Gift Acceptance Policy
Following is Chewonki’s Gift Acceptance Policy.
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.
General considerations affecting gifts of all kinds are described in Part One of the Policy; The different types of property Chewonki can accept are described in Part Two of the Policy; and The various means by which gifts may be made are described in Part Three.
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.
General Policies Relevant To All Gifts
- Employment of Counsel. In some circumstances, it is prudent for Chewonki to work with its own separate legal counsel in structuring gifts. Some of the instances in which Chewonki expects to work with counsel are identified below.
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.
- Acceptance Process. Some gifts to Chewonki are more complex than others. In the cases of certain kinds of gifts, Chewonki requires that Chewonki’s acceptance of the gift be approved by Chewonki’s Gift Acceptance Committee, which includes the President, Chief Financial Officer, Director of Development and one or more appointees of the Board Chair who are members of the Board of Trustees (the “Committee”). In the case of tangible personal property that is intended for programmatic or operational use by Chewonki, acceptance of the gift must be recommended by the Director of the particular programmatic or operational area as suitable and useful. The sorts of gifts that can only be accepted with the approval of the Committee are identified below. In any case where acceptance by the Committee is required, if the Committee is in doubt about whether the particular gift should be accepted, the matter may be referred to the Board of Trustees for its consideration. Gifts that do not need to be accepted by the Committee may be accepted by the Director of Development on Chewonki’s behalf.
- Restricted Gifts. Like all charitable organizations, Chewonki prefers gifts in general support of our goals to 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 we cannot now foresee. If a supporter of Chewonki 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;
- Whether a gift for a restricted purpose would nevertheless tend to function as either unrestricted endowment (in the case of a permanent gift) or unrestricted funds (i.e. a gift to be applied to staff salaries would tend to function in this manner);
- 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 fund fully 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 for purposes that are not consistent with Chewonki’s mission or consonant with its current or anticipated future programs cannot be accepted.
- 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, representatives of Chewonki will endeavor to alert the donor that such arrangement may have tax consequences to the donor. Fees charged by third-party vendors, such as credit card providers, 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 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 the relevant income, gift and estate tax laws and regulations. Chewonki’s Director of Development can assist you in locating these rules.
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’s Director of Development can assist you in locating the IRS governing appraisal requirements and in identifying an appropriate appraiser for the gift you would like to consider.
Chewonki will determine for its own purposes the value of property contributed to it and brought on to its financial and development books and records, and may secure its own valuation of the contributed property.
- Tax Compliance. Donors of property other than cash and marketable securities which has a value of $500 or more are required to file IRS Form 8283 with their individual tax returns for the year in which such a gift is made, if they intend to take an income-tax deduction for the gift. In each instance of Chewonki’s receiving a gift to which this rule is applicable, Chewonki will use its best efforts to call the attention of the donor to the applicability of this rule. The Internal Revenue Code also requires that if Chewonki sells property that it has received by gift within three years after the property is received, Chewonki will report the fact of the sale and the amount of the proceeds to the Internal Revenue Service on Form 8282. It is the policy of Chewonki to comply fully with this reporting requirement and all other applicable aspects of state and federal tax law.
Property That May Be Donated To Chewonki
- Gifts of Cash. The most frequent, and also the simplest, means of supporting the work of Chewonki is by cash, check or credit card. Checks should be made payable to the “Chewonki Foundation,” and checks payable to any employee, officer or agent of Chewonki cannot be accepted. Funds may also be wired to Chewonki’s bank account, if a donor desires to do so, and wiring arrangements can be made through Chewonki’s Director of Development. 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 wired to an account maintained by Chewonki are effective as of the date they are credited to that account.
- Publicly Traded Securities. Gifts of publicly traded securities are gratefully received as contributions to Chewonki and may be accepted by the Director of Development or President. Securities accompanied by appropriate transfer instructions may be delivered to Chewonki’s office or wired to an investment account maintained by Chewonki, and will be treated as having been delivered when Chewonki or its 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 gifts of such securities frequently present 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, and in the normal course of business should expect Chewonki to determine whether it will accept the proposed gift within a two to three week period.
The Committee will pay particular attention to issues that include:
- Whether there are restrictions on the security that would prevent Chewonki from ultimately 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”).
- Real Estate. Gifts of real estate or any interest therein to Chewonki can only be accepted with the approval of the Committee. Each such gift will be subject to 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 exams, 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.”
Except if real estate donated to Chewonki is proximate to an existing facility operated by Chewonki and appropriate for Chewonki’s use in the operation of that facility, donors should anticipate that contributed real estate will be sold by Chewonki as promptly as market conditions permit after Chewonki takes actual possession of the property. 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.
