Developing Fundraising Policies and Procedures

AFP’S READY REFERENCE SERIES

Best Practices for Accountability

and Transparency

Developing

Fundraising

Policies and

Procedures

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Developing

Fundraising

Policies and

Procedures

By Barbara L. Ciconte, CFRE

Updated by R. Scott Fortnum, ACFRE

Best Practices for Accountability

and Transparency

AFP’s Ready Reference Series

Developing Fundraising Policies and Procedures:

Best Practices for Accountability and Transparency

By Barbara L. Ciconte, CFRE

Updated by R. Scott Fortnum, ACFRE

transmitted in any form or medium or by any means electronic or

mechanical (including photocopying, recording, or by an information

storage and retrieval system) without permission in writing from the

Association of Fundraising Professionals

4300 Wilson Boulevard, Suite 300

Arlington, VA 22203

www.afpglobal.org

AFP’s Ready Reference Series

Acknowledgments

This is the ﬁrst update of AFP’s Ready Reference Series title

Developing Policies and Procedures: Best Practices for Accountability

and Transparency, originally published in 2007. The Ready Reference

Series is meant to be a comprehensive and easily digestible resource

on the major topics of fundraising. AFP wishes to thank those who

made this series possible. First and foremost, we are grateful to the

author, Barbara L. Ciconte, for her hard work and generous sharing of

her experience and expertise. We also recognize the work of R. Scott

Fortnum in updating this text. Thanks also to the task force that helped

update the series: D.C. Dreger, ACFRE; Nina Berkheiser, CFRE;

Thomas Campbell, ACFRE; Peggy Calhoun, ACFRE; and

R. Scott Fortnum, ACFRE.

AFP’s Ready Reference Series

Table of Contents

Why Fundraising Policies and Procedures Are Necessary .......... Page 1

Gift Policies and Procedures .....................................................Page 7

Donor Policies and Procedures .............................................. Page 23

Complying With Governmental Regulations .......................... Page 33

How to Proceed .................................................................... Page 37

Resources

References and Resources ...................................................... Page 39

Appendix A: AFP Code of Ethical Standards ........................... Page 41

Appendix B: APRA Statement of Ethics ..................................Page 45

Appendix C: Sample Pledge Commitment Form ..................... Page 49

Appendix D: Sample Gift of Personal Property Policy ............ Page 51

A Donor Bill of Rights ............................................ Inside back cover

Sample Documents

Fundraising Policies and Procedures Checklist ..........................Page 2

Gift-Acknowledgment Policy and Procedures ............................Page 9

Gift-Entry and Recording Policy and Procedures ....................Page 10

Gift-Acceptance Policy and Procedures ...................................Page 11

In-Kind Gifts Policy ................................................................ Page 15

Developing Fundraising Policies and Procedures

XYZ Organization Principles for Corporate Support

or Donations ......................................................................... Page 19

Donor Recognition Policy, Brief Version ................................. Page 24

Donor Naming Opportunities ................................................Page 27

Donor Privacy Policy, Brief Version .......................................... Page 30

Donor Privacy Policy ..............................................................Page 30

Conﬁdentiality Policy ..............................................................Page 31

Solicitation Disclosure Statement ............................................Page 34

Direct-Mail Disclaimer ............................................................Page 34

Language for Acknowledgment Letter and Receipt .................Page 35

Language for Special Event Contribution ...............................Page 35

AFP’s Ready Reference Series

Why Fundraising

Policies and

Procedures Are

Necessary

In recent years, with the overwhelmingly generous response of the

public to global and national tragedies and disasters, coupled with

the ongoing needs of non-disaster relief organizations, fundraising

challenges have multiplied. In addition, the nonproﬁt sector has faced

increased yet appropriate scrutiny by government regulators and

individual donors alike. In the United States, the passage in 2002 of the

Sarbanes-Oxley Act created an environment of greater self-examination

and accountability within nonproﬁts. This American law, while focusing

on corporate governance and ﬁnancial accounting practices, has led

many nonproﬁts around the world to review, evaluate, and change the

ways they operate.

POLICY: AS DEFINED BY THE AFP FUNDRAISING

DICTIONARY

n.—as adopted by a governing board, broad and general statements that

are guiding principles designed to inﬂuence and determine the decisions

and actions of an organization

Nonproﬁt leaders must understand that public trust is vital to the

sector’s mission, and their organizations must be transparent and

accountable to donors, stakeholders, government agencies, and future

patrons to succeed. Research and media reports throughout the world

suggest the importance of donor trust and indicate a direct correlation

between public conﬁdence in an organization and its level of support.

Developing Fundraising Policies and Procedures

Key to gaining that donor trust is keeping to established guidelines for

handling donations and other business practices. Written policies and

procedures for nonproﬁt organizations’ development-related activities

are critical not only for showing they adhere to ethical fundraising

practices but also for enhancing relations with donors and funders and

improving development staff efﬁciency and effectiveness.

This booklet offers samples of key fundraising policies and procedures

that nonproﬁt organizations should consider adapting and using for

their fundraising programs. Organizations also should have other

policies and procedures related to board governance, conﬂicts of

interest, stafﬁng, and working with outside vendors and contractors, but

these are beyond the scope of this publication.

SAMPLE DOCUMENT

FUNDRAISING POLICIES AND PROCEDURES

CHECKLIST

Is your organization registered where it raises funds?* Yes ____ No ____

Does your organization have:

