Purpose of the Guidelines
- To protect the interests of the giver, Connect International (further ministry), or causes named as the beneficiary of a gift
- To make certain all gifts to the ministry are structured to provide maximum benefits to the giver and the named entity.
- To encourage interested givers to make gifts without encumbering their own or the ministry’s financial or other resources.
- To optimize opportunities to secure gifts from individuals to causes without compromising or endangering the reputation of the ministry.
General Guidelines
- No gifts will be accepted that cannot be used or expended consistently with the purpose and mission of the ministry.
- No irrevocable gift, whether outright or life-income in character, will be accepted if, under any reasonable set of circumstances, the gift would jeopardize the giver’s financial security.
- Any gift presented to the ministry without the approval of a ministry representative shall not be received until after it is determined that the intended gift and the manner in which it is given is in the best interest of the giver.
- Giver should always be advised of their own need for legal or tax counsel to assist them in the process of making their gift. Ministry staff shall avoid becoming involved in what can be interpreted as unauthorized practice of law. Any suggestions made to a giver by ministry staff should be accompany encouragement to seek advice from the giver’s professional counsel and/or financial advisors.
- Every precaution shall be taken by the ministry staff to protect the privacy and confidentiality of each giver and the givers family. Permission must be obtained before any public acknowledgment is made of gifts received by the ministry. The right of anonymity must always be respected.
- The ministry staff shall attempt to have key executives meet with each individual giver prior to or concurrent with, the execution of a gift agreement. In the case of charitable remainder trusts or other complex arrangements, such a meeting is mandatory. These arrangements must be reviewed by the ministries’ legal counsel.
- In all cases, any professional advisors such as attorneys or CPAs hired by the ministry must recognize that their client is the ministry and that they do not represent the giver. Professional advisors for the ministry will always seek to work with the advisors for the giver.
- Gifts shall not be accepted where the mental competency of the giver is in question. This does not preclude a person acting in the capacity of attorney-in-fact from making a gift from the estate of individual granting the power of attorney. In this event every consideration shall be given to the givers charitable giving habits and financial condition to ensure that the gift is in the best interest of the giver and is carried out in a prudent manner. The giver’s power of attorney must specifically grant the power to make charitable gifts.
- The ministry will provide acknowledgments meeting IRS substantiation requirements for property received by the ministry as a gift. However, except for gifts of cash, no value shall be ascribed to any acknowledgment or other form of substantiation of a gift received by the ministry.
- Investment considerations and gift considerations are in all cases to be evaluated separately, each on their respective merits. In no event shall the offer of a gift be tied in any way to an investment action or decision by the ministry.
- The ministry shall in no way compensate – whether through commissions, finders’ fees, or other means – any third party for directing a giver to the ministry.
- All written instruments setting out the description and terms of a gift shall be reviewed by legal and/or tax counsel on behalf of die ministry and a written key staff on its compliance with applicable laws and regulations as well as an explanation of its potential liability to the ministry.
Gifts with Restrictions.
- The governing body shall maintain a listing of restricted funds for which the donations will be accepted. Restricted funds shall not be received for restrictions other than these funds without prior board approval.
- Any giving appeals by the ministry will clearly indicate whether a restricted or unrestricted gift is being sought in the gift appeal.
- If a gift is received without any giver restrictions (either explicit or implicit restrictions), then such contributions shall be placed in the ministry’s unrestricted fund balance. Similarly, if a gift is received with either an explicit or implicit restriction, and it is in conformity with board-approved restrictions, then such contributions shall be placed in the ministry’s correlating restricted fund account.
- Givers shall be informed in gift acknowledgments whether their gift was reflected as an unrestricted gift or a restricted gift. If a gift is a restricted gift, the restriction will also appear on the gift acknowledgment.
Conclusion.
A ministry should evaluate the following factors in considering potential gifts:
- whether the gift is consistent with the ministry’s tax-exempt purposes,
- whether the ministry can exercise sufficient control over the gift,
- whether the gift has the characteristics of an earmarked transaction,
- whether it will cost the ministry money to own the asset,
- whether it will cost the ministry money to sell the asset,
- staff and volunteer time required to manage or sell the asset,
- whether owning or selling the asset will expose the ministry to liability,
- the marketability of the asset and the cash flow it can be expected to generate.
