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Gift Acceptance Policies
The Ark encourages donors to make gifts that support the mission and programming of the organization. The purpose of this policy statement is to set forth guidelines and prescribe necessary approvals for acceptance of gifts made by donors to The Ark.
A. Cash Gifts and Pledges
1. Unrestricted Gifts of Cash – Gifts given without restriction on the use of the gift.
a) Unrestricted gifts are recorded as unrestricted and used to fund current operations or to maintain reserves.
b) It is recommended that all contributions above $5,000 (even unrestricted gifts) be accompanied by a statement that makes clear the donor’s intent in contributing his or her gift.
c) Unrestricted bequests are designated at the discretion of the Board of Directors and on advice from the Finance and Development Committees.
2. Restricted Gifts of Cash – Gifts given for purposes specified by the donor – only donors can restrict gifts.
a) Gifts restricted for Operations are recorded and deposited into the current operating account or into the Operating Reserve.
b) The Ark may consider accepting gifts restricted for programming; such contributions will be subject to review from the Program Committee, Administrative Committee, and others as appropriate.
c) The Ark Endowment Fund has been established at the Ann Arbor Area Community Foundation. Gifts made to that fund are subject to the policies of the AAACF.
3. Pledges – Promises to contribute amounts specified by donors.
a) Pledges may be restricted or unrestricted as described above and may be one-year or multi-year commitments.
b) Pledges are expected to be fulfilled with contributions of cash or stock.
c) For in-kind contributions to be used to fulfill pledges, the contributions must cover expenses that appear in the annual budget.
4. Matching gifts:
Unless the company specifies otherwise, matching gifts from corporations follow the restrictions of the donor whose gift is being matched: if a donor makes an unrestricted gift, the matching gift is unrestricted and, if the donor makes a restricted gift, the match is likewise restricted. The Ark counts matching gifts toward an individual’s gift total in the year the matching gift is received.
5. Publicly Traded Securities:
Upon receipt of a gift of donated securities, the Executive Director or specific designates places, as soon as practical, the securities with a recognized broker for sale at the earliest practical date. It is not The Ark’s policy to hold securities for an extended length of time. Such gifts are credited to donors according to current IRS codes.
6. Credit Cards:
The Ark accepts VISA and MasterCard. For gifts made by credit card, the date the charge is processed by The Ark is the applicable date of the gift.
B. Non-Cash Gifts
1. In-Kind Contributions – Gifts of goods or services.
a) When The Ark receives a gift of goods and services, often referred to as a “Gift in Kind” (e.g., building materials, equipment), or a gift of individual or corporate services (e.g., advertising, printing, installation, etc.) and the value of that gift is determined to be less than $5,000, the gift is processed as a non-cash gift and is considered restricted in nature. The Ark does not issue a receipt showing the cash value of such gifts, but acknowledges receipt of the object or services.
b) In-kind contributions that cover expenses in the annual operating budget may be used to fulfill pledges to The Ark. Such a contribution is acknowledged as payment toward the pledged amount.
c) For any gift-in-kind with an apparent value in excess of $5,000, the gift is considered restricted, and the donor must file Form 8283 with the Internal Revenue Service. The Ark is required to sign the portion of Form 8283 which acknowledges receipt of the gift and will do so after the donor has provided to The Ark a copy of the signed appraisal, and after the donor and appraiser have completed and signed their sections of Form 8283. It is important for The Ark to retain a copy of the signed and executed Form 8283.
d) If The Ark disposes of the item in question within two years of its receipt, The Ark must file Form 8282 with the Internal Revenue Service.
e) For tax purposes gifts in kind must be valued by the donor and costs associated with an appraisal are the responsibility of the donor.
2. Real Estate or Real Property:
a) No gift of real estate or real property is accepted if such acceptance causes The Ark to incur a financial burden, potential liability, or other obligations, unless otherwise determined by the Board of Directors.
b) A Phase I environmental impact study or, in the case of Michigan real property, a baseline environmental assessment accepted by the Michigan Department of Environmental Quality, done at the owner’s expense, is required to accompany a gift of real estate.
c) Acceptance is contingent on an independent appraisal paid for by the donor. The Ark does not value any such donated item for tax purposes.
d) If property cannot be liquidated in a reasonable amount of time, The Ark may choose to decline the gift.
3. Life Insurance
a) Subject to review by the Finance Committee, The Ark accepts only fully paid insurance policies for which The Ark is named as beneficiary and the irrevocable owner of the policy.
b) Gifts of life insurance policies are credited at face value as pledges receivable as designated by the Board of Directors unless specified by the donor.
4. Closely Held Securities
a) Gifts of closely held securities are subject to prior approval of the Administrative Committee with advice from the Finance Committee. The valuation of securities that are not publicly traded is the responsibility of the donor, and such gifts must be accompanied by an independent qualified appraisal.
b) Gifts of closely held securities are accepted barring any restrictions on their sale and once their legal marketability is determined. The donor is required to provide this valuation if appropriate.
c) Securities need to be marketable and able to be liquidated in a reasonable amount of time.
d) Donor is responsible for all costs associated with ensuring donated securities are marketable with no restrictions.
