Gift Acceptance Policy

Dear Kim,

Do you have any advice on the necessity of creating a gift acceptance policy and on what such a policy might look like?
—Gift Horses, Mouths, and all that

Dear Horses,

Every organization needs a gift acceptance policy so that you can turn down gifts that are not in your best interest. The simplest approach is for the board to adopt a policy which says, “The Board of Directors reserves for itself the right to turn down any gift which, in our judgement, would not be mission fulfilling or which is beyond our capacity to handle.”

My suggestion is that you have a discussion with the board and staff about what kinds of gifts you would turn down. Many board members will, at first blush, feel that turning down any gift is a bad idea. However, there are a lot of gifts that are not worth the effort. Generally, the more wonderful a gift can be, the more awful it can also be. For example, a client of mine accepted a vacation home from a donor, sold it and added $120,000 to their endowment. That’s wonderful. Later, they accepted a house which had radon in the basement. Further, the real estate market had hit bottom and houses were not selling. They finally did sell the house, but when the director added up the time she had put in, the property taxes the organization had paid, and the time the board had spent discussing options, she calculated that the group had just about broken even. That is not so good.

The other type of gifts people often create policies for are gifts and grants from corporations. This policy is more likely to keep you from seeking gifts and grants from inappropriate sources than from accepting them. For example, if you work on labor issues, you will want to consider carefully before seeking sponsorship for your special event from a corporation which is anti-union or uses sweatshop labor. Thinking this through ahead of time will allow you to find a policy that is ethical but not overly rigid. It is also easier to discuss accepting or rejecting gifts in the abstract.
—Kim