Most small nonprofits don’t have a gift acceptance policy because they’ve never needed one. Then a donor calls on December 29 and asks where to send 40 shares of stock. Or a longtime supporter wants to give you her late husband’s boat. Or a local business offers a check with a request to put its logo on your new van.
That’s when people realize the policy wasn’t about paperwork. It was about knowing what to say before the phone rang.
Most of the templates you’ll find online read like they were written for a university with a planned giving office and outside counsel. They’re long, they’re full of legal language, and they mostly describe how to say no. I’d argue a small nonprofit needs something different: a short document whose main job is to help you say yes quickly to the gifts you want, and decline the rest without damaging the relationship.
What a gift acceptance policy actually does
A gift acceptance policy answers three questions ahead of time: what will we accept without discussion, what needs someone to review it first, and who makes that call.
That’s it. Everything else is detail.
When those answers aren’t written down, decisions get made in the moment by whoever picks up the phone. A well-meaning development director says yes to a timeshare because she doesn’t want to offend a donor. Or the opposite happens: a stock gift sits in limbo for two weeks because nobody’s sure whether the treasurer, the executive director, or the full board has to approve it, and the donor quietly sends it somewhere else.
There’s also an outside audience. If your organization files a full Form 990 and reports more than $25,000 in noncash contributions, you complete Schedule M, and line 31 of Schedule M asks directly: “Does the organization have a gift acceptance policy that requires the review of any nonstandard contributions?” Your answer is public. A “no” isn’t a violation by itself, but it’s one more signal to a careful foundation officer or major donor reading your 990 about how your organization is run.
Sort gifts into three lanes
The most useful thing you can do is sort gifts into lanes. I’d use three.
Accept automatically. These are gifts staff can say yes to today, with no approval: cash, checks, credit card and online gifts, gifts from donor-advised funds, and publicly traded stock. If you haven’t set up a brokerage account to receive stock, do that before you need it. Telling a donor “we’ll figure it out” in late December is how a stock gift goes to another charity. (If DAF gifts still confuse your team, this piece on making it easier for donors to give from their donor-advised funds is a good place to start.)
Accept after review. These gifts might be wonderful, but someone needs to look before you say yes: real estate, vehicles, closely held business interests, cryptocurrency, life insurance policies, large in-kind donations, and any gift that comes with restrictions you don’t normally accept. Name the reviewer. For a small shop, that’s usually the executive director plus the board treasurer, with a rule that anything involving real estate or debt also goes to legal counsel.
Decline. These are gifts you won’t take regardless of who offers them. Common examples: gifts that would cost more to hold or sell than they’re worth, property with environmental or legal problems, gifts that require you to change your mission or programs, and gifts from sources that conflict with your values. This list is the one your board should spend the most time on, because it’s the one most likely to be tested by someone they know.
A quick way to test your lanes: think about the last five unusual gift conversations your organization had. Would each one have landed clearly in a lane? If two or three of them would have been a coin flip, your lanes need more detail.
Imagine how this plays out
Imagine a youth mentoring program with a $900,000 budget, a development director, and a part-time database manager. In one year they’re offered three noncash gifts.
A retired board member wants to give appreciated stock in December. Because stock is in the “accept automatically” lane and the brokerage account already exists, the development director sends the transfer instructions the same afternoon. No meeting needed.
A donor offers a 12-year-old SUV for the mentoring program to use. That’s a “review” gift. The executive director and treasurer look at insurance costs and maintenance, decide the program can’t use it, and ask the donor whether they’d consider selling it and giving the proceeds instead. The donor isn’t offended, because the policy gave staff a reason that wasn’t personal.
A local company offers a sponsorship in exchange for naming rights on the program. The policy says naming requests go to the board, so it does, and the board has a framework for the conversation instead of a debate from scratch.
None of these situations is dramatic, and that’s the point: the policy turns three potentially awkward conversations into routine ones.
The IRS pieces you should know before the gift arrives
You don’t need to be a tax expert, but a few rules come up often enough that your policy should mention them. (I’m not an attorney or accountant, so have yours review the final document.)
When a donor claims a deduction of more than $5,000 for donated property, they generally file Form 8283, Section B, and your organization is asked to sign the donee acknowledgment. According to the IRS’s guidance on substantiating noncash contributions, your signature acknowledges that you received the property. It “does not represent agreement with the appraised value.” Publicly traded securities are an exception and don’t need your signature on Section B.
If you sign Section B and then sell or otherwise dispose of that property within three years, you generally have to file Form 8282 within 125 days of the sale and give a copy to the donor. There are exceptions, including property valued at $500 or less and property you distribute for charitable purposes.
Two practical lessons follow. First, your policy should say who is authorized to sign Form 8283 for the organization, because the IRS says it must be an official authorized to sign your returns or someone that official designates. Second, anyone who sells donated property needs to know about the three-year window, or you’ll miss a filing you didn’t know you owed.
And never put a value on a noncash gift in your acknowledgment letter. Describe what you received and let the donor and their advisor handle the valuation. If your thank-you letters need work in general, here’s why your gift receipt may be the most-read letter you send.
How to say no without losing the donor
Most gift acceptance templates stop at “the organization reserves the right to decline any gift.” That sentence protects you, but it doesn’t help the person who has to make the call.
Give staff language they can use. Something like:
“Thank you for thinking of us. Our board has a policy that we don’t accept vehicles directly, because we don’t have a way to use or store them well. Would you consider selling it and making a gift from the proceeds? Or I’m happy to suggest another organization that could put it to good use.”
Notice what this does. It thanks the donor first. It points to a policy rather than a personal judgment. And it offers another way to give. Most donors respect a clear answer more than a hesitant one.
Write your one-page version this month
Here’s what I’d include in a first draft:
- A purpose statement of one or two sentences: this policy helps us accept gifts that support our mission and decline gifts that don’t.
- Your three lanes, with examples in each.
- Who reviews “accept after review” gifts, and how quickly they’ll respond (a week is reasonable; 48 hours in late December).
- Who can sign Form 8283 and who tracks property you may sell within three years.
- Your rule on restricted gifts and naming.
- A line that donors should consult their own advisors, and that the organization doesn’t provide tax or legal advice.
- A note that the board reviews the policy every two years.
Draft it in an hour, send it to your treasurer for comments, and put it on the agenda for your next board meeting. It’s also a good, concrete governance task to give a board member who wants to help but doesn’t want to ask for money; there are more ideas like that in five year-end jobs for board members.
Then set up that brokerage account. Of everything on this list, it’s the step most likely to pay for itself this year.
