Gift Acceptance Policies for Nonprofits Explained

Every nonprofit needs a rulebook for its fundraising. A gift acceptance policy is exactly that—a clear, strategic guide that ensures every donation actually helps your mission, rather than becoming an unexpected headache.

This document lays out the ground rules for which gifts you can accept, how you'll handle them, and, just as importantly, when you need to politely say "no." It’s one of the most fundamental tools you can have to protect your organization's reputation and financial health.

Why Your Nonprofit Needs a Gift Acceptance Policy

Think of a gift acceptance policy as a filter. When a potential donation comes your way, it passes through this filter, helping you separate the truly valuable contributions from those that could cause a world of trouble down the line.

Without this filter, you’re left guessing. You might accept gifts that look great on the surface but come with hidden costs, ethical landmines, or legal tangles. A well-crafted policy empowers your team to make consistent, mission-aligned decisions every single time, with total confidence.

But this isn't just about playing defense. It’s a proactive strategy for building a sustainable organization. It creates a transparent process that builds trust with your donors, your staff, and your board. When everyone is on the same page, your fundraising becomes stronger and more unified.

A gift acceptance policy serves several critical functions that protect and empower your organization. Here's a quick breakdown of its core roles.

Core Functions of a Gift Acceptance Policy

Function	Why It's Critical for Your Nonprofit
Risk Management	It prevents you from accepting gifts with hidden costs, legal liabilities, or reputational damage.
Mission Alignment	Ensures every accepted gift supports your core values and long-term strategic goals.
Clarity & Consistency	Provides clear, written guidelines for staff and board, eliminating guesswork and ensuring fair treatment for all donors.
Donor Trust	Demonstrates professionalism and thoughtful stewardship, strengthening relationships with your supporters.
Legal & Ethical Compliance	Helps you navigate complex IRS regulations and uphold ethical fundraising standards.

By serving these functions, the policy becomes an indispensable tool for responsible and effective fundraising.

Protect Your Mission and Reputation

Your nonprofit’s reputation is everything. It’s your most valuable asset. A gift acceptance policy acts as a vital shield, keeping you from associating with donors or accepting gifts that clash with your core values.

Imagine an environmental group being offered a massive donation from a company with a long history of pollution. Accepting it could trigger a public relations nightmare, undermining your credibility and alienating the very supporters who believe in your cause.

A strong policy gives you the framework to decline those gifts gracefully and ethically. You can explain that the decision isn't personal—it's based on established principles. This protects your integrity and reinforces what you stand for.

Ensure Financial Stability

Let's be honest: not all gifts are created equal. Some donations, especially non-cash gifts like real estate, art, or used equipment, can arrive with some serious baggage. We’re talking about maintenance fees, insurance, legal liabilities, and appraisal costs that can drain your resources instead of boosting them.

A gift acceptance policy forces you to ask a critical question before saying yes: "Does this gift provide a net benefit to our organization?" This simple step prevents you from accidentally accepting a "Trojan horse" gift—one that costs you more to keep than it's actually worth.

This financial due diligence is more important than ever. The fundraising world is seeing a trend where total giving is rising, but the number of individual donors is shrinking. This means nonprofits are relying more heavily on fewer, larger gifts—which are often complex assets. According to the Fundraising Effectiveness Project, this shift makes having robust gift acceptance policies for nonprofits an absolute necessity.

Provide Clarity and Consistency

A formal policy gets rid of the ambiguity. It removes the guesswork for your development team and your board, answering the tough questions before they turn into urgent problems.

• What kinds of non-cash gifts will we accept? Stocks? Real estate? Art?

• Who has the final say on approving a complex gift?

• How will we value and sell non-cash assets?

• What are the specific circumstances where we must decline a gift?

This clarity empowers your team to act decisively and treat every donor with fairness and consistency. It’s also a key ingredient in creating a lasting culture of philanthropy, because it shows your organization operates with professionalism, integrity, and foresight.

Building Your Comprehensive Gift Acceptance Policy

Drafting a gift acceptance policy can feel like a huge undertaking, but it’s really just a series of clear, logical steps. Think of it as creating a recipe for your organization's financial health—each component you add ensures a consistent, successful outcome every time a gift comes your way. This document isn't just about red tape; it’s a strategic guide that empowers your team, protects your mission, and builds unwavering trust with your donors.

Creating this policy doesn’t mean starting from a blank page. It’s about methodically defining your organization's stance on all kinds of contributions, from simple cash donations to more complex assets. The goal is to build a clear, actionable framework that anyone on your team can follow with confidence.

