I. PURPOSE OF GIFT ACCEPTANCE POLICIES
The Foundation solicits gifts to advance its broad charitable purposes. These gift acceptance policies define the considerations and processes through which The Foundation assesses the desirability of accepting a potential gift and determines whether to accept a gift as offered. In addition, these policies specify how particular types of gifts may be made. These policies are intended to be a resource to The Foundation Trustees, officers, committee members and staff, as well as prospective donors and their advisors.
II. AUTHORITY TO ACCEPT GIFTS
Except as otherwise noted herein, the Executive Director of The Foundation shall have the authority to accept gifts on behalf of The Foundation. When appropriate, the Executive Director shall consult with the Executive Committee on matters of gift acceptance and shall make regular reports to the Board of Trustees concerning accepted gifts. The Executive Director, on behalf of The Foundation, shall seek the advice of legal counsel when appropriate.
The Foundation reserves the right to refuse any gift, including gifts that are inconsistent with The Foundation’s stated mission, purposes and priorities or that would impose an unreasonable burden on or risk to The Foundation.
III. CONFLICT OF INTEREST
The Foundation will urge all prospective donors to seek the assistance of personal legal and financial advisors in matters relating to gifts to The Foundation and the resulting tax consequences. In all cases, The Foundation representatives shall emphasize that they do not represent the donor.
The Foundation will comply with the Model Standards of Practice for the Charitable Gift Planner promulgated by the National Committee on Planned Giving, shown as an appendix to this document.
IV. TYPES OF ASSETS
1. Cash
Cash is acceptable in any form. Checks shall be made payable to the Catholic Community Foundation of the Archdiocese of Baltimore, Inc., and shall be delivered to The Foundation at 320 Cathedral Street, Baltimore, Maryland 21201.
2. Publicly-Traded Securities
The Foundation can accept securities that are traded on the New York and American Stock Exchanges, as well as other major U.S. and foreign exchanges and the NASDAQ, corporate bonds, government issues, and agency securities. In general, all marketable securities shall be sold as soon as possible after their receipt unless otherwise determined by the Executive Committee, after consultation with the Investment Committee. The Foundation may not agree to hold, sell through a specific broker or trade on instruction of the donor a particular publicly-traded security without the approval of the Executive Committee.
Securities may be physically delivered to The Foundation in person or by mail or may be wired to a designated The Foundation brokerage account. If the donor mails securities, certificates should be sent unsigned and by registered mail. Signed stock/bond powers should be sent separately to The Foundation by registered mail. It is imperative that the signature on the stock/bond power exactly match the name on the certificate.
3. Closely-Held Securities
Interests in closely-held or non-publicly traded entities, including, without limitation, sole proprietorships, general and limited partnerships, corporations, real estate investment trusts (REITs), and limited liability companies, may be accepted only after prior review and approval by the Executive Committee, after consultation with the Investment Committee and legal counsel, if appropriate. Such review shall consider the marketability of the interest, any restrictions on its sale, any potential liability associated with the holding of such interest, and any tax consequences for The Foundation related to the holding and/or disposing of such interest. In general, such securities shall be sold as soon as possible following their receipt.
4. Registered Securities
The Foundation may accept restricted securities (also known as unregistered securities, investment-letter stock, control stock or private placement stock). Because of the complexity in transferring ownership and determining the fair market value of restricted stock, such gifts may be accepted only after review and approval by the Executive Committee, after consultation with the Investment Committee and legal counsel, if appropriate.
5. Tangible Personal Property
Gifts of tangible personal property, including but not limited to art, antiques, collections, manuscripts, books, vehicles, marine vessels, and computer hardware may be accepted only after review and approval by the Executive Committee.
A gift of tangible personal property should be accepted only when a review indicates that the property is readily marketable. No personal property shall be accepted under conditions that obligate The Foundation to continue to own the property in perpetuity. In addition, no perishable property or property that would require special facilities or security to be properly safeguarded shall be accepted.
Tangible personal property given to The Foundation shall be sold as soon as possible following receipt. The Foundation’s intention to sell the property shall be communicated to the donor when The Foundation receives notification of the donor’s intent to make a gift of personal property.
6. Real Estate
Gifts of real estate, both improved and unimproved, may be accepted only after review and approval by the Executive Committee after consultation with legal counsel, if appropriate. Due to the expenses associated with gifts of real property, only gifts with a current fair market value in excess of $50,000 will generally be considered. No gift of real estate may be accepted until all mortgages, deeds of trust, liens and/or other encumbrances have been discharged.
