- Unless the form follows an already reviewed prototype, the formal fund agreement for all funds with one or more current living donors must be reviewed by the Southeast Virginia Community Foundation (Foundation) legal counsel.
- The President or any persons acting on behalf of the Foundation shall encourage the donor to discuss the proposed gift with the legal and/or tax advisors of the donor’s choice, at his/her expense, to ensure that the donor receives a full, accurate, and independent explanation of all aspects of the proposed charitable gift.
- The President or any persons acting on behalf of the Foundation shall make it clear that it is the donor’s responsibility to obtain any necessary appraisals, file appropriate personal tax returns, and defend against any challenges to claims for tax benefits.
- Pledges and gifts of cash, securities or other property to existing funds should include a letter from the donor indicating the fund for which the gift is intended.
- Gift for immediate distribution will be accepted with written instructions at the time of the gift.
Chief Executive Officer Discretion
- The Chief Executive Officer may accept gifts of cash or marketable securities in any amount to either the Unrestricted Fund or to any other existing fund, without seeking Committee or Board approval.
- The Chief Executive Officer may accept gifts of cash or marketable securities intended as initial funding for a fund to be contemporaneously established, without Development Committee review, provided the fund agreement uses a standard fund agreement form, as produced by the Development Committee and previously approved by the Board.
- The Chief Exectutive Officer may accept gifts of tangible property without Development Committee review provided the property is to be used by the Foundation or can easily be granted to non-
Development Committee Review
The Development Committee shall review proposed transactions for deferred gifts, gifts of real estate, life insurance, other property than that described above, and gifts of property in excess of $5,000.
Factors to be considered by the Chief Executive Officer and the Development Committee in their review may include:
- The charitable intent and ultimate community benefit
- The nature of any restrictions
- The permanency of the gift; or in the case of a non-permanent fund, the amount of time the fund will remain with the Foundation
- The administrative cost of management
- Fee revenues to the Foundation for administering the gift
- Potential for actual or perceived conflict of interest
- Potential for conflict with the mission or goals of the Foundation.
If a gift is not accepted, the donor will be notified in writing by staff immediately. All gift reviews will be handled with confidentiality.
In all cases where required, the Foundation will prepare IRS Form No. 8283 for donations of property, as well as providing the required contemporaneous acknowledgment of all cash gifts. IRS Form No. 8282 will be prepared when donations of property are disposed of within two years of receipt.
FORMS OF GIVING
Gifts of readily marketable securities will be accepted by the Foundation subject to the General Policies criteria. It is the policy of the Foundation that marketable securities be sold immediately with a cash disbursement to the Foundation to deposit and credit to the appropriate component fund.
Gifts of securities which are not readily marketable will be accepted under the following conditions:
- Securities will be recorded at fair market value, as long as audited financial statements and/or other acceptable appraisals are provided to the Foundation to substantiate the value;
- In the absences of financial information which would enable determination of the book value, gifts of closely-held corporate stock will be carried on the Foundation’s books at the appraised value as reported to IRS on Form 8283;
- Gifts of bonds which require a holding period will be accepted and cashed when the holding period has expired.
Gifts of securities which will not be accepted include:
- Securities which are assessable or which could in any way create a liability to the Foundation;
- Securities which by their nature may not be assigned, such as series “E” savings bonds. However, such bonds are acceptable as part of an estate gift;
- Securities which have no apparent value.
The Foundation may accept gifts of real property after careful evaluation of the financial, environmental, legal, marketing, or public relations risks or liabilities associated with the gift. The level of information required to make a decision to accept a gift will vary depending on the nature of the property. The Foundation’s basic policy is to sell all gifts of property so that assets can be invested in the Foundation’s invested portfolio.
Generally the Foundation will not accept property with a value of less than $50,000, nor property that is encumbered with debt greater than 25% of the value of the property as based upon an appraisal (generally paid by the donor) of the property. All gifts of real property will be considered for approval by the Board only after a property analysis has been completed.
A representative appointed by the Foundation should personally inspect the property to:
- Assess the character of the property in relationship to the surrounding properties;
- Evaluate the physical condition of the property, and what maintenance and repairs may be needed;
- Observe any apparent hazards or other liabilities;
- Investigate and evaluate any potential legal encumbrances.
The Foundation will be willing to wait for a reasonable period of time to receive an offer near the appraised value. Unless a separate agreement is made with the donor, the Foundation has total discretion regarding when and at what price the property will be sold. Such decisions should be made with the knowledge of the donor, and if possible, with his or her consent. If, because of high taxes, sizable mortgage, or any other reason that the Foundation might dispose of the property through a quick sale at perhaps a lower than market price within two years of accepting the gift, the prospective donor will be informed of that possibility prior to the acceptance of the gift.
Tangible Personal Property
Tangible personal property may be defined generally as personal property which is touchable. Because gifts of paintings, cars, jewelry, etc. are not related to the Foundation’s purpose, the donor can receive a charitable deduction only for the lesser of fair market value or cost basis. The sale of personal property can be difficult and donors are often better served by selling the property themselves and donating the cash to the Foundation. Therefore, as a general rule, the Foundation will not accept gifts of tangible personal property which will net less than $5,000, except in the case of property which can be used by the Foundation itself, such as office equipment or supplies. No commitment will be made to the donor to retain gifts of personal property.
The establishment of value is the responsibility of the donor. If the value is over $5,000, the donor needs to have a qualified appraisal done, and dated within 60 days of the transfer, with the appraisal summary on the back of the IRS Form 8283 filled in and signed by the charity and its appraiser. If the charity sells the item(s) within two years, the charity must file IRS Form 828 informing the donor and the IRS of the sale price.
A donor may contribute an existing life insurance policy to the Foundation, provided the following conditions are met:
- The Foundation must be both the owner and the designated beneficiary of the policy, and the donor must relinquish all incidents of ownership to the policy.
- An insured person other than the donor must keep the Foundation notified of his or her permanent address.
- Upon redemption, the value of the policy must either establish a new fund, or contribute to any existing fund at the Foundation.
- If accrued dividends or accumulated cash value are sufficient to pay in full all remaining premium payments, the donor may stipulate that premiums be paid from accrued dividends or accumulated cash value of the policy.
- Premium payments must be made by direct payment to the Foundation at least ten days prior to the premium due date. The Foundation cannot assume delinquent payments. If a policy is canceled, the cash value will be added to the Unrestricted Fund in the donor’s name.
The President of the Foundation and any consultants retained by the Foundation for this purpose are authorized to negotiate planned gift agreements with prospective donors, following guidelines approved by the Board.
All planned giving agreements requiring execution by the Foundation must first be reviewed and approved as to form by the Foundation’s legal counsel.
Charitable Remainder Trusts
A charitable remainder trust is a separate trust agreement between the donor and a trustee of the donor’s choosing. Generally the Foundation will not act as trustee, but will consider participation if the following conditions are met:
- An initial gift value of $100,000 and one or more charitable beneficiaries;
- Any real property must be included in the gift, subject to the Foundation’s real property policies
- A minimum of $50% of the remainder interest must come to the Foundation.
MINIMUM GIFT TO ESTABLISH NAMED COMPONENT FUND:
Donor Advised Fund $10,000
Designated or Field of Interest Fund $ 5,000
Scholarship Fund $25,000
Unrestricted Fund $10,000