Gift Acceptance and Return Policy
Piedmont Education Foundation (PEF), a 501c3 nonprofit public benefit organization in Piedmont, California, is dedicated to providing sustained financial support to the Piedmont Unified School District (PUSD). PEF encourages the solicitation and acceptance of gifts that will help PEF to further and fulfill its mission. The following policies and guidelines govern acceptance of gifts made to PEF or for the benefit of any of its programs.
- Overview
Donations must be freely given with no expectation of anything in return other than due thanks and recognition. PEF will not accept donations when a condition of acceptance would compromise its autonomy, integrity or reputation. So that PEF staff and volunteers may dedicate their time to carrying out the mission and programs of PEF, PEF will not accept any gift whose acceptance would place an undue strain on volunteer or employee time and resources or when the cost of accepting the donation makes up a significant percentage of the value of the donation. All donations made to PEF are non-refundable.
- Purpose of Policies and Guidelines
The board of directors of PEF and its staff solicit current and deferred gifts from individuals, corporations, and foundations to secure its mission and future growth. These policies and guidelines govern the acceptance of gifts by PEF and provide guidance to prospective donors and their advisors when making gifts to PEF. The provisions of these policies shall apply to all gifts received by PEF for any of its programs or services.
- Use of Legal Counsel
PEF encourages its donors to seek their own tax or legal counsel before making a gift. PEF shall seek the advice of legal counsel in matters relating to acceptance of gifts when appropriate. Review by counsel is recommended for:
1) Closely held stock transfers that are subject to restrictions or buy-sell agreements.
2) Documents naming PEF as Trustee or administrations of any estate in which PEF is named as a beneficiary.
3) Gifts involving contracts, such as bargain sales or other documents requiring PEF to assume an obligation.
4) Transactions with potential conflict of interest that may invoke IRS sanctions.
5) Other instances in which use of counsel is deemed appropriate by the PEF executive director and board of directors.
III. Conflict of Interest
PEF does not provide personal legal, financial or other professional advice to donors or prospective donors. Donors and prospective donors are strongly encouraged to seek the assistance of their own professional advisors in matters relating to their gifts and the resulting tax and estate planning consequences.
- Restrictions on Gifts
PEF will not accept any gift that it deems too restrictive in purpose or not in the organization’s best interest. PEF will accept unrestricted gifts, and gifts for specific programs and purposes, provided that such gifts are not inconsistent with its stated mission, purposes, and priorities. Gifts that are too restrictive are those that violate the organizational policies or bylaws, gifts that are too difficult to administer, or gifts that are for purposes outside the mission. All final decisions on the restrictive nature of a gift, and its acceptance or refusal, shall be made by the PEF executive director in consultation with the board of directors. The following gifts will not be accepted, under any circumstances, by PEF.
- Any gifts that violate federal, state, or local law, statute, or ordinance.
- Any gifts that contain unreasonable conditions or partial interest in property.
- Any gifts that are made with conditions that state the proceeds will be spent by PEF for the personal benefit of a named individual.
- Any gifts that could expose PEF to liability.
- Any gifts from an individual or organization whose work or actions are incompatible with the mission, vision and goals of PEF.
- Any gifts of leased property, limited partnership interests, general partnership interests, savings bonds, or time share interests.
- Types of Gifts
The following gifts are acceptable:
- Cash. Cash is acceptable in any form. Checks shall be made payable to Piedmont Education Foundation and delivered to PEF’s administrative offices at 401 Highland Avenue, Piedmont. Credit card donations are accepted online at PiedmontEdFoundation.org, Piedmontstore.com, Piedmontstore.org, SchoolAuction.net, at the PEF offices, or through a handheld credit card acceptance system. PEF is liable for the associated costs of accepting credit card donations.
- Tangible Personal Property, including in-kind gifts. PEF reserves the right to refuse gifts of tangible personal property if the property is unmarketable, if there are undue restrictions on the property’s use, display or sale, or if there are carrying or storage costs for the property. PEF will not accept unsolicited in-kind gifts when the time and costs of handling the asset are disproportionate to the expected value or if PEF’s prospects of realizing cash are distant and disproportionate to the current costs of holding the asset.
- Professional Services. PEF will accept gifts of professional services outside of regular volunteer activity for services required by PEF for which payment would otherwise by rendered.
- Securities. PEF may accept both publicly traded securities and closely held securities. Marketable securities may be transferred to an account maintained at Schwab. As a general rule, all marketable securities shall be sold upon receipt unless otherwise directed by the investment committee. In some cases marketable securities may be restricted by applicable securities laws; in such instance the final determination on the acceptance of the restricted securities shall be made by the PEF investment committee. Closely held securities, which include not only debt and equity positions in non-publicly traded companies but also interests in limited partnerships and limited liability companies, or other ownership forms, can be accepted subject to the approval of the PEF investment committee. However, gifts must be reviewed prior to acceptance to determine that there are no restrictions on the security that would prevent PEF from ultimately converting those assets to cash; the security is marketable; and the security will not generate any undesirable tax consequences for PEF. If potential problems arise on initial review of the security, further review and recommendation by an outside professional may be sought before making a final decision on acceptance of the gift. The PEF investment committee and legal counsel shall make the final determination on the acceptance of closely held securities when necessary. Every effort will be made to sell non-marketable securities as quickly as possible.
