Templates and FAQs for Nonprofits

Reward acceptance insurance policies are an important however simply neglected a part of nonprofit administration. You gained’t miss them till you want them, and you then’ll want you’d created them earlier!

To keep away from sensitive (and doubtlessly damaging) donor relations and authorized conditions, it’s price taking the time to check up on these insurance policies and create them. This fast information covers all of the necessities, plus additional concerns it’s essential to know:

On the lookout for extra methods to enhance your nonprofit’s governing constructions and set your group up for fulfillment? We suggest board self-assessments.

Understanding Nonprofit Reward Acceptance Insurance policies

Let’s begin with the basics by reviewing a number of regularly requested questions on nonprofit present insurance policies.

What’s a present acceptance coverage?

A present acceptance coverage is a piece of or addendum to a nonprofit’s bylaws that clearly defines the varieties of presents it might probably and can’t settle for. These insurance policies most frequently come into play when donors supply to present uncommon or exceedingly invaluable in-kind or non-cash presents.

Along with defining acceptable varieties of presents, thorough (and efficient) acceptance insurance policies additionally cowl:

• The circumstances below which sure varieties of presents may be accepted
• How sure varieties of in-kind and non-cash presents can be liquidated and/or managed
• Who on the nonprofit is answerable for reviewing donations which will battle with the acceptance coverage
• Logistical particulars defining how sure presents will acknowledged, tracked, and reported
• Tips on your basic present substantiation course of, which is how and when donors obtain acknowledgment for tax-deductible presents valued over $250

Why do nonprofits create present acceptance insurance policies?

A present acceptance coverage spells out what you’ll be able to and can’t settle for, giving your fundraisers and donors a concrete set of pointers to reference when tough conversations come up.

Why is that this essential? Every kind of tangible gadgets, belongings, and securities get donated to nonprofits, and plenty of could include added baggage, comparable to compliance necessities, reputational implications, complicated restrictions, and extra prices. This implies there are instances when it’s in your nonprofit’s greatest curiosity to show down a present, both as a result of its worth isn’t well worth the added work/price of accepting it or as a result of it would open you as much as new liabilities that aren’t well worth the danger.

Acceptance insurance policies also can set up working pointers for present substantiation and reporting, that are important for sustaining your nonprofit’s authorized compliance.

Plus, it’s possible you’ll be required to have a present acceptance coverage in place when reporting some presents to the IRS in your nonprofit’s annual 990 submitting course of. When reporting non-cash presents, your nonprofit could also be required to finish Schedule M (Noncash Contributions) of Type 990 if it has obtained over $25,000 in non-cash presents or obtained sure presents of artwork or related belongings. Schedule M asks whether or not you have got a present acceptance coverage in place, and “no” will not be a suitable reply to this query.

What are the advantages of getting concrete present insurance policies?

Reward acceptance insurance policies present a number of key advantages:

• Insurance policies offer you concrete standards for figuring out if you happen to ought to or shouldn’t settle for a present with no guesswork wanted.
• Insurance policies make it a lot simpler for fundraisers to show down a present with a easy “Our acceptance coverage prohibits this type of present,” moderately than a protracted or complicated dialog that might injury your relationship with the donor.
• Tips for present reporting and substantiation included in your acceptance coverage assist to make sure that your group totally complies with rules by documenting them and assigning possession in a central location.
• As talked about above, present acceptance insurance policies are required as a part of the Type 990 course of, important for sustaining your group’s tax-exempt standing.

How you can Create a Reward Acceptance Coverage: 5 Steps

You’re able to replace (or write your first) present acceptance coverage on your group. Nice! Now, what subsequent? We suggest these core steps:

1. Safe buy-in and alignment. Get your group’s management and board on the identical web page concerning the want for a brand new or up to date present acceptance coverage. You want official sign-off and ratification for the coverage addition to take impact, so get a head begin by placing it on everybody’s radar. Recruit one or two people to hitch a small committee. If in case you have a board member with skilled authorized expertise or connections, ask them particularly to hitch.
2. Draft your present acceptance coverage. Work along with your staff to draft a coverage on your group. Check out the instance insurance policies and templates under to get began. However remember to take your time and search authorized enter if wanted. Though nonprofits’ present acceptance insurance policies are sometimes fairly related, they need to not be one-size-fits-all. A coverage personalized to your nonprofit’s wants, previous experiences, and anticipated challenges (even when they’re unlikely) all the time presents the perfect safety.
3. Assessment and revise as a staff. Collect suggestions out of your staff and one or two different organizational leaders or authorized counsel who haven’t been concerned within the drafting course of. They’ll consider the coverage extra objectively and establish any potential issues or gaps that ought to be addressed within the subsequent draft.
4. Vote and enact your coverage addition. After getting a ultimate model, share it with leaders and the board forward of your subsequent board assembly, and add the coverage to the assembly agenda. In the course of the assembly, talk about it as a bunch, decide if any additional adjustments are wanted, after which comply with your group’s protocol to vote on and enact the coverage addition.
5. Talk the change internally. Add the brand new coverage to your nonprofit’s official bylaws, republish them, and notify your complete inside staff. Ship a fast electronic mail that hyperlinks to the up to date coverage and explains these key factors:
   • What an acceptance coverage is
   • Why you’ve created or up to date one
   • The way it will assist your nonprofit and particular groups
   • Who to contact with questions

