Gift Acceptance Policies and Guidelines
The San Francisco SPCA (“the SF SPCA”), a not-for-profit organization organized under the laws of the State of California, encourages the solicitation and acceptance of gifts for purposes that further and fulfill its mission to save and protect animals, provide care and treatment, advocate for their welfare and enhance the human-animal bond.
The following policies and guidelines govern acceptance of gifts made to the San Francisco SPCA or for the benefit of any of its programs and services:
I. Purpose of Policies and Guidelines
The Board of Directors of the SF SPCA and its staff solicit current and deferred gifts from individuals, corporations, and foundations to secure the SF SPCA’s mission and future growth. These policies and guidelines govern the acceptance of gifts by the SF SPCA and provide guidance to prospective donors and their advisors about making gifts to the SF SPCA.
II. Responsibility to Donors, Ethics and Conflict of Interest
The SF SPCA, its staff and representatives shall endeavor to assist donors in accomplishing their philanthropic objectives in providing support for the SF SPCA.
a. Confidentiality: Information about all transactions between a donor and the SF SPCA shall be held by the SF SPCA in strict confidence and may be publicly disclosed only with the permission of the donor or as required by law.
b. Anonymity: The SF SPCA shall respect the wishes of donors who prefer to support the SF SPCA anonymously and will take reasonable steps to safeguard those donors’ identities.
c. Ethics: The SF SPCA will comply with the Model Standards of Practice for the Charitable Gift Planner promulgated by the National Association of Charitable Gift Planners, Appendix A to this document. The donor shall be accorded the consideration outlined in the Donor Bill of Rights developed by the Association of Fundraising Professionals, Appendix B to this document.
d. Conflict of Interest and Disclaimer: Each prospective donor shall be informed that the SF SPCA does not provide legal, tax or financial advice, and the SF SPCA staff and/or representatives will urge all prospective donors to seek the assistance of personal legal and financial advisors in matters relating to their gifts and the resulting tax and estate planning consequences.
e. Fiduciary Relationships: The SF SPCA will not agree to serve as executor of a decedent’s estate or as a trustee of any trust.
III. Use of Legal Counsel
The SF SPCA shall seek the advice of legal counsel in matters relating to acceptance of gifts when appropriate. Review by counsel is recommended for:
a. Closely held stock transfers that are subject to restrictions or buy-sell agreements.
b. Documents naming the San Francisco SPCA as Trustee.
c. Gifts involving contracts, such as bargain sales or other documents requiring the San Francisco SPCA to assume an obligation.
d. Transactions that could cause a potential conflict of interest, whether or not such conflict may invoke IRS sanctions.
e. Other instances in which use of counsel is deemed appropriate by the Chief Operating Officer and/or Associate General Counsel.
IV. Restricted Gifts
Donors shall always be encouraged to make unrestricted gifts to the SF SPCA in order to provide the SF SPCA with maximum flexibility in pursuit of its mission.
The SF SPCA may accept unrestricted gifts and gifts for specific programs and purposes, provided that such gifts are not inconsistent with its stated mission, purposes, and priorities and do not violate its corporate bylaws.
The SF SPCA will not accept gifts that are too restrictive in purpose. Gifts that are too restrictive are those that are too difficult to administer or are for purposes outside the mission of the SF SPCA.
All restricted gifts shall be memorialized in a written document describing the restrictions imposed on the gift by the donor and any other obligations that may be undertaken by the SF SPCA with respect to the gift.
Permanently Restricted Gifts: The SF SPCA generally discourages permanently restricted gifts. However, they may be accepted if they conform to the SF SPCA’s Permanently Restricted Funds Policy and if they are approved by the Board of Directors. A permanently restricted gift requires a minimum contribution of $1,000,000 and must be restricted to a program that is within the mission of the SF SPCA or unrestricted with respect to purpose. Gifts restricted to a program that becomes inactive may be allocated to a similar active program at the Board of Directors’ discretion. Donors shall be encouraged to include variance power with respect to the use of their gift in the gift agreement. All permanent restrictions must be in writing.