1. A gift solicitation and acceptance policy? Yes ____ No ____

2. A procedure for processing gifts and maintaining database

accuracy? Yes ____ No ____

3. A policy and/or procedure for:

o gifts of securities? Yes ____ No ____

o gifts of personal property? Yes ____ No ____

o gifts of real estate? Yes ____ No ____

o gifts of intellectual property? Yes ____ No ____

o restricted gifts? Yes ____ No ____

o establishing endowments? Yes ____ No ____

o planned/deferred gifts? Yes ____ No ____

o accepting in-kind gifts? Yes ____ No ____

AFP’s Ready Reference Series

4. A donor privacy policy? Yes ____ No ____

5. A donor recognition policy? Yes ____ No ____

6. A written procedure for entering and recording gifts?

Yes ____ No ____

7. A written procedure for acknowledging gifts? Yes ____ No ____

8. Internal Revenue Service/Canada Revenue Agency language on

receipts? Yes ____ No ____

9. A state disclosure statement on letters? (U.S. requirement for

certain states) Yes ____ No ____

10. A charitable registration number publicly available? (Canada only)

Yes ____ No ____

11. A permission policy for sending email communications to

members/donors? Yes ____ No ____

12. A policy for conducting new special events? Yes ____ No ____

* This is a complex area requiring an increasingly greater level of attention from

nonproﬁts, paid fundraisers, and fundraising consultants. In the United States,

charitable organizations may be required to register in states where they raise funds, but

requirements vary from state to state. In Canada, although charities can be incorporated

provincially, a fundraising organization must register a charitable registration number

or business number (BN) with the federal Canada Revenue Agency (CRA). If you are

uncertain about state/provincial and federal registration issues potentially affecting your

organization, consult with a qualiﬁed professional adviser.

In 1960, a group of development ofﬁcers established what is now the

Association of Fundraising Professionals (AFP) in response to the need

for a codiﬁcation of best practices in fundraising. Since adopting its

ﬁrst Code of Ethical Principles and Standards of Professional Practice in

1964, AFP has led the nonproﬁt sector in fostering the development

and growth of fundraising professionals and promoting high ethical

standards in the fundraising profession. All members of AFP agree

to uphold and abide by the values articulated in today’s AFP Code of

Ethical Standards.

Developing Fundraising Policies and Procedures

An excellent resource for development professionals, the AFP Code of

Ethical Standards serves as a valuable teaching tool for educating an

organization’s staff and board leadership on ethical fundraising practices

and how to incorporate them into development programs

(see Appendix A).

In addition to the AFP Code, the Association of Professional

Researchers for Advancement (APRA) Statement of Ethics also

addresses issues of donor privacy and research (see Appendix B).

MAKING THE CODE OF ETHICS YOUR OWN

Divided into four sections, the AFP Code of Ethical Standards addresses

key nonproﬁt issues: professional obligations, solicitation and use of

philanthropic funds, presentation of information, and compensation.

Reviewing the standards in the code will help you determine whether

your organization’s policies and procedures already include these

principles or if they need to be integrated into your business guidelines.

For example:

• Standard No. 9 under Solicitation and Use of Philanthropic Funds

states: “Members shall take care to ensure that contributions

are used in accordance with donors’ intentions.” This standard

should be incorporated into your gift acceptance and stewardship/

management policies.

• Standard No. 14 under Presentation of Information states:

“Members shall give donors the opportunity to have their names

removed from lists that are sold to, rented to, or exchanged with

other organizations.” This standard should be incorporated into

your donor privacy policy.

AFP’s Ready Reference Series

Developing Fundraising Policies and Procedures

In 1993, AFP, the American Association of Fundraising Counsel (now

The Giving Institute), the Association for Healthcare Philanthropy,

and the Council for Advancement and Support of Education

developed A Donor Bill of Rights so that donors and prospective

donors could have full conﬁdence in the nonproﬁts they support.

Since then, thousands of organizations have adopted A Donor Bill of

Rights. The 10 rights listed also should be reﬂected in your policies

and procedures (see inside back cover).

Protecting Donor Rights

A Donor Bill of Rights is also a valuable teaching tool for staff and board

leadership and, most importantly, donors. By promoting A Donor Bill of

Rights, your organization can integrate its principles into your mission

values and show donors that you are committed to protecting their

interests and gifts.

Advancing A Donor Bill of Rights can be accomplished easily by:

• incorporating it in board orientation and board training sessions

• printing a copy on your organization’s letterhead

• posting it in a prominent location on your website

• including a copy in your media or public relations packet

• featuring it in your newsletter or magazine

By properly stewarding donors and charitable contributions, you will

help ensure continued support for your organization. Policies and

procedures for acknowledging gifts, thanking and recognizing donors,

and guarding privacy and the conﬁdentiality of donor information

form the foundation of a successful stewardship program for your

organization.

Developing Fundraising Policies and Procedures

Improving Staff Efciency and Effectiveness

Policies and procedures also help your staff to work more efﬁciently.

Being creative is important when thinking of new and better ways

to raise increased funds for your organization. However, some

development-related tasks, such as recording gifts and preparing

receipts, are more effectively handled when standardized because then

anyone completing these tasks will know how to do them properly.

In Canada, the standardization of gift receipts is not just recommended

but required. Visit the CRA website (canada.ca/en/revenue-agency.

html) for information on the regulations governing the issuance of

receipts.

Adhering to policies and procedures for administering gift-entry and

acknowledgment systems allows staff to be more efﬁcient, giving them

more time for relationship-building activities with donors. Written

policies and procedures also preserve institutional knowledge and

shorten the learning curve for new staff.

WHEN TO SAY “NO” TO A GIFT

Having clear policies on what types of major gifts your

organization will accept and how they will be accepted also is

essential. Your nonproﬁt may be presented with a donation that

does not ﬁt the organization’s mission, has too many strings

attached, or whose maintenance costs outweigh its value. This

can be true of gifts of real estate and tangible property, such as

boats or stamp collections, and gifts with unusual or unpalatable

restrictions. A board-approved policy regarding how such

gifts will be handled is an effective way to maintain positive

relationships with major donors and help them to understand

that some restrictions on gifts may actually render them less

useful to your organization and its stakeholders.

AFP’s Ready Reference Series

Gift Policies and

Procedures

No matter what type of software program database you use to manage

donor data, focusing on three key factors will help your organization

most efﬁciently use data for your development program:

• Organization

When using one of the various commercial fundraising database

systems, be sure to work with your vendor to organize your data

properly from the start. First, your organization must decide what

donor information to record and track and what kinds of reports you

will need. In the United States, the Health Insurance Portability and

Accountability Act (HIPAA) prohibits organizations from recording

information about a patient’s illness(es), treatment, or services provided

without prior authorization from the patient. Also, your nonproﬁt

should identify and train a few key employees who will have permission

to enter and change data, limiting others to read-only access. By taking

the time to evaluate database needs and requirements at the outset,

your organization can build a system that will be a valuable fundraising

tool—not just the organization’s mailing list.

