Adopted by the Board 9/20/06
Amended 12/20/06 and 1/6/2010
The Community Foundation of the Gunnison Valley, (“CFGV” or “the Foundation”), a nonprofit organization organized under the laws of the State of Colorado, encourages the solicitation and acceptance of gifts to CFGV that will help the Foundation further and fulfill its mission. The following policies and guidelines govern acceptance of gifts made to the Foundation for the benefit of any of its programs.
The Community Foundation of the Gunnison Valley strengthens and enriches the community through engaged philanthropy, thoughtful grantmaking, strategic education, and collaborative leadership.
1. Purpose of Policies and Guidelines
The Board of Directors of the Foundation and its staff solicit current and deferred gifts from individuals, corporations and foundations to secure the future growth and missions of the Foundation. These policies and guidelines govern the acceptance of gifts by the Foundation and provide guidance to prospective donors and their advisors when making gifts to the charity. The policies also serve to inform staff and the Gift and Fund Acceptance Committee of the intent of the Board of Directors when this policy was incorporated into the governance documents of the Foundation.
2. Use of Legal Counsel
The Foundation shall seek the advice of legal counsel in matters relating to the acceptance of gifts when appropriate.
The purpose of a gift to the Foundation, other than cash or publicly traded stock that is to be immediately liquidated for unrestricted use by the Foundation, will be defined in a written fund agreement or deferred gift instrument signed by the donor, or his or her appointed representative and, if appropriate, an officer of the Foundation.
It is the policy of the Foundation to develop a signed fund agreement prior to receiving a current outright gift to establish a fund valued at more than $5,000, or in the case of a planned gift in which the donor is living, as soon as possible as the Foundation becomes aware of its existence.
Standard fund agreements which have been approved by legal counsel may be used. Individual fund agreements will be prepared and reviewed by Staff and or legal counsel of the Foundation.
3. Conflict of Interest
Foundation Staff should disclose to all prospective donors the benefits and liabilities that could reasonably be expected to influence the donor’s decision to make a gift to the Foundation. All prospective donors of gifts other than outright gifts of cash or publicly traded stock given for unrestricted use will be encouraged to consult with legal counsel and/or financial advisors in matters relating to their gifts and the resulting tax and estate planning consequences. The Foundation will comply with the Model Standards of Practice for the Charitable Gift Planner disseminated by the National Committee on Planned Giving, shown as an appendix to this document.
In particular, donors should be made aware through the Fund application process of the following:
- the irrevocability of a gift;
- the Foundation’s variance power;
- the Foundation’s spending policy and definition of endowment funds;
- in the case of donor-advised funds, applicable policies and limitations;
- prohibitions of donor restriction;
- items subject to variability: market value, investment return and income yield; and
- applicable administrative and investment management fees
4. Restrictions on Gifts
The purpose of a gift must fall within the broad charitable purposes of the Foundation. Each proposed fund or gift will be considered on a case by case basis. The Foundation reserves the right to accept or decline any proposed fund or gift to the Foundation. The Foundation will not accept gifts that are too restrictive in purpose and violate the terms of the corporate charter, gifts that are too difficult to administer, or gifts that are outside the mission of the Foundation. All final decisions on the restrictive nature of a gift, and its acceptance or refusal, will be made by the Board of Directors after presentation by the Gift and Fund Acceptance Committee, in consultation with the Executive Director.
5. Gift and Fund Acceptance Committee
In general, the Foundation Staff will be authorized by the board to accept new gifts and funds subject to the policies outlined herein. To assist Staff in the evaluation of complex gifts and funds, the Board of Directors authorizes the creation of a sub committee, to be known as the Gift and Fund Acceptance Committee, which will have the responsibility to consider and accept or reject complex gifts and funds. Members of the Gift and Fund Acceptance Committee shall consist of:
- The President of the Board
- The Treasurer of the Board
- 1 member of the Executive Committee, other than the Board President
- 1 member of the Finance and Investment Committee, other than the Treasurer
- Such other members as appointed by the President
- Ex-Officio member(s) include the Executive Director and any Development Director as may sometime be employed by the Foundation
The Staff and Gift and Fund Acceptance Committee are charged to ensure that gifts received are consistent with these policies, and with State and Federal law and IRS Guidelines, and that they are in the best interest of the Foundation. Committee members will reach agreement by simple majority of voting members, with the assistance of advisory members who have expertise in specific types of gifts. Committee members may also review proposed funds that may fall outside the ordinary scope of Staff expertise.
In the case of significant disagreement or hesitancy on the part of this Committee, the Committee may wish to present the proposed gift or fund in a confidential way to the CFGV Board of Directors for further consideration.