- Real Estate. Gifts of real estate may include developed property, undeveloped property, or gifts subject to a prior life interest. Prior to acceptance of real estate, PEF shall require the prospective donor to provide an initial environmental review of the property to ensure that the property has no environmental damage. In the event that the initial inspection reveals a potential problem, PEF shall retain a qualified inspection firm to conduct an environmental audit. The cost of the environmental audit shall be an expense of the prospective donor. When appropriate, a title binder shall be obtained by PEF prior to the acceptance of the real property gift. The cost of this title binder shall be an expense of the prospective donor. Prior to acceptance of the real property, the gift shall by approved by the PEF board of directors and legal counsel. Criteria for acceptance of the property shall include and analysis of the usefulness of the property to the purposes of PEF; marketability of property; restrictions, reservations, easements, or other limitations associated with the property; carrying costs, which may include insurance, property taxes, mortgages, or notes, etc., associated with the property; and environmental audit damage results.
- Remainder Interests in Property. PEF will accept a remainder interest in a personal residence, farm, or vacation property subject to the provisions described in the above paragraph on Real Estate donations. The donor or other occupants may continue to occupy the real property for the duration of the stated life. At the death of the donor, PEF may use the property or reduce it to cash. Where PEF receives a gift of a remainder interest, expenses for maintenance, real estate taxes, and any property indebtedness are to be paid by the donor or primary beneficiary.
- Oil, Gas, and Mineral Interests. PEF may accept oil and gas property interests, when appropriate. Prior to acceptance of an oil and gas interest the gift shall be approved by the PEF board of directors, and if necessary, by legal counsel. Gifts of surface rights should have a value of $50,000 or greater. Gifts of oil, gas, and mineral interests should generate at least $10,000 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. A working interest will not be accepted. The property should undergo an environmental review to ensure that PEF has no current or potential exposure to environmental liability.
- Bargain Sales. PEF will enter into a bargain sale arrangement rarely, and only in instances in which the bargain sale furthers the mission and purposes of PEF. All bargain sales must be reviewed, recommended and approved by the PEF board of directors. In determining the appropriateness of the transaction, PEF must obtain an independent appraisal substantiating the value of the property. If PEF assumes debt with the property, the debt ratio must be less than 50% of the appraised market value. PEF must determine that it will use the property, or that there is a market for sale of the property, allowing sale within 12 months of receipt. PEF must calculate the costs to safeguard, insure, and expense the property (including property tax, if applicable) during the holding period.
- Life Insurance. PEF must be named as both beneficiary and irrevocable owner of an insurance policy before a life insurance policy can be accepted and recorded as a gift. The gift is valued at its interpolated terminal reserve value, or cash surrender value, upon receipt. If the donor contributes future premium payments, PEF will include the entire amount of 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, PEF may either continue to pay the premiums, convert the policy to paid up insurance, or o surrender the policy for its current cash value at the discretion of the PEF board of directors.
- Charitable Gift Annuities. PEF may offer charitable gift annuities. The minimum gift for funding is $500,000. The minimum age for life income beneficiaries of a gift annuity shall be 70. Where a deferred gift annuity is offered, the minimum age for life income beneficiaries shall be 65. No more than two life income beneficiaries will be permitted for any gift annuity. Annuity payments may be made on a quarterly, semi-annual, or annual schedule. PEF will not accept real estate, tangible personal property, or any other illiquid asset in exchange for current charitable gift annuities. PEF may accept real estate, tangible personal property, or other illiquid assets in exchange for deferred gift annuities so long as there is at least a 5-year period before the commencement of the annuity payment date, the value of the property is reasonably certain, and the PEF board of directors approves the arrangement. Funds contributed in exchange for a gift annuity shall be set aside and invested during the term of the annuity payments. Once those payments have terminated, the funds representing the remaining principal contributed in exchange for the gift annuity shall be transferred to PEF’s general endowment funds.
- Charitable Remainder Trusts and Charitable Lead Trusts. PEF may accept designation as remainder beneficiary of a charitable remainder trust or as income beneficiary of a charitable lead trust with the approval of the PEF board of directors. PEF will not accept appointment as trustee of a charitable remainder trust or of a charitable lead trust.
- Bequests and Retirement Plan or Life Insurance Beneficiary Designations. Donors and supporters of PEF are encouraged to name Piedmont Education Foundation as beneficiary in their will or trust or life insurance policy, or of their retirement plans. Such bequests or designations will not be recorded as gifts until such time as the gift is irrevocable. When 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.
- Gift Returns
Donations made to PEF are generally non-refundable. Once a contribution has been made to a charity, the funds enter into the public trust and must be used toward the public good as it pertains to PEF’s mission. Funds may only be returned in very unusual circumstances. Circumstances wherein a charitable donation may be returned include:
- Credit card fraud. If a stolen credit card was used to make the contribution and the legal owner of the credit card did not authorize the contribution, PEF will refund the donation, less credit card fees, on recommendation from the credit company.
- Violation of agreement. If PEF is unable to use the donation in accordance with the agreement made with the donor at the time of the gift, PEF will inform the donor and recommend that the funds be used for a different project or transferred to another 501c3 nonprofit. If no agreement can be reached and the funds have not yet been granted to a project, the PEF board will meet to determine if the gift should be refunded.
VII. Miscellaneous Provisions
- Securing appraisals and legal fees for gifts to PEF. It will be the responsibility of the donor to secure an appraisal (where required) and independent legal counsel for all gifts made to PEF.
- Valuation of gifts for development purposes. PEF will record a received gift at its valuation for gift purposes on the date of gift.
- Responsibility for IRS Filings upon sale of gift items. PEF is responsible for filing IRS Form 8282 upon the sale or disposition of any asset sold within two years of receipt by PEF when the charitable deduction value of the item is more than $5,000. PEF must file this form within 125 days of the date of sale or disposition of the asset.
- Acknowledgement of gifts. PEF will provide a donation receipt for tax purposes by email within two business days once the donation has been received and processed.
VIII. Changes to Gift Acceptance Policies
These policies and guidelines have been reviewed and accepted by the PEF board of directors. The PEF board of directors must approve any changes to, or deviations from, these policies.
Approved on the16th day of January, 2019.