Methacton Education Foundation Policy: Acceptance of Gifts
Approved and Adopted by the Board: June 11, 2019
This Policy governs interactions and decisions related to acceptance of gifts offered to the Methacton Education Foundation (hereafter, the “Foundation”). It applies to Board directors, officers, employees, and volunteers of the Foundation.
A “gift,” as used in this Policy, means a donation of property, services or other items of value to the Foundation for which the donor receives no direct benefit. Gifts may be cash or non-cash. Gifts do not include goods or services provided to or purchased by the Foundation at fair market value, nor do they include grant awards from governmental or nonprofit sources for which the Foundation applies.
A “cash” gift, as used in the Policy, means a gift made via cash, check, credit card, or electronic payment. All other gifts are considered “non-cash” gifts. Examples of non-cash gifts are described in the Appendix to this Policy.
A “donor,” as used in this Policy, means a person or legal entity who makes a gift to the Foundation, or directs that a gift be made to the Foundation.
STATEMENT OF POLICY
The Foundation is dedicated to encouraging community-wide participation and philanthropy in order to enhance and expand enrichment opportunities for all students in the Methacton School District and provide the District with financial flexibility to support students, faculty and staff. Consistent with that purpose, the Foundation provides supplemental funding for innovative educational programs and initiatives to enrich student learning. This is the Foundation’s mission.
Gifts from public or private donors allow the Foundation to fund programs, professional development and other initiatives to benefit the Methacton School District. The Foundation welcomes and encourages gifts that will assist it in fulfilling its mission, to the extent consistent with this Policy.
The Foundation is grateful for the interest, generosity and commitment of its donors and prospective donors. However, as outlined below, there are certain gifts that the Foundation may be unable to accept, or will accept only under certain circumstances.
I. Criteria and Procedures for Acceptance of Gifts
a. Gift non-acceptance criteria. The Foundation will not accept gifts under the following circumstances:
● The Foundation will not accept any gift unless it can be used and expended in a manner consistent with the Foundation’s mission.
● The Foundation will not accept gifts that are overly restrictive in purpose or conditions of use. Unrestricted gifts are preferred and encouraged.
● The Foundation will not accept gifts that are inconsistent with its corporate charter, or that may jeopardize its status under Section 501(c)(3) of the Internal Revenue Code as a tax-exempt, nonprofit organization.
● The Foundation will not accept gifts that it determines to be too difficult or expensive to administer in relation to their value.
● The Foundation will not accept gifts that may result in any unacceptable consequences for the Foundation, including but not limited to potential reputational harm, harm to future fundraising activities, adverse publicity, risk of litigation or other liabilities.
● The Foundation will not accept gifts that require the Foundation or the Methacton School District to take a personnel action regarding a specific individual.
● The Foundation will not accept gifts that involve unlawful discrimination, or that otherwise violate the Foundation’s policy of non-discrimination and equal opportunity.
b. Gifts accepted without prior review. The Foundation’s Executive Director or President may accept the following types of gifts on behalf of the Foundation without review or approval of the Board of Directors or any committee of the Foundation, provided the Executive Director or President determines that the gift clearly does not implicate the non-acceptance criteria described above in Section I.a:
● Unrestricted gifts of cash or publicly-traded securities.
● Gifts that are restricted to one of the Foundation’s broad, primary focus areas published at www.methactonfoundation.org/what-we-fund/focus_areas.html, without additional or more specific restrictions.
● Gifts that are restricted to a use or purpose for which the Foundation has specifically solicited the gift from the donor, without additional or more specific restrictions.
c. Gifts requiring review prior to acceptance. All other gifts (i.e., those not described in Section I.b) may be accepted on behalf of the Foundation only if the Foundation’s Executive Committee determines that the gift does not implicate the non-acceptance criteria described in Section I.a of this Policy. Nothing in this Policy shall prohibit the Executive Committee, in its discretion, from deferring the decision to accept a gift to the Board of Directors.
II. Acknowledgement and Recognition of Gifts
The Foundation will provide written/email acknowledgment of gifts following their receipt and acceptance by the Foundation, provided donor contact information is made available. Donors will be recognized for their generosity in a manner consistent with the expressed wishes of the donor (if any), this Policy, and other Foundation practices and policies.
III. Operational/Administrative Retention
The Foundation relies on third-party donations to support its general operations and administration. The Foundation may reserve up to 20% of the value of the following types of gifts for general operational and/or administrative purposes:
● Unrestricted gifts.
● Gifts for which restrictions are imposed by law rather than by the donor, provided applicable law permits the Foundation to reserve a portion of the gift for these purposes (e.g., gifts made under Pennsylvania’s Educational Improvement Tax Credit program).
Additionally, if the Foundation agrees under Section I.c of this Policy to accept other gifts that the donor restricts for a specific program or purpose, the following conditions of acceptance apply:
● For gifts of $2,500 or less, the Foundation will reserve 10% of the gift’s value for general operational/administrative use.
