AIGA gift acceptance policy
AIGA, a not for profit organization organized under the laws of the State of New York, encourages the solicitation and acceptance of gifts to AIGA for purposes that will help AIGA to further and fulfill its mission. The following policies and guidelines govern acceptance of gifts made to AIGA or for the benefit of any of its programs.
The mission of AIGA is to advance design as a professional craft, strategic advantage and vital cultural force.
Purpose of policies and guidelines
The board of directors of AIGA and its staff solicit current and deferred gifts from individuals, corporations and foundations to secure the future growth and mission of AIGA. These policies and guidelines govern the acceptance of gifts by AIGA and provide guidance to prospective donors and their advisors when making gifts to AIGA. The provisions of these policies shall apply to all gifts received by AIGA for any of its programs or services.
Use of legal counsel
AIGA shall seek the advice of legal counsel in matters relating to acceptance of gifts when appropriate. Review by counsel is recommended for:
- Closely held stock transfers that are subject to restrictions or buy-sell agreements
- Documents naming AIGA as trustee
- Gifts involving contracts, such as bargain sales or other documents requiring AIGA to assume an obligation
- Transactions with potential conflict of interest that may invoke IRS sanctions
- Other instances in which use of counsel is deemed appropriate by the executive committee
Conflict of interest
AIGA will urge all prospective donors to seek the assistance of personal legal and financial advisors in matters relating to their gifts and the resulting tax and estate planning consequences.
Restrictions on gifts
AIGA 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. AIGA will not accept gifts that are too restrictive in purpose. Gifts that are too restrictive are those that violate the terms of the corporate charter, gifts that are too difficult to administer or gifts that are for purposes outside the mission of AIGA. All final decisions on the restrictive nature of a gift, and its acceptance or refusal, shall be made by the executive committee of AIGA.
Review of gifts
The executive committee of the AIGA board also serves as a gift acceptance committee, charged with the responsibility of reviewing all gifts made to AIGA, properly screening and accepting those gifts and making recommendations to the Board on gift acceptance issues when appropriate.
The executive committee may make special advisors ex officio members of the committee when it sits as a gifts acceptance committee.
Types of gifts
The following types of gifts are acceptable:
- Frequent flier miles or award credits
- Tangible personal property
- Real estate
- Remainder interests in property
- Oil, gas and mineral interests
- Life insurance
- Charitable remainder trusts
- Charitable lead trusts
- Retirement plan beneficiary designations
- Life insurance beneficiary designations
The following criteria govern the acceptance of each gift form:
Cash is acceptable in any form. Checks shall be made payable to AIGA and shall be delivered to AIGA administrative offices.
Tangible personal property
All other gifts of tangible personal property shall be examined in light of the following criteria:
- Does the property fulfill the mission of AIGA?
- Is the property marketable?
- Are there any undue restrictions on the use, display or sale of the property?
- Are there any carrying costs for the property?
The final determination on the acceptance of other tangible property gifts shall be made by the executive committee of AIGA.
Publicly traded securities
Marketable securities may be transferred to an account maintained at one or more brokerage firms or delivered physically with the transferor’s signature or stock power attached. As a general rule, all marketable securities shall be sold upon receipt unless otherwise directed by the executive 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 executive committee of AIGA.
Closely held securities
Closely held securities, which include not only debt and equity positions in non-publicly traded companies but also interests in LLPs and LLCs or other ownership forms, can be accepted subject to the approval of the executive committee of AIGA. However, gifts must be reviewed prior to acceptance to determine that:
- There are no restrictions on the security that would prevent AIGA from ultimately converting those assets to cash,
- The security is marketable, and
- The security will not generate any undesirable tax consequences for AIGA.
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 final determination on the acceptance of closely held securities shall be made by the executive committee of AIGA and legal counsel when necessary. Every effort will be made to sell non-marketable securities as quickly as possible.
Gifts of real estate may include developed property, undeveloped property or gifts subject to a prior life interest. Prior to acceptance of real estate, AIGA shall require 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, AIGA shall retain a qualified inspection firm to conduct an environmental audit. The cost of the environmental audit shall generally be an expense of the donor.
When appropriate, a title binder shall be obtained by AIGA prior to the acceptance of the real property gift. The cost of this title binder shall generally be an expense of the donor.
Prior to acceptance of the real property, the gift shall be approved by the executive committee of AIGA and by AIGA’s legal counsel. Criteria for acceptance of the property shall include:
- Is the property useful for the purposes of AIGA?
- Is the property marketable?
- Are there any restrictions, reservations, easements or other limitations associated with the property?
- Are there carrying costs, which may include insurance, property taxes, mortgages or notes, etc., associated with the property?
- Does the environmental audit reflect that the property is not damaged?
Remainder interests in property
AIGA will accept a remainder interest in a personal residence, farm or vacation property subject to the provisions detailed above. 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, AIGA may use the property or reduce it to cash. Where AIGA 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
AIGA 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 executive committee of AIGA and by legal counsel. Criteria for acceptance of the property shall include:
- Gifts of surface rights should have a value of $50,000 or greater.
- Gifts of oil, gas and mineral interests should generate at least $5,000 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 is rarely accepted. A working interest may only be accepted where when there is a plan to minimize potential liability and tax consequences.
- The property should undergo an environmental review to ensure that AIGA has no current or potential exposure to environmental liability.
AIGA must be named as both beneficiary and irrevocable owner of an insurance policy before a life insurance policy can be 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, AIGA 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, AIGA may:
- Continue to pay the premiums,
- Convert the policy to paid up insurance, or
- Surrender the policy for its current cash value.
Charitable gift annuities
AIGA may offer charitable gift annuities. The minimum gift for funding is $5,000. AIGA’s president may make exceptions to this minimum. The minimum age for life income beneficiaries of a gift annuity shall be 55. Where a deferred gift annuity is offered, the minimum age for life income beneficiaries shall be 45. 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. AIGA’s president may approve exceptions to this payment schedule. AIGA will not accept real estate, tangible personal property or any other illiquid asset in exchange for current charitable gift annuities. AIGA 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 five-year period before the commencement of the annuity payment date, the value of the property is reasonably certain and the president of AIGA 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 AIGA’s general endowment funds or to such specific fund as designated by the donor.
Charitable remainder trusts
AIGA may accept designation as remainder beneficiary of a charitable remainder trust with the approval of the executive committee of AIGA. AIGA will not accept appointment as Trustee of a charitable remainder trust.
Charitable lead trusts
AIGA may accept a designation as income beneficiary of a charitable lead trust. The board of AIGA will not accept an appointment as Trustee of a charitable lead trust.
Retirement plan beneficiary designations
Donors and supporters of AIGA will be encouraged to name AIGA as beneficiary of their retirement plans. Such designations will not be recorded as gifts to AIGA 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.
Donors and supporters of AIGA will be encouraged to make bequests to AIGA under their wills and trusts. Such bequests will not be recorded as gifts to AIGA 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.
Life insurance beneficiary designations
Donors and supporters of AIGA will be encouraged to name AIGA as beneficiary or contingent beneficiary of their life insurance policies. Such designations shall not be recorded as gifts to AIGA until such time as the gift is irrevocable. Where the gift is irrevocable, but is not due until a future date, the present value of that gift may be recorded at the time the gift becomes irrevocable.
Securing appraisals and legal fees for gifts to AIGA
It will be the responsibility of the donor to secure an appraisal (where required) and independent legal counsel for all gifts made to AIGA.
Valuation of gifts for development purposes
AIGA will record a gift received by AIGA at its valuation for gift purposes on the date of gift.
Responsibility for IRS filings upon sale of gift items
The executive committee of AIGA is responsible for filing IRS Form 8282 upon the sale or disposition of any asset sold within two years of receipt by AIGA when the charitable deduction value of the item is more than $5,000. AIGA must file this form within 125 days of the date of sale or disposition of the asset.
Acknowledgement of all gifts made to AIGA and compliance with the current IRS requirements in acknowledgement of such gifts shall be the responsibility of the board of AIGA.