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Fund and Gift Acceptance Policy

Washington County Community Foundation Policy on Fund and Gift Acceptance

The purpose of this fund and gift acceptance policy is to advance the Foundation’s mission of connecting donor interests to community needs and opportunities utilizing community knowledge and leadership. By providing guidelines for negotiating and accepting various types of gifts for different types of funds, these policies are designed to serve the best interests of the Foundation, donors who support the Foundation’s programs through charitable gifts, and a healthy and caring community. These policies are established to assure that each gift to the Foundation is structured to provide maximum benefits to the community, the donor, the Foundation and the beneficiaries of the Foundation’s charitable programs and activities.

Scope

These policies address both current and deferred gifts. The goal is to encourage financial support for the Foundation without encumbering it with gifts which either generate more cost than benefit, or which may be restricted in a manner that is not in keeping with the Foundation’s charitable purposes or applicable laws governing charitable gifts. These policies also describe the types of funds that the Foundation maintains. Notwithstanding anything in this policy to the contrary, the Foundation reserves the right to waive any requirements herein with respect to acceptance of specific gifts.

Ethical Standards in Dealing with Donors

Every person acting for or on the Foundation’s behalf shall adhere to A Donor Bill of Rights.

Philanthropy is based on voluntary action for the common good. It is a tradition of giving and sharing that is primary to the quality of life. To ensure that philanthropy merits the respect and trust of the general public, and that donors and prospective donors can have full confidence in the nonprofit organizations and causes they are asked to support, we declare that all donors have these rights:

  • To be informed of the organization's mission, of the way the organization intends to use donated resources, and of its capacity to use donations effectively for their intended purposes.
  • To be informed of the identity of those serving on the organization's governing board, and to expect the board to exercise prudent judgment in its stewardship responsibilities.
  • To have access to the organization's most recent financial statements.
  • To be assured their gifts will be used for the purposes for which they were given.
  • To receive appropriate acknowledgement and recognition.
  • To be assured that information about their donation is handled with respect and with confidentiality to the extent provided by law.
  • To expect that all relationships with individuals representing organizations of interest to the donor will be professional in nature.
  • To be informed whether those seeking donations are volunteers, employees of the organization or hired solicitors.
  • To have the opportunity for their names to be deleted from mailing lists that an organization may intend to share.
  • To feel free to ask questions when making a donation and to receive prompt, truthful and forthright answers.

The Foundation is committed to the highest ethical standards of philanthropy and development. In all transactions between potential donors and the Foundation, the Foundation will aspire to provide accurate information and full disclosure of the benefits and liabilities that could influence a donor’s decision, including with respect to the Foundation’s fees, the irrevocability of a gift, prohibitions on donor restrictions, items that are subject to variability (such as market values and investment returns), the Foundation’s responsibility to provide periodic financial statements with regard to donor funds, and investment policies and other information needed by donors to make an informed choice about using the Foundation as a vehicle of charitable gifts. In addition, all donors will be strongly encouraged to discuss their gifts with their own financial and tax advisors before signing any gift agreement. The role of the Foundation’s staff is to inform, guide, and assist the donor in fulfilling his or her philanthropic goals, without pressure or undue influence.

The Foundation recognizes the paramount role of donors and their gifts to the Foundation in executing its charitable mission. In carrying out the Foundation’s development program, staff will recognize and acknowledge donors in appropriate ways, both publicly and privately, subject to the Foundation’s Policy on Confidentiality. Donors reserve the freedom to determine the degree and type of recognition that they prefer and the Foundation respects the confidentiality of donors who do not wish to be publicly recognized.

Component Funds

The terms and conditions for all funds, both endowed (permanent) and non-endowed (non-permanent), shall be defined in a written agreement between the Foundation and the Donor(s). Any two the current authorized signers shall be authorized to execute the agreement and accept the fund, provided the fund complies with all elements of this Policy. Acceptance of a fund which is not fully compliant with all elements of this Policy may only be accepted after consideration and approval of the Board.