• Consistency

Develop consistent standards for your employees to follow when entering

data. These guidelines should be clearly documented in the vendor’s manual

or an in-house manual. Include proper procedures for such items as:

o name capitalization and use of periods

o telephone numbers

o addresses, with abbreviations for street types

o gifts, pledges, in-kind gifts, and planned gifts

o attendance at events and meetings

o board and volunteer services

o volunteering

Developing Fundraising Policies and Procedures

• Accuracy

Be sure you maintain the accuracy of the data through address-

correction requests, website address-change submissions, and internet

research and information provided by board members, employees,

and volunteers. Document the date and who makes changes to a data

record. Periodically review groups of records to ensure employees

are following the data-management standards. Make corrections as

necessary. If some records have bad data that require time-consuming

changes, archive records for attention later.

When you write the procedures for data management, make sure you

train all the users to follow these standards. The standards are only as

effective as they are followed, so periodically review the guidelines,

solicit comments from the users, and revise the policies as needed.

Also remember to back up your data regularly to protect the database’s

integrity.

Recording and Acknowledging Gifts

One important key to an organization’s success is how well it manages

the back end of gift receipts. Are staff members recording gifts properly

in the database? Are they entering donations into the accounting system

quickly and accurately? Are they thanking donors appropriately and

meaningfully? Who is responsible for these various tasks? Having clear

guidelines for recording and acknowledging gifts will help staff in this

essential administration.

Most organizations will want to have various levels of database access

and ability to change information based on job function.

Your development department should have pertinent policies and

procedures in a physical or online manual that is easily accessible for

staff. This manual, which should outline how gifts are to be recorded

and acknowledged, also can be used to train new employees. Be sure

to include sample copies of the various types of thank-you letters that

should be sent to donors in acknowledgment of their contributions.

AFP’s Ready Reference Series

When developing gift-acceptance policies for your organization, it

is important to anticipate the kinds of gifts your charity’s mission or

program might attract. Having a procedure for reviewing major gifts by

the executive director/president, development committee, and board

of directors will help your organization not only get the most out of

its current and planned donations but also decline gifts that would

not be a good ﬁt with your organization’s mission and work. Many

organizational boards establish a gift-acceptance committee to review

gifts and contributions.

SAMPLE DOCUMENT

GIFT-ACKNOWLEDGMENT POLICY AND

PROCEDURES

(Note: Charities should determine gift levels and staff involvement that

correspond to organizational needs and culture.)

1. Acknowledge all gifts within three business days using appropriate

thank-you letters based on gift level. If receipts are included, they

must feature the wording required by the IRS or CRA.

2. A gift of $249 or less will be acknowledged with the appropriate

thank-you letter or preprinted card signed by the executive

director.

3. A gift of more than $250 will be acknowledged with the

appropriate thank-you letter signed by the executive director and

include the required IRS language. (Canada only regulates the

language used on gift receipts, not thank-you notes.) If no goods

or services were received in exchange for the gift, insert “No goods

or services were received in exchange for your gift. Therefore,

the full amount of your contribution is tax-deductible as allowed

by law.” If a good or service was received, the organization must

inform the donor of its fair market value in order for the donor

to know the tax-deductible portion of the contribution: “In

exchange for your contribution of $500, you received a book with

an estimated fair market value of $75, so $425 may be treated as a

charitable donation.”

Developing Fundraising Policies and Procedures

4. The board chair will send an additional thank-you letter for a gift

of $500 or more.

5. The director of development will call donors of $500–999 to thank

them personally.

6. The executive director will call donors of $1,000 or more to thank

them personally.

SAMPLE DOCUMENT

GIFT-ENTRY AND RECORDING POLICY AND

PROCEDURES

1. Send all checks to the development department for recording.

Then forward them to the ﬁnance department for accounting and

depositing.

2. Update donor information in the database if the information on

the check and/or response form is different. Note the date of

change in the record.

3. Record gifts according to the donor’s intended use (e.g.,

unrestricted, restricted [speciﬁc program or project], endowment,

etc.).

4. Record in the system the source of the gift (e.g., direct-mail appeal,

special event, personal solicitation, etc.).

5. Prepare a daily report of gifts to be circulated to appropriate

staff to keep them in the loop and for special acknowledgment

attention.

6. Acknowledge all gifts within three business days using appropriate

thank-you letters based on gift level.

AFP’s Ready Reference Series

Soliciting and Accepting Gifts

Noncash Gift Policies and Procedures

Additionally, it is recommended that noncash gifts be reviewed prior

to acceptance because of challenges they create. Some gifts, such as

stock, real estate, life insurance, or personal property, impose special

obligations on an organization.

For noncash donations, the charity and the donor must each complete

IRS Form 8283 in the United States. The charity does not appraise the

value of the property. As set forth in the form and its instructions, who

does the appraisal and how it is done varies with the type and value of

the donated property.

In Canada, a third-party appraisal is strongly recommended by the CRA

for in-kind gifts of $1,000 or more.

In addition, in the U.S., if an organization receives property that was

subject to a charitable deduction and within two years sells, exchanges,

or disposes of the property, the organization has to ﬁle IRS Form 8282,

Donee Information Return, unless (a) the property is valued at $500 or

less or (b) the property is distributed for charitable purposes.

SAMPLE DOCUMENT

GIFT-ACCEPTANCE POLICY AND PROCEDURES

The XYZ Organization seeks outright gifts and future gift commitments

that are consistent with its mission. Donations generally will be accepted

from individuals, partnerships, corporations, organizations, government

agencies, or other entities without limitations—unless the acceptance

of gifts from a speciﬁc source is inconsistent with the organization’s

beliefs, values, and mission. The XYZ Organization will not accept gifts

from companies whose products may be harmful to our clients or from

donors whose requests for public recognition are incompatible with our

philosophy of appreciation.

In processing, all gifts will be coded in the donor database for the

constituency source from which the gifts were given (e.g., individual,

corporation, foundation, organization, etc.).

