PATRICK COUNTY HIGH SCHOOL
GIFT and FUND ACCEPTANCE POLICY and GUIDELINES
I. PURPOSE OF POLICY AND GUIDELINES
The purpose of these Gift and Fund Acceptance Policy and Guidelines is to guide the efforts of the Patrick County High School Alumni Association (The Association), donors and their professional advisors in achieving donors’ charitable goals. They address the policies and procedures for accepting various types of assets, the types of gift mechanisms that can be used and the types of fund options available. The Association seeks to ensure that any assets it accepts do not place other assets of the Association at risk and that they can be readily converted into assets that fall within the Association’s investment guidelines. The listing of types of outright, planned and testamentary gift mechanisms and of types of funds that may be established is intended as a planning reference.
II. POLICY STATEMENT
It is the policy of the Association’s Board of Directors/Executive Body to encourage donors to make outright, planned and testamentary gift, utilizing the following types of assets and gift mechanisms:
Outright gifts – Planned and testamentary gifts:
Cash, cash equivalents, checks – Bequests
Publicly traded securities – Charitable Remainder and Charitable Lead Trusts
Real Estate – Life Insurance, Remainder Interests in Personal Residences, Retained Life Estates, Retirement Assets
The Association will develop, as needs require, a variety of types of funds to meet donors’ philanthropic objectives, including:
Unrestricted Funds – Scholarship Funds
Field of Interest Funds – Designated and Organizational Endowments
Advised Funds – Supporting Organizations
III. GIFT ACCEPTANCE RESPONSIBILITIES
The Association Board
The Board will maintain and revise as appropriate policies and guidelines relating to gift and fund acceptance. The Board delegates to the Gift Acceptance Committee authority to accept gifts that fall within the Policy Statement except as provided in Section V, below. The President is authorized to execute any document creating a fund within the Foundation. Proposed gifts of assets not specified in this Policy or the proposed declination of any gift will be referred to the Board for action.
Gift Acceptance Committee
The President, Vice-President and Treasurer constitute the Gift Acceptance Committee. The Committee will develop and revise as appropriate documentation by which funds are created with the Association.
Review of Gifts
The following factors will be considered in determining whether gifts should be accepted by the Association:
- The charitable intent and ultimate community benefit
- The nature of any restrictions
- The permanence of the gift or, in the case of a non-permanent fund, the amount of time the fund will remain with the Association
- Projected costs of managing the gift asset
- Economic practicality of administering the gift
IV. FUND DEVELOPMENT PRACTICES
The role of the Association is to inform, serve, guide or otherwise assist donors who wish to support the Association’s activities. Under no circumstances will a donor be pressured or unduly persuaded to make a gift to the Association.
The Association will hold all information concerning donors and prospective donors in strict confidence, subject to legally authorized and enforceable requests for information by government agencies and courts. The Association will not release information about donors or prospective donors that is not otherwise public information unless permission is obtained from the donor.
The Association does not provide tax or legal advice. Persons acting on behalf of the Association shall encourage the donor to discuss the proposed gift with the legal and/or tax advisors of the donor’s choice at the donor’s expense.
Normally all donors will be recognized for contributing to the mission of the Association and for providing resources to serve charitable interests. However, the Association will respect the confidentiality of donors who do not wish to be publicly recognized.
V. TYPES OF GIFTS
In conformance with applicable statutes and regulations governing charitable associations, gifts to the Association may not be directly or indirectly subjected by a donor to any material restriction or condition that prevents the Association from employing the transferred assets or the income derived from them in furtherance of its exempt purposes.
The Association will accept gifts in the following form, subject to the conditions described below. In order for the Association to provide written substantiation for gifts, the donor should provide name, address and any necessary IRS documentation.
Cash, cash equivalents or checks. Gifts of cash should be paid to the Association, accompanied by a written document signed by the donor, indicating the purpose for which the contribution will be used.
Pledges. Written pledges to make gifts may be made applicable to any fund at the Association. A schedule of pledges payable should be included in the fund documentation. The donor will be invoiced according to the schedule.
Securities. Publicly traded stocks and bonds may be electronically transferred, reregistered in the name of the Association or conveyed through use of stock power form. The Association also will accept interests in mutual funds. Generally these securities are sold upon receipt. Stock controlled under Securities and Exchange Commission rule 144 or other applicable restrictions on sales will be held until the restriction on sale expires and then will be sold. Gifts of bonds that require a holding period may be accepted and cashed when the holding period has expired.