6. Gifts Which Do Not Require Review
Gifts received in the following forms can be accepted by Foundation Staff and will not require prior review and approval by the Committee:
- Cash or cash equivalents and checks
The Foundation accepts cash, checks or money orders made payable to the Foundation or any of its Funds.
- Marketable Securities
The Foundation will add the proceeds (sale price per share multiplied by number of shares minus sales expense) of a marketable securities contribution to a fund of the Foundation. In the event the Foundation receives actual stock certificates, these should be properly endorsed by the donor and the Foundation. It is the general policy of the Foundation to sell marketable securities immediately upon receiving them, unless otherwise directed by the Investment Committee. The Foundation will govern the disposition of securities and will make all decisions regarding the sale or retention of securities. In some cases marketable securities may be restricted by applicable securities law; in such instance the final determination of the acceptance of the restricted securities shall be made by the gift and Fund Acceptance Committee of the Foundation.
- Gifts of personal property for the Foundation’s offices or programs
7. Gifts that may require review or approval by the Committee include:
a. Closely Held Securities
- Donors wishing to make gifts of stock in a closely held corporation or S corporation must have it valued by a reputable independent accounting or appraisal company prior to making a contribution. If the stock is immediately marketable it may be accepted and will be sold. If the stock is not immediately marketable, the committee may recommend non-acceptance of the gift or may authorize that the stock be held by the Foundation until it may be redeemed or sold for cash. In order to be in compliance with Federal excess business holding rules for assets in Donor Advised Funds, Donor Advised Funds are prevented from holding business interests in which the Donor, Advisor or any related party holds interest in excess of 20% unless there is a plan in place to divest said interest within 5 years.
- The acceptability of a gift of closely held or S corporation stock will depend on the ultimate financial liability of the Foundation and the amount of management attention required.
b. Tangible personal property
- Tangible personal property may be accepted as a gift. In general, the Foundation will only accept a personal property gift if the Foundation can identify an end user prior to acceptance of the gift. If the value exceeds $5000, a donor is required to have a qualified appraisal done by a qualified appraiser as determined by the IRS and submit IRS Form 8283. If the Foundation sells the property within three years, IRS Form 8282 must be filed by the Foundation, informing the donor and IRS of the sale price of the item(s)
- All tangible personal property shall be examined with the following criteria in mind:
- Is the property marketable?
- Are there any undue restrictions on the use, display, or sale of the property?
- Are there any carrying costs for the property?
- All tangible personal property shall be examined with the following criteria in mind:
c. Real property
- If a donor wishes to contribute real property or an interest in real property to the Foundation, whether as an outright gift or through a deferred giving arrangement, the Foundation Staff and Gift Acceptance Committee shall consider all facts and circumstances whether to recommend accepting the gift. Donors should always be advised to confer with their own counsel to review the terms of the gift.
Policies for the Acceptance of Gifts of Real Estate – in italics
Gifts of real estate may be accepted on behalf of the Foundation in accordance with the policies stated below.
Authority to Accept Gifts of Real Estate
The following officers of the Foundation are authorized to accept gifts of real estate that are permitted by these policies: The President of the Board or the Executive Director — only after review by the Foundation’s Gift and Fund Acceptance Committee.
Conditions for Acceptance
In general, it is the policy of the Foundation to accept gifts of real estate only if they are to be sold within 12 months with the proceeds used for the general purposes of the Foundation, or as provided by the donor. The Foundation reviews each proposed gift on an individual basis, and may accept or reject any proposed gift. A gift of real estate may also be accepted under the following conditions on a case by case basis: if it is to be used by the Foundation in connection with established or specifically approved programs or activities; or if it is to be held for the production of income.
The Foundation will not accept property which would jeopardize its tax-exempt status, or expose it to expenses for which no source of funds has been identified.
Conditions Affecting Acceptance
- If the property is to be used by the Foundation, it shall be in good physical condition. If it is not in compliance with applicable building, health, and safety codes, or requires repairs or improvements, a source of funds for the costs of bringing the property into compliance must be identified prior to acceptance.
- The proposed use must be lawful and consistent with the previously approved strategic plans of the Foundation involving the use or acquisition of real property.
- If the property is to be held for the production of income, a pro forma positive cash flow analysis must compare favorably to the amount of income that would be obtained if the property were sold and the proceeds invested as a part of the general endowment pool.