5. Planned Gifts
The Ark appreciates the generosity of those donors who wish to name the organization as a beneficiary in Charitable Remainder Trusts, Charitable Remainder Unitrusts, and Charitable Lead Trusts.
C. Unacceptable Gifts
The Administrative Committee makes the final decision about acceptance of gifts that may be deemed to fall outside of established policy guidelines. The Ark reserves the right to refuse a charitable gift without publicly disclosing the reason. The Ark is not required to accept any charitable gifts or contributions, particularly those which:
1. Are designated with restrictions that fall significantly outside the organization’s mission and program priorities;
2. May cost the organization money, provide a liability or potential penalty of any kind;
3. Have conditions that are not deemed in the best interest of The Ark, or those that fall outside ethical boundaries;
4. Are not able to be liquidated into cash in a reasonable amount of time.
D. Interpretation of Gift Acceptance Policies
Only the Executive Director and specific designates are authorized to receive gifts on The Ark's behalf. The Executive Director is assisted in the interpretation and implementation of these guidelines by the Chair of the Board of Directors, Treasurer, Finance Committee, Development Committee, and Administrative Committee. Other Board members may be consulted at the Administrative Committee’s discretion. Advice may be sought from the agency’s auditors. The Administrative Committee’s role is to approve gift agreements and the acceptance of gifts that deviate from these policies.
E. Review and Amendments of Gift Acceptance Policies
1. Responsibility for review and suggested amendments is with The Ark’s Executive Director, in consultation with the Development Committee.
2. The procedure to amend these guidelines is as follows: The Executive Director provides written recommendations to the Finance and Administrative Committees, and then to the Board of Directors for approval.
F. Code of Conduct
Representatives of The Ark exercise caution to avoid pressure, persuasion or undue influence and encourage donors to seek their own counsel when considering a planned gift option.
All personnel employed by The Ark to contact prospective donors or to promote the planned gifts program are paid a salary or fixed wage, and do not receive commissions which could give such personnel a direct beneficial interest in any agreement.
The Ark recognizes that it is in a position of trust with the donor, and that the donor has placed trust in the organization concerning confidentiality. Therefore, all donor information, correspondence and governing instruments is kept in a secure place, which is accessible to individuals with approval of the Executive Director. It is known throughout The Ark that this is confidential information.
H. Use of Constituent Lists
It is the organization’s policy not to sell, loan, trade, or share its constituent lists to individuals or organizations interested in using it for fund raising.
I. Protection of Donor’s Interest
No program, agreement, trust, contract or commitment is knowingly urged upon any prospective donor that would benefit The Ark at the expense of the donor’s interest and welfare.
No agreement is made between The Ark and any agency, person, company or organization on any matter related to investments, management or otherwise which knowingly jeopardizes the donor’s interest.
J. Use of Legal Counsel
A prospective donor is advised to seek legal or tax counsel of his/her attorney in any and all aspects of a proposed gift, whether by bequest, trust agreement, contract, or outright gift. They are advised to consult with their attorney or accountant on matters related to the tax implications and estate planning aspects of a planned gift agreement.
The Ark consults with separate legal counsel in all matters pertaining to its planned giving program and consults counsel when executing agreements, contracts, trusts or legal documents. In no case is The Ark’s attorney the attorney for the donor. Donors are advised to seek their own legal or tax counsel.
No legal fee is paid by The Ark for the drafting of a will or other trust instruments on behalf of prospective donors even if the organization is to be named as a beneficiary. No legal fee is paid by The Ark for determining the marketability of any donated property, whether securities or real property. The Administrative Committee must authorize any exemptions to this policy.
K. Gift Acknowledgement Policies
Effective 1994, the Omnibus Budget Reconciliation Act of 1993 (OBRA) added Internal Revenue Code section 170(f)(8) which denies donors a charitable deduction for any contribution of $250 or more unless the donor obtains a written acknowledgement of the contribution from the charity. The Ark is in full compliance with the law; it is the policy of the organization to provide an acknowledgement for all gifts regardless of the size.
The law also requires charities to provide written disclosure about the solicitation or receipt of quid pro quo contributions that exceed $75.00. The disclosure must: inform the donor that the amount of the contribution that is tax deductible for federal income tax purposes is limited to the excess of the amount on any money and other property contributed by the donor, over the value of the goods and services provided by the charity; and provide the donor with a good faith estimate of the value of such goods and services. This disclosure must be made when the contribution is solicited or when the contribution is received.
There are three situations in which a disclosure is not required: where the goods or services are “insubstantial,” (i.e., token or otherwise de minimis); where no donative intent is present, (e.g., sales of T-shirt at reunion); where only an intangible benefit is provided to the donor, (e.g., participation in a religious ceremony).
L. Policy for Thanking Donors
In addition to processing all gifts and generating gift receipts, The Ark is also responsible for thanking donors for their gifts in a timely manner. This acknowledgement includes the official gift receipt. The Ark has established internal procedures for thanking donors for their contribution including information on who signs the letter, what type of acknowledgement letter is sent, what letters are kept in permanent files, etc.
Approved June 28, 2010