Purpose of policy
The purpose of this fund and gift acceptance policy is to advance the Foundation’s mission of connecting donor interests to community needs and opportunities by utilizing community knowledge and leadership. By providing guidelines for negotiating and accepting various types of gifts, this policy is designed to serve the best interests of the Foundation, donors who support the Foundation’s programs through charitable gifts, and a healthy and caring community. This policy assures that each gift to the Foundation is structured to provide maximum benefits to the community, the donor, the Foundation, and the beneficiaries of the Foundation’s charitable programs and activities.
Scope of policy
This policy addresses both current and deferred gifts, with an emphasis on specific types of deferred gifts and gifts of non-cash property. The goal is to encourage financial support for the Foundation without encumbering it with gifts that either generate more cost than benefit or which may be restricted in a manner that is not in keeping with the Foundation’s charitable purposes or applicable laws governing charitable gifts.
Notwithstanding anything in this policy to the contrary, the Foundation reserves the right to waive any requirements herein with respect to acceptance of specific gifts.
Purpose of gifts
The purpose of each gift to the Foundation must fall within the Foundation’s broad charitable purposes. The Foundation cannot accept any gift that will be directly or indirectly subject to any material restriction or condition by the donor that prevents the Foundation from freely and effectively employing the gift assets or the income from such assets to further its charitable purposes. In addition, the Foundation reserves the right to reject any gift that might place the other assets of the Foundation at risk or that is not readily convertible into assets that fall within the Foundation’s investment guidelines. The Foundation may also decline a gift if it is not able to administer the terms of the gift in accordance with the donor’s wishes.
Responsibilities to Donors
Every person acting for or on the Foundation’s behalf shall adhere to those standards set forth in A Donor Bill of Rights, found at http://www.afpnet.org/files/ContentDocuments/Donor_Bill_of_Rights.pdf . The Foundation is committed to the highest ethical standards of philanthropy and development.
In all transactions between potential donors and the Foundation, the Foundation will aspire to provide accurate information and full disclosure of the benefits and liabilities that could influence a donor’s decision, including with respect to the Foundation’s fees, the irrevocability of a gift, prohibitions on donor restrictions, items that are subject to variability (such as market value, investment return, and income yield), the Foundation’s responsibility to provide periodic financial statements with regard to donor funds, and investment policies and other information needed by donors to make an informed choice about using the Foundation as a vehicle of charitable gifts.
Donors should also be made aware of the Foundation’s variance power. Federal tax regulations require that every community foundation have the power to modify any restriction or condition of the distribution of funds for any specified charitable purpose or to any specified organization if such restriction or condition becomes unnecessary, incapable of fulfillment, or inconsistent with the charitable needs of the community served.
The Foundation recognizes the paramount role of donors and their gifts to the Foundation in executing its charitable mission. The role of the Foundation’s staff is to inform, guide, and assist the donor in fulfilling his or her philanthropic goals without pressure or undue influence. LAMVCF does not provide legal, tax, or financial advice and shall encourage donors to discuss all charitable gift planning decisions with his or her legal, financial, or tax advisor before entering into any commitment to make a gift to the Foundation.
In carrying out the Foundation’s development program, staff will recognize and acknowledge donors in appropriate ways, both publicly and privately. Information concerning all transactions between a donor and LAMVCF shall be held by the LAMVCF in strict confidence and may be publicly disclosed only with the permission of the donor or if required by law. Donors may, if they wish, choose to support LAMVCF anonymously.
Authority to Accept Gifts
Acceptance by Officers & Designated Employees
Any of the Foundation’s officers or employees designated by the Foundation’s Board may accept, for and on the Foundation’s behalf, any of the following outright gifts:
- Cash
- Gifts via credit cards
- Checks
- Gifts of personal property for use in the Foundation’s offices or programs
- Marketable securities
Acceptance by LAMVCF Board
All other gifts will require review and, if appropriate, approval, by the Foundation’s Board, except as specifically noted.
Timing of Review
Gifts requiring review will be handled as quickly as possible. Foundation staff will immediately notify donors if a gift is not accepted.