Starting with a Clear Purpose Statement

The very first thing your gift acceptance policy needs is a purpose statement. This is your "why." It's a short, mission-focused paragraph that explains the policy's role in moving your organization's goals forward.

Your purpose statement sets the tone for the entire document. It should tie the act of accepting gifts directly back to your core mission, framing the policy not as a set of restrictive rules, but as a tool for smart stewardship.

For instance, a purpose statement might say: "This policy is established to ensure all gifts accepted by [Organization Name] advance our mission, are handled with the highest ethical principles, and are managed with full fiduciary responsibility." This simple declaration gives immediate context to every guideline that follows.

Defining Key Roles and Responsibilities

Once your purpose is clear, you need to answer a critical question: who does what? A common stumbling block for nonprofits is confusion around who has the authority to make decisions. Your policy must clearly spell out the roles involved in the gift acceptance process.

This section prevents that awkward moment of hesitation when a complex or unusual gift offer lands on your desk. It makes sure the right people are involved at the right time.

Consider defining responsibilities for these key players:

• Development Staff: They're usually the first point of contact and are responsible for initial gift screening and donor communication.

• Executive Director/CEO: Typically has the authority to accept standard gifts that fall squarely within the policy guidelines.

• Gift Acceptance Committee: This is a dedicated group, often with board members and financial experts, tasked with reviewing and approving complex, high-value, or unusual gifts.

• Board of Directors: Holds the ultimate fiduciary responsibility and gives the final green light for the most significant or potentially risky gifts, like real estate or private company stock.

By clearly delegating authority, your policy empowers your team to handle routine donations efficiently while ensuring that complex gifts get the thorough vetting they deserve.

Outlining Procedures for Different Gift Types

The heart of any gift acceptance policy is the section that details the types of gifts you will—and will not—accept. This is where you get specific, giving your team clear instructions to follow. A great way to approach this is to categorize assets and create rules for each one.

For example, your policy should have distinct procedures for common gift types.

1. Cash and Publicly Traded SecuritiesThese are the most straightforward gifts. Your policy should state that cash, checks, and credit card donations are gratefully accepted. For publicly traded stocks and bonds, it's a standard best practice to specify that they will be liquidated immediately upon receipt to avoid market risk. This converts the asset to cash quickly, maximizing its value for your mission.

2. Tangible Personal PropertyThis category includes things like art, jewelry, vehicles, or equipment. The policy here needs to be more careful. Key questions to answer include:

• Mission Relevance: Does the item directly support your programs (like a van for a food bank)?

• Marketability: If not, can it be sold easily?

• Associated Costs: Will there be costs for storage, insurance, appraisal, or maintenance?

• Valuation: Your policy should require a qualified independent appraisal for items valued over a certain threshold—often $5,000, as per IRS guidelines.

3. Real EstateAccepting real estate can be a game-changer, but it also carries the highest risk. Your policy must require a strict due diligence process before you even think about accepting it. This includes a professional appraisal, a title search, and an environmental assessment to uncover any hidden liabilities like liens or cleanup costs. Board approval should almost always be required for gifts of real property.

4. Complex and Illiquid AssetsGifts like privately held stock, cryptocurrency, or life insurance policies need special handling. The policy should state that these will be reviewed on a case-by-case basis by the Gift Acceptance Committee. For private shares, this means evaluating transfer restrictions and figuring out a clear liquidation strategy, since you can't just sell them on a public market.

Addressing Restricted Gifts and Donor Recognition

Finally, your policy needs a plan for gifts that come with strings attached. A restricted gift is one where the donor specifies exactly how the funds must be used. Your policy must state that your organization will only accept restrictions that align with its mission and can be practically managed.

This section is also the perfect place to outline how you'll acknowledge your supporters' generosity. Detailing your approach to recognition manages donor expectations right from the start. You can learn more about effective strategies in this comprehensive guide to donor wall recognition, which covers how to create displays that honor contributions and inspire future giving.

By building these essential components into your gift acceptance policies for nonprofits, you create a robust, practical document. It becomes a living guide that not only protects your organization but also strengthens its ability to turn donor generosity into meaningful impact.

Navigating Critical Legal and Ethical Issues

A strong gift acceptance policy is so much more than a set of internal rules—it’s your organization’s legal and ethical compass. It grounds every fundraising decision in integrity and transparency, making sure you always protect your mission and your reputation. This framework is your best defense against the tricky situations that inevitably pop up, from controversial donors to gifts with hidden financial strings attached.

Without this compass, your organization is flying blind. You could accidentally accept a gift that blows up into a public relations nightmare or, worse, saddles you with a legal mess and unexpected costs. A well-defined policy gives your board and staff the confidence to make the right call, knowing their choices are backed by established, mission-aligned principles.

