GIFT ACCEPTANCE POLICY
PRESERVATION OF CAPITAL POLICY
The Community Foundation encourages the acceptance of gifts, which enable us to fulfill our mission:
“ The Red Deer & District Community Foundation is a community catalyst committed to building a legacy which strengthens the quality of life in Red Deer and the surrounding area.”
The Gift/Fund Acceptance Policy is intended to provide guidance to donors wishing to support their community. It is an important tool in ensuring that donors are fully informed so that their gifts are made in a manner that is consistent with their objectives.
A Gift/Fund Acceptance Policy also provides guidance to Red Deer & District Community Foundation Board Members and its Executive Director in evaluating proposed gifts to the Foundation. It ensures that gifts to the Foundation are made in accordance with legal and ethical regulations and guidelines, and that they promote consistent practices and exercise of fiduciary responsibility.
This policy is designed to ensure clarity of roles, responsibilities and expectations of both the Foundation and its donors. It applies to those gifts for which a tax-deductible charitable receipt is to be issued.
All gifts must be consistent with the overall mission of the Foundation. A gift must not compromise the integrity and non-partisan status of the Foundation in the community, or undermine its classification or status under the terms of the Income Tax Act of Canada.
Basic Form of Property Accepted:
The Foundation routinely accepts only property that is readily marketable at reasonable cost. That refers to cash, deposit instruments of a government in Canada or financial institution, publicly traded securities, policies of life insurance, or any other property that is property that the Foundation may invest in consistent with its investment policy.
Acceptance of Other Forms of Property:
The Foundation recognizes that donors will occasionally wish to give it property that is not described in the previous paragraph, such as real estate, private corporation share and residuary interests in trusts. While the Foundation is generally pleased to accept gifts, it has to be careful to evaluate whether there may be “hidden costs” in accepting such property. It therefore reserves the discretion to decline a gift of property because of the nature of the property that is being offered to it. Matters that the Foundation will take into account are:
a) The likelihood that the value of the property will be a matter of differing opinions. The Foundation does not wish to become unnecessarily entangled in valuation disputes with CRA.
b) The possibility that the property will not sell in a reasonable period of time.
c) The potential carrying cost associated with owning the property.
d) The potential environmental risk associated with owning the property.
e) The potential for controversy associated with owning the property.
f) Whether a satisfactory arrangement can be made with the donor with respect to the absorption of the costs of valuation, maintenance and disposition. As a general rule, the Foundation expects the donor to bear the costs associated with the settlement of the gift on the Foundation and the issuance of a receipt therefore, which includes the cost of valuation; and will charge the proceeds of disposition of the gift, rather than its other funds or its general operating expenses, with the costs of maintenance and disposition of the property.
The Foundation reserves the right to secure and rely on its own appraisal in determining the acceptability of the gift and the value of the receipt for income tax purposes.
Gift related costs such as legal fees, appraisals, real estate commissions and taxes relating to acceptance, maintenance, management or re-sale of a gift or property, will normally be the responsibility of the donor, unless The Foundation, upon prior agreement, agrees to assume responsibility for any portion of these items.
Gifts Not Accepted:
The Foundation reserves the right to decline to accept a gift based on lack of consistency with The Foundation’s mission; desire of the donor to exert unacceptable conditions or controls over disbursement or the net income from the gift; cost-of-ownership implications related to administration time, management and marketability of the gift; unacceptable risks; gifts that are illegal; or other factors agreed to by the Board of Directors.
The Foundation is not permitted to offer charitable annuity products, whether reinsured or reserve based.
Timing of Issuance of Receipt:
The Foundation cannot issue a receipt for a gift until it is legally the property of the Foundation, and must issue a receipt for the value of the property as of the date that it becomes the Foundation’s property. To facilitate the transfer of property (such as publicly traded securities) that has a variable value the Foundation works with the donor’s brokers, employing a book based transfer (BBS). When this is not possible, the Foundation uses its contracted investment manager(s).
Subsequent Use of Property:
Unless agreed to in the terms of a negotiated and signed agreement, the Foundation does not make any representation that by accepting a gift it will retain the property or employ the donated property for the same purposes as it was used by the donor. For example, without such an agreement, if the Foundation acquires a residence as a gift, it will not retain it as an office or retreat but will sell it and invest the proceeds in accordance with its investment policy.
Restrictions on Gifts:
The needs of our community are continually changing and in order to respond effectively to grant applications, the Red Deer & District Community Foundation prefers gifts that are, at least in part, “undesignated” or specified for a “field of interest”. This allows the Foundation future discretion to support community projects as they are identified by charitable agencies. However, the Foundation welcomes gifts for all manner of charitable purposes, and will not decline a gift merely because earnings derived therefrom are to be allocated in a specific manner.