It is The Foundation’s general policy to dispose of all gifts of real estate as expeditiously as possible. This policy will be communicated to a donor when The Foundation receives notification of the donor’s intent to make a gift of real estate.
Before accepting a gift of real estate, The Foundation shall obtain:
a. a title insurance commitment showing marketable title in the donor, free and clear of unacceptable encumbrances, issued by a reputable title insurance company;
b. an MAI appraisal by a qualified appraiser (not older than 60 days);
c. a Phase I environmental audit by a qualified engineer indicating that ownership will not expose The Foundation to environmental liability;
d. a market feasibility study for purposes of liquidation (when appropriate);
e. an on-site evaluation by the Executive Director or his designee (or if the property is located in a geographically isolated area, a local real estate broker acceptable by the Exec. Dir.);
f. a structural engineering report (when appropriate);
g. a review of leases (for commercial property);
h. evidence of compliance with the Americans with Disabilities Act (when applicable);
i. a disclosure statement from the donor reflecting any and all carrying costs, including but not limited to taxes, insurance, association dues, membership fees and transfer charges.
All costs related to the environmental impact study, title search, appraisal, marketability study and any other related study shall be borne by the donor.
7. Life Insurance
The Foundation will accept gifts of life insurance policies of which it is named the irrevocable owner and beneficiary. The Foundation may accept a “paid-up” policy (i.e., no additional premiums will be required, regardless of changing rates or dividends) or a new or existing policy for which the donor intends to continue to make payments so that the policy does not lapse. The Foundation will not accept a policy with any term insurance component.
The Foundation will make premium payments on a donated policy if the donor makes annual gifts at least equivalent to the amount of the premium. The Foundation may, but is under no obligation to continue to pay the premiums if the donor elects not to continue to make gifts to cover premium payments. In that instance, The Foundation may allow the policy to lapse, convert the policy to paid-up insurance or surrender the policy for its current cash value.
8. Other Property
Other property of any description (e.g., mortgages, notes, copyrights, royalties, etc.) may be accepted only with the approval of the Executive Committee. The difficulty inherent in establishing the acceptability of this class of assets places additional importance on a thorough review of such gift proposals. In particular, the Executive Committee shall review the marketability of the gift, the carrying costs associated with it and the potential exposure of The Foundation to tax and other liabilities. Depending on the value of the proposed gift, consideration should be given to encouraging the donor to dispose of the property and donate the proceeds to The Foundation.
V. GIFT VEHICLES
1. Outright Gifts
The Foundation accepts current, outright gifts of property that are consistent with these policies.
2. Bequests
A bequest to The Foundation is made in the donor’s Will or Revocable Trust. The donor can direct that a specific dollar amount, specific assets, a percentage of the donor’s estate or trust, or the remainder of the donor’s estate or trust be distributed to The Foundation While all bequests are contingent, in that the donor can change his/her Will or Revocable Trust prior to the donor’s death, the donor can further condition a bequest to The Foundation upon the occurrence or non-occurrence of a particular event (e.g., survival of a named person, birth of a child, etc.). Accordingly, a bequest to The Foundation is not “complete” until the death of the donor and, where applicable, the satisfaction of the condition.
Donors may also establish by will a charitable remainder trust or charitable lead trust (see below).
Bequests may be made to The Foundation through the execution of a new Will or Revocable Trust or by a Codicil or Amendment, respectively, thereto.
3. Beneficiary Designations
The Foundation may accept amounts it receives as a designated beneficiary (primary or contingent) of a life insurance policy, deferred annuity contract, IRA, defined benefit plan, 401(k) plan, profit-sharing plan or other qualified plan. If The Foundation is anything other than an outright beneficiary of such assets, the prior review and approval of the Executive Committee shall be required.
4. Charitable Gift Annuities
The Foundation is not currently registered to issue charitable gift annuities in any jurisdiction. However, the Archdiocese of Baltimore has agreed to issue charitable gift annuities, the remaining principal of which shall be distributed to The Foundation upon the death of the last surviving annuitant. Minimum funding amounts, age(s) of annuitant(s), rates, and other terms of such charitable gift annuities shall be determined by the Archdiocese.
