Gift Acceptance Policy

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Gift Acceptance Policy

Policy on the Acceptance of Funds

Approved by the Trustees’ Executive Committee on September 9, 2021

Mission

Chewonki inspires transformative growth, teaches an appreciation and stewardship of the natural world, and challenges people to build thriving, sustainable communities throughout their lives.

Introduction

Chewonki’s Board of Trustees is charged with maximizing Chewonki’s ability to perform its mission. Toward that end, Chewonki’s Trustees have a fiduciary duty to reasonably assure that Chewonki’s assets are employed efficiently and protected from potential liabilities and diversion to purposes other than those that will further Chewonki’s goals.

In discharging that fiduciary duty, Chewonki’s Board of Trustees has approved this Policy on the Acceptance of Gifts (the “Policy”), which is intended both to help keep Chewonki financially secure and to assure donors that their contributions to Chewonki are used in accordance with their wishes and Chewonki’s fundamental mission. This explicit statement of the Policy is intended as a guide to the responsibilities of both donors and Chewonki in planning and completing charitable gifts by describing the circumstances under which Chewonki can accept present and future interest gifts of different kinds.

Acceptance Process

Some gifts to Chewonki are more complex than others. In the case of certain kinds of gifts, Chewonki requires that Chewonki’s acceptance of the gift be approved by Chewonki’s Gift Acceptance Committee (the “Committee”) which includes the President, Chief Financial Officer, Director of Development, and one or more members of the Board of Trustees who are appointed by the Board Chair. Gifts for purposes that are not consistent with Chewonki’s mission or consonant with its current or anticipated future programs will not be accepted. The Committee retains the right to reject a gift or return a donation for any reason at any time.

We appreciate donors’ consideration of any gift to Chewonki. We would be happy to provide a copy of this Policy to anyone with whom a donor consults in the course of considering a gift and to answer any questions regarding the application of this Policy. Please call Chewonki’s Director of Development at (207) 883-7323 if you have any questions or if you wish to discuss any aspect of this Policy.

The Gift Acceptance Policy is divided into four parts.

Part One describes the type of gifts covered by this policy.
Part Two describes general policies relevant to all gifts.
Part Three describes the methods of giving.
Part Four is a summary of key provisions.

PART ONE – TYPES OF GIFTS

Gifts of Cash and Securities

Cash, Check, Credit Card, and Debit Card.

Cash is acceptable in any form (cash, check, or credit card). It is the most frequent, and also the simplest, means of supporting the work of Chewonki. Checks should be made payable to the “Chewonki Foundation”; checks payable to any employee, officer or agent of Chewonki cannot be accepted. Gifts by cash or check are effective as of the date they are delivered in hand to Chewonki or as of the date they are placed in the U.S. Mail as evidenced by the postmark on the transmitting envelope or package. Gifts by credit card are effective as of the date the charge is made to the card.

Funds may also be wired to Chewonki’s bank account and wiring arrangements can be made through Chewonki’s Development Office. Gifts wired to an account maintained by Chewonki are effective as of the date they are credited to that account.

Contributions are accepted by mail, phone, or in person. Chewonki will also maintain a safe and secure online giving environment to make a one-time gift, recurring gift, or payment on an existing pledge.

Stocks and Other Securities

Stocks and mutual fund gifts are another way to give. These gifts are tax deductible and, under current law, the donor will not have to pay capital gains tax on the security or mutual fund. There are three types of stock or security gifts.

Stock gift held by the donor
Stock gift held by a broker
Mutual fund gift

Chewonki will sell stock as soon as it is received in order to realize the gift’s present value.

