Gift Acceptance policy
GIFT ACCEPTANCE POLICY
I. PURPOSE OF THIS POLICY STATEMENT
This policy statement shall give guidance and counsel to individuals concerned with the solicitation, receipt, acceptance, application and disposition solely of gifts to Montgomery County Community College Foundation (the “Foundation”) It should be noted that this document is not intended to provide detailed descriptions of various giving instruments or offer advice to prospective donors regarding the most effective means of achieving their philanthropic goals.
Specifically, the policies contained herein will provide guidelines for the Foundation to:
- Accept gifts and pledges that are made using a range of the most common giving instruments;
- Credit/account for gifts and pledges made to the Foundation;
- Recognize donors who contribute to the Foundation; and
- Inform decisions made on matters related to gifts made or pledged to the Foundation.
II. GUIDING PRINCIPLES
The following are important guiding principles used in developing these policies.
- These policies are informed by established industry guidelines for “best practices” in fund raising. These guidelines include Generally Accepted Accounting Principles (GAAP), and standards approved by the Financial Accounting Standards Board (FASB), and the Council for the Advancement and Support of Education (CASE), among other organizations.
- The “total funds raised” at a given point during the fiscal year is a tally of acceptable gifts and documented and appropriately valued gift commitments (i.e., pledges and deferred gifts).
- It is assumed that the Foundation and its representatives will endeavor, at all times, to faithfully implement the stated and/or written philanthropic goals of donors.
- Persons acting on behalf of the Foundation shall encourage donors to discuss proposed gifts with independent legal, financial and/or tax advisors and shall stress the importance of such counsel when gifts in question are structured and irrevocable.
- Accounting systems will be consistent with accounting and investment policies at Montgomery County Community College.
III. GIFT AND PLEDGE CONFIRMATION
All gifts must be received by the Foundation outright, or pledged in writing and signed by the donor or the donor’s qualified representative. Written confirmation should include a statement that allocates gifts to the Foundation or, alternately, projects outlined in the case for support.
Acceptable forms of written confirmation include, but are not limited to, a signed: letter of intent or pledge card; letter authored by the donor; written agreement; trust document or other legally binding documentation associated with acceptable planned giving instruments; or other legal notification.
For pledges, a schedule of pledge payments will be requested to assist the Foundation in financial planning.
Oral pledges may not be counted.
IV. LENGTH OF PLEDGES
Pledged gifts may be fulfilled over a period of five years. The Finance Committee and/or the Foundation’s leadership can, at its discretion, extend the pledge payment period to accommodate donors’ wishes/needs on a case-by-case basis.
V. ACCEPTANCE AND CREDITING OF OUTRIGHT GIFTS
- Cash. Gifts in the form of cash (including checks) shall be accepted regardless of amount unless, as in the case of all gifts, there is a question as to whether donors have sufficient title to gifted funds or are mentally competent to legally transfer funds to the Foundation as gifts. All checks should be made payable to Montgomery County Community College Foundation; in no event should a check be made payable to an employee, agent or volunteer for the credit of the Foundation.
- Publicly Traded Securities. Readily marketable securities shall be accepted. Gifted securities will be sold promptly. In no event shall an employee or volunteer working on behalf of the Foundation commit to a donor that a particular security be retained by the Foundation.
Crediting and Guidelines
- Gifts of publicly traded securities will be credited at the averages of the high and low selling prices on the dates that the donors transfer control of assets to the Foundation (not the value of the securities on the dates they are sold by the Foundation). For mailed gifts, this is the postmark date on the donor’s envelope.
- Illiquid Securities. Gifts of illiquid securities include hedge funds, private equity interests, and closely held securities. Typically, it is not possible to sell such securities immediately upon their having been gifted.
- Such gifts should be reviewed carefully by the Finance Committee and Foundation’s leadership before they are accepted. Key considerations include the likelihood that the securities can be sold; whether the nature of the businesses and/or practices of the gifting corporations or funds are consistent with the College’s mission; and whether the Foundation could incur any unrelated business income tax.
Crediting and Guidelines
- If accepted, gifts of closely held stock that exceed $10,000 in value should be counted at the fair market value placed on them by a qualified independent appraiser as required by the Internal Revenue Service.
- Gifts of closely held stock of $10,000 or less may be valued at the per-share cash purchase price of the most recent transaction (normally, this transaction is the redemption of the stock by the gifting corporation). If no redemption has occurred during the reporting period, an independent certified public accountant who maintains the books for that corporation is qualified to value its stock.