5. Charitable Remainder Trusts
A charitable remainder trust is established by an irrevocable gift to a trustee made during the donor’s lifetime or upon the donor’s death. The primary feature of a charitable remainder trust is that it provides for periodic payments of a fixed percentage (not less than 5%) of the value of the trust assets to the donor and/or another person specified by the donor, for life or a specified term of years (not to exceed 20), after which the trust assets pass to The Foundation. The most common forms of charitable remainder trusts are Charitable Remainder Annuity Trusts (CRATs) and Charitable Remainder Unitrusts (CRUTs). The significant difference between a CRAT and a CRUT is that the annual payment from a CRAT is a fixed percentage of the initial value of the trust, while the payout from a CRUT is calculated by applying the fixed percentage to the value of trust, valued annually. Additional contributions may be made to a CRUT, but no additional contributions may be made to a CRAT.
The Foundation may accept a designation as remainder beneficiary of a charitable remainder trust, provided that the gift does not violate any other provision of these policies as they relate to the types of assets or restrictions that may be accepted.
In general, The Foundation will not serve as the Trustee or as a co-Trustee of a charitable remainder trust. Exception may be made with the prior approval of the Executive Committee. Factors to be considered in determining whether The Foundation shall serve as the trustee of a charitable remainder trust shall include: the value of the initial contribution to the trust, the number of non-charitable beneficiaries, the ages of the non-charitable beneficiaries if the trust term is based on one or more lives, the present value of The Foundation’s remainder interest, and whether the designation of The Foundation as the sole remainderman is irrevocable. In the event The Foundation agrees to serve as Trustee or co-Trustee of a charitable remainder trust, gifts of any asset other than cash or unrestricted publicly-traded securities, or a combination of both, will not be accepted as funding for such trust. Any agreement pursuant to which The Foundation consents to serve as Trustee or co-Trustee of a charitable remainder trust shall be reviewed and approved on behalf of The Foundation by its legal counsel.
6. Charitable Lead Trusts
A charitable lead trust is a trust from which the income or “lead” interest is paid to The Foundation for a set number of years (not to exceed 20), after which the remaining trust assets pass to one or more non-charitable beneficiaries designated by the donor. The amount paid to The Foundation may be either a fixed sum (an “annuity” interest) or a percentage of the trust assets valued each year (a “unitrust” interest). Moreover, charitable lead trusts may be established during the donor’s lifetime or upon the donor’s death pursuant to a Will or Revocable Trust.
The Foundation may accept a designation as remainder beneficiary of a charitable remainder trust with the approval of the Executive Director, provided that the gift does not violate any other provision of these Gift Acceptance Policies as they relate to the types or purposes of gifts that may be accepted.
The Foundation will not serve as the Trustee of a charitable lead trust.
7. Retained Life Estates
The Foundation may accept a gift of a personal residence or farm where the donor (and/or another person) retains the right to use the property for a term of years or for the life or lives of the donor and/or another person. Upon the expiration of the retained interest, The Foundation may use or sell the property as it sees fit.
Such gifts are subject to the conditions and guidelines applicable to gifts of real estate. The gift is accomplished by the execution of a Deed to The Foundation, pursuant to which the retained interest is expressly reserved. In addition, the donor must enter into a Retained Life Estate Agreement (RLEA) which provides that the donor and/or the life tenant shall remain responsible for maintenance, taxes, utilities, insurance and other costs associated with the property, unless other arrangements, approved by The Foundation, are made for the payment of these expenses. The Deed and the RLEA shall be reviewed and approved by The Foundation’s legal counsel.
8. Bargain Sales
The Foundation may enter into a bargain sale arrangement with respect to an unrestricted gift (i.e., not to a particular fund) only with the consent of the Executive Committee. Such arrangements are subject to the conditions and guidelines applicable to gifts of real estate.
VI. MISCELLANEOUS PROVISIONS
1. Appraisals and Legal Fees
It is the responsibility of the donor to secure and pay for an appraisal (when required) and independent legal counsel for all gifts made to The Foundation.
2. Confidentiality
The Foundation and its Board of Trustees and committees shall hold all information concerning (prospective) donors and their proposed gifts in the strictest confidence. A donor may grant permission to The Foundation to publicly announce any gift or feature of a gift to the public.
3. Acknowledgement
The Foundation shall follow Internal Revenue Service regulations with respect to the acknowledgement of gifts. The donor retains sole responsibility for determining the date and value of a gift to The Foundation.
