Last time, we looked at pledges.

A gift acceptance policy should require that all pledge agreements be vetted by the development office before being executed. A gift acceptance policy also should state:

• that the donor must state up-front, in writing, the source or sources of assets that will be used to pay the pledge; and
• how noncash assets will be valued for purposes of paying the pledge.

Let’s turn to gift receipts.

Gift receipts are tax law documents. They’re not thank-you letters. Without a correct gift receipt, the donor’s claim of a charitable deduction will be disallowed on audit. The entire burden of obtaining a correct gift receipt is placed, by the tax law, on the donor.

For example, let’s take the gift receipt for a charitable gift annuity. Lots of major-league charities issue gift receipts stating that the donor received no goods or services. Wrong! The receipt should state that the donor received no goods or services in addition to the annuity.

A gift acceptance policy should address, in detail, how the charity shall fashion gift receipts. Gift receipts are part of gift acceptance.

Now let’s look at donor-obtained appraisals.

Wow. I’ve not seen one, not one, donor-obtained appraisal that meets the definition of a “qualified appraisal”. Not one. In more than 34 years. To me, this means there’s total non-compliance with the qualified appraisal rules.

Now for the bad news. The qualified appraisal rules were substantially revised as of January 1, 2019. Now they’re even more complex, more tricky, more confusing.

We’ll pick up here next time.

by Jon Tidd, Esq