Developing Fundraising Policies and Procedures

Multiyear pledges for major gifts are encouraged, but for no more than

three to ﬁve years. A donor should complete and sign a gift or pledge

agreement form detailing the purpose of the gift, the payment schedule,

and how they wish their name to appear in donor recognition materials.

(See Appendix C for a sample pledge commitment form.)

Donors are encouraged to support areas reﬂecting their interests. The

XYZ Organization’s priorities include gifts for unrestricted, restricted,

and endowment purposes.

A selection of named or commemorative gift opportunities may be

made available to each donor. Such opportunities represent a tangible

means of demonstrating an individual donor’s investment in the XYZ

Organization.

When gifts with restrictions are accepted, restrictions will be honored.

These restrictions will be detailed in the donor’s gift or pledge

commitment letter.

Donor information that should be private and conﬁdential will not be

made public.

Nonproﬁts also should develop policies regarding how the following

gifts will be handled:

• Publicly Traded Securities

Stocks, bonds, and other securities should be accepted only upon

approval of the executive director. Many organizations make it their

policy to sell all publicly traded securities within a speciﬁed time frame.

In the United States, a gift of stocks or bonds held for more than

six months, having grown in value, not only qualiﬁes for a charitable

contribution deduction (based on the fair market value) but also avoids

tax on the appreciated portion of the gift. A broker must determine

the value of stocks and bonds, which is assessed as the mean between

the high and the low price on the date of the gift. The date of the gift

will be calculated as (1) the date the certiﬁcate is personally handed

to a representative of the charity, (2) the date on the certiﬁcate if it’s

changed to the name of the charity or its designated ﬁscal agent, or

(3) the postmark date if mailed or the date and time of transfer if

electronically transferred to an account at the charity’s broker’s ofﬁce.

AFP’s Ready Reference Series

• Closely Held Securities

Nonpublicly traded securities may be accepted in the United States,

but a nonproﬁt is advised to ﬁrst consult with its treasurer and/or legal

counsel. A qualiﬁed appraiser must determine the fair market value of

the securities. Organizations should explore methods of immediate

liquidation of the securities through redemption or sale before

accepting the gift. Nonproﬁts also should not commit to repurchase or

sell closely held securities until the gift of the securities is complete, as

the transaction might be viewed by the IRS/CRA as a sale rather than

a gift, with adverse tax consequences for the donor. In Canada, the

government discourages the gifting and receipt of nonpublicly traded

securities. Additionally, Canadian charities are well advised to sell gifts

of publicly traded securities immediately, although they are not bound

by law to do so.

• Real Estate

Gifts of real estate should be reviewed by an organization’s board of

directors or gift-acceptance committee before acceptance. Typically, the

donor should be responsible for obtaining and paying for an appraisal of

the fair market value and an environmental audit of the property. Before

making a presentation to the board or gift-acceptance committee, a staff

member needs to inspect the property. If the property is geographically

isolated, a local real estate broker can do the inspection. Property

that carries a mortgage should not be accepted. Should there be any

continuing concerns about the status and ownership of real estate being

offered as a donation, the organization can arrange for a title search.

That will reveal any mortgages, court judgments, or other liens that

may be on the property.

• Life Insurance

Many charities allow the executive director to accept a life insurance

policy as a gift when the organization is named as the owner and

beneﬁciary of the policy.

Developing Fundraising Policies and Procedures

In Canada, charitable receipts for income tax purposes can only be

issued for life insurance policies when the charity is named as the owner

and beneﬁciary. If the charity is named as the owner and beneﬁciary,

ofﬁcial receipts also can be issued for premiums paid to fund the policy.

• Tangible Personal Property

Gifts of jewelry, artwork, collections, equipment, and software should

be approved by designated senior staff and board members or by the

gift-acceptance committee and presented to the board for ﬁnal approval.

These gifts must be used by or sold for the beneﬁt of the organization.

If gift items are sold, the organization must follow all IRS/CRA

requirements for disposing of gifts of tangible personal property and

ﬁling the appropriate tax reporting forms. Any gift of property worth

more than $5,000 in the United States requires an authorized appraisal,

which should be paid for by the donor. In Canada, gifts of art or

cultural property worth more than $1,000 should be appraised by a

registered appraiser. (For a sample gift of personal property policy, see

Appendix D.) Special incentives, rules, and procedures apply to gifts of

cultural property and to ecological gifts.

As part of its gift-acceptance policy, a charity may elect to refuse gifts

of cash, securities, real estate, or other items of value if it believes that

such gifts are incompatible with the mission of the organization, conﬂict

with its core values, or would create a ﬁnancial, administrative, or

programmatic burden. The executive director should refer questionable

gifts to the executive committee or the board of directors for guidance

on a case-by-case basis.

CANADA REVENUE AGENCY (CRA) REGULATIONS

The tax status of noncash gifts is different in Canada than in the United

States in many respects, so a professional adviser must be consulted. For

example, the tax receipt for a gift of securities in Canada is the stock

market value of the shares at the close of business the day the securities

were transferred to the charity, regardless of whether or not the stock

is sold. Charities are strongly discouraged from receiving nonpublicly

traded securities. There is no capital gains exemption for nonpublicly

traded securities in Canada.

AFP’s Ready Reference Series

The CRA has recently updated many of its regulations, which can be

found on the agency’s website (www.cra-arc.gc.ca). Form T1170 (05)

on the CRA website lists the types of gifts that are eligible for capital

gains exemptions. An electronic newsletter is also available.

SAMPLE DOCUMENT

IN-KIND GIFTS POLICY

The purpose of this policy is to ensure that the XYZ Organization

accepts gifts-in-kind that support its mission, are consistent with its

policies, and are properly accounted for and acknowledged.

A gift-in-kind is an item such as equipment, software, or a product that

a donor voluntarily transfers to the XYZ Organization without charge

or consideration.

Only the XYZ Organization’s executive director and board of directors

have the authority to accept in-kind gifts.

Donors must complete a gift-in-kind form that includes the name of the

donor, a description of the item(s), the retail value of the item(s), and

permission to publicly recognize the donation.