Upholding Fiduciary Responsibility

At the heart of every nonprofit is the concept of fiduciary duty. It’s a formal-sounding term, but it simply means the board has a legal and ethical obligation to act in the organization's best interests. This responsibility is never more critical than when you’re accepting donations. Board members have to ensure every gift provides a net benefit and doesn’t expose the nonprofit to unnecessary risk.

Imagine your nonprofit gets offered a beautiful historic building. It looks like a dream come true! But a proper due diligence process—which your gift acceptance policy would require—uncovers that the property needs millions in asbestos removal and has a mountain of unpaid tax liens.

Accepting this gift without doing your homework would be a serious breach of fiduciary duty. The policy ensures a thorough review happens automatically, protecting the organization from a "gift" that would drain your resources instead of fueling your mission.

This is what good governance looks like in practice. It turns an abstract legal duty into a practical, repeatable process that protects your organization’s financial health for the long haul.

Understanding Unrelated Business Income Tax

One of the stickiest legal issues your policy needs to cover is Unrelated Business Income Tax (UBIT). Put simply, this is a tax the IRS can charge on income your nonprofit earns from activities that aren't directly related to your tax-exempt purpose.

For example, if a donor gives you a small, fully operational coffee shop, the profits you make from selling lattes could be subject to UBIT because running a café probably isn’t part of your core mission. Your gift acceptance policy must spell out exactly how to handle assets that could generate this kind of income.

A good policy will typically include:

• An Automatic Review: Any gift that might generate UBIT gets flagged immediately for review by your legal or financial experts.

• A Liquidation Plan: In most cases, the best move is to sell these assets quickly. This converts the gift into cash for your mission and avoids any ongoing UBIT headaches.

• Clear Authority: The policy should state exactly who—whether it's a Gift Acceptance Committee or the full board—gets the final say on accepting these complex gifts.

Handling Ethically Complicated Gifts

Beyond the black-and-white legal rules, your policy needs to provide a roadmap for navigating the ethical gray areas. These are the situations where a gift might be financially sound but could create a moral or reputational crisis.

Your policy should empower your team to ask the tough questions:

• Donor Alignment: Does this donor's public image or business practices clash with our organization's core values?

• Gift Restrictions: Are there strings attached to this gift that would compromise our independence or force us to act unethically?

• Anonymous Donations: What’s our process for vetting large anonymous gifts to ensure the money is clean and not an attempt to launder a reputation?

A clear policy gives you the backbone to decline a gift that, while valuable, could tarnish your brand or alienate the very community you serve. It lets you say "no" gracefully by pointing to pre-established principles, rather than making a stressful, on-the-spot decision.

This foresight is crucial, especially when managing the year-end giving rush. Recent federal tax law changes have led many donors to accelerate their gifts to maximize tax benefits, with a huge percentage of giving now happening in the last few months of the year. With a solid policy in place, your organization can act decisively and ethically, even during the busiest fundraising seasons. You can learn more about these trends and see why clear acceptance criteria are vital for navigating donor deadlines for 2025.

Handling Complex and Non-Cash Gifts

While cash donations are simple and clean, today's philanthropy is full of more complex gifts. We're talking about non-cash assets like stocks, real estate, and art. These donations can bring incredible value to your mission, but they also demand a smart, careful approach. Your gift acceptance policy is the roadmap that ensures they become genuine assets, not hidden liabilities.

Think of this section of your policy as a specialized toolkit. You wouldn't fix a delicate watch with a sledgehammer, right? In the same way, you need specific procedures for different types of non-cash gifts. Each one comes with its own unique set of benefits, risks, and legal hoops to jump through, and you need to know what you're getting into before you say "yes."

Evaluating Publicly Traded Stocks

Publicly traded stocks are one of the most common—and valuable—types of non-cash gifts out there. For donors, giving stock is a huge win, often letting them sidestep capital gains tax on the appreciated value. It's no surprise that stock gifts are frequently much larger than the average cash donation, making them a massive opportunity for growth.

Your policy needs a clear, simple process for handling these gifts.

• Set Up a Brokerage Account: First things first, your nonprofit needs a dedicated account to receive stock transfers electronically.

• Provide Clear Transfer Instructions: Make it incredibly easy for donors. Put your brokerage name, account number, and DTC (Depository Trust Company) number right on your website.

• Adopt an Immediate Liquidation Rule: This is non-negotiable. It's a standard best practice for gift acceptance policies for nonprofits to state that all publicly traded securities will be sold immediately upon receipt. This move converts the gift to cash fast and shields your organization from the whims of the market.