Variance Power

In 1976, the Internal Revenue Service issued Treasury Regulations that endorsed and codified the variance power as an essential feature of community foundations. The regulations recognized that a community foundation that is comprised of many separate trusts is a single public charity, rather than treating the trusts as separate private foundations. As a result, donors who create their own funds within a community foundation enjoy more favorable income tax deductibility than donors who give to a private foundation, and their funds escape the tax on investment income and the annual distribution requirements that would apply to assets held in a private foundation. Filing a single information return with the IRS means significantly lower administrative costs. To qualify for single entity treatment, the community foundation must meet several requirements, including having the power to modify the terms of a component trust or fund. Treas. Reg. §1.170A-9(f)(11)(v)(B)(1) provides that the governing body must have the power to modify a restriction on the use of a fund if a restriction effectively becomes “unnecessary, incapable of fulfillment, or inconsistent with the charitable needs of the community or area served.” Accordingly, the Foundation Board shall have the power to modify any restriction or condition on the distribution of funds for any specified charitable purposes or to specified organizations if in the sole judgment of the Board (without the approval of any trustee, custodian or agent), such restriction or condition becomes, in effect, unnecessary, incapable of fulfillment or inconsistent with the charitable needs of the community or area served.

Endowed (Permanent) Component Funds

The minimum amount to create a permanent fund is $25,000, which may be initiated with a $5,000 contribution with the remaining $20,000 contributed over a five year period. There is no fee to create a permanent fund. The WCCF charges an annual management fee of 2% to permanent funds, which is assessed quarterly and based upon the average fair market value of the fund over the previous three months. Component funds may be created during a donor’s lifetime or be bequest.

Donors may establish permanent component funds as follows:

Discretionary Funds – support the changing and emerging needs of the community. The annual distribution decision is entrusted to the WCCF Board of Trustees. Discretionary funds are used to support charitable projects benefiting Washington County in the areas of the arts & humanities, community improvement, education, environment & animal welfare, health & fitness, human needs and religion & faith.

Designated Charity Funds – support specific charities identified by the donor in the fund agreement

Field of Interest Funds – support specific causes identified by the donor in the fund agreement

Scholarship Funds – may be merit based or need based. Other criteria may be considered.

Donor Advised Funds – The donor or donor designee may annually participate in the selection of the charities or charitable purposes to benefit from grants of earnings from the fund. The Foundation shall in good faith consider the grant recommendations, but shall not be bound by them. Recommended grants shall be screened by Foundation personnel to ensure compliance with all Federal and State requirements. Grant recommendations deemed to be compliant shall be processed in a timely manner. The Board shall receive for ratification, a complete schedule of all donor advised fund grants issued during the most recent period.

  • Grants from a Donor Advised Fund cannot result in the donor, advisors or any related parties receiving an exchange of goods or services or any personal or material benefit that is not provided to the general public (for example newsletters). Prohibited benefits include tickets, memberships, meals, preferred parking, preferred seating, discounted merchandise or other preferential treatment from a donee organization.
  • Donor Advised Fund grants also cannot be used to satisfy all or a portion of a pre-existing personal pledge or other financial obligation of the donor, advisors, or any related parties. Advisors may, however, recommend that a grant be paid out over multiple years, subject to grant approval and annual due diligence.
  • Provisions of the Pension Protection Act of 2006 prohibit Donor Advised Funds from making grants to individuals such as scholarships, emergency hardship grants or disaster relief grants. This includes checks written directly to an individual or checks written to an entity for the benefit of a specified individual. For example, a grant to a university for the benefit of a designated student is prohibited.
  • Donors, advisors or any related parties may not receive grants, loans, compensation or similar payments (including expense reimbursements) from donor advised funds.

Non-Endowed (Non-Permanent) Component Funds

The Foundation may, from time to time, accept non-permanent funds as a service to the donor and / or the community. The acceptance of non-permanent funds shall be determined by the Foundation on a case by case basis. Common reasons for donors to utilize pass through funds are for anonymity, ease of gift processing when a single gift is intended to support multiple charities, or when the donor wishes to support an identified worthy entity which has not yet received its charitable tax-exempt status. The WCCF may charge an administrative fee of up to 10%, which shall be assessed upon receipt of any and all monies deposited in the fund. Exact fees shall be determined on an individual basis, considering the complexity and time frame of the gift. In most situations, non-endowed funds earn no interest. Discretionary Funds, Designated Charity Funds, Field of Interest Funds, Scholarships Funds, and Donor Advised Funds (all as defined in previous section) may be created as Non-Endowed Component Funds.