Once accepted, the donated item(s) becomes the property of the XYZ

Organization, which retains the right to dispose of a gift-in-kind as it

sees ﬁt, unless another arrangement has been made with the donor.

• Car Donation Programs

The IRS has issued speciﬁc guidance that restricts how a charity can

accept and valuate the donation of motor vehicles, boats, and airplanes

(see IRS Publication 4302) and imposes an obligation on the charity to

use Form 1098-C.

In Canada, these items are treated as any other gift-in-kind.

Developing Fundraising Policies and Procedures

Planned Giving

In the both Canada and the United States, mechanisms such as

charitable remainder trusts, unitrusts, charitable gift annuities, bequests,

and gifts of life insurance policies often provide a donor with signiﬁcant

tax relief while at the same time providing for the future of charities.

In Canada, the categories and terminology for planned giving are

different than in the United States, as are many of the laws of what is

acceptable. A good reference book for this kind of donations is Planned

Giving for Canadians by Frank Minton and Lorna Somers.

The following planned gifts are means of funding charities in the United

States while offering beneﬁts to donors. Some of these include receiving

an income or passing assets on to heirs. Minimum gifts mentioned are

derived from charity best practices.

• Charitable Gift Annuity: a contract between the organization

and the donor paying a guaranteed lifetime income to one or

two beneﬁciaries in return for a gift of cash, securities, or real

estate. The rates of payout on gift annuities should follow the

rates established by the American Council on Gift Annuities.

There should be no more than two beneﬁciaries. The minimum

gift accepted to establish a charitable gift annuity is $10,000. No

income beneﬁciary for a charitable gift annuity should be younger

than 50 years of age.

• Deferred Gift Annuity: an annuity tailored to meet the needs of

the donor who prefers to receive income at a future date (at least

one year after the date of the gift) but also claims a substantial

charitable contribution in the year of the gift. The principal value

of a charitable deferred gift annuity can be pledged over a period

of years prior to when payments are scheduled to begin. The donor

will not receive income until the entire pledge is fulﬁlled. There can

be no more than two beneﬁciaries. The minimum gift accepted to

establish a deferred gift annuity is $10,000. No income beneﬁciary

for a deferred gift annuity should be younger than 40 years of age.

AFP’s Ready Reference Series

• Pooled Income Fund: a fund that operates similarly to a mutual

fund. Administrative fees are paid from the income earned on the

pooled income fund. No income beneﬁciary in the fund should

be younger than 55 years of age, and no more than two income

beneﬁciaries may be named. The minimum initial contribution to

the fund is $10,000. Additional gifts may be added for amounts

beginning at $1,000. This kind of fund is not obtainable in

Canada.

• Charitable Trust: a trust for which the nonproﬁt organization

does not act as trustee. The administration of this trust should be

performed by a bank trust department or other trustee selected by

the donor.

• Charitable Remainder Unitrust: an individual trust providing

annual income to a donor and/or named beneﬁciaries that

can increase or decrease year to year, depending on the annual

valuation of the trust’s assets. A unitrust is well suited to a donor

seeking income growth, though with some downside risk. A

net-income-only unitrust is well suited to donors of real estate.

Unitrusts are not used in Canada.

• Charitable Remainder Annuity Trust: a trust offering the assurance

of a ﬁxed-dollar income. The donor and/or beneﬁciary receive

annually an amount of money ﬁxed irrevocably at the time the gift

is established and stated in the trust agreement. The minimum gift

is $100,000.

• Lead Trust (Income to Charity for a Term Certain): a trust whose

income, or “lead” interest, is given to the nonproﬁt recipient.

The remainder interest is given to one or more noncharitable

beneﬁciaries, which can be the donor and/or their family. This gift

option offers current income to the organization, but the assets can

be retained by the donor or passed to heirs at a later time, often

at considerable tax savings. This kind of trust is not available in

Canada.

• Bequest: a gift bequeathed to an organization in a donor’s will.

Unless the donor speciﬁes its use, the organization may direct this

gift to an endowment fund or to the general fund to be used for

current purposes.

Developing Fundraising Policies and Procedures

Developing an Endowment Policy Manual

Endowment donors are deeply committed to your organization’s

mission and want to help guarantee its ﬁnancial future. To gain

their conﬁdence and trust in making gifts to an endowment, your

organization must develop an endowment policy manual. A guide for

internal policies and procedures, this manual also is an effective donor

relations tool and can be shared with current and potential donors.

Your endowment policy manual should include guidelines for the

following issues:

• investment and spending policy

• types of gifts accepted

• purposes for which endowment gifts are accepted

• minimums for naming funds

• process for accepting and administering gifts

• who has the authority to accept gifts

• donor recognition

• board policy to place unrestricted gifts in the endowment

• how and when endowment policies are reviewed

As with any major gift, it is important that the donor completes a

formal gift agreement deﬁning the type and terms of the gift to the

endowment.

Special Policy for Corporate Support

Frequently, educational, children and youth, and health-related

organizations have policies not to accept donations and support from

certain types of corporations, such as those that manufacture, promote,

and/or sell tobacco, alcohol, and/or other potentially harmful

products. When developing your principles for corporate support, you

should determine whether there are companies whose contributions

would not be acceptable.

AFP’s Ready Reference Series

Having such a policy also can be useful to nonproﬁts that wish to enter

into cause-marketing agreements with corporations. Keep in mind when

negotiating potential partnerships that your organization’s name and

reputation are its greatest assets.

SAMPLE DOCUMENT

XYZ ORGANIZATION PRINCIPLES FOR

CORPORATE SUPPORT OR DONATIONS

Introduction

The XYZ Organization believes that it can best fulﬁll its mission

through a broad base of support from various sources. However,

to maintain its independence and objectivity, it seeks to identify any

areas where there may be real or apparent conﬂicts of interest or

where the mission, programs, projects, and independence of the XYZ

Organization could be compromised.

As part of expanding its base of support, the XYZ Organization is

willing to consider partnerships with and gifts from the corporate sector.

The XYZ Organization recognizes that corporations, as proﬁt-centered

organizations, have obligations to their shareholders, boards, and

employees to be successful. The XYZ Organization also recognizes that

companies support the nonproﬁt sector not only out of a desire to be

helpful but also with the hope of a return or beneﬁt.

