How to Write a Nonprofit Gift Acceptance Policy (+ Free Template)

A nonprofit gift acceptance policy (also known as a gift agreement) outlines the evaluation procedures to determine if the nonprofit should accept or reject different types of donations, such as cash gifts, securities, personal property, real estate, and other potential assets. Gift acceptance policies can also be used to decipher how certain gifts will be tracked and reported to regulatory agencies.

The development of a gift acceptance policy should be a collaborative process among the nonprofit executive director, other board member positions, and senior nonprofit staff. The board will then approve the policy with a vote. 

A gift acceptance policy may not initially appear to be important, as most donations will come in the form of cash, check, or credit card. But some potential gifts may invite unwanted complications like compliance requirements or legal obligations. In fact, there are situations where it’s in the nonprofit’s best interests to turn down a gift. 

How to Write a Nonprofit Gift Acceptance Policy

1. Define Purpose and Scope of the Policy

The first step involves identifying the scope of the gift policy for your nonprofit governing board. The scope will ultimately depend on the cause your nonprofit supports and your internal policies. Placing the nonprofit’s mission statement at the top of the policy can also reinforce important objectives.

2. Identify Acceptable and Unacceptable Gifts

Another key aspect of the gift acceptance policy is to define which donations, assets, and arrangements are acceptable or unacceptable for your nonprofit. Acceptable and unacceptable gifts can be further categorized in other ways. Some gifts can be accepted immediately without any restrictions or review, while others demand a greater level of scrutiny. For unacceptable gifts, the nonprofit should list the reasons for rejecting a gift, according to their rules and bylaws. 

3. Establish Evaluation Criteria

Transparency is fundamental to any nonprofit. To that end, the gift acceptance policy should explain the criteria used by the nonprofit to approve or refuse gifts from prospective donors. Pre-emptively outlining the factors behind each decision provides clarity to the process and prevents awkward conversations with nonprofit donors. 

4. Outline the Gift Review and Approval Process

Specify any criteria or restrictions for accepting gifts, including alignment with your mission, legal and ethical considerations, and the ability to use or manage the donation effectively. Establish a review process for evaluating complex or high-value gifts, designating who will be involved, such as the executive director, board members, or legal advisors.

5. Incorporate Legal, Ethical, and Compliance Standards

Like all nonprofit board of directors fiduciary duties, a gift acceptance policy should be crafted and implemented with ethics in mind. This protects the board from potential liability, legal sanctions, and damage to its image. Legal counsel may be sought to review gifts involving highly valuable assets, legal documents, and potential conflicts of interest involving donors, staff, or board members. 

Once a draft of the policy is completed, show it to other senior leaders or legal experts to gain feedback. They may offer a fresh view of the policy or identify problems or gaps in the language that can be addressed before the policy becomes official. 

Related: How to Write a Nonprofit Annual Report