• Introductions and contextual sections that clearly outline what your nonprofit considers a “present”
• Particulars about any present evaluate committees or inside workers positions answerable for reviewing particular varieties of presents and what that course of entails
• Particulars, necessities, and expectations for any present settlement processes that you could be implement to make sure mutual understanding of the insurance policies for giant presents above a sure worth threshold
• Precise acceptance standards and processes for presents of money, publicly traded securities, non-public securities, cryptocurrency, varied varieties of in-kind presents, actual property, donor-advised fund grants, varied varieties of deliberate presents, and extra
• Liquidation timeframes for presents of securities or cryptocurrency
• Whether or not sure varieties of presents can be restricted or unrestricted upon donation, plus the method for altering a donation’s restriction standing if desired by the donor
• Explanations of how employer-sponsored matching presents can be recorded and substantiated
• Particulars about customary present counting and reporting processes

Reward Acceptance Coverage Templates

Reward acceptance insurance policies are extraordinarily diversified as the entire level is that they need to shield and assist your distinctive group. Nonetheless, they do normally share a number of widespread parts and particulars that make your workers’s lives simpler and shield your 501(c)(3) standing.

Insurance policies may be easy and quick to cowl your bases or extraordinarily thorough to spell out actual protocols for particular conditions. For reference, listed below are templates for a fundamental and extra detailed present acceptance coverage:

Reward Acceptance Coverage Template – Fundamental

1. [Nonprofit] solicits and accepts presents in line with its mission and assist its core applications and particular initiatives.
2. Donations and different donated types of assist are usually accepted from people, companies, foundations, authorities businesses, and different companions, topic to the next acceptance limitations:
   1. [Descriptions of limitations, which may include:]
   2. [Specific types of gifts]
   3. [Delivery/pickup of donated items]
   4. [Condition of donated items]
   5. [Proof of ownership or provenance of donated items]
3. Presents of Actual Property, Private Property, Securities, and different Belongings could solely be accepted upon approval of [specific committee within the nonprofit].

This instance clearly states that accepted presents are decided to be in line with the mission, adhere to particular limitations, and require approval in some instances. Its final level helps cowl your bases and eliminates the necessity for granular element, however do not neglect to comply with by means of with the approval course of.

If a coverage is so unfastened or mild that it’s forgotten the subsequent time a donor desires to present you a sure kind of donation, you would possibly as effectively not have the coverage in place in any respect!

Reward Acceptance Coverage Template – Reasonably Thorough

[Nonprofit] solicits and accepts presents for functions that may assist it additional and fulfill its mission. [Nonprofit] encourages potential donors to hunt the help of private authorized and monetary advisors in issues regarding their presents, together with the ensuing tax and property planning penalties. The next insurance policies govern acceptance of presents made to [Nonprofit].

Goal of the Coverage: The aim of this coverage is to control the acceptance by [Nonprofit] of [all or specific types of gifts], and to supply steering to potential donors.

Reward Assessment Committee: Any present or proposed present that doesn’t adjust to this coverage should be reviewed and accepted by the [internal committee], which consists of [internal roles that make up the committee]. As indicated under, sure proposed presents could require the approval of the [Board or Executive leadership, if applicable].

Use of Authorized Counsel: [Nonprofit] will search the recommendation of authorized counsel in issues regarding acceptance of presents when applicable. Assessment by counsel is advisable for [common stipulations below]:

1. Presents of securities which are topic to restrictions or buy-sell agreements
2. Paperwork naming [Nonprofit] as trustee or requiring it to behave in any fiduciary capability
3. Presents requiring [Nonprofit] to imagine monetary or different obligations
4. Transactions with potential conflicts of curiosity
5. Presents of property that could be topic to environmental or different regulatory restrictions

Restrictions on Presents: [Nonprofit] is not going to settle for presents that:

1. Would end in [Nonprofit] violating its company constitution
2. Would end in [Nonprofit] shedding its standing as an IRC § 501(c)(3) not-for-profit group
3. Are too tough or too costly to manage in relation to their worth
4. Would end in any unacceptable penalties for the group
5. Are for functions outdoors [Nonprofit]’s mission.

Choices on the restrictive nature of a present, and its acceptance or refusal, shall be made by the Government Committee, in session with the Government Director.

Presents Typically Accepted With out Assessment [common examples below]:

• Money. Money presents are acceptable in any type, together with by examine, cash order, bank card, or on-line… [Provide additional requirements and restrictions for all gift types as needed.]
• Marketable Securities. [Include details about the transfer process, liquidation timeframe, restrictions, approval processes, etc.]
• Bequests and Beneficiary Designations below Revocable Trusts, Life Insurance coverage Insurance policies, Business Annuities, and Retirement Plans.