● For gifts of more than $2,500, the Foundation may reserve up to 10% of the gift’s value for general operational/administrative use, as determined by the Executive Committee or the Board of Directors.
If the Foundation identifies a need to reserve a larger percentage of a gift’s value for operational and/or administrative purposes than described in this Section, it will, to the extent permitted by law, seek the donor’s agreement to the larger reserve.
IV. Professional Counsel
In determining whether to accept a gift under Section I of this Policy, the Foundation shall seek the advice or professional legal or tax counsel as deemed appropriate by the Executive Committee or the Board of Directors.
All donors and prospective donors should seek independent professional legal, tax, estate planning and/or financial planning advice before making a gift to the Foundation. In no instance are representatives of the Foundation (e.g., Board members, staff, volunteers) authorized to provide legal, tax, estate planning and/or financial planning advice to donors or prospective donors.
VIOLATIONS OF THIS POLICY
Violations of this Policy will be brought to the attention of the Board of Directors to determine appropriate remedial action. Remedial actions that the Board may consider include, but are not limited to, return of a previously-accepted gift to the donor.
Examples of Non-cash Gifts
Charitable Lead Trusts: A charitable lead trust provides an income stream for a specified period of time to the Foundation. The Foundation receives the income from the trust, generally for application to a specific project. The principal is then returned at the end of the set period to whomever the donor designates.
Charitable Remainder Trusts: A charitable remainder trust is established when a donor irrevocably transfers money or securities to a trustee who invests the assets to pay annual lifetime income to the donor or others chosen by the donor. At the end of the beneficiaries’ lives, the remaining trust assets are distributed to the Foundation.
Closely Held Securities (non-public): Closely-held securities are those that are not publicly-traded (see definition of “Publicly-traded Securities” below). Closely-held securities may raise considerations related to valuation and marketability.
Endowments: An endowment is a permanent fund established in response to an irrevocable contribution of assets to the Foundation.
In-Kind Gifts: A gift-in-kind is an irrevocable non-cash contribution of tangible property or work performed. Tangible property may consist of, but is not limited to, equipment, art, books, collectibles, antiques, or other tangible property. Donations of property or services given in-kind may be subject to a qualified appraisal obtained by the donor.
Life Estates: A life estate is a gift of a personal residence or farm, while retaining full use and rights to the property during the donor’s lifetime.
Life Insurance: Gifts of life insurance may name the Foundation as a beneficiary of the policy or as beneficiary and owner.
Matching Gifts: Matching gifts are usually provided by corporations. They are most frequently dollar for dollar, but may be other ratios that match an employee’s gift to a nonprofit organization. Matching gifts may be counted toward assessment of the donor’s gift recognition level if received within the fiscal year in which the donor’s qualifying gift is received.
Personal Property: Gifts of personal property may include, but are not limited to, works of art, patents, copyrights, antiques, stamp and coin collections, jewelry, furniture, rare books, manuscripts, or any other item that has a determinable value. Donations of personal property may be subject to a qualified appraisal obtained by the donor.
Planned Gifts: A planned or deferred gift is a commitment established legally during the donor’s lifetime, the principal benefits of which usually do not accrue to the charitable recipient until some future time. Annuities, gifts of insurance, trusts, and commitments through estate plans are all usually referred to as planned gifts.
Pooled Income Funds: A pooled-income fund is sometimes called a charitable mutual fund, as it allows the donor to combine gifts with those from other individuals to participate in life income trusts with smaller initial gifts. The annual income is based upon the donor’s investment in the fund and varies with the actual earnings of the fund.
Publicly-traded Securities: Publicly-traded securities are those (1) listed on an exchange in which quotations are published daily; (2) regularly traded in national or regional over-the-counter markets for which: published quotations are available; or (3) that are shares of a mutual fund for which quotations are published on a daily basis in a newspaper of general circulation throughout the United States.
Quasi-endowments: A quasi-endowment fund is a fund sequestered and invested with other endowments, but whose principal may be invaded at the discretion of the Foundation.
Real Property: Real property includes improved or unimproved land, personal residences, farmland, commercial property, rental property, and mineral interests. Gifts of real estate present special considerations regarding assessment of the value of the donated property and the potential burden to the Foundation of accepting the gift. Donations of real property may be subject to a qualified appraisal obtained by the donor. Additionally, real estate gifts raise considerations regarding environmental compliance, including testing for conformity with state and federal laws (e.g., EPA regulations).
Revocable Trusts: In a revocable trust, the donor transfers assets to a trustee through a written agreement. Income and principal may be payable to the donor for the term of the trust.
Testamentary Gifts: Donors can make charitable gifts to the Foundation in wills, living trusts, or other estate planning documents. Donors are encouraged to advise the Foundation of their intention to make such testamentary gifts, to ensure that the donor’s intent can be carried out through the Foundation’s grantmaking and organizational capacity.