Publicly Traded Securities. Gifts of publicly traded securities may be received as contributions to Chewonki, pending authorization from the Director of Development, CFO, or President. Securities can be wired to the investment account maintained by Chewonki, and will be treated as having been delivered when Chewonki’s investment agent has received all the documentation necessary to complete the transfer of ownership without any further involvement on the part of the donor. Securities traded exclusively in markets outside the United States can only be accepted with the approval of the Committee. Marketable securities will be sold by Chewonki promptly upon receipt so that their proceeds may be invested in a manner consistent with Chewonki’s overall investment policies.
Closely Held and Restricted Securities. Corporate stock for which there is no established market that is readily accessible to Chewonki, including the stock of “Subchapter S Corporations,” stock which is subject to trading restrictions, partnership interests in general or limited partnerships or in limited liability partnerships, and memberships in limited liability companies that are not traded on an established domestic securities market (“closely held securities”) can be accepted by Chewonki only with the approval of the Committee. Chewonki is willing to consider any proposed gift of closely held, restricted or controlled (Rule 144) securities, but the gift of such securities frequently presents tax and other issues for both the donor and Chewonki, so each such gift must be carefully examined on a case-by-case basis. Chewonki will ordinarily expect to retain legal counsel to advise it in connection with any proposed gift of closely held or restricted securities. Because of the complexity involved in Chewonki’s accepting gifts of such securities, a prospective donor should allow ample time between the proposal of the gift and its completion. The Committee will pay particular attention to issues that include:

Whether there are restrictions on the security that would prevent Chewonki from readily converting the assets to cash;
What the plan and prospects are for marketing the security; and
Whether holding the security for a fixed or indefinite time will generate any undesirable tax consequences for Chewonki, such as Unrelated Business Taxable Income (“UBTI”).

Gifts of Non-Cash Property

Gifts of Real Estate.

Gifts to Chewonki of real estate or any interest therein can only be accepted with the approval of the Committee. Each such gift will be subject to an environmental review to assure the absence of environmental contamination. The appropriate level of environmental review shall be determined by the Committee. All necessary environmental testing will be conducted by engineering experts acceptable to the Committee and answerable to Chewonki. Chewonki ordinarily engages legal counsel when considering a gift of real estate and may require a legal opinion as to the state of the donor’s title before such a gift can be accepted. Because of the time necessary to perform title searches, environmental reviews, and potential environmental testing, a donor in the normal course of business can expect Chewonki to determine whether it will accept the proposed gift within a three month period. The cost of the environmental audit is generally an expense to the donor.

Prior to acceptance of the real property, the gift must be approved by the Committee and by Chewonki’s legal counsel. Considerations for acceptance of the property include:

Is the property useful for the purposes of Chewonki;
Is the property locatable and accessible to Chewonki staff for evaluation
Is the property is marketable;
Are there are any restrictions, reservations, liens, easements, or other limitations associated with the property;
Are there any carrying costs, such as insurance, association fees or dues, real estate taxes, maintenance expenses etc., associated with ownership or possession of the property;
Are there any environmental liabilities or hazards related to the property;
Does the environmental audit reflect that the property is not damaged; and
Whether and how the property is to be insured against general liability during any anticipated period of holding by Chewonki.

Donors should anticipate that Chewonki will sell the contributed real estate as promptly as market conditions permit after Chewonki takes possession of the property, unless the property is contiguous to existing Chewonki property or advances Chewonki’s mission. Chewonki is unable to accept gifts of real estate for which there is not likely to be a market. During any period in which donated real estate is retained by Chewonki prior to sale, the donated property may be subject to real estate taxes, insurance costs, and other maintenance expenses. Chewonki will evaluate these expenses in the process of accepting the gift.

Chewonki ordinarily does not accept real estate that is encumbered by mortgages or other liens.

Appraisals of real property for the purposes of substantiating a charitable deduction are the responsibility of the donor.

Where appropriate, a title binder will be obtained by Chewonki prior to the acceptance of the real property gift. The cost of this title binder is generally an expense to the donor.

Gift of Tangible Personal Property.