- If the property is to be sold, it should be marketable within a reasonably short period of time. If the Board deems market conditions unfavorable to receive and acceptable/fair price within the 12 month period stated in “Conditions for Acceptance,” the full Board may vote to extend the 12 month holding limit as necessary. Acceptance of offers to purchase property from the Foundation requires the signature of the Executive Director, or the Executive Director’s corporate legal delegate and the approval of the Gift and Fund Acceptance Committee.
- The Foundation, at this time, will not carry back financing on a property sold. The future may dictate a change in this policy.
Prior to formal acceptance, the following shall be obtained by Foundation staff:
- Preliminary title report covering the subject property (the title report shall reflect that title is vested in the donor on the form represented, and is subject to no claims, liabilities or major defects of title;
- A suitable property valuation by a qualified appraiser as defined in the Pension Protection Act of 2006. The donor may be asked to pay the costs associated with obtaining any necessary final appraisal;
- A list of improvements to the property;
- A current list of leases, if any;
- A list of encumbrances, liens, and current expenses, if any;
- A commitment for title insurance; and
- A professional physical inspection of the property by a consultant to the Foundation.
Conditional acceptance may be made subject to satisfactory completion of each of the foregoing.
Hazardous Waste Considerations
If deemed necessary, prior to formal acceptance, a Stage I Environmental Assessment must be made by an individual or firm competent to advise the Foundation whether further investigation is needed.
Upon acceptance of the gift of real estate, it is the responsibility of the Gift Acceptance Committee and the Executive Director to insure that the grant deed is properly conveyed to the Foundation. This includes having the donor sign the deed and recording it with the appropriate county. All closing paperwork shall be handled by a Title Company or attorney. The Executive Director or the Executive Director’s legal delegate has the responsibility for the proper safeguarding of all deeds.
Internal Revenue Service Form 8283
The Internal Revenue Service requires that Form 8283 be completed so as to be filed with the donor’s tax return. Upon acceptance of the gift, the Executive Director or the Executive Director’s delegate shall be responsible for completing the “Donee Acknowledgement section” of IRS Form 8283, mailing the original form to the donor and a copy subsequently filed.
Internal Revenue Service Form 8282
The Internal Revenue Service requires that Form 8282 be completed and filed (with respect to any real estate for which a Form 8283 has been filed when that property is disposed of by the donee institution within three years of the date of gift. Upon disposition, the Foundation will be responsible for filing Form 8282 in a timely manner.
Maintenance, Upkeep, Insurance, etc.
Prior to acceptance of any gift of real estate, a source of funds must be identified for maintenance, upkeep, insurance, etc. of the donated property. It is advisable to ask the donor for funds to meet these costs if it is anticipated that the Foundation will hold the property for longer than six months prior to sale.
d. Life Estates
- Simple Life Estate Agreements
In the case of property donated to the Foundation subject to a life estate, the life tenant shall enter into an agreement in writing providing that the life tenant shall pay all the costs of maintenance and upkeep of the property including but not limited to repairs, improvements, taxes, insurance, etc. The Foundation’s life estate agreement will be attached to said document.
- Cost Recovery
Funds to cover costs such as appraisals, hazardous substance assessments, taxes, insurance, maintenance, and unanticipated expenses may be advanced from other funds of the Foundation and recovered at the time disposition of the property is made. The cost of recovery shall include interest on Foundation funds, normally equal to earnings of funds operating as an endowment. Donors shall be advised of this policy.
- Documentation of Acceptance of Property
It is the responsibility of the Executive Director to secure acceptance from any of those parties authorized to accept property and assure documentation of acceptance. Documentation may be in the form of a memo to the file or more formally by letter.
- Death of Donor
Upon the death of the donor, the Foundation may use the property or reduce it to cash. Where the Foundation receives a gift of a remainder interest, expenses for maintenance, real estate taxes and any property indebtedness are to be paid by the donor’s estate.
- Exception Procedure
Exceptions to these policies may be made by the Executive Director or the Executive Director’s legal delegate when such exceptions are deemed to be in the best interest of the Foundation. Such exceptions shall be in writing and set for the basis of the exception.
e. Partnership Interest
- The Foundation does not accept gifts of general partnership interest.
f. Bargain Sales
- The Foundation does not participate in bargain sales at the time of the initial formation of this policy but reserves the right to add bargain sales to the policy at a later time in keeping with the guidelines for changing policy.
g. Planned Gifts
The Foundation’s planned giving program encompasses all types of gifts whose benefits do not fully accrue to the Foundation until some future time (such as the death of the donor or other income beneficiaries or the expiration of a predetermined period of time) or whose benefits to the Foundation are then followed by the interests of noncharitable beneficiaries. The types of planned giving opportunities accepted by the Foundation are listed below:
- Gifts by Will or Living Trust
The Foundation encourages donors and supporters to make bequests to the Foundation under their wills and trusts. The Foundation encourages such donors to contact the Foundation during their lifetime to discuss their charitable intent. Sample bequest language is available from the Foundation, however donors are encouraged to consult a professional advisor for additional assistance.