All decisions about accepting or declining a restricted gift shall be made by the Chief Operating Officer and/or Associate General Counsel and will be final.
V. Authority to Accept Gifts
The Chief Operating Officer and/or Associate General Counsel are responsible for reviewing all gifts made to the SF SPCA, properly screening and accepting those gifts, and making recommendations to the Board about gift acceptance issues when appropriate. They may delegate authority to accept gifts that meet specific criteria at their discretion.
VI. Types of Gifts
The following types of gifts are acceptable:
1. Cash: Cash and other currency are acceptable in any form. Checks shall be made payable to the SF SPCA and shall be delivered to its administrative offices.
- Pledges: Unless a longer period is approved by the Senior Vice President of Development, the pledge payment period will not exceed five years.
- Pledges payable over more than one year shall be at least $10,000.
2. Securities: The SF SPCA may accept both publicly traded securities and closely held securities.
a. Publicly Traded Securities: Readily marketable securities may be transferred to an account maintained at one or more brokerage firms or physically delivered with the transferor’s signature or with a stock power attached.
b. Restricted Securities: If marketable securities are restricted by applicable securities laws, including but not limited to Rule 144, or if there are any other restrictions that might prevent immediate sale, the donor must disclose this information before the transfer. The final decision about the acceptance of the restricted securities shall be made by the Chief Operating Officer and/or Associate General Counsel.
c. Options and Other Rights in Securities: Proposed gifts of warrants, stock options, stock appreciation rights, and other such interests shall be reviewed prior to acceptance. Considerations prior to acceptance of the property shall include:
Is the SF SPCA required to advance funds upon exercise of the gift? If so, does the SF SPCA have the required funds?
Does the SF SPCA risk of loss of funds if it accepts the gift?
Are the rights restricted? If so, does the restriction affect the ability of the SF SPCA to dispose of the asset? Does the restriction materially impact the value of the gift?
Will acceptance of the gift and/or exercise of the option trigger any tax consequences to the donor?
d. Closely Held Securities: Closely held securities, which include not only debt and equity positions in non-publicly traded companies but also interests in LLPs, LLCs, and other forms of ownership may be accepted subject to the approval of Associate General Counsel and/or the Chief Operating Officer. Gifts must be reviewed prior to acceptance to determine that:
- There are no restrictions on the security that would prevent the SF SPCA from ultimately converting those assets to cash.
- There is a market for the security.
- The security will not generate any undesirable tax consequences for the SF SPCA, including Unrelated Business Income Tax (UBIT)? If so, does the SF SPCA have the funds to pay the tax? Unless the SF SPCA’s Chief Operating Officer and/or Associate General Counsel has specifically approved the gift.
- Could ownership of an interest in the entity create liability for the SF SPCA?
- The security would not generate any undue liability for the SF SPCA (i.e., the security provides for limited liability as the owner of the business or asset and would not subject the SF SPCA to capital calls or other potential cash outlays).
- Will the gift trigger any negative tax consequences to the donor?
- Is the security marketable? If so, what is the market for sale, and estimated time required for sale?
Further review by an outside professional may be sought before making a final decision about acceptance of the gift. The final determination about the acceptance of closely held securities shall be made by the Gift Acceptance Committee and legal counsel when necessary. Every effort will be made to sell non-marketable securities as quickly as possible.
3. Tangible Personal Property: Tangible personal property unrelated to the mission of the SF SPCA will be accepted on a case-by case basis with the prior written approval of the Associate General Counsel and/or the Chief Operating Officer.
Consideration should be given as to whether the item might be used in conjunction with an existing SF SPCA program. If not, there should be a plan for selling the property for cash, including the anticipated time frame and marketing expense for the proposed sale before the gift is accepted.
Considerations prior to acceptance of the property shall include:
- Does the property fulfill the SF SPCA’s mission?
- If not, is the property marketable?