Project Funds Board Identified - The Foundation may establish and maintain project funds as non-endowed component funds to meet community needs as identified by the Board.

Project Funds Community Identified - The Foundation may establish and maintain project funds as identified by community groups, as non-endowed component funds. Applications for such project funds shall be directed to the Legal Committee for review and approval. If approved as a project fund, the project may apply to other funding sources under the auspices of the WCCF, but the WCCF is not in any way responsible for fundraising or for providing financial support for the project. WCCF staff must review all fundraising plans and requests for funding. In addition, all copy used in marketing or fundraising must be approved by WCCF staff. As compensation for project support services, the WCCF may charge an administrative fee of up to 10%, which shall be assessed against all contributions. Exact fees shall be determined on an individual basis, considering the scope and time frame of the project. In most situations, project funds earn no interest. The WCCF retains the absolute right to accept or reject any application for project funds so long as such decision is not based on discriminatory or unlawful criteria.

Disaster Relief and Emergency Hardship Funds - The Foundation may establish disaster relief or emergency hardship funds to assist people in time of need and to help our community recover when disasters strike. The Foundation shall issue grants from these funds to approved organizations that provide assistance to individuals and other community organizations.

Tax Credit Funds - The Foundation may establish various non-endowed funds for which donors may receive tax credits, provided that the purpose of the funds is compliant with this Policy. Such funds include, but are not limited to, those funds created to accept contributions through the Pennsylvania Educational Improvement Tax Credit Program and the Opportunity Tax Credit Program. The Foundation shall administer such funds in compliance with the parameters determined by the taxing body providing the tax credit and therefore such funds may not be subject to the Foundation’s Variance Power.

Authority to Accept Gifts

Any of the Foundation’s employees may accept gifts of cash, checks or credit card, provided that the gift is to be used in furtherance of the Foundation’s mission and is fully compliant with this Policy.

The President & CEO or the Director of Development & Public Relations may accept gifts of marketable securities or wire transfer, provided that the gift is to be used in furtherance of the Foundation’s mission and is fully compliant with this Policy.

Any two of current authorized signers shall be authorized to accept gifts of illiquid assets, defined as gifts other than cash, checks, credit card, marketable securities, or wire transfers, provided the gift is to be used in furtherance of the Foundation’s mission and is fully compliant with this Policy. Gifts of illiquid assets which are not fully compliant with all elements of this Policy may only be accepted after consideration and approval of the Board.

Authority to Negotiate and Sign Gift Agreements

The President & CEO is authorized to handle inquiries, negotiate with donors, assemble documentation, and retain expert and technical consultants. Agreements to execute gift agreements or to create component funds shall require two signatures from the Foundation’s current authorized signers.

Purpose of Gifts

The purpose of each gift to the Foundation must fall within the Foundation’s broad charitable purposes. The Foundation cannot accept any gift that will be directly or indirectly subject to any material restriction or condition by the donor that prevents the Foundation from freely and effectively employing the gift assets or the income from such assets to further its charitable purposes. In addition, the Foundation reserves the right to reject any gift that might place the other assets of the Foundation at risk or that is not readily convertible into assets that fall within the Foundation’s investment guidelines. The Foundation may also decline a gift if it is not able to administer the terms of the gift in accordance with the donor’s wishes.

Investment of Gifts

The Foundation reserves the right to make any or all investment decisions regarding gifts to it in accordance with its Investment Policy, as amended from time to time. In making a gift to the Foundation, the donor gives up all rights, title and interest to the assets contributed. In particular, the donor relinquishes the right to choose investments and investment managers, brokers, or to veto investment choices for the contributed assets. However, when the size of a fund warrants separate investment consideration, and when otherwise permitted by law, the Foundation will endeavor to accommodate requests from donors for separate investment of fund assets, or use a particular investment manager, broker or agent in accordance with the Foundation’s Investment Policy, and may consult with donors on investment options for such fund.