- Real Estate. Proposed gifts of real estate will be reviewed and approved by the Finance Committee and the Foundation’s leadership, but in general, the Foundation will accept gifts of houses, residential condominiums, commercial property and unimproved land if the properties are unencumbered, owned in fee simple, and the sales of which will yield proceeds sufficient to justify the necessary efforts (value of $100,000 or greater for property within the United States, $200,000 or more for property outside the United States).
Unless stated otherwise by the Foundation’s leadership, gifts of real estate will be accepted with the intent that they will be sold as soon as possible.
Prior to accepting any gift of real estate, the Foundation will obtain an appraisal from a qualified appraiser. The fair market value will be determined by an appraisal provided by the donor. The Foundation reserves the right to obtain its own appraisal in the absence of a donor appraisal, or if the donor appraisal is deemed unreasonable.
Crediting and Guidelines
- Gifts of real estate will be credited and recognized at their appraised value at the time they are gifted. The Foundation reserves the right to adjust the gift credit to the net sale proceeds within three years of the gift date.
- Tangible Personal Property. Gifts of high-value tangible personal property for the purposes of resale must be approved by the College’s Vice President for Finance and Administration prior to acceptance by the Foundation.
- Prior to accepting any gift of tangible personal property, the donor shall incur the cost to obtain an appraisal from a qualified appraiser who has no business or relationship with the donor. In accordance with IRS rules, the donor should provide a completed IRS Form 8283 to the Foundation.
Crediting and Guidelines
1. Gifts of tangible personal property will be credited and recognized at their appraised value at the time they are gifted (not the sale prices).
F. Other Property. Other types of property such as mortgages, notes, copyrights, royalties and easements shall only be accepted at the recommendation of the Finance Committee and with the approval of the Foundation’s leadership and the College’s Vice President for Finance and Administration.
Crediting and Guidelines
- Gifts of other property will be credited and recognized at their appraised value at the time they are gifted (not the sale prices).
- Gifts-in-kind. Gifts-in-kind will be considered for acceptance and recognition if such gifts are eligible for charitable tax deductions under Internal Revenue Service standards.
Crediting and Guidelines
- In general, the Foundation does not place a monetary value on gifts-in-kind, and these will only be credited if the donor provides substantiation of value in accordance with IRS regulations.
- Deep discounts or bargain sales can be credited if an individual or company provides a bill of sale clearly indicating the normal retail price that the College would have paid the individual or company for the product (the “normal price” would reflect any discounts typically provided to the College), less the charitable contribution of the discounted amount, and a net cost.
- The value of gifts of “time” in the form of donated professional services will not be credited. The Foundation does not accept gifts of services.
VI. ACCEPTANCE AND CREDITING OF DEFERRED AND/OR PLANNED GIFTS
Acceptance and crediting policies regarding some of the most common deferred giving instruments are outlined below. As a general rule, deferred gifts that mature will be credited at full value.
- Bequests (Generally). Gifts in the form of bequests will be accepted and counted. Language for leaving a bequest to the Foundation is:
- “I, [Donor Name], bequeath to Montgomery County Community College Foundation, located at 340 DeKalb Pike, Blue Bell, PA 19422, [the sum of / percent of the rest, residue and remainder of my estate]. This bequest should be designated in support of Montgomery County Community College.”
- Irrevocable Bequests. Gifts in the form of irrevocable bequests will be accepted and credited subject to the guidelines set forth immediately below.
Crediting and Guidelines
1. Gifts in the form of irrevocable bequests from donors who are at least 65 years of age and provide supporting documentation will be credited at the full value of their bequest provisions.
C. Revocable Bequests. The foundation does not credit revocable bequests and, as a general rule. Any exception will be subject to the judgment of the Finance Committee and Foundation’s leadership, who will, to the best of their ability, look for and be guided by evidence of the following two factors.
A significant and established relationship between the donor and the Foundation such that would warrant a high degree of trust in a given donor’s inclination to fulfill his or her bequest intention; and
Clear indication of a given donor’s financial ability to fulfill his or her bequest intention.
D. Retirement Plans. As an alternative to leaving a gift by will, the Foundation may be named as the ultimate beneficiary of a donor’s individual retirement account or 401(k) or comparable plan.
Crediting and Guidelines
1. Because of their revocable nature, gifts made in the form of retirement plans should be credited in much the same manner as revocable bequests (Policy 6.C).