Tangible personal property is personal property that can be physically relocated, such as furniture and office equipment. Chewonki accepts contributions of tangible personal property or assets that are needed by Chewonki and can be used in fulfilling its mission. Examples of such property include trucks, vans, cars, tractors, boats, canoes or other outdoor equipment usable at our Wiscasset campus or satellite sites, furniture, educational equipment, hardware, software or other technological equipment, including personal or laptop computers, artwork, and other collectibles.

All gifts of tangible personal property shall be examined in light of the following criteria:

Does the property or the proceeds from its sale fulfill Chewonki’s mission?
Is the property marketable?
Are there any undue restrictions on the use, display, or sale of the property?
Are there any carrying costs for the property?

In the absence of a letter to the donor from the Committee or the President stating that contributed tangible personal property will be retained by Chewonki, a donor must assume that the property will be offered for sale. Chewonki cannot accept gifts of tangible personal property that are subject to restrictions related to the timing of its sale or for which there is no market to which Chewonki has relatively convenient access. If there will be costs associated with the maintenance and storage of a donated item of personal property between the time of its contribution to Chewonki and the time when it is likely to be sold, Chewonki expects donors to contribute funds sufficient to cover those expenses as a condition of accepting the gift.

The Committee shall make the final determination on the acceptance of any other kind of tangible asset.

Gifts of Other Property Interests.

Contributions of other property rights, such as mortgages, non-marketable notes, assignments of rent due under leases, oil and gas interests, patents, copyrights, royalties, frequent flyer miles, easements, cryptocurrency, or other contract rights or entity ownership rights of intrinsic utility can only be accepted by Chewonki with the approval of the Committee after appropriate review and evaluation of documents relevant to the interest, and the costs, benefits, and liabilities associated with the proposed gift.

Chewonki may accept oil and gas property interests, where appropriate. Prior to acceptance of an oil and gas interest, the gift shall be approved by the Committee, and if necessary, by Chewonki’s legal counsel. Chewonki will sell the rights to interests not consistent with our mission as determined by the Committee. Criteria for acceptance of the property shall include:

Gifts of surface rights should have a value of $20,000 or greater.
Gifts of oil, gas and mineral interests should generate at least $3,000 per year in royalties or other income (as determined by the average of the three years prior to the gift).
The property should not have extended liabilities or other considerations that make receipt of the gift inappropriate.
If the interest is a working interest, the donating organization should determine the impact on Chewonki so that it may develop a plan to minimize that impact if accepted.
The property should undergo an environmental review to ensure that Chewonki has no current or potential exposure to environmental liability.

Gifts of Life Insurance.

Gifts to Chewonki of fully paid whole life, ordinary life or endowment policies on which no future premium payments are due may be accepted by the Committee.

Chewonki will need to be named as owner (and beneficiary) of an insurance policy to be recorded as a current and outright gift to Chewonki, with Chewonki being the irrevocable owner of the insurance policy. Insurance policies are valued at the interpolated terminal reserve value if ongoing premiums are required. However, the donor’s deduction is based on the lesser of the policy’s fair market value or cost basis.

If the donor contributes future premium payments, Chewonki will designate the additional premium payment as a gift in the year that it is made.

If the donor does not elect to continue to make gifts to cover premium payments on the life insurance policy, Chewonki may:

Continue to pay the premiums
Convert the policy to fully paid up life insurance
Surrender the policy for its current surrender cash value

In no event will Chewonki use third parties, such as insurance agents or financial planners, to solicit insurance-related agreements. While Chewonki will not direct its donors to work with such agents or advisors, it will cooperate with the efforts of such professionals at the request of the donor, provided the relationship of the agent or planner is with the donor and not Chewonki.

Gifts of life insurance policies naming multiple beneficiaries will be referred to the Committee for its consideration before acceptance. Chewonki will not accept gifts of cash or property from a donor if the use of the gift is restricted to the purchase of a life insurance policy on the donor or any other person.

Retirement Plan Beneficiary Designations.

