Donors to Silicon Valley Community Foundation include tech moguls and companies, such as Square, Facebook, and eBay, that often want to donate complex assets. Foundation leaders decided years ago to accept complicated gifts, and developed a policy to aid the process. Even if your nonprofit isn’t courting tech donors, the ability to accept a variety of financial assets, such as restricted stock, real estate, or IRA benefits, without big delays or complications can help your bottom line. Here, a foundation executive explains the value of having a formal gift-acceptance policy.
At Silicon Valley Community Foundation, our gift-acceptance policy is a living document, nearly 100 pages, that helps us quickly accept a variety of complex assets from wealthy donors. Last year, applying the policy with thoughtfulness and care helped us raise $1.4 billion.
I find the policy invaluable because it serves as our institution’s fundraising memory, knowledge bank, and road map. That’s crucial at a time when turnover among fundraisers is so high because they often leave with important knowledge of what worked and what didn’t. A gift-acceptance policy can minimize the effects of staff turnover by capturing lessons learned and spelling out the best-case scenarios for various types of gifts.
Take, for example, the donation of a charitable gift annuity. This is an arrangement in which a donor gives cash, securities, or other assets to a charity to invest and, in return, receives a tax break plus regular fixed payments for life. For obvious reasons, receiving this kind of gift from an annuitant who is 80 years old, rather than 40, has more immediate value. Your policy can make this point clear to a newcomer so he or she won’t have to learn by doing. It saves time and helps set priorities.
By using the gift-acceptance policy as your organization’s fundraising bible, you can build fundraising plans based on institutional knowledge. At Silicon Valley Community Foundation, every member of the development team is asked to refer to the policy and help update it regularly, so the experience and knowledge of every member of the fundraising team is captured.
Once each year, changes or additions to the policy are sought from every staff member who has a role in acquiring donations. Our board of directors then reviews and approves the policy revisions. In 13 years, the document has been changed every year except one.
For example, several years ago, accepting virtual currency was considered cutting-edge. We send every offer of an unconventional type of donation to a Gift-Acceptance Committee, made up of select board members who review such offers and approve or reject them. Now, after receiving dozens of gifts involving virtual currency, staff members have mastered the practice of accepting them and the risks are known. Therefore, we plan to ask the board to modify the gift-acceptance plan to allow staff to receive virtual currency without having to seek the committee’s approval each time.
Because the foundation’s gift-acceptance policy is so well defined, many complex donations, including various types of assets, can be accepted without the committee’s review.
Every new fundraiser is asked to study the policy and to inform us if any aspect of the document is unclear. This helps avoid organizational jargon and makes the policy more useful.
More Timely Response
By providing a “playbook” for staff and committee members, the gift-acceptance policy leads to timeliness and a consistent interpretation of risks and rewards, and enables both groups to work together seamlessly. That’s important because all decisions about gifts must be made within 24 hours.
Many people ask me about the secret to Silicon Valley Community Foundation’s fundraising success. While I can’t share the recipe for the “secret sauce” exactly, I can say that our rapid-response time is a key factor. When a philanthropist is expecting an influx of wealth related to a business transaction and considers the possibility of making a charitable gift, there is often little time in which to act. If the nonprofit isn’t able to respond quickly and nimbly, time may run out before the donation can be completed.
Here are a few steps for drafting or updating your gift-acceptance policy to improve your nonprofit’s ability to accept a broad variety of donations, including unusual assets or complex gifts:
Dig out your gift-acceptance policy from wherever it hides and start using it. If you don’t have one, create one.
You can start by documenting all types of gifts you now receive. Then, think of some gifts that required discussion to accept. Why did they require discussion? Who had to get involved to make the decision? Capture the answers to these questions and include that information in your policy. Accepting a similar gift in the future will be easier with this guidance, especially for staff who were not present when the earlier gift was made.
- Read the policy as if it were a high-level fundraising manual for different types of gifts. It should say things such as “Our organization can accept trusteeship of Charitable Remainder Trusts” and explain your organization’s requirements for serving as trustee, such as fees or restrictions on the use of the remainder to your endowment.
- Ensure there is a section for every type of gift you accept. For example, have a section to address cash and other basic assets. If you have a planned-giving program, create a section for the various types of planned gifts you accept. Also ensure you have a section for how to deal with unusual gifts.
- Have someone who doesn’t know your work read it and indicate anything that is unclear.
- As you do fundraising throughout the year, consult the policy as it pertains to the types of gifts you are working on. Make a note if something is not accurate or if you learn something new about a type of asset.
- If you discover a type of gift that your policy doesn’t cover, note that and discuss whether it should be added. You’ll want to be prepared if such a gift comes your way. At Silicon Valley Community Foundation, we have a folder to keep notes and comments that we collect throughout the year from staff and legal counsel to help us remember what policy changes we might want to make.
- Your gift-acceptance policy should be a living document. Read and revise it every year, but only once a year. Doing so more frequently can burden your board, which should approve any changes to the policy, and can confuse staff, especially if several different versions of the policy begin to circulate.
Mari Ellen Loijens is the chief business, development, and brand officer at Silicon Valley Community Foundation.