Given these realities and both legal and ethical considerations, the XYZ

Organization is willing to negotiate partnerships and accept support

from the corporate sector in ways that will beneﬁt and recognize the

supporting companies while enabling the XYZ Organization to better

achieve its mission without compromising its principles.

Developing Fundraising Policies and Procedures

General Guidelines

The XYZ Organization, as an independent nonproﬁt organization, will

accept no cash or real property gift or pledge of support or noncash

gift or services or enter into any partnership with any company or

other organization that produces products that are or may be harmful

to the XYZ community. Nor will the XYZ Organization accept any of

the above or support from any company or organization that, in the

judgment of the XYZ Organization, exploits students or teachers in its

product lines, advertising, marketing, or workforce, or in any other way.

Principles

The XYZ Organization will at all times maintain an independent

position on educational issues and concerns.

The XYZ Organization will solicit and accept support only for activities

that are consistent with its mission.

The XYZ Organization will accept funds for research, informational,

and educational activities only when the content is to be determined by

the XYZ Organization or an independent group designated by the XYZ

Organization.

The XYZ Organization will maintain complete control, consistent with

any donor restrictions acceptable to the XYZ Organization, of all funds

provided by corporations, organizations, and individuals.

The XYZ Organization will not accept any support that implies or

requires endorsements of products.

Acknowledgments of corporate support will be limited to a company’s

name, logo, or slogan that is an established part of the supporter’s

identity, trade name, address(es), and telephone number(s).

Recognition of major corporate support will be developed in

cooperation with the corporate donors and will be consistent with the

level of support and the XYZ Organization’s mission and purposes. The

XYZ Organization will seek to develop recognition opportunities that

are appropriate and meaningful for both the supporting companies and

the XYZ Organization.

AFP’s Ready Reference Series

The XYZ Organization’s intangible intellectual assets, including its

name, research, and other work, will be protected at all times. Donors

will not be permitted to use the XYZ Organization’s name or other

items for commercial purposes or in connection with the promotion of

any product.

The XYZ Organization’s board and staff reserve the right to refuse

any donation of cash or other real property, services, noncash gifts, or

any other forms of support if such support is not in keeping with the

above principles or for other reasons that the XYZ Organization deems

appropriate.

AFP’s Ready Reference Series

Donor Policies and

Procedures

One of the best ways to encourage continued support from your donors

is to recognize and thank them for their generosity. You should take

advantage of the many opportunities for thanking your supporters

throughout the year, such as recognizing donors at special events, in

public settings, in print materials, in an annual honor roll of donors, in a

prominent display in your ofﬁce, and on your website.

When establishing your donor recognition program, ﬁrst take an inven-

tory of your organization’s annual events and printed materials to see

which can be incorporated into this special program. Keep in mind that

recognizing donors not only builds good relationships with current do-

nors but also motivates other donors to give and increase their giving.

Developing a comprehensive recognition program for your donors

will ensure your nonproﬁt does not to miss a chance to honor

these important supporters. As with other signiﬁcant organizational

programs, you should have clear policies and procedures for how to

recognize donors at various gift levels.

RECOGNIZING CORPORATIONS IN CANADA

In Canada, corporate donors are handled differently. If a corporation is

given a tax receipt for a charitable gift, it cannot receive an “advantage”

as deﬁned by the CRA. Any recognition beyond being listed with other

donors could be considered by the CRA to be a marketing beneﬁt

to the corporation. If a company chooses a noncharitable or business

receipt, there are no legal restrictions related to recognition.

Before publicly recognizing your donors, be certain you have their

permission. You also should know the exact way they wish to be

listed (e.g., individually, with professional credentials, as a couple, or

anonymously). To ﬁnd out, include a request for this information in

your various response devices organization uses. (See Appendix C for a

sample pledge commitment form.)

Developing Fundraising Policies and Procedures

WHAT’S IN A NAME?

Sample Text:

_____________________________________________________________

So that we may recognize you properly, please write in the space above

how you would like to be listed.

For those donors who wish to remain anonymous, you must have

procedures in place that address how anonymous donors will be coded

in your database, how they will continue to receive mailings, and how

their gifts will be included in fundraising reports.

While more commonly used for capital campaigns, the sample policy

below can easily be adapted for annual donors to your organization.

SAMPLE DOCUMENT

DONOR RECOGNITION POLICY, BRIEF VERSION

Category and Ways to Recognize

Platinum ($1 million-plus)

Recognition at campaign gala, proﬁle in annual report and campaign

publications, prominent display at top level on donor recognition wall,

naming opportunity to be selected, and website recognition

Diamond ($500,000–999,999)

Recognition at campaign gala, proﬁle in annual report and campaign

publications, prominent display at second level on donor recognition

wall, naming opportunity to be selected, and website recognition

AFP’s Ready Reference Series

Gold ($250,000–499,999)

Recognition at campaign gala, proﬁle in annual report and campaign

publications, prominent display at third level on donor recognition wall,

naming opportunity to be selected, and website recognition

Silver ($100,000–249,999)

Recognition at campaign gala, proﬁle in annual report and campaign

publications, prominent display at fourth level on donor recognition

wall, naming opportunity to be selected, and website recognition

Bronze ($50,000–99,999)

Recognition at campaign gala, listing in annual report and campaign

publications, prominent display at ﬁfth level on donor recognition wall,

naming opportunity to be selected, and website recognition

Patron ($25,000–49,999)

Recognition at campaign gala, listing in annual report and campaign

publications, prominent display at sixth level on donor recognition wall,

and website recognition

Partner ($10,000–24,999)

Recognition at campaign gala, listing in annual report and campaign

publications, and recognition on donor wall and website

Supporter ($5,000–9,999)

Recognition at campaign gala, listing in annual report and campaign

publications, and recognition on donor wall and website

Friend ($1,000–4,999)

Listing in annual report and campaign publications and recognition on

donor wall

Developing Fundraising Policies and Procedures

Naming Opportunities and Policies

As a part of your donor recognition program, an organization may

wish to offer major donors special opportunities to have their names,

or the name of a loved one, associated with a speciﬁc facility space or

program. In a capital campaign that involves raising funds to build

a new facility or renovate an existing one, the building itself offers

many opportunities for recognizing donors for their generosity. Other

opportunities include naming scholarships, research funds, publications,

conferences, seminars, programs, and new initiatives.