Donors are encouraged to name Chewonki as beneficiary of their retirement plans. Such designations will not be recorded as gifts to Chewonki until such time as the gift is irrevocable. Where the gift is irrevocable, but is not due until a future date, the present value of that gift may be recorded at the time the gift becomes irrevocable.

PART TWO: GENERAL POLICIES RELEVANT TO ALL GIFTS

Conflict of Interest.

All prospective donors are strongly urged to seek the assistance of personal legal and financial advisors in matters relating to their gifts and the resulting tax and estate planning consequences. Chewonki will comply with the Code of Ethical Standard, Donor Bill of Rights and Model Standards of Practice for the Charitable Gift Planner..

Restrictions on Gifts.

Chewonki accepts unrestricted gifts, and gifts for specific programs and purposes, provided that such gifts are not inconsistent with its stated mission, purposes, and priorities. Like all charitable organizations, Chewonki prefers gifts in general support of our goals, versus gifts for more limited purposes. Unrestricted support helps assure that Chewonki will be able to respond to the needs and desires of the people it serves as those needs and desires change over time, in ways that cannot now be foreseen..

Restrictions will be stated as a preference unless otherwise provided in the gift’s documentation and Chewonki will use its best efforts to comply with the stated preference.

Chewonki will not accept gifts that are too restrictive in purpose. Gifts that are too restrictive are those that violate the terms of the Chewonki Articles of Incorporation, gifts that are too difficult to administer, or gifts that are for purposes outside the mission of Chewonki. The Committee shall make all final decisions on the restrictive nature of a gift, and its acceptance or refusal.

Gifts with restrictions may be restricted in use, purpose, time, or perpetuity. If a donor desires to devote a gift to a particular purpose, the size of the gift should warrant the effort necessary to see that the donor’s wishes are fulfilled. In this regard, Chewonki considers the following factors in deciding whether to accept a restricted gift:

The mission-related significance of the particular purpose;
The time period over which the gift is to be received and applied;
Whether the proposed gift is intended to create restricted permanent endowment;
Alternative sources of funding for the particular purpose that is the subject of the restriction;
If the proposed gift is intended to fund a new initiative, whether the gift is sufficient, by itself or together with other similar gifts or amounts in hand or reasonably anticipated, to fully fund that initiative as an initial or recurring matter, as the case may be;
Whether the gift terms call for separate investment or other special administration or, alternatively, whether the gift terms permit administration as part of another fund already administered or to be administered by Chewonki;
Whether the proposed restriction is intended to be legally binding, or advisory only, and whether clarification should be sought from the donor;
Gifts to endow a particular program or function can be accepted and held as separate, identified funds in Chewonki’s endowment if they exceed $50,000 or may reasonably be expected to exceed that amount when Chewonki comes into possession of them in the future.

Gifts with restrictions may only be released when the donor’s intent is met.

Employment of Counsel.

Where appropriate, Chewonki shall seek the advice of legal counsel in matters relating to acceptance of gifts. Counsel review is recommended for:

Review of closely held stock transfers that are subject to restrictions or buy-sell agreements
Review of documents naming Chewonki as Trustee
Review of all gifts involving contracts, such as bargain sales or other documents requiring Chewonki to assume an obligation
Review of all transactions with potential conflict of interest that many invoke IRS sanctions
Other instances in which use of counsel is deemed appropriate by the Committee

Chewonki encourages donors to consult their own legal and tax counsel as their needs may require, and we ask that all potential contributors to Chewonki understand that counsel working with Chewonki to structure a gift cannot also work with or represent the person making the gift. Chewonki and its employees and agents are prohibited from advising donors about the tax consequences of their donations, so donors should seek advice on the tax ramifications of any gift to Chewonki from independent legal or tax advisors.

Fees and Commissions.

