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The Importance of Having Gift Acceptance Policies

This is part of a special series, brought to you by the Standards for Excellence Institute, to provide nonprofit leaders with a brief nonprofit governance and management tip weekly over the course of 2020. We hope these short tips will be helpful to you and the nonprofits you serve. If you have suggestions for future topics, please forward these to acmadsen@standardsforexcellence.org.

I recently read an article “Nonprofits Decline Gifts With Too Many Strings or Misaligned Values, Survey Finds” in the Chronicle of Philanthropy with interest and even a little glee. In some cases, it seems that nonprofits lean toward accepting gifts almost without limitation to ensure that they are not offending their donors. However, in many cases, accepting an unusual or unanticipated gift ends up creating hardships and added expense for the organization.

The Chronicle article, which is based on research from the Center for Effective Philanthropy, notes that 40 % of nonprofits have declined a gift. The research cites that the most common reason for turning down gifts is that the gifts came with too many strings attached. Other reasons given in the survey included the practicality of the donation and conflicts between the values of the donors and the values of the nonprofit organization.

The Standards for Excellence Institute has been a proponent of board-approved gift acceptance policies since its inception. In fact, our Standards for Excellence code states, “An organization should have policies in place to govern the acceptance and disposition of charitable or in-kind gifts that are received in the course of its regular fundraising activities.” These policies should include:

Procedures to determine any limits on individuals or entities from which the organization will accept a gift
The purposes for which donations will be accepted
The types of property that will be accepted
Whether to accept an unusual or unanticipated gift considering the organization’s mission and organizational capacity.

The Standards for Excellence code also states that “nonprofits must honor the known intentions of a donor regarding the use of any and all types of donations, including but not limited to cash, in-kind, cryptocurrency, and stocks.” When taking both benchmarks together, it is easy to see that if a nonprofit cannot or will not be able to honor the intentions of the donors regarding a gift, the most positive outcome is often to turn down the gift. Certainly, having a well thought out and comprehensive gift acceptance policy can help make and communicate such decisions in a smoother,less personal manner.

In the more than 20 years that we have been encouraging nonprofits to have gift acceptance policies, I am pleased to say that we’re getting fewer comments like, “Why do we need a gift acceptance policy? We are a small nonprofit, we need EVERYTHING!” and getting more comments supporting the idea that gift acceptance policies are important and such policies help nonprofits turn down gifts that are not mission-centered in a way that is not offensive or off-putting for our donors and community members. I hope you explore how a gift acceptance policy will help your organization.

The Standards for Excellence educational resource packet, Fundraising, Solicitation, Acceptance of Gifts, and Working with Donors contains a comprehensive gift acceptance policy that can be modified and customized to meet the needs of nonprofits around the country.

This educational resource packet and the full series of all packets - including sample policies, tools and model procedures to help nonprofits achieve best practices in their governance and management - can be accessed by contacting a licensed Standards for Excellence replication partner, one of the over 150 Standards for Excellence Licensed Consultants, or by becoming a member of the Standards for Excellence Institute.

By Amy Coates Madsen | March 05, 2020 | Fundraising , Policies

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About the Author: Amy Coates Madsen

Amy Coates Madsen is the Director of the Standards for Excellence Institute, a national initiative to promote the highest standards of ethics and accountability in nonprofit governance, management, and operations, and to facilitate adherence to standards by all organizations. The Standards for Excellence Institute is a program of the Maryland Association of Nonprofit Organizations where Amy has served for more than twenty-two years. Amy is responsible for coordinating all aspects of the association’s comprehensive ethics and accountability program and efforts to replicate the program nationally. She serves as a frequent trainer and writer in the areas of board conduct, program evaluation, program replication, fundraising ethics, and nonprofit management. She has taught courses on nonprofit ethics and accountability at the Johns Hopkins Institute for Policy Studies Certificate Program on Nonprofit Management. She has held positions at the Trenton lobbying firm of the Princeton Public Affairs Group, and the Public Policy Liaison Unit at the world headquarters of Catholic Relief Services. Amy received her Master of Arts in Policy Studies degree from the Johns Hopkins University – Institute for Policy Studies in Baltimore, Maryland; and her Bachelors degree from the Virginia Polytechnic Institute and State University in Blacksburg, Virginia. Amy is a member of Phi Beta Kappa. Amy serves on the Internal Revenue Service Advisory Committee on Tax Exempt and Government Entities (ACT). Amy is a former member of the Disaster Action Team of the Central Maryland Chapter of the American Red Cross and is qualified to provide disaster preparedness training to children and adults. She has also served as the former President of Central Maryland CAN TOO and was a member of the Board of Trustees of the largest United Methodist Church in Baltimore City. She serves on the board of her children’s preschool PTA and is a volunteer with the Girl Scouts of Central Maryland. Amy is currently leading an effort to establish an endowment for the Virginia Tech University Honors Program.