust agreements
The board must ensure the organization understands legal obligations for gift recognition.
- Gifts of $250 or over must receive a receipt to be deductible.
- The organization is responsible for defining the deductible amount i.e. indicating whether the donor receives something in return and indicating its monetary value.
- Token benefits (valued at $9.10 for donations of $45.50 or more in 2008) can be disregarded.
- For gifts of $50,000 or more the IRS can substantiate the fair market value to facilitate deductibility.
For the contributors of $250 or more to receive their tax deductions, the organization must provide receipts. A receipt must include:
- the name of the donor
- the date when the donation was received
- the amount or description of the item donated
- a statement indicating whether any goods or services were provided in return for the gift
- a good faith estimate of the value of goods or services provided to the donor The receipt should not indicate the estimated value of the donation; that is the responsibility of the donor.