Chewonki does not pay “finder’s fees” or commissions to third parties in connection with any kind of gift to Chewonki. No officer, employee, or agent of Chewonki is or will be compensated in a manner that is dependent on the size or nature of gifts made to Chewonki by any person. When Chewonki engages legal counsel, accounting professionals, appraisers or environmental consultants, their fees and expenses will be determined by the time they spend engaged in Chewonki’s work and not by reference to any particular gift in connection with which they are retained. Unless Chewonki otherwise agrees in writing, the costs associated with making the gift will be paid by the donor. Any such professional engaged by Chewonki will be clearly identified to the donor or potential donor as working on behalf of Chewonki and not on behalf of the donor. In any case in which a donor’s professional fees are paid in whole or in part by Chewonki per written agreement signed and received prior to accepting the gift, representatives of Chewonki will endeavor to alert the donor that such arrangement may have tax consequences to the donor. Fees charged by a third-party, such as a credit card provider or other transaction agent, to process gifts are not prohibited under this section.

Establishing the Value of Donated Property.

It is the responsibility of donors to Chewonki to determine the value of their gifts and to report that value to state and federal taxing entities for purposes of taking charitable deductions. Chewonki’s gift acknowledgements will contain a description of the gift received and in most cases will not state a specific dollar value, except when the gift is a gift of cash. Donors should comply fully with the valuation rules established by the Internal Revenue Service and all relevant income, gift and estate tax laws and regulations.

In most instances, property contributed to Chewonki that has a value in excess of $5,000 must be accompanied by an appraisal; there are some exceptions and higher dollar thresholds based on the type of property being contributed.

Chewonki will determine for its own purposes the value of property contributed to it and brought onto its financial and development books and records, and may secure its own valuation of the contributed property.

Tax Compliance.

The filing requirements and valuation amount are subject to change by the federal government and should be reviewed at the time of gift. It is the policy of Chewonki to comply fully with this reporting requirement and all other applicable aspects of state and federal tax law.

PART THREE: METHODS OF GIVING

Outright Gifts.

Outright gifts are transferred directly to Chewonki for its immediate use. Such gifts maximize the value of the donation to Chewonki and are generally similar and quicker to conclude than other kinds of donations. Whether an outright gift is to be accepted on Chewonki’s behalf by the Director of Development, President, CFO, or by the Committee depends on the nature of the property being donated.

Bequests.

The most common planned giving arrangement for the benefit of Chewonki is a bequest in a will. Charitable gifts made in a will currently are 100 percent tax deductible. As with current gifts, bequests may be designated as unrestricted, giving Chewonki the most flexibility, or restricted; that is, designated for a specific purpose.

In a will or a trust, a cash amount may be left to Chewonki using the following language: “I give and devise to Chewonki Foundation, with principal offices in Wiscasset, Maine,

the sum of $_______________________________________
(#) or ($ value) shares of stock in ______________________
real estate located at ________________________________
_____ % of my estate, the rest, residue, and remainder of my estate to be used for its general charitable purposes.”

Restricted bequests must be approved by the Committee before Chewonki can accept them, so donors and their professional advisors should contact Chewonki’s Director of Development to discuss the restricted purpose at the time the relevant document is drafted to make sure the donor’s intention can be realized.

Chewonki appreciates being advised by supporters that they have remembered Chewonki in their estate plans, whether the remembrance is in the form of a restricted gift or an unrestricted one.

Charitable Remainder Trusts.

Chewonki does not serve as trustee of charitable remainder trusts. A representative of Chewonki can assist in the establishment of such trusts to assure that payments to Chewonki from such trusts can be used by Chewonki in accordance with the donor’s wishes and expectations.

Chewonki reserves the right to decline remainders under trust instruments created without its knowledge if the nature of the property or the conditions on its use are not consistent with the best interests and other activities of Chewonki. Decisions on whether to accept trust remainders that consist of property other than cash or marketable securities or which are subject to use restrictions are made by the Committee. Unrestricted remainders consisting of cash or marketable securities may be accepted by the Director of Development.

Charitable Lead Trusts.

This arrangement provides Chewonki with an income from the trust for a specific term, or for the lifetime of an individual. At the end of the payment period, the trust property reverts to the donor or, more commonly, passes to family members.