In developing naming opportunities and related policies, include the

following:

• process for formalizing commitment agreements

• morals clause and procedure for removing name(s) in certain

situations

• naming opportunities available with minimum gift amount required

• how and when gifts will be recognized

• sample language for naming and plaques

• payment schedule

• process for handling a merger

• process for replacement of property

• recognition time frame (in perpetuity or for a deﬁned time period)

AFP’s Ready Reference Series

SAMPLE DOCUMENT

DONOR NAMING OPPORTUNITIES

Overview

For all gift levels of $5,000 and above, a signed letter of intent and

payment schedule must be received before the gift will be included in

any recognition materials or campaign publications.

Gifts of less than $5,000 will be mentioned in the ﬁrst update published

after the gift or pledge is received and then in the ﬁnal donor honor roll

listing.

Before ordering, all plaque language must be approved by the donor,

but it should conform to basic standards adopted by the organization.

Building Campaign

$1,000,000 Gift Level—Renovated Wing of Building

The gift can be made as a multiyear pledge but must be at least two-

thirds completed before any signage will be installed. The donor will

be recognized with signage in the renovated wing of the building.

Language for the plaque must be approved by the donor but should be

along the lines of “The renovation of this space was made possible by

the generosity of Mr. and Mrs. John T. Smith.”

Additionally, the gift will be listed in all other campaign recognition

materials, such as campaign reports and updates, and in any cumulative

campaign recognition efforts, including the full campaign recognition

wall. Such recognition will begin as soon as a signed letter of intent for

the pledge is received.

Program Development

$500,000—Child Development Center

The gift can be made as a multiyear pledge but must be at least two-

thirds completed before any signage will be installed. The donor will be

recognized with signage on the property, such as “ABC Corporation

Child Development Center.” Naming rights will be secured in

perpetuity.

Developing Fundraising Policies and Procedures

Recognition will include signage on the property and prominent

mention in the annual report and on the website. Once the signage

is in place, the building will then be referred to in all organization

publications by its appropriate name (for example, the “ABC

Corporation Child Development Center”).

Fellowship Program

$250,000—Endowed Fellows Program

This is a one-time gift to establish a named endowed fund to support

an international journalism fellowship program. Recognition will

include prominent mention in all materials related to the fellowship

program, as well as in the annual report and on the website. Once the

fund is established, participants in the program will be referred to as the

“[Donor Name] Fellows.”

Research

$100,000—Named Research Fund

This is a one-time gift to establish a named research fund to focus on

a speciﬁc area of greatest need as identiﬁed by the XYZ Organization.

Recognition will include prominent mention in all print materials

related to the research, as well as in the annual report and on the

website.

Scholarships

$25,000 (minimum)—Named Endowment Scholarship

This is a one-time gift to establish a named scholarship fund.

Recognition will include prominent mention in the annual report and

scholarship program materials, as well as participation in the annual

scholarship ceremony and reception.

AFP’s Ready Reference Series

Donor Privacy Policy

Most nonproﬁts treat donor information with the utmost

conﬁdentiality. However, it is still necessary to establish a donor privacy

policy to assure donors of their privacy when contributing to your

organization. Your donor privacy policy should explain how donor

information will be used, whether donor information is ever shared, and

how a donor’s name can be removed from your mailing list. Publicize

your organization’s full policy or a brief donor privacy statement on

your website, in your annual report, and in fundraising appeal packages

on the response device.

In developing the policy for protecting donor privacy, keep in mind that

the information your nonproﬁt keeps on donors should only be:

• what is required for fundraising purposes

• what is appropriate for the donor or prospect to see, if he or she

requests to see the donor record

• made available to the staff, board members, and volunteers on a

“need-to-know” basis

Again, in the United States, healthcare organizations must be certain

they are not in violation of HIPPA. In Canada, organizations must

adhere to several regulated privacy policies. All provinces have Freedom

of Information Protection and Privacy (FOIP) legislation that governs

the privacy of information for public organizations, and there is also

the federal Personal Information Protection and Electronic Documents

Act (PIPEDA). PIPEDA supersedes any provincial policy that does not

meet the federal standard.

Developing Fundraising Policies and Procedures

SAMPLE DOCUMENT

DONOR PRIVACY POLICY, BRIEF VERSION

All information concerning donors or prospective donors (including

their names, addresses, and telephone numbers; the names of their

beneﬁciaries; the amount of their gift, etc.) shall be kept strictly

conﬁdential by the XYZ Organization, its staff, and volunteers, unless

permission is obtained from donors to release such information.

SAMPLE DOCUMENT

DONOR PRIVACY POLICY

The XYZ Organization is committed to respecting the privacy of

donors. The types of donor information that it collects and maintains

are as follows:

• contact information (name, address, telephone number, and email

address)

• giving information

• information on events attended, publications received, and special

requests for program information

• information provided by the donor in the form of comments and

suggestions

The XYZ Organization uses donors’ information to understand their

interests in its mission and to update them on the organization’s plans

and activities. It is shared with staff, board members, volunteers, and

consultants only on a “need-to-know” basis.

The organization also assures donors that their names and addresses will

not be shared with any third party unless permission has been granted.

For those who do not wish to be included on a mailing list that might

be sold, rented, or leased to other organizations, donors should contact

the XYZ Organization to have their names removed.

If you have comments or questions about the XYZ Organization’s donor

AFP’s Ready Reference Series

Condentiality Policy

Staff, board members, and volunteers involved in fundraising often are

privy to personal information about a donor’s giving history, family,

wealth, and assets. They must understand how vital it is to donors and

the organization that they keep this information conﬁdential, as detailed

in the AFP Code of Ethical Standards and A Donor Bill of Rights. One

way to do this is to have the staff, board members, and volunteers read

and sign a conﬁdentiality policy agreement. Violation of such a policy

would be grounds for discipline and/or removal of the offending

people from their positions with the organization.

