By John Jensen
Having well-defined real estate gift acceptance policies in place can minimize many potential challenges and open the door for a valuable charitable gift. Here are some tips for creating a clear real estate gift acceptance policy.
- Establish minimum estimated net values, assuming the property will be sold. This quickly eliminates gifts too small to be worthwhile.
- Obtain a preliminary objective opinion of value. Brokers will often provide a “windshield appraisal” providing an initial sense of value.
- Determine who holds title to the property. Asking who has title will generally produce more accurate information than asking who owns it. This information can often be found on a recent property tax bill.
- Require that any outstanding mortgages or other liens be identified early in the discussion.
- Require a Phase I Environmental Assessment if your organization will take title to the property.
- Prior to any final decisions, require that a staff member physically inspect the property. This can bring to light potential problems that may not be otherwise apparent.
These are just a few of the many issues that should be addressed in effective real estate gift acceptance policies. Take a systematic approach, but be prepared to be flexible when appropriate. Too many charities either reject real estate gifts as a matter of policy or impose so many rigid requirements on the gift that the donor walks away before there is ever a serious discussion.
John Jensen is a Senior Consultant and Senior Vice President with Sharpe Group. His background includes 10 years at The Nature Conservancy as Director of the Maine Chapter and National Vice President for Development. He has worked on more than 500 real estate gifts. John has prepared numerous gift acceptance policy manuals combining both suggested gift policies with detailed pragmatic advice about how to approach and work through various types of gifts.
For more information about encouraging or accepting gifts of real estate, contact a Sharpe Group consultant at 901.680.5300 or info@SHARPEnet.com. ■
Sharpe Chairman Robert Sharpe has more information on the encouraging real estate gifts. Click here to read more.
You can help educate your donors about noncash gifts, such as real estate. Click here to learn more about Sharpe booklets.