Criteria to be used by the Committee in reviewing a proposed gift of real estate shall include:
- Whether the property is useful for the purposes of Chewonki;
- Where the property is located and its accessibility to Chewonki staff for evaluation
- Whether the property is marketable;
- Whether there are any restrictions, reservations, easements, or other limitations associated with the property; and
- Whether there are carrying costs, such as insurance, association fees or dues, etc., associated with ownership or possession of the property, or environmental liabilities or hazards related to the property.
- Whether and how the property is to be insured against general liability during any anticipated period of holding by Chewonki;
- Tangible Personal Property. The term “tangible personal property” includes any property that is not real property, such as interests in real property, cash, securities, patents, copyrights, royalties or other contract rights or entity ownership rights, that has an intrinsic utility. Chewonki gladly accepts contributions of tangible personal property 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. Gifts of tangibles that are intended to be usable immediately in Chewonki’s operations may be accepted by the Committee, as aforesaid.
Except in extraordinary circumstances, Chewonki does not accept automobiles, boats or aircraft that will not be used in its programs and will need to be sold.
Gifts of other kinds of tangible personal property that will not be put to use in Chewonki’s programs must be accepted by the Committee, and it is to be expected that Chewonki will sell any such property as promptly as market conditions permit. 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 their sale or for which there is no market to which Chewonki has relatively convenient access. If there will be costs associated with the maintenance 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 may request donors contribute funds sufficient to cover those expenses as a condition of accepting the gift.
- 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 President. It is Chewonki’s practice to convert such policies to cash after the policy has been transferred to Chewonki unless otherwise agreed to with the donor of the policy. Gifts of policies having a current cash value but with respect to which future premium payments are possible or are known to be due can only be accepted by the Committee. If policies having outstanding premium payments due are accepted, it is Chewonki’s practice to convert such policies to cash after the transfer unless otherwise agreed to with the donor. In any case in which a policy is accepted, Chewonki will work with the insuring company to transfer ownership of the policy from the donor to Chewonki and will change the beneficiary designation to permit Chewonki to collect the insurance proceeds when the policy matures.
Gifts of term life insurance without cash value can be accepted by the Committee if the donor of the policy agrees to maintain the policy in force by remaining responsible for payment of future premiums. The beneficiary designation will also be changed to name Chewonki as beneficiary.
It is Chewonki’s strong preference that gifts of term life insurance without cash value and gifts of new life insurance policies that are expected to accumulate cash value not be used to make gifts to Chewonki. 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 that 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.
- Other Property Interests. Contributions of unusual property rights, such as mortgages, non-marketable notes, assignments of rent due under leases, oil and gas interests, patents, copyrights, royalties, frequent flyer miles and easements can only be accepted by Chewonki with the approval of the Committee after appropriate review and evaluation of the costs, benefits, and liabilities associated with the proposed gift.
- Retirement Plan Beneficiary Designations. Chewonki gladly accepts gifts from retirement plans and donors are encouraged to name Chewonki as beneficiary of their retirement plans.
- Outright Gifts. Outright gifts are transfers 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 or by the Committee depends on the nature of the property being donated.
Over the many years of its existence, Chewonki and those it serves have benefited from the generosity of many people who have written checks to Chewonki during their lives or left outright gifts to Chewonki in their wills or trust documents. Without this support, Chewonki would be much less able than it is today to fulfill its mission. Donors who wish to participate in this long tradition of direct support may write checks to the “Chewonki Foundation” or make transfers to take effect through their estates.
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 x% of my estate or trust residuary) to be used for its general charitable purposes.”
If a donor or a professional advising a donor would like assistance in wording a bequest to Chewonki he or she should contact Chewonki’s Director of Development. 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 annuity trusts or charitable remainder unitrusts. Chewonki’s Director of Development and other representatives as appropriate are available and happy to discuss the benefits of charitable remainder trusts, how a donor could establish a charitable remainder trust, and how to include Chewonki as a beneficiary of a charitable remainder trust.
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. Chewonki does not serve as trustee of charitable lead trusts. As with remainder trusts, however, representatives of Chewonki are available to assist in the establishment of such trusts to assure that payments to Chewonki from any such trust 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. Chewonki does not maintain a pooled income fund. Chewonki’s Director of Development and other representatives as appropriate are available and happy to discuss the benefits of pooled income funds and how a donor could establish such a gift at an appropriate institution.
- Charitable Gift Annuities. Chewonki does not offer charitable gift annuities. Chewonki’s Director of Development and other representatives as appropriate are available and happy to discuss the benefits of charitable gift annuities and how a donor could establish such a gift at an appropriate institution.
- Gifts of Remainders in Residences or Farms. 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 up-keep 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. 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.
Approved by the Board of Trustees, 10th day of February, 2010.