Securities not acceptable include those which are assessable or which create a potential liability, those which by their nature may not be assigned (such as series “A” savings bonds) and those which have no apparent value.
Real Property. Generally, gifts of real property in Virginia to the Association should result in a contribution of at least $25,000. Gifts of real property outside of Virginia should result in a contribution of at least $50,000.
Real property will be accepted at fair market value as established by independent appraisal paid for by the donor. The donor must provide evidence of clear title to the property. Real property that is encumbered by a trust, deed, loan or mortgage will be accepted only in exceptional circumstances. Prior to acceptance of a gift of real property, the Association and the donor must agree, in writing, on arrangements for paying expenses associated with the property, including taxes and assessments, insurance coverage and maintenance costs.
The donor will be required to provide an independent appraisal, an environmental review (in most cases Phase I) and a description of the property. The Board and Counsel will review these documents as well as consider any liabilities, restrictions or other conditions related to the gift. These policies also will apply to any other asset that has real estate holdings as an element of its value.
In addition, to the consideration listed above, commercial properties and businesses will be examined in relationship to the potential for exposure of the Association to unrelated business taxable income and/or other liabilities.
Royalties, distribution rights. The Association may accept gift of royalties or distribution rights on published works (such as books, film or other intellectual properties) where there is clear evidence of marketability or assurance of an income stream. An independent appraisal paid for by the donor is required.
Insurance policies and proceeds. Donors may transfer ownership of paid-up policies or premium-due policies to the Association. In either case the Association shall be the owner and permanent beneficiary of the policy and retain the policy. Upon redemption, the value of the policy may establish a new fund or be contributed to any existing fund in the Association.
Contributions for premium-due policies must be made by direct payment to the Association at least ten days prior to the premium date. It is not the Association’s practice to advance premium payments; however, the Association at its discretion may make premium payments if it is deemed prudent to do so, on a case by case basis. If a policy is canceled, the case value will be added to the Association’s unrestricted fund and recognized as a gift of the donor.
Retirement assets. “Account” type retirement plans, in which a balance accumulates as principal, may be gifted to the Association. These include Individual Retirement Accounts (IRA), 401(k), 403(b) and defined contribution plans. (“Annuity” plans such as defined benefit plans in which retirement benefits are paid out as income and principal does not accumulate generally cannot be used for making charitable gifts.)
Methods of gifting retirement assets include:
- naming the Association as successor or contingent beneficiary for
all or part of the assets upon death of either the retirement asset
owner or spouse;
- creating a testamentary charitable remainder trust with the assets
upon the death of the asset owner, naming the Association as the
remainder beneficiary and non-charitable heirs as income
Planned and Testamentary Gifts
The Association’s planned and testamentary giving program encompasses all forms of gifts whose benefits do not fully accrue to the Association until some future time, such as the death of the donor or other beneficiaries or the expiration of a predetermined period of time or whose benefits to the Association are not then followed by the interests of non-charitable beneficiaries.
Bequest and Trust Distributions
Gifts from a will or distributions from a trust may be used to establish any of the types of funds acceptable to the Association. Representatives of the Association are authorized to solicit direct testamentary charitable contributions through wills or trusts, as well as testamentary contributions to establish charitable remainder and lead trusts.
A will or trust should include the following information:
- The name of the Patrick County High School Alumni Association located in Stuart, Virginia.
- The name of the fund. (This may be a new or existing fund.) In the case of a new fund, the purpose of the fund should be defined unless the fund is to be unrestricted.
Assets Requiring Board Review and Approval
Gifts of the following assets will be referred to the Board for consideration and action:
- Gifts of real property.
- Charitable remainder trusts or charitable lead trusts if funded with assets other than cash or publicly traded securities.
- Remainder interest in a resident, ranch or farm.
- Gifts of intellectual property, mineral reserves, precious metals and other types of assets carrying their own challenges.
- Life insurance policies requiring future premium payments by the Association.
- Other property that may be unusual or fall outside the type of gifts usually handled by the Association, including tangible personal property unrelated to the Association’s charitable purpose or which may not be readily marketable.
Gifts requiring Board review will be handled promptly. If a gift is not to be accepted, the donor will be notified in writing immediately. All gift reviews will be handled with confidentiality.
VI. INTERNAL PROCEDURES
Internal procedures for processing gifts and establishing new funds have been established and will be revised as necessary.