- Are there any undue restrictions on the use, display, or sale of the property? If the donor proposes restrictions on the use of the property, are they consistent with the SF SPCA’s institutional needs?
- Are there any carrying costs for the property, including, but not limited to, insurance, storage, maintenance, etc.
- Is the gift deductible to the donor under the Related Use rules?
The SF SPCA does not normally accept gifts of art, jewelry, timeshares, frequent flyer miles or livestock.
Gifts of vehicles shall be handled by a third party that will transmit the proceeds to the SF SPCA.
The final decision about acceptance of gifts of tangible property shall be made by the Chief Operating Officer and/or Associate General Counsel.
4. Real Estate: The SF SPCA will consider real property gifts if they have a market value that is reasonable in light of the cost and effort required to liquidate it. Gifts of real estate may include developed property, undeveloped property, or gifts subject to a prior life interest. Gifts of real estate are typically listed for sale as soon as they are received unless the SF SPCA prefers to occupy it or use the property to further its mission.
Prior to accepting real estate, the SF SPCA shall require an initial environmental review to ensure that the property has no environmental damage. If the initial inspection reveals a potential problem, the SF SPCA may retain a qualified inspection firm to conduct an environmental audit. The prospective donor shall bear the cost of the initial environmental review and any subsequent environmental audit. The SF SPCA shall obtain a preliminary title report prior to accepting the real property.
Prior to accepting the real property, the gift shall be approved by the Chief Operating Officer and/or Associate General Counsel.
Considerations prior to acceptance of the property shall include:
- Is the property useful for the purposes of the SF SPCA?
- If not, is the property marketable?
- Are there any restrictions, reservations, easements, or other limitations associated with the property?
- Are there carrying costs, which may include insurance, property taxes, mortgages, or notes, etc., associated with the property?
- Does the environmental audit reflect that the property is not damaged?
5. Remainder Interests in Property: The SF SPCA may accept a remainder interest in a personal residence, farm, or vacation property subject to the provisions of paragraph 4, above.
The donor or other life tenant may continue to occupy or otherwise use the real property for the duration of the stated life. At the death of the life tenant, the SF SPCA may use the property for purposes related to its mission or sell it. Expenses for maintenance, real estate taxes, insurance, any property indebtedness, and all other expenses related to the property are the responsibility of the life tenant. A representative of the SF SPCA will inspect the property periodically.
6. Oil, Gas, and Mineral Interests: The SF SPCA may accept oil, gas, and mineral property interests. Prior to acceptance such an interest the gift shall be approved by the Chief Operating Officer and/or Associate General Counsel and if necessary, by the SF SPCA’s legal counsel. Gifts should be carefully evaluated to determine possible tax consequences, potential liability and environmental impact. An environmental review should be conducted prior to accepting the gift.
7. Intellectual Property: The SF SPCA may accept gifts of intellectual property including but not limited to royalties, patents, copyrights, and contract rights.
These gifts shall be evaluated on a case-by-case basis and require approval from the Chief Operating Officer and/or Associate General Counsel. Considerations prior to acceptance of the property shall include:
- Is the intellectual property right related to the SF SPCA’s mission?
- Can ownership of the intellectual property rights be transferred or assigned to the SF SPCA?
- Is the gift a full or fractional interest in the intellectual property? If fractional, who are the other owners and their percentage interests?
- Is the gift deductible to the donor under the Partial Interest rules?
- Does the right in the intellectual property generate, or have the potential to generate, meaningful income for the SF SPCA?
- Is there a market for the sale or licensing of the intellectual property? Is there a manager or agent?
- Are there any costs associated with acceptance of the intellectual property? (e.g., Will further action be needed to secure a patent, are there any claims, liens or other contests associated with the property, or are there likely to be costs associated with defending the intellectual property right?)
- Are there any restrictions on the retention or use of the property?
- What agreements or other legal documents would the SF SPCA be required to execute to obtain patents, market the property and grant licenses?