Chewonki does not serve as trustee of charitable lead trusts. As with remainder trusts, however, representatives of Chewonki can assist in the establishment of such trusts to assure that payments to Chewonki from such trusts can be used by Chewonki in accordance with the donor’s wishes and expectations.

Chewonki reserves the right to decline to accept distributions from charitable lead trusts in the drafting of which Chewonki has not been consulted if the distributions consist of property other than cash or marketable securities or if the uses to which the distributions are to be put are restricted under the terms of the trust instrument to purposes not consistent with the mission and programs of Chewonki.

Pooled Income Funds.

In this life-income arrangement, the donor’s irrevocable gifts are combined with those of others in a Pooled Income Fund. As an income beneficiary, Chewonki will receive a proportionate share of the Fund’s net income. The annual income received is based on the donor’s investment in the fund and varies with the actual earnings of the Fund. The Fund allows the donor to participate in a life-income plan with smaller initial gifts. Chewonki does not maintain pooled income funds, but can be named as the beneficiary of a pooled income fund that is managed at an appropriate institution.

Chewonki does not serve as trustee of pooled income funds at the present time.

Charitable Gift Annuities.

Chewonki does not offer charitable gift annuities.

Gifts of Remainders in Residences or Farms.

The gift of real estate with a retained life interest happens when the donor gifts their residence or farm to Chewonki and wishes to live there during their lifetime. Transferring the property to Chewonki, while reserving a life estate for the donor and/or another person, provides them with a current federal income tax charitable deduction. The deduction equals the present value of Chewonki’s remainder interest. This gift also permits the donor to avoid any potential capital gains tax on the built-in appreciation.

Gifts of remainder interests in personal residences or farms can be accepted only with the approval of the Committee. In the case of any such gift, as with any other gift of real estate, Chewonki will perform the same level of due diligence as it would if the gift under consideration were an outright gift of real estate as described in section 4 of Part II. During the life tenancy, donors will continue to be responsible for the maintenance and upkeep of the property, utilities, property taxes, insurance, and other expenses normally incurred by them in their ownership of the property.

Chewonki will remain in close contact with the owners of the life interest or interests in a residence or farm throughout the period of his, her or their occupancy so that it can remain confident of the absence of environmental liabilities and work with the owner or owners of the life interest to maintain the value of the property.

Chewonki reserves the right to decline the acceptance of any remainder interest of which it did not have notice and did not accept when the interest was initially created.

Bargain Sales.

In this type of gift, the donor and Chewonki enter into a written agreement setting the terms of the sale. The donor transfers assets to Chewonki and receives a lump sum or installment payment of the sales price.

Bargain sales to Chewonki are possible only with the approval of the Committee. Chewonki may retain legal counsel to consider any such sale. Whether other steps are necessary before the consummation of any such sale will depend on the nature of the property to be sold, as described in Part Two of this Policy. Chewonki’s ownership of real estate subject to a mortgage or other leverage may give rise to Unrelated Business Taxable Income (“UBTI”), and counsel will be instructed to consider any issues in this regard.

PART FOUR: SUMMARY OF KEY PROVISIONS

Securing appraisals and legal fees for gifts to Chewonki.

It is the responsibility of the donor to secure an appraisal (where required) and independent legal counsel for all gifts made to Chewonki.

Valuation of gifts for development purposes.

Chewonki shall record a gift received for gift purposes at its valuation on the date of receipt.

Responsibility for IRS filings upon sale of gift items.

The Committee is responsible for filing necessary IRS documentation within appropriate statutory timelines.

Acknowledgement.

Chewonki is responsible to issue an acknowledgement of all gifts made to Chewonki in a manner that complies with the current IRS Publication 526 (Charitable Contributions) and IRS Publication 561 (Determining the Value of Donated Property).

Changes to Policies.

These policies and guidelines have been reviewed and accepted by the Committee. The Committee must approve any changes to or deviations from these policies.