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.
The three tiers a working policy uses
- Accept routinely. Cash and card, publicly traded securities, recurring gifts and documented pledges, grants from foundations, donor-advised fund grants, in-kind goods a program can actually use, and volunteer time. These need no special decision — only a prompt acknowledgment and any restriction confirmed in writing.
- 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 — commonly livestock, hazardous materials, and timeshares, 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 (Form 990), Part I, line 31 asks whether the organization has a gift acceptance policy that requires the review of any nonstandard contributions. The word the line turns on is requires — a policy that merely encourages a second look does not answer it. A nonstandard contribution, broadly, is one with no ready market to liquidate it and a value that is hard to pin down.
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. The policy is worth having either way, and unlike most of the annual return's governance questions this one has a specific operational consequence attached.
Valuation is the donor's job, not yours
A nonprofit does not appraise gifts or state a value for a donor's tax purposes. Substantiating and valuing a non-cash gift is the donor's responsibility, with a qualified appraiser where the tax rules require one — generally for property claimed above $5,000, with exceptions including publicly traded securities. The organization's job is a prompt written acknowledgment that describes the item, gives the date received, and states whether any goods or services were provided in return.
One paperwork trap is worth knowing before it arrives. When a donor asks the organization to sign the donee acknowledgment on their non-cash contribution form (Form 8283, Section B), that signature creates an obligation: if the organization sells, exchanges, or otherwise disposes of the item within three years of the gift, it must file Form 8282 with the IRS within 125 days and give the donor a copy. Somebody has to be tracking that clock, and in most small organizations nobody is.
Restrictions follow the money
A restriction is binding only if it was in writing and the organization accepted it — but once accepted, it does not expire because a program ends. Before taking a restricted gift, confirm you can carry it out, account for the funds separately, and meet any deadline attached. Where a restriction later becomes impossible, go back to the donor where you can and take advice where you cannot. Quietly repurposing the money is the one option that is not available.
The mistakes small organizations make most
- Writing the policy around cash and leaving the hard categories unnamed, which is the same as having no policy.
- Putting a number on the acknowledgment letter — a favor to nobody, least of all the donor.
- 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
Charitable solicitation registration, rules on donated vehicles, and the handling of restricted and endowed funds all vary by state. 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 governance policies the annual return asks about by name. 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.