- Gifts of Life Insurance
A donor may make a gift of life insurance to the Foundation in several ways. The Donor may choose to give a life insurance policy irrevocably designating the Foundation as owner and beneficiary and further pledging to make annual gifts to the Foundation in the amount of the annual premium. Premiums would then be paid by the Foundation. The Foundation can also be designated as a percentage beneficiary of a life insurance policy owned by the donor. In addition, the Foundation also accepts tax deductible gifts of insurance policy dividends.
Gifts of life insurance policies may be accepted without special approval if the premiums for the insurance policy are fully paid up and when the donor intends to cancel the policy immediately for its cash surrender value.
- Charitable Remainder Trust
The Foundation may accept designation as remainder beneficiary of a charitable remainder trust with the approval of the Gift and Fund Acceptance Committee. The Foundation will not accept appointment as Trustee of a charitable remainder trust.
- Charitable Lead Trust
The Foundation may accept designation as income beneficiary of a charitable lead trust. The Foundation will not accept appointment as Trustee of a charitable remainder trust.
- Gift Annuities
The Foundation does not participate in gift annuities at the time of the initial formation of this policy but reserves the right to add gift annuities to the policy at a later time in keeping with the guidelines for changing policy.
- Retirement Plan Beneficiary Designation
Donors and supporters of the Foundation are encouraged to name the Foundation as beneficiary of their retirement plans.
h. Gifts whose structures fall outside the ordinary purposes, bylaws and procedures of the Foundation
i. With regard to Donor Advised Funds: Any gift that will result in excess business holdings must be analyzed by the Gift Acceptance Committee and will be considered for acceptance only if there is a written plan for divestiture within 5 years. The holdings of a donor advised fund, together with the holdings of persons who are donors and advisors to the fund, in a business enterprise, may not exceed: 20 percent of the voting stock of an incorporated interest, 20 % of the profits interest of a partnership or joint venture or the beneficial interest of a trust or similar entity or ownership of unincorporated businesses that are not substantially related to the fund’s purposes is prohibited. A business is the active conduct of a trade or business including any activity which is regularly carried on for the production of income from the sale of goods or the performance of services.
8. Miscellaneous Provisions
The Foundation reserves the right to refuse any gift that it believes is not in the best interest of the Foundation. If a gift is not accepted, Foundation Staff will contact the prospective donor immediately.
Accepted gifts will be acknowledged by Staff in accordance with federal regulations.
In conformance with Treasury Department regulations governing community foundations, gifts to the Foundation may not be directly or indirectly subjected by a donor to any material restriction of condition that prevents the Foundation from freely and effectively employing the transferred assets or the income derived therefrom, in furtherance of its exempt purposes.
Appraisals and Legal Fees
It will be the responsibility of the donor to secure an appraisal where required and independent legal counsel when necessary for all gifts made to the Foundation. The Foundation does not pay legal, accounting or appraiser fees for any future gift.
The Foundation will record a gift received by the Foundation at its valuation for gift purposes on the date the gift is completed.
Investment of Gifts
- The Board of Directors and the Investment Committee reserve the right to make any or all investment decisions regarding gifts received.
- In making a gift to the Foundation, donors give up all rights, title and interest to the assets contributed. In particular donors give up the right to choose investments and investment managers, brokers or to veto investment choices for their gifts.
The Foundation shall acknowledge all gifts made to the Foundation in compliance with the current IRS requirements in acknowledgement of such gifts. IRS Publication 561 Determining the Value of Donated Property and IRS publication 526 Charitable Contributions are attached to these policies as an Appendix.
Changes to Gift and Fund Acceptance Policies
These policies and guidelines have been accepted by the Board of Directors of the Foundation, as recommended by the Executive, Investment and Finance Committees. The Board of Directors of the Foundation must approve any changes to or deviations from these policies. Exception: when IRS regulations change, the then current IRS policies shall become part of these policies replacing those attached the day of initial approval of the Board of Directors, without action of the Board.
Approved on the 20th day of September, 2006 and amended 12-20-06
Model Standards of Practice of the Charitable Gift Planner
IRS Form 8282 and Instructions as of date of approval of any Gift
IRS Form 8283 and Instructions as of date of approval of any Gift
IRS Publication 561 Determining the Value of Donated Property as of date of approval of any Gift
IRS Publication 526 Charitable Contributions as of date of approval of any Gift