Welcome back. In the last lesson you learned how to structure a planned giving strategy mindful of legacy management. In this lesson, we will address documenting gift acceptance policies. After this lesson, you will be able to: explain what goes into a gift acceptance policy, discuss the proper administration of planned gifts to ensure policy compliance and list the benefits to the donor, the charity for having good gift acceptance policies in place. Let's get started. When I use the term gift acceptance policy, I mean a policy or document that details the gifts that your charity will accept. It seems simple and self-explanatory but I can't overstate the importance. It is the guiding document to help you navigate complex gift proposals and efficiently respond to donors. Donors become very frustrated when a charity takes excessive amounts of time to make a decision on accepting their gift. This can be a deal breaker, and negatively affect the perception of your charity. A gift acceptance policy will expedite the decision making process and standardize the types of gifts that you will be accepting. It's important for the reputation of the charity to treat every donor fairly. Having your gift acceptance policy in place, will allow you to accomplish this worthy goal. Here is an example of a gift acceptance policy. This sample comes from UC Davis. I provide sample documents in your resources for you to study further. What is important to note about this document that would be generic to other such documents, is that the components of the document are meant to protect the donor as well as the charity. These components cover almost every potential gift option. It's like a menu that you can choose which parts are applicable to your organization and build your own policy. For the parts that are not applicable, it would still be valuable to leave them in with a note that you did not accept that particular gift option. These policy document should continually be reviewed and updated. As your charity evolves, you may be in a position to accept a larger variety of gifts or the minimum levels of certain gift options may change. Next, we will review some of the components of a gift acceptance policy. The basic components of a gift acceptance policy you need to know are: a general policy statement, fiduciary responsibility to the donor, professional counsel, acceptance and administration of planned gifts, approved planned gifts, charity as a trustee and an investment policy statement. Let's look at each of these in turn. When I use the term general policy, I mean the introduction and basic overview for the policy. This would be the framework for the entire gift acceptance policy. It tells the organization what's in the policy. When I use the term, fiduciary responsibility to donor, I mean that we as development professionals, have a responsibility to be donor-centered. Being donor-centered means putting the donor's interest and well-being first and foremost. We never want to push the donor to give a gift that we know isn't in their best interest. For example, if the gift jeopardizes their quality of life or causes unnecessary family issues, then we would not be upholding our fiduciary responsibility. Here is an example of fiduciary responsibility to a donor. I've worked with a few donors in my career who wanted to make a gift but I was aware of circumstances that led me to believe it wasn't in their best interest. A classic example is a donor who wants to make an irrevocable planned gift like a charitable gift annuity. The charitable gift annuity provides the donor income and the remainder goes to charity upon their passing. The donor cannot access the original gift or the principle of the charitable gift annuity. This particular donor wanted to put most of his assets in the charitable gift annuity because it would provide more than enough income for him to live on. On the surface, this sounds like a great opportunity for the charity, but it doesn't meet the fiduciary responsibility established by your gift acceptance policy. Why? Because a donor cannot access the principle of the charitable gift annuity. If something catastrophic were to happen to him, then he could be adversely affected. You wouldn't want him to be unable to pay for health care services or basic needs because he made this gift. Therefore, the right thing to do is to counsel the donor towards a different gift strategy. This demonstrates fiduciary responsibility to the donor.
