What is a gift acceptance policy?

What the policy is for

Every gift is welcome as a gesture. Not every gift serves the mission. Some cost more to hold, insure, maintain, or sell than they are worth. Some carry restrictions the organization cannot honor. Some would compromise its independence, and a few would cost it more in reputation than they bring in cash.

A gift acceptance policy exists so those judgments are made against a standard the board set in advance, calmly, rather than in the moment by whoever happened to take the call at a gala. Its real function is to give the person on the phone something to say other than yes.

Three tiers to adapt to your organization

These are illustrative organizing categories, not IRS acceptance rules. A gift's conditions, your capacity to use or sell it, and applicable law can change the decision. Choose the categories and approval authority with your advisers.

• Accept routinely within defined limits. For example, unrestricted cash and card gifts through an established process, or familiar in-kind goods your program has approved. A grant agreement, unusual condition, or reputational concern may require review even when the payment itself is cash. Keep volunteer screening separate from the decision to accept donated property.
• Review required. Vehicles, real estate, closely held stock or partnership interests, cryptocurrency, artwork and collectibles, life-insurance and retirement-plan designations, bequests, restricted gifts for a program you do not yet run, and naming gifts. The policy names who reviews, the threshold above which the full board decides, and what the review considers: fit with the mission, the cost of holding and disposing of the asset, liability and environmental risk, whether any restriction can actually be honored, and whether it can be converted to cash in a reasonable period.
• Decline. Categories the organization has decided in advance it will not take — for example, assets it cannot safely handle or afford to maintain, plus any gift whose conditions the organization cannot meet or whose source would compromise the mission. A written refusal category is far easier to invoke than an improvised one.

What Schedule M actually asks

Schedule M, Part I, line 31 and its instructions ask whether the policy makes review mandatory for nonstandard contributions. The instructions describe items not expected to serve exempt purposes apart from raising funds, with no ready resale market and a speculative or difficult-to-establish value. Your policy may send a broader set of gifts for review; do not confuse those internal categories with the form's definition.

Schedule M itself is filed by organizations that answered Yes on Form 990, Part IV, line 29 or line 30 — broadly, more than $25,000 in non-cash contributions, or any gift of art, historical treasures, or a qualified conservation contribution — so not every nonprofit files it. Use the current Schedule M filing instructions to check whether it applies. A nonprofit can choose to use a gift policy even when it does not file Schedule M.

Valuation is the donor's job, not yours

The donor is responsible for substantiating a deduction, including an appraisal when required. Deductions over $5,000 generally require a qualified appraisal, subject to exceptions and aggregation rules; check the Form 8283 instructions for the property and deduction involved. This is distinct from the nonprofit's own accounting or reporting of a gift.

For a contribution of $250 or more, the donor's required written acknowledgment describes noncash property without valuing it and addresses any goods or services provided in return. If there were return benefits, the applicable description and value estimate concern those benefits. IRS acknowledgment requirements

Track the receipt and disposition dates for charitable deduction property. Disposal within three years can require Form 8282, generally within 125 days of disposition, with a copy to the donor. The rule has exceptions, including qualifying items valued at $500 or less and property consumed or distributed without consideration for the organization's exempt purpose. There is also a special timing rule when the organization later learns that the substantiation requirements applied. Check the Form 8282 instructions before treating every signed Form 8283 as the same filing obligation.

Restrictions follow the money

Do not assume a restriction is ineffective because there is no separately signed agreement. The governing law and gift records matter: for example, New York's definition of a gift instrument includes an institutional solicitation. New York gift-instrument definition

Before accepting a restricted gift, document its purpose, deadlines, and approval, and confirm the organization can carry them out. If the purpose later becomes unworkable, get advice about the applicable process for release or modification instead of assuming the board can repurpose it. The New York Attorney General's governance guidance illustrates the duty to use and account for restricted assets according to the gift instrument; other states' rules must be checked separately.

Practical mistakes to avoid

• Writing the policy around cash and leaving the hard categories unnamed, leaving staff without a review route.
• Assigning the donor's deduction value on the acknowledgment instead of describing the property and handling return benefits correctly.
• Accepting a restriction the organization cannot deliver, usually out of enthusiasm at the moment of the offer.
• Leaving the review threshold blank. A threshold nobody has chosen means every gift is reviewed or none are.
• Declining badly. A gift can be turned down warmly — thank the donor sincerely, make clear the decision is about what the organization can responsibly steward, and suggest another route.

A template is a starting draft, not advice

Gifts can involve federal tax reporting as well as state-law duties. Charitable solicitation and restricted-fund requirements depend on the jurisdictions involved. Real estate, closely held business interests, and cryptocurrency each carry their own tax and liability questions. Take professional advice before accepting any of them, however welcome the offer, and have counsel or your accountant review a policy before your board adopts it. Nothing here is legal or tax advice.

Related templates and concepts

A gift acceptance policy is one of the policies Schedule M asks about when that schedule applies. The free board meeting agenda and minutes templates are an ungated taste — the minutes template is where a board's decision to accept or decline a reviewed gift gets recorded. The full Nonprofit Board & Volunteer Policy Template Pack adds the gift acceptance policy with its decision table, and fifteen more documents. See also what a conflict of interest policy is, restricted fund accounting, which policies a small nonprofit needs, and the templates for nonprofits hub for the rest.