Gift Acceptance Policy (IA2)

SUBJECT:
Gift Acceptance Policy

PURPOSE:
This policy serves as a guideline to members of Graceland University (hereinafter referred to as Graceland) employees involved with accepting gifts, to outside advisors who assist in the gift planning process and to prospective donors who wish to make gifts to Graceland. This policy is intended only as a guide and allows for some flexibility on a case-by-case basis.

POLICY:
Only a donor may restrict a gift and the restriction must be in writing whenever possible. Prior to accepting any restricted gift, a review may be required by the appropriate committee or personnel, to determine if the restriction allows the gift to be consistent with the goal(s), plan(s) and mission of Graceland.

1. Gifts of cash, check and credit card shall be accepted by Graceland, regardless of amount.

2. Checks shall be made payable to Graceland University and shall be delivered by the development officer or mailed to the development office, Graceland University, 1 University Place, Lamoni, IA 50140, or other Graceland designated address.

3. Any restriction should be noted in the memo portion of the check or on a separate sheet of paper or letter that is signed by the donor. In no event shall a check be made payable only to an individual representing Graceland.

Pledges or Commitments

Pledges or commitments, in any amount, may be payable in single or multiple installments. There is no limit to the size of the pledge or to the amount of time a donor wishes to pay this obligation as long as it is reasonable, when considering the donors’ life circumstances and purposes of the gift.

1. Graceland adheres to all IRS requirements related to accepting, valuing, keeping and/or disposing gifts of tangible personal property and filing appropriate forms.

2. Gifts of tangible personal property to Graceland must have a use related to Graceland's exempt purpose and help Graceland fulfill its mission.

3. Gifts of jewelry, artwork, collections, equipment, and software shall be accepted only after the potential gift is communicated to and approved by the Vice President of Institutional Advancement and the Institutional Advancement Committee. Pictures, appraisals, or documents of authenticity may be required prior to acceptance of gift. Gifts of artwork will be accepted in consultation with the chair of the Fine Arts Division or his/her designee.

4. Such gifts of tangible personal property defined above shall be used by or sold for the benefit of Graceland.

5. Property requiring special display facilities or security shall not be accepted by Graceland or anyone representing Graceland without consulting with the VP of Institutional Advancement and the Institutional Advancement Committee.

6. When the donor requests a receipt, the donor shall have a qualified appraiser (as defined in IRS Publication 561) value the asset or shall personally provide a receipt or invoice for the item(s) before Graceland considers its acceptance.

7. An agreement in writing is required between Graceland University and the donor regarding any restrictions relating to use, display, storage or sale of the property.

1. Marketable securities can be accepted by Graceland.

2. As a general rule, all gifts of marketable securities are likely to be sold immediately unless otherwise directed by the office of Institutional Advancement or Business Services.

3. For Graceland’s gift crediting and accounting purposes, the value of the securities is the average of the high and low stock price as listed in the Wall Street Journal or equivalent reliable source, on the date as prescribed by IRS regulations.

1. Non-publicly traded securities may be accepted within the policies of the Business Services Office.

2 Prior to acceptance, Graceland shall explore methods of liquidation for the securities through redemption or sale. A representative from the development office shall try to contact the closely held corporation to determine:

An estimate of fair market value of the security,
Marketability of the security,
Any restrictions on the security that would prevent Graceland from ultimately converting those assets to cash,
Possibility of responsibilities and liabilities,
Possibility of repurchase by issuing company, and
Assurances that the security will not generate any undesirable tax consequences for Graceland.

3. The final determination on the acceptance and sale of the closely held securities shall be made by the Vice Presidents of Institutional Advancement and Business Services of Graceland and their legal counsel where necessary.

4. Every effort will be made to sell non-marketable securities as quickly as possible.

Real Estate – Gifts of real estate may include developed property, undeveloped property or gifts subject to a life interest.

1. Gifts of real estate must be presented to the Vice Presidents of Institutional Advancement and Business Services for review and recommendation to the President of Graceland, subject to existing board policy.

2. The donor is responsible for obtaining an appraisal of the property. The cost of the appraisal is borne by the donor.

3. Prior to presenting a proposed gift to the Vice President of Institutional Advancement and Vice President of Business Services, the development officer must conduct a visual inspection of the property, in addition to providing any and all supporting documentation or reports to support the review of such a gift. If the property is located in a geographically isolated area, a local real estate broker can substitute for a member of the staff in conducting the visual inspection.

4. Due to the expenses associated with gifts of real estate, only gifts in excess of $10,000 should be considered.

5. Prior to presenting a gift proposal to the Vice President of Institutional Advancement and Vice President of Business Services, the donor must provide the following documents:

Real estate deed/title
Appraisal of property
Real estate tax bill
Plot plan
Restrictions and easements
Substantiation of zoning status
Environmental assessment – In the event that the initial inspection reveals a potential problem, Graceland may retain a qualified inspection firm to conduct an environmental audit should either the donor or Graceland decide to pursue the gift further.
Disclosure of land-use history

6. Depending on the value and desirability of the gift, the donor may be asked to pay for all or a portion of the following until the gift is completed:

Maintenance costs
Real estate taxes
Insurance
Real estate broker’s commission and other costs of sale
Environmental audit

7. For Graceland gift crediting purposes, the value of the gift is the appraised value of the real estate. For accounting purposes, Graceland records the appraised value of the gift in the fund designated (restricted) by the donor, but any associated realized gains/losses or expenses related to the gift may be recorded to the same fund. The resulting “fund balance” may be less than the donor’s gift credit.