The Red Deer & District Community Foundation will abide by all laws governing the charitable sector. In addition, the Foundation endorses the following principles and declares that all donors have these rights:
a) To be informed of the Foundation’s mission, of the way the Foundation intends to use donated resources and of its capacity to use donations effectively for their intended purposes.
b) To be informed of the identity of those serving on the Foundation’s Board of Directors, and to expect the Board to exercise prudent judgment in its stewardship responsibilities.
c) To have access to the Foundation’s most recent financial statements.
d) To be assured their gifts will be used for the purposes for which they were given.
e) To receive appropriate acknowledgement and recognition.
f) To be assured that information about their donations is handled with respect and with confidentiality to the extent provided by law.
g) To expect that all relationships with individuals representing organizations of interest to the donor will be professional in nature.
h) To feel free to ask questions when making a donation and to receive prompt, truthful and forthright answers.
The Community Foundation has formally adopted the Ethical Fundraising and Financial Accountability Code developed by the Canadian Centre for Philanthropy. This Code clearly establishes the donor’s rights and sets the standards for all the Foundation’s fund development work. A copy of this Code is contained in the Policy Manual that is available at the Foundation’s office.
Any information learned by any representative of the Foundation about a donor or proposed donor that is not required to be recorded publicly will be treated as confidential unless the donor advises otherwise. From time to time, donors will also request the Foundation to treat their gifts as made anonymously. While the Foundation must through at least one office know who is making the gift, it makes its best efforts to respect such requests.
The Foundation is prepared to provide donors with recognition in a degree consistent with the recognition afforded donors of gifts of similar magnitude, immediacy of effect and degree of restriction.
The Foundation encourages donors to work with their own professional advisors in making gifts. It will not solicit or accept a gift from a donor unless it is satisfied that the donor has a bonafide intention to donate to charity and has a proper understanding of the consequences of making the gift, the work of the Foundation, and the uses to which the gift capital and income will be put.
Benefit to Donor:
The nature of any charitable gift is that a donor cannot expect material consideration (financial benefits, or opportunities for other persons not at arm’s length) to flow from the gift, nor, after the gift has been made, to direct the Foundation as to how it must apply the earnings from the gift. A donor may, however:
a) Establish, at the time the gift is made, limitations on the uses to which the gift may be put. For example, a donor may “designate” particular charities or charitable purposes for which a gift is made. He or she may subsequently waive or loosen such restrictions.
b) Advise the Foundation from time to time how he or she wishes the earnings from the gift to be applied through either a “donor advised” or “field of interest” arrangement.
Preservation of Donor’s Purpose:
Should the Foundation ever discontinue operations or become incapable of administering a fund to fulfill a donor’s purpose, the Foundation will employ the best possible efforts to ensure continued application of the fund to the purpose originally contemplated by the donor.
No Benefit To Individuals:
The Foundation applies the earnings from its funds only to benefit charitable organizations. It does not benefit individuals directly, even if the activities they undertake are charitable in nature.
The Executive Director is authorized to negotiate planned gift agreements with prospective donors, with respect to the name, nature and use of their gifts at the time a gift is made. Gifts will be planned to benefit the community through the Foundation, and to effectively interpret donors’ charitable interests.
b. All fund or gift agreements requiring execution by the Foundation shall be prepared in a format approved by the Board of Directors. Gift agreements will clearly identify that it is the responsibility of the Board of Directors to approve all disbursement of net income from endowed funds.
Donations Other Than To Endowment:
The principal mission of the Foundation is to raise, administer and distribute earnings from funds that are held on a permanent or endowed basis. As a service to donors, the Foundation is prepared to accept and disburse gifts that are not intended to be held as endowment funds. The Foundation exercises broad discretion as to whether or not to accept such gifts and may charge an administrative fee as established by the Foundation in its “Flow Through Fund” Policy.
Application of Administrative Policies:
The Foundation adopts policies from time to time that impose administrative charges on its endowment funds, settle the manner of investment of the funds, and determine the appropriate portion of funds to distribute for charitable purposes or retain as capital to protect against erosion by inflation. Without any more precise agreement with the donor overriding these general policies, the Foundation will apply its policies equitably to all funds under its control and may amend such policies on a continuing basis.
Sustainability of the Community Foundation:
Sustainability speaks to longevity, vision and proactivity – all desirable features we look for in the agencies we fund – and all Guiding Principles of the Community Foundation. The Foundation will address its own sustainability by continuing to build its Operating Endowment, in the following manner, until the Board of Directors determines that the income from that fund is sufficient to support the operations of the Community Foundation:
All donors will be informed of the Foundation’s Operating Endowment, and be encouraged to direct a portion of their gift to that fund.
Ten percent (10%) of every undesignated gift will be directed to the Foundation’s Operating Endowment.
Ten percent (10%) of all administrative charges will be directed to the Foundation’s Operating Endowment.
Community Foundation as Appropriate Recipient:
The principal focus of the Foundation’s activities is Red Deer and the Central Alberta region. However, the Foundation may accept gifts for any charitable purpose, such as projects having a broad Canadian focus or overseas development. It may refer a donor to another Community Foundation or charitable organization if it perceives that the donor will be better served by such other organizations.