A policy of immediate liquidation is your best defense against market risk. The goal is to secure the funds for your mission, not to become stock market speculators.

Tackling Tangible Personal Property and Real Estate

Gifts like art, vehicles, jewelry, and real estate require a much higher level of due diligence. While they can be incredibly valuable, they can also sneak up on you with hidden costs and responsibilities that can drain your resources.

Your policy has to mandate a thorough review process before accepting any of these assets. This should always include an independent appraisal to figure out the fair market value, especially for any item worth over $5,000. For real estate, the checklist is even longer, demanding a title search, an environmental assessment, and a crystal-clear plan for either managing or selling the property.

This infographic highlights just how central legal and ethical duties are when you're navigating these complex gifts.

As the visual shows, every decision must align with your duty to the organization while respecting the values of your donors.

Making sure donors understand the tax implications is a crucial part of the conversation. For a great breakdown of what donations are tax deductible, this resource is a fantastic guide for both your team and your supporters.

Your policy is the perfect place to lay out the ground rules for these tricky but potentially rewarding donations. Here’s a quick comparison of what to look out for.

Comparison of Common Non-Cash Gift Types

Gift Type	Primary Benefit	Key Risk or Consideration	Policy Must Address
Publicly Traded Stocks	High value, tax benefits for donor, easy to liquidate.	Market volatility if not sold immediately.	Requirement for immediate liquidation upon receipt.
Real Estate	Potentially very high value, can be used for programs or sold for cash.	Hidden costs (taxes, insurance, maintenance), environmental liability.	Mandatory title search, appraisal, and environmental assessment.
Tangible Property (Art, etc.)	Can be unique and valuable assets.	Appraisal costs, storage, insurance, difficulty selling (illiquidity).	Requirement for third-party appraisal and a clear plan for use or sale.
Closely Held Stock	Significant value if company goes public or is sold.	Very difficult to value and sell, potential conflicts of interest.	Strict case-by-case review by a specialized committee; requires an exit strategy.

Having these distinctions clearly defined helps your team make consistent, mission-aligned decisions every single time.

Navigating Corporate and Illiquid Gifts

Corporate philanthropy is a powerhouse. Corporations contribute over $21 billion to nonprofits every year, a number that's seen a 3.4% jump recently. These gifts often show up as matching funds, grants, or in-kind donations of goods and services. Your policy should detail how to manage these corporate partnerships, including any reporting requirements or brand alignments that come with them.

Then you have the most complicated assets of all, like shares in a private company or intellectual property. These are illiquid assets, which is a fancy way of saying they can't be turned into cash easily. Accepting them requires serious expertise and full board-level approval, as they often come with legal restrictions and fuzzy valuations. Your policy should make it clear that these gifts are reviewed on a strict case-by-case basis by a gift acceptance committee, ensuring your organization has a clear path to liquidation before ever taking ownership.

Putting Your Policy Into Action

A gift acceptance policy is only as good as its implementation. Just having the document saved somewhere on a server won’t do a thing; it needs to become a living, breathing part of your organization's daily operations. This is where you transform the guidelines you’ve so carefully drafted into a clear, actionable process that empowers your entire team to act with confidence and consistency.

The goal is to move from theory to practice, building a roadmap that everyone from the front desk to the boardroom can follow. It starts with bringing the right people together to formalize the document and ends with making sure it’s actually understood and used.

Assembling the Right Team

The first move in creating and launching your policy is to get the right people in the room. A gift acceptance policy touches multiple departments, and its success hinges on getting buy-in from key stakeholders across your organization. Your drafting committee should be a cross-functional group.

This team almost always includes:

• Board Members: They bring that high-level governance perspective and hold the ultimate fiduciary responsibility for the organization.

• Development Staff: As your frontline fundraisers, they live and breathe donor relationships and understand the practical realities of soliciting and receiving gifts.

• Finance Department: Their expertise is absolutely critical for assessing financial risks, managing assets, and handling the accounting side of complex donations.

By weaving these diverse perspectives together from the very beginning, you ensure the final policy is not only legally and ethically sound but also practical for the people who will use it every single day. This collaborative approach also tends to speed up the approval process, since your key decision-makers are already invested.

Drafting and Approving the Policy

With your team in place, the drafting can begin. It’s smart to start with a solid template or examples from similar organizations, but always customize the content to fit your nonprofit's specific mission, needs, and risk tolerance. The goal is to create a document that is comprehensive yet easy to understand.

Think of the drafting process as building a playbook for your fundraising team. It should provide clear instructions for every common scenario, removing ambiguity and empowering staff to make consistent, mission-aligned decisions.