4. IRS Filings Upon Sale of Donated Property
If The Foundation sells, exchanges or otherwise disposes of any property (other than unrestricted publicly-traded securities) with a claimed charitable deduction value in excess of $5,000 within three years of the date The Foundation originally received the property, or such amount or within such time as may be hereinafter required by the Internal Revenue Service, The Foundation shall file IRS Form 8282, or its successor, and provide a copy to the donor.
5. Amendments to Gift Acceptance Policies
These policies have been reviewed and accepted by the Board of Trustees of the Foundation. The policies shall be subject to periodic review and may be amended by the Board of Trustees from time to time.
Appendix 1
NCPG MODEL STANDARDS OF PRACTICE
National Committee on Planned Giving®
FOR THE CHARITABLE GIFT PLANNER
Preamble
The purpose of this statement is to encourage responsible gift planning by urging the adoption of the following Standards of Practice by all individuals who work in the charitable gift planning process, gift planning officers, fund raising consultants, attorneys, accountants, financial planners, life insurance agents and other financial services professionals (collectively referred to hereafter as “Gift Planners”), and by the institutions that these persons represent.
This statement recognizes that the solicitation, planning and administration of a charitable gift is a complex process involving philanthropic, personal, financial, and tax considerations, and often involves professionals from various disciplines whose goals should include working together to structure a gift that achieves a fair and proper balance between the interests of the donor and the purposes of the charitable institution.
I. Primacy of Philanthropic Motivation
The principal basis for making a charitable gift should be a desire on the part of the donor to support the work of charitable institutions.
II. Explanation of Tax Implications
Congress has provided tax incentives for charitable giving, and the emphasis in this statement on philanthropic motivation in no way minimizes the necessity and appropriateness of a full and accurate explanation by the Gift Planner of those incentives and their implications.
III. Full Disclosure
It is essential to the gift planning process that the role and relationships of all parties involved, including how and by whom each is compensated, be fully disclosed to the donor. A Gift Planner shall not act or purport to act as a representative of any charity without the express knowledge and approval of the charity, and shall not, while employed by the charity, act or purport to act as a representative of the donor, without the express consent of both the charity and the donor.
IV. Compensation
Compensation paid to Gift Planners shall be reasonable and proportionate to the services provided. Payment of finder’s fees, commissions or other fees by a donee organization to an independent Gift Planner as a condition for the delivery of a gift is never appropriate. Such payments lead to abusive practices and may violate certain state and federal regulations. Likewise, commission-based compensation for Gift Planners who are employed by a charitable institution is never appropriate.
V. Competence and Professionalism
The Gift Planner should strive to achieve and maintain a high degree of competence in his or her chosen area, and shall advise donors only in areas in which he or she is professionally qualified. It is a hallmark of professionalism for Gift Planners that they realize when they have reached the limits of their knowledge and expertise, and as a result, should include other professionals in the process. Such relationships should be characterized by courtesy, tact and mutual respect.
VI. Consultation with Independent Advisers
A Gift Planner acting on behalf of a charity shall in all cases strongly encourage the donor to discuss the proposed gift with competent independent legal and tax advisers of the donor’s choice.
VII. Consultation with Charities
Although Gift Planners frequently and properly counsel donors concerning specific charitable gifts without the prior knowledge or approval of the donee organization, the Gift Planner, in order to insure that the gift will accomplish the donor’s objectives, should encourage the donor early in the gift planning process, to discuss the proposed gift with the charity to whom the gift is to be made. In cases where the donor desires anonymity, the Gift Planner shall endeavor, on behalf of the undisclosed donor, to obtain the charity’s input in the gift planning process.
VIII. Description and Representation of Gift
The Gift Planner shall make every effort to assure that the donor receives a full description and an accurate representation of all aspects of any proposed charitable gift plan. The consequences for the charity, the donor and, where applicable, the donor’s family, should be apparent, and the assumptions underlying any financial illustrations should be realistic.
IX. Full Compliance
A Gift Planner shall fully comply with and shall encourage other parties in the gift planning process to fully comply with both the letter and spirit of all applicable federal and state laws and regulations.
X. Public Trust
Gift Planners shall, in all dealings with donors, institutions and other professionals, act with fairness, honesty, integrity and openness. Except for compensation received for services, the terms of which have been disclosed to the donor, they shall have no vested interest that could result in personal gain.
Adopted and subscribed to by the National Committee on Planned Giving and the American Council on Gift Annuities, May 7, 1991. Revised April 1999.