Gift Agreements
Subject to the review and approval authority detailed above, the Foundation’s Chief Executive Officer will have the authority to handle inquiries, negotiate with donors, assemble documentation, retain expert and technical consultants, and execute agreements on the Foundation’s behalf.
Outright Gifts
Cash
The Foundation accepts gifts of cash
- In currency of the United States;
- By checks made payable to the Foundation or the component fund; or
- By credit cards or wire transfer to the Foundation’s account(s).
Publicly-Traded Securities.
The Foundation accepts gifts of marketable, publicly-traded stocks and bonds. As a general rule, publicly-traded stocks and bonds contributed to the Foundation will be redeemed or sold as soon as practicable. All proceeds from such redemption or sale less commissions and expenses are then credited to the component fund to which the stocks or bonds were originally contributed.
No appraisal is required so long as the stock or bond is not subject to any restrictions, including those imposed by contract or the Securities Exchange Commission. Where appraisal is not required, the value of the gift is determined by calculating the mean of the high and low prices of the securities on the date of the gift.
Non-Marketable Securities
The Foundation may accept gifts of closely held C-Corp or S-Corp stock with consideration given to the probability of converting the stock to a liquid asset in a reasonable period of time. There should be no liability associated with accepting, holding or selling the stock and the Foundation should be able to appropriately review the business interests represented in the corporation. The donor may be responsible for providing an independent appraisal on the value of the stock and completing I.R.S. Form 8283 if the value of the stock is greater than $5,000. The donor’s gift credit will be based on the appraised fair market value of the shares on the day they are given to the Foundation.
Partnership Interests
The Foundation generally does not accept gifts of general partnership interests due to the unlimited liability of general partners.
Acceptance of gifts of limited partnership or limited liability company (LLC) interests depends on the ultimate financial liability to the Foundation. The donor must provide a qualified appraisal of the fair market value of the partnership. The Foundation will review the marketability of the partnership interest and give consideration as to whether the partnership might generate unrelated business taxable income (UBTI) that might subject the Foundation to income tax. If the Foundation accepts the gift, the donor’s credit will be based on the net sales price after all fees and costs of sale.
Real Property
Gifts of real property, including outright gifts of residential and commercial property and farmland; bargain-sale transactions; and gifts of remainder interests in which the donor retains a life estate are subject to the Foundation’s Real Estate Gift Acceptance Process.
Before accepting any gift of real property the Foundation will consider all facts and circumstances in determining whether or not to accept it. Donors may be required to provide a qualified appraisal and an independent environmental assessment of the proposed gift property. Donors may be responsible for ongoing financial obligations associated with the property, such as taxes, insurance, maintenance, and other costs, until the property can be sold. Donors will be advised to consult with their own tax and legal advisors to review the terms of the gift.
The Foundation does not accept gifts of timeshares.
Tangible Personal Property
The Foundation accepts gifts of personal tangible property (e.g., artwork, coin collections, jewelry) only if: (i) the Foundation determines that the property will be used in furtherance of the Foundation’s exempt purposes or (ii) the Foundation will be able to sell the property. If the property is to be sold, the Foundation will accept the gift only if it has sufficient value to justify the expenditure or resources required for such sale. If the property’s value exceeds $5,000 the donor will be required to have a qualified appraisal performed and submitted on IRS Form 8283. If the Foundation sells the property within two years, IRS Form 8282 will be filed by the Foundation informing the IRS and the donor of the sale price.
Cryptocurrencies and other digital assets
The Foundation may accept gifts of digital assets after determining that the asset can be transferred and liquidated. Determining factors include the Foundation’s ability to immediately liquidate the asset; to comply with the IRS in acknowledging the donation (which is viewed as property); and any undesirable consequences from accepting the gift, including gifts from anonymous donors.
Deferred Gifts and Planned Giving
These are gifts whose benefit does not fully accrue to the Foundation until some future time, or whose benefits are split with non-charitable beneficiaries. Foundation representatives are authorized to solicit direct charitable gifts through wills and other planned gift vehicles. In cases where the gifts are complex, the Chief Executive Officer may request review and approval by the Board.
