In my last post, The Importance of a Gift Acceptance Policy For an FQHC - Part 1, we discussed how the Scope and Purpose of the policy sets the expectation of the FQHC regarding charitable donations. In this post, we will discuss the screening process of gifts.
Common Gifts
For common gifts such as checks and readily marketable securities, most organizations have a policy that these gifts will be accepted without prior approval of the Board of Directors. Each month, the FQHC’s Board receives a list of these gifts and then ratifies the acceptance of these donations. For gifts with specific restrictions, the policy will generally have a dollar threshold where additional due diligence is required.
Unique and/or Complex Gifts
It is important for your policy to disclose how your Board will handle unique and/or complex gifts. Generally speaking a gift is unique or complex if it is:
A gift other than cash, check or marketable securities and/or
Any large distribution from an estate.
Staff is generally responsible for providing the Board with details of these types of gifts. The Board should also determine if legal council should be retained to advise them on complex transactions. Many FQHC’s have an attorney on their Board who is familiar with charitable giving and estate planning who may provide pro bono services. The Board should also consult with its CPA firm and its Finance Committee to determine if a formal independent appraisal is needed or if they should engage a CPA firm to certify the donor’s appraisal.
Ultimately, the Board is responsible for either accepting or rejecting these types of gifts. As part of this process, the Board needs to consider the gift’s consistency in furthering the mission of the organization, outline the communication steps with the donor in the acceptance/rejection process and advise staff on how to protect the FQHC from any possible repercussions.
Finally, many FQHCs adopt policies on how large gifts without any restrictions are to be used. Often these policies state that a portion of large unrestricted gifts fund operational reserves or help to grow an endowment.
In my next post, I will be discussing real estate gifts.
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