Costs of Accepting and Administering Gifts

Generally, costs associated with the acceptance of a gift, such as the donor’s attorneys’ fees, accounting fees, and appraisal and escrow fees, are borne by the donor. The direct costs of administering gifts are generally paid out of the assets of the individual funds. Custodial, investment, and administrative fees are paid from the respective funds in accordance with the Foundation’s guidelines and fee schedules. The Foundation reserves the right to assess administrative fees for all gifts and all component funds.

Gifts Accepted

The Foundation accepts a wide variety of gifts including, but not limited to, the following:

Cash, Checks, Credit Card Payments, Wire Transfer, Bank ACH

Publicly Traded Securities - Gifts of publicly traded securities are routinely accepted by the Foundation. The gift amount shall be determined by the mean of the stock on the day it is received by the Foundation. Gifts of securities may be made electronically to the Foundation through our account at WesBanco Trust & Investment Services. Detailed instructions follow:

Depository Trust Company – Eligible Securities

All assets held at DTC or eligible for deposit to DTC must be deposited and delivered through DTC with the following instructions:

DTC Clearing Number - 2271(WesBanco Trust and Investment Services)

Reason Code - 040 (Free Delivery Settlement)

Agent Internal Account – 1035017925

Closely-Held Stock and S Corporation Stock - Gifts of closely-held and S corporation stock must be reviewed by the Legal Committee. Subject to the Committee’s approval, the Foundation may accept gifts of closely-held or S corporation stock in any amount to any existing fund. Gifts to establish a new component fund at the Foundation must meet the applicable minimum funding requirement. The Foundation may accept gifts of stock in closely-held or S corporation that generate unrelated business income only if certain agreements are reached with the donor and/or the corporation. These include an agreement by the donor that the taxes on the unrelated business income and the Foundation’s associated administrative expenses (e.g., accounting and tax return preparation) will be charged against the fund holding the contributed stock. Further, the donor should agree to contribute additional cash to the fund to pay the foregoing taxes and administrative expenses to the extent there is insufficient cash in the subject fund balance to cover such taxes and expenses. Each gift of closely-held or S corporation stock giving rise to a charitable deduction of more than $5,000 must be appraised in accordance with federal tax law. The donor will be responsible for obtaining such appraisal. Distributions from a component fund that consists entirely of closely-held or S corporation stock are limited to the income generated by the securities less fees assessed by the Foundation and any unrelated business tax imposed thereon. The Foundation will generally seek to redeem or sell closely-held or S corporation stock contributed as soon as possible and generally will not accept gifts that cannot be liquidated within three years.

Life Insurance - Such gifts will be valued on receipt at the cash surrender value. Fully paid policies transferred to the Foundation may be retained or cashed in at the discretion of the Foundation. Special arrangements must be made by the donor for policies on which premiums are still due and owing. Insurance policies owned by the Foundation generally are listed on the Foundation's balance sheet at the cash surrender value.

IRA Charitable Distribution - The Pension Protection Act of 2006 permitted individuals to distribute up to $100,000 from an individual retirement account (IRA) directly to a qualifying charity (WCCF) without recognizing the assets transferred as income. A qualified charitable distribution is money that individuals who are 70½ or older may direct from their traditional IRA to eligible charitable organizations. The provision has a cap of $100,000 for charitable distributions from individual IRAs each year. Individuals may exclude the amount distributed directly to the WCCF from their gross income.

IRA Bequest – Providing for an IRA bequest is accomplished by designating the WCCF as a beneficiary of the IRA. The designation may be for the full amount or a percentage of the IRA. Many individuals are surprised to learn that heirs (other than a spouse) could pay as much as 77 cents on every dollar in accumulated income tax and estate taxes for bequests from a traditional IRA — more tax than most other assets. When IRA assets are bequeathed to the WCCF, the Foundation will receive 100% of the amount. For this reason, many professional advisors urge their clients to turn to their IRAs first for charitable bequests. Assets that will be taxed less at death can then be targeted for heirs.