Bequests
The Foundation accepts bequests from donors who have directed in their wills that certain assets be transferred to the Foundation and honors the wishes of the donor as expressed but reserves the right of refusal as necessary and appropriate. Sample bequest language for restricted and unrestricted gifts is available from the Foundation, and on its website, to donors and/or advisors. The Foundation may not be named as Executor for a donor in his/her will and will not serve if named. The Foundation may create a named fund in memory of the donor if there is no stipulation for anonymity. A bequest will not be recorded as a gift until the gift is irrevocable.
Retirement Plans or IRA Accounts
Donors may name the Foundation as the beneficiary of their plan. Retirement plans include, but are not limited to, Individual Retirement Accounts (IRA), 401(k), 403(b), and defined contribution plans. The Foundation’s Chief Executive Officer may accept such gifts without Board approval. Designations will not be recorded as gifts until the gift is irrevocable.
Life Income Gifts
The Foundation will accept designation as remainder beneficiary or income beneficiary of estate planning vehicles such as a charitable remainder trust (CRT), charitable lead trust (CLT), or charitable gift annuity (CGA). The Foundation’s Chief Executive Officer may accept such gifts without Board approval.
The Foundation will not accept an appointment as a trustee of any such trust. The Foundation does not create and/or manage life income gifts.
Life Estate
A donor may wish to contribute a personal residence, vacation home, or farm to the Foundation and retain the right to use the property until death. Upon the donor’s death, the Foundation owns the entire interest in the property. Such gifts are subject to the Foundation’s Real Estate Gift Acceptance Process.
Life Insurance
The Foundation may accept gifts of life insurance policies so long as (a) the policy is not encumbered (i.e. there is no outstanding loan against the policy); and (b) the Foundation is made the policy’s owner and primary beneficiary. When premium payments can no longer be made because there is insufficient value in the policy to keep it in force or because the Foundation chooses to discontinue premium payments, the policy will be surrendered. If the donor contributes future premium payments, they will be included as gifts in the years made.
Additional Gift Provisions
Pledge agreements
In connection with the acceptance of many types of non-liquid assets, the Foundation may incur costs such as unrelated business income tax, fees or commissions associated with the sale or liquidation of assets, asset management and holding costs, consultant fees, or other expenses outside the normal scope of the Foundation’s administrative costs. Accordingly, as a condition of the Foundation’s acceptance of the gift, the Foundation may require a pledge or other written agreement between the donor and the Foundation that provides for the payment of all or a portion of any such costs or expenses, including unrelated business income taxes, to the extent, there is insufficient cash in the donor’s fund to which the asset(s) have been donated to cover such costs.
Minimum gifts
Subject to the policies set forth in this document, the Foundation may accept gifts of any size. The minimum gift for a new unrestricted or donor advised fund is $5,000. Exceptions are subject to the approval of the Foundation’s Chief Executive Officer.
Investment of gifts
The Foundation reserves the right to make any or all investment decisions regarding gifts to it in accordance with its Investment Policy, as amended from time to time. In making a gift to the Foundation, the donor gives up all rights, title, and interest to the assets contributed. In particular, the donor relinquishes the right to choose investments and investment managers, and brokers, or to veto investment choices for the contributed assets. Any exception to this provision must be approved by the Board.
Costs of gift administration
Costs associated with the acceptance of an outright or planned gift, such as the donor’s attorneys’ fees, accounting fees, and appraisal and escrow fees, are borne by the donor and/or taken from the donated assets. The costs of administering gifts will be paid from the donated assets and/or the fund to which the assets are contributed. Custodial, investment, and administrative fees are paid from the respective funds in accordance with the Foundation’s guidelines and fee schedules. The Foundation reserves the right to assess a set-up fee.
Restricted gifts
Any gift with donor-imposed restrictions will be accepted only if such restrictions are approved by the Board.
Designated gifts
A donor may elect to designate a cash gift for a specific Foundation program or fund at the time of the donation. If the donor indicates that the cash gift will include a designation but does not provide instruction on the designation at the time of the donation, the Foundation will request that information from the donor (either in writing, in-person, or video/audio means) six months after the donation and twelve months after the donation. If no instructions or designations are provided a year or more after the donation, the Foundation will assign the funds to its Impact Fund.