Once you have a solid draft, the next phase is all about feedback. Circulate the document to the entire board, senior leadership, and any other relevant staff. This review period is critical for spotting potential blind spots or areas that need a bit more clarity.

After incorporating feedback and tightening up the language, the policy must be formally presented to the board of directors for a vote. Official board approval gives the document its authority and sends a clear signal to the entire organization that these guidelines are to be taken seriously. This formal adoption is a non-negotiable step in creating a truly effective gift acceptance policy for nonprofits.

Training Staff and Communicating with Donors

Once your policy is board-approved, the real work begins. You can’t just email the document out and hope for the best; you have to actively train your team. Host a dedicated training session for all staff involved in fundraising, gift processing, or donor relations.

During this training, walk through the policy section by section. Use real-world scenarios and examples to illustrate key points, especially how to handle those complex or unusual gift offers. Make sure everyone knows who to go to with questions and what the procedure is for escalating a gift for review by the Gift Acceptance Committee.

Communicating the policy to donors is just as important, though it requires a more delicate touch. You don't need to send every donor a copy, but your development officers should be comfortable explaining the guidelines when necessary. This is especially vital when declining a gift. Your training should equip them with respectful, mission-focused language to explain why a gift cannot be accepted, preserving the donor relationship. Thoughtful donor communication is key, and it's essential to know how to thank donors and build real relationships even in these challenging situations.

Finally, remember that a policy is not a "set it and forget it" document. Schedule a review every one to two years, or whenever a major change happens in tax law or your organization’s strategic direction. Regular reviews ensure your policy remains relevant, effective, and protective. Once your policy is established, adopting robust grant management best practices becomes essential for ensuring compliance and maximizing the impact of every gift.

Frequently Asked Questions About Gift Policies

Even with the best guide in hand, some questions always pop up when you're in the weeds of creating or managing a gift acceptance policy. Think of this as your quick-reference cheat sheet for those "what if" moments.

We'll tackle the common curveballs here, from surprise donations to knowing when your policy is getting a little stale.

How Often Should We Review Our Policy?

A gift acceptance policy isn't a "set it and forget it" document. It’s a living, breathing guide that needs to stay in sync with your organization and the world around it. The standard best practice is to give it a formal review at least every two years.

That said, some events should trigger an immediate huddle and review:

• Changes in Tax Law: New IRS rules can completely change the game for donors and your own responsibilities.

• A Shift in Your Mission: If your nonprofit is heading in a new strategic direction, your policy needs to follow suit to make sure you're accepting gifts that support the new vision.

• New Kinds of Assets Emerge: Just think about the rise of cryptocurrency. If new ways of giving pop up, your policy needs to have a plan for them.

• You Run Into a Problematic Gift: If you get tangled up in a difficult gift situation, treat it as a lesson. Use that experience to patch the holes in your policy so it doesn't happen again.

Regular check-ins keep your policy from becoming just another dusty binder on a shelf. It ensures it remains a genuinely useful and protective tool.

What Should We Do with Unexpected or Unsolicited Gifts?

An out-of-the-blue donation is a fantastic problem to have! But it doesn't get a free pass. It still needs to go through the same careful review process outlined in your policy.

Run it through your checklist. Does it actually align with your mission? Are there any sneaky hidden costs or strings attached? Is the person or entity behind the gift someone you want to be associated with? Your policy is what keeps you from making a purely emotional decision in a moment of excitement.

If the gift just doesn't fit within your guidelines, your policy is the objective framework you can lean on. It gives you the confidence and the board-approved backing to politely say no, protecting your organization while keeping the conversation professional.

How Do We Politely Decline a Gift?

Telling a generous person "no, thank you" is never easy, but sometimes it's absolutely necessary. A strong policy makes this one of its most important jobs. The goal is to handle it with grace, honesty, and a real focus on the relationship.

When you have to decline a gift, always follow these steps:

1. Start with Gratitude: Always. Thank the donor sincerely for their generous spirit and for thinking of your cause.

2. Point to the Policy: Explain that your board has a formal gift acceptance policy that guides these decisions. This immediately depersonalizes the "no" and shows you have a thoughtful process. It’s not you, it’s the policy.

3. Give a Simple, Clear Reason: You don't need to write a novel, just a clear "why." Something like, "Our policy doesn't allow us to accept real estate with an outstanding mortgage," or "At this time, we aren't equipped to properly manage gifts of artwork."

4. Suggest Other Ways to Help: Keep the door open! Propose other ways they could support your mission, like a cash donation, volunteering their time, or perhaps a gift of publicly traded stock.

This thoughtful approach protects your nonprofit and often ends up strengthening the relationship. It shows donors you’re professional, responsible, and serious about stewardship.

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