E. Life Income Plans. With the qualifications set forth herein, life income gifts will be accepted and credited. All life income plans entered into shall comply with state and federal regulations governing these types of charitable gifts. Each life income plan must constitute an irrevocable gift. Current Foundation investment policies will apply to those gifts where the Foundation serves as the trustee.
Crediting and Guidelines
1. Charitable Gift Annuities. The Foundation will credit an irrevocable gift of $10,000 or more (paid in cash or marketable securities) made in exchange for a guaranteed fixed income for life.
The Foundation will not enter into an immediate annuity agreement in which any income beneficiary is less than 65 years old, and will not enter into a deferred annuity agreement in which any income beneficiary is less than 60 years old when payments begin.
Donors who establish charitable gift annuities who are at least 79 years of age will be credited at the full value of the funds transferred to the Foundation. Donors who are between 65 and 78 years of age shall be credited at the charitable remainder value of the assets given.
2. Charitable Remainder Trusts. The two most common forms of charitable remainder trusts are (1) charitable remainder annuity trusts and (2) charitable remainder unitrusts (unitrusts can have several variations, including “straight,” “net income,” “net income with make-up provision,” and “flip” trusts). Each of these instruments, with qualifications, can be used to make gifts that will be credited.
With regard to minimum ages and amounts at which to be credited, annuity trusts and unitrusts shall be credited to the campaign in the same manner as charitable gift annuities (as outlined in Policy 6.E.1). Other guidelines include:
§ The Foundation will not, in general, act as trustee or co-trustee of charitable remainder trusts.
§ When the Foundation must act as a trustee or co-trustee and sole remainderman, there will be a minimum of $100,000 face value on all unitrusts and a $50,000 minimum on annuity trusts. In cases in which the Foundation is not the sole remainderman, the minimum on all trusts will be $200,000. There must be a 20% expected remainder (present value of the future remainder interest) to the Foundation for any trust in which the Foundation agrees to act as trustee or co-trustee.
§ When the Foundation acts as trustee or co-trustee, the maximum expected term for a trust should not exceed 25 years. Trusts in which SMMCF serves as trustee or co-trustee should not provide for annual income distributions of more than 8% of principal (exceptions may be considered).
§ A 7% fee will be allocated from the remainder of all charitable remainder trust proceeds in which SMMCF has acted as trustee or co-trustee, in order to offset future trust administration costs. This fee is at the discretion of the Campaign Executive Committee.
§ Qualified real estate (see Policy 5.D) may be used to establish charitable remainder unitrusts (but not annuity trusts). In such cases, the type of unitrust preferred is either a “net income,” “net income with make-up,” or a “flip” trust. Donors retain the trusteeship on the trusts until such time as properties are sold. The Foundation will proceed with the initial creation of the trusts as if it is to act as initial trustee, responsible for providing all other administration services associated with the trusts and assuming trusteeship or co-trusteeship upon completion of the sale of the properties.
§ Legal fees that may arise from the creation of trusts that are generated by donors’ attorneys will be borne by donors.
3. Life Insurance. With qualifications set forth herein, gifts of life insurance will be accepted by the Foundation and credited, at the discretion of the Finance Committee. Such a gift may be affected in one of two ways: by transferring all indicia of ownership over the policy to the Foundation or by simply naming it as the beneficiary.
If a donor transfers all indicia of ownership over a policy to the Foundation and premium payments are outstanding, said donor will be expected to provide for the payment of the annual premium. Donors will be asked to contribute the amount of the premium payments to the Foundation and the Foundation will, in turn, pay the premium to the insurer. This is consistent with current Internal Revenue Service regulations authorizing such payments as tax-deductible contributions.
If a policy is abandoned by a donor with premium payments outstanding, The foundation reserves the right to cash in the policy.
Donors of life insurance policies will be credited as follows.
4. Donors who are 79 years of age or older shall be credited and recognized with the full face value of their policies.
5. Donors between ages 55 and 79 shall be credited and recognized with the net present value of their policies.
6. Prospective donors below age 55 shall be discouraged from making gifts of life insurance; in such cases, decisions regarding gift acceptance and crediting will be made at the discretion of the Finance Committee and the Foundation.
B. Charitable Lead Trusts. The foundation will credit and recognize gifts of income-producing assets that are placed in trust for the benefit of the College for a fixed period of time.
VII. SPECIAL CONSIDERATIONS AND POLICIES REGARDING GIFTS DESIGNATED FOR ENDOWMENT
With regard to gifts designated for purposes of endowment, at least two important issues affect policy considerations.