Bequest – The Foundation works closely with area attorneys to assist clients who wish to make a testamentary gift to the WCCF for its general charitable purposes, to add to an existing fund or to create a new fund. Bequests are particularly encouraged for the Acorn Fund, the Foundation’s primary discretionary grant-making fund. Sample language is as follows: "I give and bequeath to the Washington County Community Foundation, Inc., EIN #25-1726013, (a sum of $ or percentage of estate) to (detail the charitable cause or charities to benefit)."

Real Estate – The Foundation may, after thorough due diligence, choose to accept gifts of real estate. See Policy on Real Estate Gifts.

Charitable Gift Annuity – A charitable gift annuity (CGA) is an agreement in which an individual transfers assets to a charity (WCCF) in exchange for a lifetime income stream and a tax benefit. The primary goal of a CGA is to benefit a charity (WCCF). A CGA provides the vehicle for donors to support their favorite charitable causes in the future while receiving a tax deduction today and maintaining an income stream for the rest of their lives. The annuity rates for the program are the suggested uniform gift annuity rates of the American Council on Gift Annuities. Payments may begin immediately or be deferred. The minimum age for a WCCF gift annuity is 55 and the minimum contribution is $25,000. At the completion of the gift annuity term, the residuum (remainder) can be used to support the general purposes of the WCCF, to create a new fund at the WCCF, add to an existing fund at the WCCF, or to provide a lump sum payment to another qualified charity. The Foundation has contracted with WesBanco Trust & Investment Services to administer its CGA program. Charitable Remainder Trust - A charitable remainder trust (CRT) is a trust that provides for a specified distribution, at least annually, to at least one non-charitable income recipient for a period specified in the trust instrument, with the remainder interest paid to at least one charitable beneficiary (WCCF). The Foundation may elect to serve as trustee for CRTs, or work with the donor to obtain another trustee.

Charitable Lead Trust - A charitable lead trust (CLT) is a trust designed to provide income payments to at least one qualified charitable organization (WCCF) for a period measured by a fixed term of years, the lives of one or more individuals, or a combination of the two; after which, trust assets are paid to either the grantor or to one or more non-charitable beneficiaries named in the trust instrument. The Foundation may elect to serve as trustee for CLTs, or work with the donor to obtain another trustee.

Special Consideration for Gifts to Donor Advised Funds - The Pension Protection Act of 2006 amended section 4943 of the Internal Revenue Code to limit ownership of closely-held business interests in a donor advised fund. A fund’s holdings, together with the holdings of disqualified persons (donor, advisor, members of their families and businesses they control) may not exceed any of the following: 20% of the voting stock of an incorporated business; 20% of the profits interest of a partnership, joint venture, or the beneficial interest in a trust or similar entity; Any interest in a sole proprietorship. These limitations do not apply if the donor advised fund holds an interest that does not exceed two percent of the voting stock and two percent of the value of the business. Donor advised funds receiving gifts of interests in a business enterprise have five years from the receipt of the interest to divest holdings that are above the permitted amount, with the possibility of an additional five years if approved by the Secretary of the Treasury. To prevent a violation of these rules, it is the Foundation’s policy is to divest itself of such holdings within five years from the date the Foundation acquired the asset. If that is not possible, the asset will be transferred to a new or existing fund that is not an advised fund.

Other Types of Property - WCCF will accept other gifts of property including but not limited to automobiles, pleasure vehicles, art work, etc., consistent with its mission and purpose. WCCF shall have the absolute right to refuse any gift of property for reasons WCCF deems prudent and in the best interest of WCCF. Unless the property is to be used in furtherance of the WCCF’s mission or another pre-defined and acceptable charitable purpose, the WCCF shall seek to quickly convert gifts of property to cash for further use by the Foundation. It shall be the policy of WCCF to strictly limit the use of such donated property until sale of the property. Under no circumstances will the donated property be used for the personal benefit of any Trustee or Employee of WCCF.

Substantiation Requirements for Gifts

While the legal requirement for substantiating the value of the contribution are primarily the responsibility of the donor, it shall be the policy of WCCF to provide the donor and his agents with whatever assistance and guidance they may need to fulfill IRS requirements.

Cash Contributions - WCCF shall acknowledge in writing receipt of all cash contributions in a timely fashion, indicating name of the donor, the date of the contribution and the amount of the contribution.

Property Contributions - WCCF shall acknowledge in writing receipt of all contributions of real or personal property, indicating: the name of the donor, the date and location of the contribution, and a description of the property in detail reasonably sufficient under the circumstances. In the case of securities, the name of the issuer, the type of security and whether the security is regularly traded on a stock exchange or on an over-the-counter market. If the fair market value of the contribution is readily available or can be computed using IRS tables, WCCF staff shall include the value of the charitable deduction, the method used to determine the fair market value, and if the valuation was determined by appraisal, a copy of the original report by the appraiser. The terms of any agreement or understanding entered into with the donor, which relates to the use, sale or other disposition of the contributed party.

Contributions in Excess of $500 - If the claimed value of all property contributions exceeds $500 (regardless of their individual values), the donor must complete Form 8283, “Non-cash Charitable Contributions,” and attach it to his tax return. WCCF staff shall sign Part I, “Donee Acknowledgment.”

Qualified Appraisal Requirements - When a donor makes a contribution of property (other than cash or publicly traded securities) with a value in excess of $5,000, certain additional requirements must be met by the donor. A qualified appraisal shall be obtained by the donor for the property contributed. An appraisal summary shall be completed and attached to the tax return on which the deduction is first claimed. Records for property contributions shall be maintained. WCCF staff shall assist the donor in hiring an appraiser who is qualified to submit an appraisal acceptable to the Internal Revenue Service. WCCF staff shall mail to the appraiser, selected by the donor, the information on Qualified Appraisal and the IRS Form 8283, which is to be completed by the appraiser and returned to WCCF along with the copy of the appraisal. WCCF staff shall include the Appraisal Summary Form 8283 with other materials pertaining to the gift when they are mailed to the donor for his tax records.

The President & CEO shall be authorized to sign IRS Form 8283 on behalf of the charity. It is understood that this does not represent WCCF’s concurrence in the value placed on the contributed property by the qualified appraiser. It simply represents the WCCF’s acknowledgment that the property described in the summary has been received by the charity on the specified date. The signature also acknowledges that the President understands the additional reporting requirement (Form 8282) to which WCCF is subject should the property be sold, exchanged or otherwise disposed of within two (2) years after the date it was received. Qualified appraisals - The information to be included in a qualified appraisal is the same as that which would be obtained in an ordinary appraisal, with certain exceptions.

The following is a checklist of requirements to substantiate the gift value of a charitable contribution. The date of the appraisal is not more than 60 days prior to the date of the contribution. It is prepared, signed and dated by a qualified appraiser. The property is described in sufficient detail so that a person not familiar with the donated property would conclude that the appraised property and donated property are one and the same property. In the case of tangible personal property, a description of the property’s physical condition is provided. The terms of any agreement or understanding entered into (or expected to be entered into) by or on behalf of the donor are listed, which relates to the charity’s use, role or other disposition of the property, including any agreement that: Restricts temporarily or permanently the charity’s right to use or dispose of the donated property, Reserves to or confers upon any individual any right to the income from the donated property, the possession of the donated property, the right to buy the property, in the case of stock the right to vote the stock, or earmarks the property for a particular use. The name, address and taxpayer identification number (TIN) of the qualified appraiser and also the name, address and TIN of any individual, partnership or corporation, if any, that employs or engages the qualified appraiser. The qualifications of the qualified appraiser who signs the appraisal, including the appraiser’s background, experience, education and membership in any professional appraisal associations. A statement that the appraisal was prepared for income tax purposes. The date or dates on which the property was valued. The appraised fair market value of the property on the date or expected date of the contribution. The method of valuation used to determine the property’s fair market value. The specific basis for the valuation, if any, such any specific comparable sale. A description of the fee arrangement between the donor and the appraiser.

Date of Adoption: June 27, 2019