8. Gifts of Real Estate being considered for a Retained Life Estate, Charitable Remainder Trust, Pooled Income Funds or property that is mortgaged will be considered on its individual merits.

9. Remainder Interests In Property: Graceland will accept a remainder interest in a personal residence, farm or vacation property subject to the provisions established above in the Real Estate section.

1. Graceland may enter into a bargain sale arrangement in instances in which the bargain sale furthers the mission and purposes established by Graceland.

2. All potential gifts that qualify as a bargain sale must be presented to the Vice President of Institutional Advancement and Vice President of Business Services for review and recommendation to the President of Graceland subject to the existing board policy.

3. Factors used in determining the appropriateness of the transaction include:

• Graceland may obtain an additional independent appraisal substantiating the value of the property.

• If Graceland assumes debt with the property, the debt ratio must be less than 50% of the appraised market value.

• Graceland must determine that it will use the property or that there is a market for sale of the property allowing sale within 12 months of receipt.

• Graceland should carefully consider all expenses associated with the property.

Graceland may accept gifts of life insurance policies when:

• Graceland is named as the beneficiary and the irrevocable owner of an insurance policy. The contract must be signed and a copy of the policy received by Graceland before the policy can be recorded as a gift.

• The value of the gift for Graceland’s gift crediting and accounting purposes is the cash surrender value. (Note: For IRS purposes, the donor’s charitable income tax deduction is equal to the interpolated terminal reserve, which is an amount slightly in excess of the cash surrender value.)

• If the donor contributes future premium payments on a new or existing policy, Graceland will include the premium payment as a gift in the year that it is made as long as Graceland is owner and beneficiary.

• If the insured is 70 years of age on the date the policy becomes owned by the University, full projected death benefit shall be counted. A decreasing percentage of the projected death benefit shall be counted for younger insureds as follows:

Age 65 – 70 . . . . . . . . . . . . . Count 90%
Age 60 – 65 . . . . . . . . . . . . . Count 80%
Age 55 – 60 . . . . . . . . . . . . . Count 70%
Age 50 – 55 . . . . . . . . . . . . . Count 60%
Age 45 – 50 . . . . . . . . . . . . . Count 40%
Age 40 – 45 . . . . . . . . . . . . . Count 20%

Life insurance bequests of people below 40 will be gratefully acknowledged, but will not be counted toward the campaign goal.

Note: The following are additional examples of life insurance gifts that can be arranged by the donor. Graceland will provide the appropriate recognition for these types of gifts, but no receipt will be issued until the death benefit is actually received by Graceland.

• Donor may be the owner and Graceland is named as sole beneficiary or partial beneficiary.

• If the donor does not elect to continue to make gifts to cover premium payments on the life insurance policy, Graceland may:

1. Continue to pay the premiums,
2. Convert the policy to paid up insurance, or
3. Surrender the policy for its current cash value.

Planned Gifts

Graceland University offers the following planned gift options:

Charitable gift annuities
Deferred gift annuities
Pooled income funds
Charitable remainder trusts
Bequests
Retained life estates

1. The minimum gift accepted to establish a charitable gift annuity is $10,000.

2. No income beneficiary for a charitable gift annuity shall be younger than 50 years of age.

3. No more than 2 life income beneficiaries will be permitted for any charitable gift annuity.

4. Annuity payments may be made on a quarterly, semi-annual or annual schedule.

5. Administrative fees shall be paid from the income earned or the corpus/principal on the charitable gift annuity.

6. Graceland follows the Board of the American Council on Gift Annuities (ACGA) annually suggested rates.

7. Graceland will not accept real estate, tangible personal property or any illiquid asset to fund current charitable gift annuities

1. The minimum gift accepted to establish a deferred gift annuity is $10,000.

2. No income beneficiary for a deferred gift annuity shall be younger than 40 years old at the time the document is signed. Newly established or newly confirmed bequests will be counted toward the deferred gifts campaign goal. All bequest provisions for campaign purposes instituted by donors who will reach age 70 by the end of the campaign period shall be credited to the campaign at their full estimated face value when proper documentation of the bequest commitment has been completed. Similar bequests from individuals who will be younger than age 70 at the end of the campaign may be credited to the campaign (with proper documentation), but at the following percentages of the total estimated value of the bequest:

Age 65 - 70 . . . . . . . . . . . . . Count 90%
Age 60 - 65 . . . . . . . . . . . . . Count 80%
Age 55 - 60 . . . . . . . . . . . . . Count 70%
Age 50 - 55 . . . . . . . . . . . . . Count 60%
Age 45 - 50 . . . . . . . . . . . . . Count 40%
Age 40 - 45 . . . . . . . . . . . . . Count 20%

3. There shall be no more than 2 beneficiaries on a deferred gift annuity.

4. Administrative fees shall be paid from the income earned or the corpus/principal on the charitable gift annuity.

5. In limited circumstances, Graceland may accept real estate, tangible personal property or other illiquid assets in exchange for deferred gift annuities. There must be at least a one-year period from the date of the sale of said property before the commencement of the first annuity payment date. Any gift proposal which deals with the assets as specified must be presented to the Vice President of Institutional Advancement and Vice President of Business Services for review and recommendation to the President of Graceland. (For additional guidelines that pertain to this topic, see the sections dealing with real estate and tangible personal property.)

6. Graceland follows the Board of the American Council on Gift Annuities (ACGA) annually suggested rates.

1. Due to the cost of drafting and administration, the minimum to establish a charitable remainder trust is $25,000. A donor proposing to make a gift of less than $25,000 will be encouraged to consider a gift annuity.

2. Management fees for the administration of a charitable remainder trust, when Graceland is named trustee or co-trustee, shall be paid from the income of the trust or from principal/corpus when necessary.

3. The investment of charitable remainder trust assets shall be determined or recommended by Graceland or its representatives, only when serving as trustee. No representations shall be made to the donor by Graceland, its employees or persons acting on behalf of Graceland as to the management or investment of such assets.

4. The pay out rate of a charitable remainder trust shall be determined in consultation with the donor and Graceland University’s investment advisor. The pay out rate negotiated between the donor and Graceland shall reflect the number of beneficiaries, their ages, and the size of the trust.

5. If the youngest life beneficiary of the trust will have attained the age of 70 on or before the end of the campaign period, the full initial value of the trust fund will be counted. The percentage of the value of the fund to be counted in the case of younger life beneficiaries is as follows:

Age 65 - 70 . . . . . . . . . . . . . Count 90%
Age 60 - 65 . . . . . . . . . . . . . Count 80%
Age 55 - 60 . . . . . . . . . . . . . Count 70%
Age 50 - 55 . . . . . . . . . . . . . Count 60%

Charitable gift annuities naming the University as final beneficiary shall be credited to the deferred gifts goal as specified above. The University staff will make payments to the donor as agreed provided monies are available to fund those payments either from the interest earned on the gift or from the principal of the gift, but the University staff will not continue payments to the donor if the principal is exhausted.

Donors and supporters of Graceland shall be encouraged to make bequests to Graceland University, 1 University Place, Lamoni, IA in their will and/or trust.

1. Revocable bequests shall not be recorded as gifts to Graceland until such time as the gift is either received by Graceland or becomes irrevocable. Where the gift is irrevocable, the present value of that gift may be recorded. If an irrevocable gift is recorded for financial statement purposes, Graceland must have sufficient information from the donor/trustee/personal representative to update the present value of the gift at least annually.

2. Donors who have indicated that they have made a bequest to Graceland may, depending upon the individual situation, be asked to disclose, in writing or by copy of the will, the relevant clause that benefits Graceland as evidence of their gift. This information is used by Graceland for recognition or acknowledgement purposes.

Graceland may accept a designation as income beneficiary of a charitable lead trust. Graceland will determine on a case by case basis to accept an appointment as Trustee of a charitable lead trust.

Donors and supporters of Graceland shall be encouraged to name Graceland as beneficiary of their retirement plans. Such designations shall not be recorded as gifts to Graceland until such time as the gift is irrevocable or when the gift is actually received by Graceland.

Revocable gifts: The donor will receive the appropriate recognition in accordance with development guidelines at the time Graceland receives proper notification.

1. To establish select endowed funds, the following minimum levels must be achieved:

2. To establish an endowment:

• For an outright gift, the fair market value of the asset used must meet the minimum endowed level.

• The donor must establish, sign and return to the office of Institutional Advancement, guidelines that will be followed once the minimum endowment level is met. All guidelines must be approved by the Business Services office before being accepted. The approved guidelines form must be signed and returned within 60 days of the donor having made the first payment to their endowed fund. Otherwise funds will remain in the general endowment.

• The minimum endowed level must be met and completed no later than 3 years from the date of making the first payment. While making payments towards an endowment or endowed scholarship, contributions will be applied to the general endowment or general scholarship endowment until the full minimum endowed level is reached. Should the minimum endowed level not be reached in the allotted time, the funds contributed shall remain in the general endowment or general scholarship endowment.

• If the minimum level is met within the allotted time, Graceland will establish the named program or scholarship endowment based on the approved guidelines specified and signed by the donor.

• For a planned gift being designated for an endowed fund, the market value of the gift will be the then present value of the asset(s) being gifted and must meet the minimum endowed level.

3. When fully funded, the endowed fund distributes earnings in accordance with the endowment spending policy.