A. “Nearest Practical Purpose” Endowment Agreement Clause. When entering into endowment agreements, there should be a shared understanding between donors and the Foundation that it is in the best interest of the Foundation and its mission to promote practices that permit the most flexibility in long-term planning, utilization and investment. This flexibility is particularly important, for example, in cases in which programs supported by endowment are, by necessity, discontinued or otherwise become obsolete or impracticable. Therefore, the foundation will, in general, seek endowment gifts that least restricts the purpose, administration and the investment of principal.
With these concerns in mind, donors who give in support of endowment funds may be asked to review and consent to a written agreement clause stating that the foundation may reallocate money from an endowment fund to the nearest practical purpose consistent with the Foundation’s mission. In all cases, no such reallocations will be attempted without the express consent of donors or their representatives.
B. Minimum Age Requirements for Deferred Gifts Designated for Endowment. The creation of cash flow to aid in the long-term sustainability of programs and facilities is the primary reason gifts of endowment are sought. Because of the long-term nature of endowment support, special minimum age requirements for the acceptance and crediting of certain deferred gifts designated for endowment will be in effect as follows. (All requirements listed in Policies 6.B-F not specifically modified below remain intact.)
1. Irrevocable Bequests. Donors who at least 65 years of age and who provide supporting documentation will be credited at the full value of their bequest provisions.
2. Revocable Bequests. Minimum age requirements and crediting policies remain unchanged (see Policy 6.C).
3. Retirement Plans. Minimum age requirements and crediting policies remain unchanged (see Policy 6.D).
4. Life Income Plans. Minimum age requirements and crediting policies are as follows for the most common life income giving instruments.
a. Charitable Gift Annuities. Donors who are at least 72 years of age will be credited at the full value of the funds transferred to the Foundation. Donors who are between 65 and 71 years of age shall be credited at the charitable remainder value of the assets given.
b. Charitable Remainder Trusts and Unitrusts. Donors who are at least 72 years of age will be credited at the full value of the funds transferred to the Foundation. Donors who are between 65 and 71 years of age shall be credited at the charitable remainder value of the assets given.
c. Life Insurance. Donors who are 72 years of age or older shall be credited and recognized with the full face value of their policies; donors between ages 55 and 71 shall be credited and recognized with the net present value of their policies.
5. Charitable Lead Trusts. Minimum age requirements and crediting policies remain unchanged (see Policy 6.F).
VIII. RECOGNITION OF CAMPAIGN GIFTS
A. Gift Acknowledgments. Gifts and pledges will be acknowledged with letters from the Foundation’s leadership and campaign volunteers. Written acknowledgment will be mailed within five business days of gift or pledge receipt.
B. Naming Opportunities. The Foundation’s leadership must approve a schedule of gift levels for naming opportunities. Naming opportunities will require a signed agreement and donors may be subject to background checks t o protect the name of the College.
C. Matching Gifts. Matching gifts will be credited toward donors’ recognition levels.
IX. DECLINING AND RETURNING GIFTS
The Finance Committee and the Foundation’s leadership may decline gifts under certain conditions including, but not limited to, the following.
A. Gifts that are restricted and would require support from other resources that are unavailable, inadequate, or may be needed for other institutional purposes.
B. Gifts that are restricted and would support purposes or programs peripheral to existing principal purposes of the College, or create or perpetuate programs or obligations which would dissipate resources or deflect energies from other programs or purposes.
C. Gifts that could injure the reputation or standing of the College or the Foundation, or cause it to enter into activities that are in conflict with its mission.
D. Gifts that could put at risk the Foundation’s tax-exempt status or trigger negative tax situations, such as unrelated business income tax.
E. Once accepted, gifts may be not be returned to donors. Under Pennsylvania law, a gift committed to charity may not be diverted from that charitable purpose, so the Foundation’s policy is not to return gifts.
1. Cases in which a donor has erroneously overpaid on a pledge or a check should have been forwarded to a different institution may be returned if the donor provides the appropriate taxpayer identification number and verification of paying account to ensure the refund is made to the original account.
X. POLICY EXCEPTIONS, CHANGES AND ADDITIONS
Any exception, change or addition to the approved policies must be approved and recommended by the Finance Committee, and further approved by the Foundation’s leadership. Such exceptions, changes and/or additions may include policies regarding the acceptance and crediting of gifts and gift instruments not outlined in this policy statement.
Approved by the Foundation Finance Committee — August 18, 2011
Approved by the Foundation Board — Date of Approval