Presents Accepted Topic to Prior Assessment:

Sure types of presents or donated properties can be topic to evaluate by [committee, board, and/or executive leadership] previous to acceptance. Examples of presents topic to prior evaluate embody, however aren’t restricted to [common examples below]:

• Tangible Private Property. [Details about acceptance requirements, restrictions, approval processes and criteria, etc.]
• Life Insurance coverage.
• Actual Property. 

This instance is extra thorough than the primary and extra clearly defines particular particulars about varieties of presents and the processes and protocols that encompass their acceptance.

However if you need, your coverage can go even additional! Seek the advice of along with your nonprofit’s authorized counsel to develop a present acceptance coverage tailor-made to your group’s actual wants.

Nonetheless, do not forget that whilst you don’t essentially must get your present acceptance coverage excellent the very first time, you do must have one in place! You possibly can all the time increase or refine it over time by working along with your group’s leaders and authorized counsel.

Further Issues to Preserve in Thoughts

As you draft or replace your nonprofit’s acceptance coverage, there are further concerns that you must have in mind. These will assist to additional shield your group, maximize the coverage’s utility and worth, and guarantee adoption.

• Modify your coverage over time. As famous above, your present acceptance coverage is not set in stone. Drafting an exhaustive coverage isn’t all the time vital, and it may be fairly time-intensive when executed by yourself. If it’s essential to develop a fundamental one to cowl your bases shortly, go for it. Then, take the time later to seek the advice of with a nonprofit authorized professional, draft a extra thorough model, and get it accepted by your board.
• Embrace gift-specific clauses as wanted. It is likely to be straightforward to outline what your nonprofit considers “presents” and slap a present evaluate committee course of onto the coverage (positively higher than nothing!), nevertheless it won’t serve you effectively in the long term. It’s straightforward to neglect or neglect unfastened insurance policies, and insurance policies that create further steps for a number of staff members are more likely to be disliked and maybe disregarded over time—not a great consequence. Contemplate the varieties of presents you at present settle for and wish to settle for. For instance, in case your nonprofit desires to deliberately increase its applications for securing deliberate presents or company presents of in-kind items, a coverage playbook can be extraordinarily useful for reaching these objectives.
• Contemplate further varieties of clauses as wanted. Most notably, resolve if you wish to embody variance and morality clauses. The first perform of those clauses is to present your nonprofit choices for coping with the repercussions of a donor’s poor repute or authorized troubles, permitting your group to separate itself from their identify. An unlucky consequence, nevertheless it does occur, so greatest to have choices!
  • Variance clauses in present agreements dictate what occurs when the unique phrases of a present can now not be met. For instance, if a constructing funded by a donor’s main present is renovated or rebuilt, their identify can be faraway from the up to date or new constructing. These clauses also can extra usually ban perpetual public recognition and get rid of any expectations that your nonprofit should show the donor’s identify on distinguished funded buildings or installations in perpetuity.
  • Morality clauses explicitly give your nonprofit the flexibility to distance itself and take away naming if a donor (or the donor’s enterprise practices) now not align along with your said values and mission. These may be sensitive to debate with donors, which is why many nonprofits depend on a mixture of variance and morality clauses to supply safety with out offending new donors when present phrases are mentioned.
• Have a plan for utilizing your present acceptance coverage. When your present acceptance coverage is triggered (or a present officer merely encounters an unfamiliar scenario), have a course of and pointers in place for talk about it with donors. First, guarantee your coverage is internally publicized and simply accessible to everybody in your bylaws. Subsequent, actively practice your fundraisers, present officers, accounting staff, and some other related workers on the coverage’s contents and applicability. Define particular steps they need to comply with to raise uncommon or new points that aren’t lined in your coverage.

Deepening Relationships By way of Non-Money and Company Presents

One ultimate advice is to make use of the event of drafting or updating your nonprofit’s present acceptance coverage as a possibility to take into account your present (and perfect) income streams.

These insurance policies are most useful in conditions that contain both non-cash presents or donations made by means of different organizations moderately than people. As you’re employed in your acceptance coverage, use it as a springboard to consider what additional progress would possibly seem like on your nonprofit. Contemplate these questions:

• Are you closely reliant on particular person contributions?
• Are you profiting from alternatives to safe non-cash presents or presents from companies and foundations?
• Do you actively discuss various or alternate giving choices with donors?
• Have you ever promoted matching presents to your donors (the best solution to construct a company giving stream by far)?
• Do you discover your main and mid-level donors’ company connections to uncover new potential partnerships?

Company giving platforms for nonprofits like 360MatchPro by Double the Donation and software program constructed particularly for deliberate giving, inventory giving, DAFs, and extra can assist you construct extra strong giving applications that match the robustness of your acceptance insurance policies (and aspirations).

Discover your choices and don’t be afraid to diversify. Overreliance on a single type of income is dangerous for nonprofits, and there are tons of straightforward methods to diversify your fundraising and give your donors higher, extra versatile experiences. To proceed studying construct a effectively ruled and funded nonprofit, check out these further assets: