nonprofit donation

When your nonprofit is just getting started, any nonprofit donation is a welcome donation, right?

It’s hard to imagine turning down a gift.

But trust me, there may be times when you don’t want to say “yes” to the donation being offered.

The vast majority of donations your organization receives are simple, cash transactions.

You either get a credit card donation through your organization’s website or you receive personal checks from donors sent to your organization’s office or P.O. box.

These gifts are simple and easy to deposit and use.

And hooray because you need cash to pay for all your operating expenses!

But from time to time, a donor will offer you something else: stock, bonds, exchange-traded funds (ETFs), cryptocurrency, an acre of undeveloped land, a house, a boat, a car, a painting, a sculpture, a rare book, a musical instrument, or something else that makes you scratch your head.

Should you say “yes” and take the donation?

Are there times that you could actually do your nonprofit harm by taking a non-cash donation?

Let’s look at some kinds of nonprofit donations that you may be offered and what you need to know about them so you’re better prepared to make that decision.

Donations Aren’t Always Simple

Sometimes donations come with complications.

Donations via third-party platforms like Facebook, online donation tools like QGiv or Little Green Light, and employer matching platforms like Benevity, aren’t always straightforward.

Sometimes you don’t know who the original donor is and it’s difficult or even impossible to thank them. Facebook is a great example of that.

Sometimes checks come from a donor-advised fund (DAF) that requires logging in to see who made the gift. It’s an extra step that you must take to properly thank and steward the donor.

Foundations and companies often send checks, though sometimes they want to make a deposit directly into your bank account via an electronic funds transfer (EFT). You need a simple process for that.

Most of the time, these more complicated donations are fine to accept, they just take a little more work to manage.

Then there are sticky situations, like when a gift comes from an organization or an individual, but the organization or individual has been in the news under scandalous circumstances. Maybe they plan to use their donation to garner some good will to help offset their scandal. Do you really want to be associated with bad publicity and have your nonprofit’s name drug into a negative situation?

Or maybe the donation comes from a corporation whose work conflicts with your nonprofit’s values. I know of a faith-based rescue mission who wrestled with accepting a donation from the local strip club for its domestic violence program. You can see how that might be a problem for some of their devout donors to know where the money came from.

Or maybe the gift comes with strings attached, such as the expectation that you include the company’s logo on your website’s home page.

Here’s where a Gift Acceptance Policy can help (more on that in a moment). You don’t want to be on the spot to make a decision about any donation that looks complicated. You might say to that donor “That’s a generous offer, but our policy says I need to take this sort of donation to my Board for approval.” Now you’re off the hook.

But let’s dig deeper. When should you absolutely say “no” and how do you do it without offending the donor?

There are many types of gifts, many ways donors want to give you gifts, and many reasons it might be in your organization’s best interest to decline a gift.

Let’s start by taking a look at all the different types of donations, the processes you need to have in place to receive donations from so many third-party platforms, and the all-important Gift Acceptance Policy that makes it easier to determine when and how to graciously say ‘no thanks.’

How to accept (and evaluate) any type of nonprofit donation 

There are three types of nonprofit donations you might receive: standard, nonstandard, and in kind.

Let’s explore each type of donation and the myriad of ways people, organizations, and corporations may try to give you a nonprofit donation.
 
 
Standard donation: A standard donation is a gift that can be easily liquidated and used to run your organization.

The most common form is cash, checks, and credit cards, and I’ll bet most of your fundraising results in these kinds of donations. Some donations might arrive from third-party platforms like Facebook or via donor-advised funds, but they’re still cash.

A standard donation can also be something that you can liquidate easily for cash to fund your operations. This includes stocks, bonds, and other types of securities. Even cryptocurrency is a standard donation! You can convert it to cash right away and spend it!

With a standard donation, you need processes in place to make sure you can receive the gift in the way the donor wishes to give it to you.
 
 
1. Stocks and bonds: Accepting stocks and bonds is easy. Simply set up a brokerage account with any brokerage firm such as Charles Schwab or Fidelity and have the donor’s broker talk to your broker to make the donation. If you can find a local broker who loves your cause, they’ll help you manage the securities and maybe help in other ways like suggesting your nonprofit to their other clients who are interested in making charitable gifts.

Work with your Board to create an Investment Policy that will determine what you do with the stock and bond gifts you receive. Most organizations sell right away to avoid losses, but others prefer to save certain securities as savings for the future. Either way, your Investment Policy will outline how donated stocks and bonds are handled.
 
 
2. Third-party donations: Gifts that pass through third-party platforms such as Benevity can be addressed through a simple procedure. Benevity is a pass-through many companies use to distribute employee matching gifts. You need to register with the platform and provide some information, such as proof of 501(c)3 status and bank details. Then you can start receiving funds, often via direct deposit.

Other third-party platforms are all-in-one fundraising tools like Snowball and crowdfunding platforms like GoFundMe. Signing up for these platforms, like Benevity, is usually straightforward. These are usually simple to use, but instead of getting lots of individual donations, you get one larger one each month containing all the gifts from that month. And sometimes these are slow to process meaning you might have to wait a while to get the funds.

Amazon Smile is also super-simple but unless you have lots of people making big purchases, the money you receive through Amazon Smile will likely be super small.

Facebook, however, is the giant among third-party fundraising platforms, and it requires a decision. At the time of this writing (hey, things change fast!), you can register with Facebook and receive funds directly from the platform or wait several weeks and get a check from Facebook’s third-party partner: Network for Good.

Some organizations choose not to register with Facebook and provide their bank information, due to the sheer size of Facebook, lack of customer service, concerns about data breaches, or general distrust of Facebook and its parent company, Meta.

Signing up to accept donations from third-party platforms can be a tedious task, just because there are so darn many of them. But, in most cases, it’s a no-brainer to participate. Your organization is simply receiving donations that have been passed through an intermediary.
 
 
3. Donor-advised funds (DAF): Sometimes when you receive a check in the mail, it comes from a bank, but the check does not have the donor’s name or signature on it. The donor’s name is on a letter explaining that the donation is from their donor-advised fund.

Here’s how that works: A donor sets up a DAF with a bank or community foundation to give their money to nonprofit organizations and get a tax benefit. It can be confusing sometimes to determine if the check is from a DAF or a family foundation, as the DAF could have a name that sounds like a family foundation. The letter accompanying the check will state that the gift is from a DAF.

When you send a thank-you note for a gift received through a DAF, you do not include tax language, as the donor has already received the tax benefit from the bank. Simply thank the donor for their generous gift.

Record the donation in your CRM platform as being from the bank. Then soft-credit the donor. Your CRM platform has instructions on how to do this.

With a DAF, there is nothing to sign up for and nowhere to register. Yea! These gifts are usually large and exciting and the only downside is that there isn’t a list of DAFs that you can market to.

Donor-advised funds have proliferated over the years, and you can expect to receive more of these checks from donors.
 
 
4. Cryptocurrency: Believe it or not, receiving a gift of cryptocurrency is not difficult. You don’t have to understand Bitcoin to receive a donation of Bitcoin.

To accept a gift of cryptocurrency, such as Bitcoin, set up an account just like you would with a brokerage with a third-party that is set up to process cryptocurrency donations, such as The Giving Block or Engiven. Through the third-party, you can convert the crypto gift to cash immediately or keep it in crypto form.
 
 
5. Miscellaneous: Even life insurance policies, annuities, IRAs and other types of gifts should be straightforward to accept, as long as they can be liquidated. Consult your bank or broker on how to do so.

Having money coming in from so many directions can be confusing at times. But, in the end, there really is no difference between a gift of stock and a check sent through the mail. Either way, it’s money your organization can use to run programs and change lives.
 
 
Nonstandard donation: A nonstandard donation is one that cannot be easily liquidated and converted into cash that your organization can spend.

And it’s not something your organization can use.

An offer of this type of gift puts your organization in the situation of deciding whether to accept the gift, and often the only common-sense decision is to politely decline.

Stories abound of nonprofits being offered condemned property, obscure collectibles with no known market, and valuable art that requires special care just to handle and store prior to selling. I know of a nonprofit that received an offer of a piece of property that upon closer inspection had significant hazardous materials buried on it and would have been very costly to clean up.

It’s hard to turn down a gift, especially when the donor has given you money in the past and might give more in the future. You might be tempted to accept the gift just to maintain a relationship with the donor. Don’t do it! It’s not your organization’s role to be a dumping ground for your donor’s unwanted items.

When considering a gift your organization can neither use nor immediately and easily sell, ask what is in it for your organization. Often the answer is nothing. Though the gift might seem cool to own, it’s only worth accepting if it will benefit the people or animals your organization works with. 
 
 
nonprofit donationIn-kind donation: An in-kind donation is an item or service a donor offers your nonprofit, thinking you could use it.

For example, a computer or a printer for your office, a musical instrument if you work with children, or a bed if you help homeless people move into homes.

Before you say yes to an in-kind donation, make sure your organization can use it right away. If you can’t use it today but might be able to use it a few months or years from now, consider the cost and hassle of storage.

Can your organization afford to maintain and repair the item? Who will move the item? If your organization is expected to pick up and transport the item, is there a deadline to do so?

If the gift is a computer or other type of technology, is it still relevant? Does it work? Can it be repaired if it breaks? Can you get replacement parts?

Donors are usually well-intentioned when they offer a nonprofit an in-kind donation. But they don’t always think about the donation from the organization’s perspective.

As with a nonstandard donation, if your organization does not have an immediate use for the gift, don’t take it.

A better way to leverage in-kind donations for your nonprofit is to ask for the items you need. Create a wishlist on Amazon, Target, or other retail store, and circulate the link so your supporters can purchase the items you need. Or circulate a wish list of gently used items you can accept. Be very specific, and only take what you can use and store.

How do you navigate the choppy waters of donor relations when a gift your donor is offering isn’t something your organization can use or easily sell?

You do so with a Gift Acceptance Policy!

How to craft a Gift Acceptance Policy so you’ll be covered no matter what unexpected gift you get offered

A Gift Acceptance Policy gives you a reason to pause before you say “yes” to anything other than a standard donation.

It takes you out of the hot seat so you’re never trying to make a decision in-the-moment about what to accept or not. It also takes Board members and volunteers out of that spot, too.

With a Gift Acceptance Policy in place, you have time and space to carefully evaluate the offered donation to decide if it’s something you want or not. Or if your policy declines a specific type of donation like property, it saves you the energy and strife of considering every land offer on a case-by-case basis. Yet crafting and adopting a Gift Acceptance Policy is something nonprofits postpone or decline to do. Why?

Well, crafting a policy forces you to think about things you have a hard time imagining. “No one is going to offer us a boat!”

Yeah, but you don’t really know what the future will bring, now do you?

When you use a policy, you’ll be able to respond quicker and more confidently to an offer instead of making the donor wait around while you figure out if you can accept her antique dining room table.

The best time to adopt a Gift Acceptance Policy is before a donor tries to give you a boat. And the best time to consult your Gift Acceptance Policy is anytime you receive a nonprofit donation or an offer of a donation that falls outside of what you’re used to accepting or that causes you any discomfort.

You may still have to evaluate some nonprofit donations as they come up. But having a policy will give you a jumping off point.

Here is an example of a Gift Acceptance Policy, adapted from examples provided by the National Council of Nonprofits, for informational purposes only. Work with your Board and your attorney on a policy tailored to your organization’s needs.

  1. [Organization Name] accepts and solicits donations that are needed for the organization to fulfill its mission.
  2. Donations will generally be accepted from individuals, partnerships, corporations, foundations, government agencies, and other entities. 
  3. In the course of its regular fundraising activities, [Organization Name] will accept donations of money; marketable securities that may be transferred electronically to an account maintained at [brokerage firm name]; and certain in-kind items and services that the organization can use and manage. 
  4. Certain types of gifts must be reviewed by the Board prior to acceptance due to the special liabilities they may pose for [Organization Name]. Examples of gifts that will be subject to board review include real estate and certain types of personal property. The Board’s decision is final.

 
In crafting your organization’s policies, consider the types of gifts you might be offered and whether the gift should be subject to Board review. Include language that makes it clear you only accept gifts that your organization can use to fulfill your mission.

Most Gift Acceptance Policies maintain a friendly tone for the sake of donors. Avoid legalese and negative language. Keep the policy simple and direct.

How to politely decline a gift

nonprofit donation

There are times when it’s not a good idea to accept a gift.

What if your Board considers the almost new minivan a donor is offering and decides to decline the offer due to the donor’s wish that the van not be sold … ever?

What if your Board declines a piano a donor is offering because of the cost of moving the piano and the tight deadline in which the donor wants the piano picked up?

What if your Board rejects an offer of a piece of property in another state because a review of the property indicates no buyer interest?

In cases like this, it shouldn’t be hard to say ‘no.’ If the donor contacted you by phone, call the donor to let them know the Board has determined that the organization cannot accept the gift, in accordance with your Gift Acceptance Policy. By letting the donor know you did not personally make the decision, it’s easier to decline the gift without going into detail. And it’s not personal – it’s policy.

If the donor offered the gift via email, it’s fine to send an email. Thank the donor for the offer, politely decline, and include information on upcoming events or volunteer opportunities to let the donor know you would love for them to remain involved with your organization’s work.

What if the situation is more delicate? What if the Board decides to turn down a major gift because the donor has been charged with a crime?

What if the Board declines a gift from a corporation because its policies are deemed harmful to the homeless families you serve? Or the CEO is a known big game hunter which goes against your beliefs as an animal welfare organization?

What if the Board decides to decline a grant from a foundation, because the organization has a statement in its values that goes against your organization’s values? For example, the donor organization states on its website that marriage is only between a man and a woman, yet your organization has volunteers, employees, and Board members in same-sex partnerships.

In these situations, it’s best for the Board chair to call the donor and let the donor know how much the Board appreciates the donor’s desire to support the organization. Then let the donor know the organization is declining the gift and state the reason why in a brief and forthright manner. Do not go into detail or discuss the opinions of individuals on the Board.

Hopefully your organization will never have to decline a gift based on misaligned values. But if the situation does arise, you should be prepared for it.

I have never heard an organization express regret for turning down a donation. Over the years, I have heard several nonprofit leaders express regret for accepting a donation they shouldn’t have.

Your integrity is worth more than any donation. Get comfortable saying ‘no, thank you.’

The Bottom Line

Who knew accepting a nonprofit donation could be so complicated?

The good news is that the vast majority of the donations you receive will be through your website via a credit card or in the form of personal checks. That is how most donors give today.

Considering gifts that don’t align with your organization’s needs is something most nonprofit leaders deal with only occasionally. But when you need to consider an unusual gift, you want to be ready.

By adopting a Gift Acceptance Policy and building a nonprofit that can easily accept a range of gifts while responding promptly to offers of real estate, vehicles, and other large items, you will gain a reputation of being professional and a pleasure to work with.

Donors who have a positive experience when working with your organization will have a high likelihood of coming back again and again. By being agile in your ability to accept a range of donations, you’ll bring in more money and change more lives. And that’s what it’s all about!