Why You Need a Formal Gift Acceptance Policy

Andy M. Haynie - CPA, CFE

Originally from Tangier Island, VA, Andy began working for Leatherbury-Broache and Company upon graduating from Salisbury University in 1998. He joined PKS in 2000, and became a Partner in 2012. Andy lives in Marion Station with his wife Amy and two sons, Thomas and Conner. Outside of work he loves spending time with his family. A typical weekend for Andy includes traveling for soccer with his boys or on a rare occasion going to the beach to relax. He is constantly listening to music, collects vinyl records (old and new) and will see as many live music shows in a year as possible. Andy is also an avid runner and participates in a number of regional races through the year with distances ranging from 5ks to 50ks.

Gifts and donations are vitally important to nonprofit organizations. But not all donations are created equal, especially non-cash gifts and in-kind donations. In some circumstances, these kinds of donations can cause more problems than they’re worth.

This is why nonprofits should establish a formal gift acceptance policy. In fact, Schedule M of Form 990 specifically asks, “Does the Organization have a gift acceptance policy that requires the review of any non-standard contributions?” These are any donations that would not directly be expected to satisfy the nonprofit organization’s core mission, such as stock in a closely held business or rare and unusual items.

For example, suppose a donor wanted to give your organization a piece of real estate. But after accepting the gift, you discover that there’s a leaky underground storage tank on the property that has contaminated a nearby stream. The cost of environmental cleanup and future inspections could be hundreds of thousands of dollars.

Or suppose a donor wanted to give perishable food items to a nonprofit that assists domestic violence victims. However, the organization doesn’t have the proper storage facilities for the food or appliances for preparation. The nonprofit might be better off advising the donor to give the food to a local food bank instead.

A gift acceptance policy should include the following:

  • A statement that the nonprofit will only solicit and accept donations that are in line with its mission
  • A statement that the nonprofit must review any in-kind donations of real and personal property prior to acceptance.
  • Which governing body will review the potential gift (e.g., the board of directors or executive committee)

Having a formal, written gift acceptance policy will make it easier to decline gifts that don’t satisfy your core mission without leading to awkward conversations with donors and possibly offending them.

We can help you draft a formal gift acceptance policy.



PKS & Company, P. A. is a full service accounting firm with offices in Salisbury, Ocean City and Lewes that provides traditional accounting services as well as specialized services in the areas of retirement plan audits and administration, medical practice consulting, estate and trust services, fraud and forensic services and payroll services and offers financial planning and investments through PKS Investment Advisors, LLC.


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