Chicago Scholars Foundation Gift Acceptance Policy
Chicago Scholars Foundation solicits and accepts gifts for purposes that will help the organization further and fulfill its mission. Chicago Scholars Foundation urges all prospective donors to seek the assistance of personal legal and financial advisors in matters relating to their gifts, including the resulting tax and estate planning implications. The following policies and guidelines govern acceptance of gifts made to Chicago Scholars Foundation for the benefit of any of its operations, programs or services.
Gifts Generally Accepted Without Review—
A. Cash. Cash gifts are acceptable in any form, including by check, money order, credit card, wire transfer, or on-line.
B. Marketable Securities. Marketable securities may be transferred electronically to an account maintained at the Foundation’s brokerage firm or delivered physically with the transferor’s endorsement attached. All marketable securities will be sold promptly upon receipt unless otherwise directed by Chicago Scholars Foundation’s Finance Committee. In some cases marketable securities may be restricted, for example, by applicable securities laws or the terms of the proposed gift; in such instances the decision whether to accept the restricted securities shall be made by the Finance Committee.
Gifts Accepted Subject to Prior Review—Certain forms of gifts or donated properties may be subject to review prior to acceptance. Examples of gifts subject to prior review include, but are not limited to:
A. Charitable Remainder Trusts. Chicago Scholars Foundation will accept designation as a remainder beneficiary of charitable remainder trusts.
B. Charitable Lead Trusts. Chicago Scholars Foundation will accept designation as an income beneficiary of charitable lead trusts.
C. Bequests and Beneficiary Designations under Revocable Trusts, Commercial Annuities and Retirement Plans. Donors are encouraged to make bequests to Chicago Scholars Foundation under their wills, and to name Chicago Scholars Foundation as the beneficiary under trusts, commercial annuities and retirement plans.
D. Tangible Personal Property. The Finance Committee shall review and determine whether to accept any gifts of tangible personal property, including works of art, in light of the following considerations: does the property further the organization’s mission? Is the property marketable? Are there any unacceptable restrictions imposed on the property? Are there any carrying costs for the property for which the organization may be responsible? Is the title/provenance of the property clear?
E. Life Insurance. Chicago Scholars Foundation will accept gifts of life insurance where Chicago Scholars Foundation is named as both beneficiary and irrevocable owner of the insurance policy. The donor must agree to pay, before due, any future premium payments owing on the policy.
F. Real Estate. All gifts of real estate are subject to review by the Finance Committee. Prior to acceptance of any gift of real estate other than a personal residence, Chicago Scholars Foundation shall require an initial environmental review by a qualified environmental firm. In the event that the review reveals a potential problem, the organization may retain a qualified environmental firm to conduct an environmental audit. Criteria for acceptance of gifts of real estate include: Is the property useful for the organization’s purposes? Is the property readily marketable? Are there covenants, conditions, restrictions, reservations, easements, encumbrances or other limitations associated with the property? Are there carrying costs (including insurance, property taxes, mortgages, notes, or the like) or maintenance expenses associated with the property? Does the environmental review or audit reflect that the property is damaged or otherwise requires remediation?
Gifts In-Kind Standards— Donated goods and/or services may be subject to certain acceptance and documentation standards. Decisions on the acceptance or refusal of a gift in-kind shall be made by the Development Committee and Finance Committee, in consultation with the President/CEO. Examples of certain acceptance and documentation standards include, but are not:
A. Compliance with the Organization’s Mission: All In-Kind donations must be used in furtherance of the tax exempt mission, purpose, and program objectives of the recipient non-profit
B. Valuation: Gift In-kind contributions shall be valued at their fair values as of the date of donation.
C. Required Documentation: Gift In-kind contributions recorded as revenue and expense must be supported by documentation relating the product value, donated inventory and verification of receipt
D. Recognition of revenue and expenses: The organization should only accept the donation if it will take possession of the in-kind contribution, and add significant value by increasing the utility of the in-kind contribution, not simply add value to the in-kind contribution transaction.
1. The organization should consider the following when evaluating the criteria for recognizing a contributed service:
a) Services creating or enhancing a nonfinancial asset. Services creating or enhancing a nonfinancial asset will be recognized at their fair value.
b) Specialized skills required. Common indicators of specialized skills include maintaining a particular license or certification, or working with technical tools or artistic talent at a proficiency greater than the general public.
c) The need to purchase services. If the Organization determines that it would not normally pay for a service, and would probably forego the performance if it were not donated, then the Organization will not record the contribution.
d) Contributed services by a Board Member. Since board members are expected to utilize their specialized skills in serving the nonprofit, their services will not be recognized as a contribution, unless the services is outside the expectation of a Board Member’s responsibilities and the Organization would otherwise have to pay another vendor for the services.
Use of Legal Counsel—Chicago Scholars Foundation will seek the advice of legal counsel in matters relating to acceptance of gifts when appropriate. Review by counsel is recommended for:
A. Gifts of securities that are subject to restrictions or buy-sell agreements.
B. Documents naming Chicago Scholars Foundation as trustee or requiring Chicago Scholars Foundation to act in any fiduciary capacity.
C. Gifts requiring Chicago Scholars Foundation to assume financial or other obligations.
D. Transactions with potential conflicts of interest.
E. Gifts of property which may be subject to environmental or other regulatory restrictions.
Restrictions on Gifts—Chicago Scholars Foundation will not accept gifts that (a) would result in Chicago Scholars Foundation violating its corporate charter, (b) would result in Chicago Scholars Foundation losing its status as a 501(c)(3) not-for-profit organization, (c) are too difficult or too expensive to administer in relation to their value, (d) would result in any unacceptable consequences for Chicago Scholars Foundation, or (e) are for purposes outside Chicago Scholars Foundation’s mission. Decisions on the restrictive nature of a gift, and its acceptance or refusal, shall be made by the Development Committee and Finance Committee, in consultation with the President/CEO.
Date: October 13, 2017