A gift acceptance policy before unusual gifts arrive
Why a non-profit needs a written gift acceptance policy, what it should say about vehicles, property and old equipment, and how to record gifts.
By Achekam · · 4 min read · For Non-profit businesses in South Africa, Nigeria, Kenya
The phone call usually starts warmly. A long-time supporter is moving house and would love the organisation to have her late husband's car. Or a company is replacing its computers and offers the old ones. Or an elderly donor wants to leave a plot of land to the cause. Everyone at the office is touched, and nobody wants to say anything that sounds ungrateful.
Then the car turns out to need a new gearbox and has years of unpaid licence fees. The computers cannot run current software and cost money to dispose of. The land comes with rates arrears and a boundary dispute. The generous gift has become a cost, and the organisation accepted it because nobody had a rule that allowed them to say no. A written gift acceptance policy is that rule.
Gifts that cost more than they are worth
The National Council of Nonprofits, a United States body whose guidance applies well beyond America, says some gifts, such as old cars, outdated computers or gifts with too many strings attached, may cost a non-profit more in hassle and expense than they are worth. That, it says, is why a written gift acceptance policy is considered best practice.
Strings are the less visible problem. A donor who offers funding on condition that the organisation opens a branch in a particular town, or employs a named person, or renames a programme, may be offering something that pulls the organisation away from its plan. The board's duty, as the Council puts it elsewhere, is to make sure the organisation's assets are used in support of its mission and in line with donors' intent. A gift that changes the mission is not a neutral addition.
Gifts that bring legal obligations
The Council notes that some gifts create legal obligations a non-profit may not be ready for. Its examples are property tax on gifts of real property, and hazardous waste disposal and licensing issues with gifted vehicles or boats.
Translate those to local terms. In South Africa, Nigeria and Kenya alike, land and buildings usually bring rates or land rates, and sometimes arrears the donor never mentioned. Vehicles need licensing, roadworthiness and insurance before they can be used. Old electronic equipment may contain components that cannot simply be thrown away. Each of these is a cost the organisation takes on from the day it accepts.
What the policy should say
The Council suggests a gift acceptance policy may require a review or legal advice before accepting gifts such as real estate. It also says the policy should make clear that the non-profit will not give donors tax or financial advice on their gift. A practical policy for a small organisation covers:
| Type of gift | What the policy says |
|---|---|
| Cash and bank transfers | Accepted, subject to the usual checks on the source |
| Equipment and goods | Accepted only if the organisation will use them or can sell them, and disposal costs are known |
| Vehicles | Accepted only after checking condition, outstanding licence fees and running costs |
| Land and buildings | Reviewed by the board and, where needed, a legal adviser before acceptance |
| Gifts with conditions | Accepted only if the conditions fit the mission and can be met |
| Tax questions from donors | The organisation does not advise; donors are referred to their own adviser |
Add who may accept each type. Staff might accept cash and small equipment; the board, or a committee, decides on property and conditional gifts.
Adopted by the board, so no one says no alone
The Council says a board-adopted written policy gives staff and volunteers a consistent way to handle unusual gifts, and de-personalises the awkward task of telling a donor that a gift cannot be accepted. That second benefit is easy to underrate. "Our board's policy means we can't take vehicles we wouldn't use, but we would be glad to sell it on your behalf" is far easier to say, and to hear, than a coordinator's personal judgement.
The Council also suggests posting the policy on the organisation's website, and having a board fundraising committee adopt and review it. Publishing it lets donors see the rules before they offer.
Recording what you accept, and filing the policy
The signed policy
Once adopted, the policy should be signed and kept where staff can find the current version. In Achekam, any document can be sent for electronic signature with signature and initials fields placed on it, signers in order or all at once, an expiry and reminders. The signed PDF and a completion certificate are filed back into Documents. Signing board resolutions electronically covers how to use this for board decisions.
Document Centre is a folder-based store where you can upload, preview, download, rename, move, tag, archive and search files, and a new version keeps the earlier ones. Keep the policy there, and when the board revises it, upload the revision as a new version so the history remains.
Equipment and vehicles you keep
A vehicle or equipment the organisation accepts and keeps for its own use belongs on the fixed-asset register. Achekam's register adds assets at cost, depreciates them monthly by straight line or reducing balance with a journal each month, and records disposal with the profit or loss posted. A donated asset has no purchase price, so agree with your accountant the value at which it is recorded before adding it. Goods you accept in order to sell or give away are a different matter; see donated goods recorded as products.
File the donor's letter, the condition report and any valuation in Document Centre beside the asset, tagged with the asset's name.
Draft it before the next phone call
The National Council of Nonprofits' guidance on gift acceptance policies explains why they matter and what they typically cover. Draft yours using the table above, put it to the board at its next meeting, and publish it once adopted.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