8. Bargain Sales: The SF SPCA generally does not enter into bargain sale transactions. Exceptions may be made if the SF SPCA either intends to use the property for its mission and purpose or establishes that there is a market that will allow for a sale within 12 months of receipt.
Bargain sales require that the value of the property must be substantiated by an independent appraisal, careful evaluation of any debt on the property, the amount of any taxes and the costs of owning the property, including but not limited to management, maintenance, and insurance, during the holding period have been determined.
Acceptance of such gifts requires the approval of the Associate General Counsel and/or the Chief Operating Officer
9. Bequests: The SF SPCA encourages its donors and supporters to make bequests to it through their wills and trusts.
Bequests will not be recorded as gifts until the gift becomes irrevocable.
10. Beneficiary Designations: Donors and supporters of the SF SPCA will be encouraged to name it as a remainder beneficiary of their retirement plans and financial accounts and/or beneficiary or contingent beneficiary of life insurance and annuity policies.
Donors of such gifts should be strongly encouraged to inform the SF SPCA of the gift, the name of and contact information for the financial institution or insurance company and the account or policy number, preferably by giving the SF SPCA a copy of the designation of beneficiary form. Without this information it may be impossible to realize the donor’s intended gift.
Such designations will not be recorded as gifts until the gift is irrevocable.
11. Other Gifts of Life Insurance: The SF SPCA may accept gifts of policies that are paid-up or have a cash value. The SF SPCA will not accept life insurance if it will be responsible for payment of premiums, even if the donor intends to provide the funds for the premiums.
The SF SPCA must be named as both beneficiary and irrevocable owner of an insurance policy before a life insurance policy can be recorded as a gift.
The SF SPCA will not accept or engage in any viatical arrangements.
12. Life Income Gifts
a. Charitable Gift Annuities: The SF SPCA does not have a license to issue gift annuities and therefore does not issue charitable gift annuities. The SF SPCA may work with donors to facilitate such gifts for its benefit through a licensed third party.
b. Charitable Remainder Trusts: The SF SPCA may be designated as a beneficiary of a charitable remainder trust. The SF SPCA will not serve as Trustee of a charitable remainder trust. The SF SPCA may work with donors to facilitate such gifts for its benefit when the donor or a third party will serve as trustee.
c. Pooled Income Funds: The SF SPCA does not offer a pooled income fund.
13. Charitable Lead Trusts: The SF SPCA may be designated as a beneficiary of a charitable lead trust. The SF SPCA will not serve as Trustee of a charitable lead trust. The SF SPCA may work with donors to facilitate such gifts for its benefit when the donor or a third party will serve as trustee.
VII. Miscellaneous Provisions
A. Appraisals and Advice to Donors: It is the donor’s responsibility to secure an appraisal (where required) and to consult their own independent legal counsel, financial or other professional advisers for all gifts made to the SF SPCA.
B. Valuation of Gifts: The SF SPCA will value all gifts at their market value on the date of gift.
C. Acknowledgement and Compliance: The Finance Department is responsible for filing IRS Form 8282 upon the sale or disposition of any asset sold within three years of receipt by the SF SPCA when the charitable deduction value of the item is more than $5,000. The SF SPCA must file this form within 125 days of the date of sale or disposition of the asset. Form 8282 with Filing Instructions and IRS Publication 561 Determining the Value of Donated Property can be downloaded from www.irs.gov.
D. Exceptions to Policies: Acceptance of gifts to the SF SPCA in a manner that is inconsistent in any way with this statement of policy must be approved in writing by the Associate General Counsel and/or the Chief Operating Officer, who shall report such exceptions to the Board of Directors at the next regular meeting.
E. Policy Review, Acceptance and Revisions: The Chief Operating Officer and the Associate General Counsel shall periodically (but no less frequently than every five years) review these policies to ensure that they continue to accurately describe the policies of the SF SPCA. In addition, these policies shall be reviewed and ratified by the Board of Directors each time the Board determines that the SF SPCA will embark on a major capital or other fundraising campaign.