SAMPLE DOCUMENT

CONFIDENTIALITY POLICY

In performing their duties, XYZ Organization staff, board members,

and volunteers are privy to information about individuals and families,

such as giving history, assets, wealth, and family relationships. This is

especially true for staff, board members, and volunteers involved in

fundraising and development activities. Due to the sensitivity of this

information, it is important that all XYZ Organization staff, board

members, and volunteers adhere to the policy that information shared

with them remains conﬁdential, is not discussed with others in private

or public settings, and is not disclosed or used for any other purposes.

I agree to comply with this policy.

____________________________________________ _______________

NAME DATE

Necessary Policies for New or Joint Special Events

Often, volunteers or other organizations in the area present nonproﬁts

with ideas for new fundraising events. Although your organization

may appreciate their interest, many times it is not possible for staff

to take on new time-intensive events, given their current duties and

responsibilities. This is especially true when you are uncertain of the

return on investment for the event.

Developing Fundraising Policies and Procedures

To be able to respond systematically to such inquiries, you need to

develop policies that address the following:

• Who in the organization should evaluate proposals for new events?

• Is there a minimum net proﬁt goal for an event (such as 50 percent

of gross proceeds or a speciﬁc dollar amount)?

• What are the demands on staff time?

• Are volunteers available to work on the event?

• What is the public relations value for the organization?

• What are the estimated ﬁxed costs to produce the event?

• Is this event similar to others in the area?

• How much is at risk ﬁnancially?

• How much is estimated to be raised before the event?

If you choose to move forward on a new event, it is best that your

organization and the volunteer group or other parties involved sign an

agreement stipulating such items as:

• Who is sponsoring the event? Who is the beneﬁciary of the funds

raised?

• Who is authorized to sign contracts with vendors and suppliers?

• Who is the ofﬁcial spokesperson for the event?

• Will any publicity that uses your organization’s name in connection

with the event be cleared ﬁrst by your organization? Who is

authorized to release its use?

• Does your organization have any restrictions regarding possible

event sites, speciﬁc sponsors, and/or donor recognition?

• How will the post-event evaluation be conducted?

AFP’s Ready Reference Series

Complying With

Governmental

Regulations

Conforming to U.S. State and IRS Regulations

Many states require the registration of charitable organizations,

fundraising counsel, and professional solicitors. Complying with

registration requirements for those organizations that are not exempted

is necessary—not optional. Be certain your organization is registered

with the proper agency in your state or province and the states and

provinces in which you solicit funds. In most U.S. states, registration is

handled by the secretary of state or the attorney general. In a few states,

it is handled by the consumer protection department or agriculture

department. Visit the National Association of State Charity Ofﬁcials

(NASCO) website (nasconet.org) for useful information and links to

state charity regulators within the United States.

In this time of heightened accountability for nonproﬁts, you must

be certain your organization complies with two other regulations

stipulating items that many states require:

• A solicitation disclosure statement that is conspicuously printed on

solicitation materials and receipts or wherever the governmental

jurisdiction dictates

• A required disclaimer in all direct-mail pieces

Be certain you know and follow the regulations for all states in which

you solicit funds. Below as a sample, you will ﬁnd the secretary of state’s

disclosure statement for the State of Maryland. All written solicitation

materials and receipts must contain the following disclosure statement,

required under Maryland’s Solicitations Act.

Developing Fundraising Policies and Procedures

SAMPLE DOCUMENT

SOLICITATION DISCLOSURE STATEMENT

A copy of our current ﬁnancial statement is available upon request by

contacting [name of organization] at [address and telephone number

of organization]. Documents and information submitted to the State of

Maryland under the Maryland Solicitations Act are available from the

Ofﬁce of the Secretary of State for the cost of copying and postage.

SAMPLE DOCUMENT

DIRECT-MAIL DISCLAIMER

When printing a direct-mail disclaimer, you need to determine the

best placement for the text. One acceptable place is on the back of the

response card. In some states, no editing of the text is permitted, and

the disclaimer statement must contain the speciﬁc text required by

the state.

Check with your state government for speciﬁc requirements.

[Name of organization] was established in [state] on [date] and

incorporated on [date]. [Organization] has a 501(c)(3) classiﬁcation

from the Internal Revenue Service, and donations are tax deductible.

You may send a written request for our annual report to [name and

address of organization].

(alternately)

Residents of the following states may request information from the

ofﬁces indicated here [list of states]. Registration with any state does not

imply endorsement by that state. A copy of the latest ﬁnancial statement

and/or registration statement for [organization] may be obtained by

contacting us at [address and telephone number] or by contacting the

state agencies as noted above. [Organization] is in compliance with all

state registrations required.

AFP’s Ready Reference Series

IRS Substantiation and Quid Pro Quo Rules

If a contribution is $250 or more, the donor may not claim a tax

deduction without a receipt. When a donor makes a contribution

of $75 or more and receives something in return, such as a book,

entertainment, or a dinner, the IRS requires the charity to provide the

donor with the fair market value of any goods or services the donor may

receive. Only a donation that exceeds the fair market value of the goods

or services the donor receives is tax deductible.

SAMPLE DOCUMENT

LANGUAGE FOR ACKNOWLEDGMENT LETTER

AND RECEIPT

“No goods or services were received in exchange for your contribution,

so the entire donation qualiﬁes for a charitable deduction.”

“We very much appreciate your gift of $________ [or description

of property]. In consideration of your gift, we have provided you

with _________ [insert description], which we estimate has a value

of $_______. The amount of your contribution that is deductible for

federal income tax purposes is limited to the excess of your contribution

over the value of goods and services we provided to you.”

SAMPLE DOCUMENT

LANGUAGE FOR SPECIAL EVENT CONTRIBUTION

“The ticket price is $100 ($75 is tax deductible).”

Complying With the Sarbanes-Oxley Federal Law

As noted earlier, the Sarbanes-Oxley law applies mostly to publicly

traded, for-proﬁt companies. However, all business entities, including

nonproﬁts, are expected to have (1) a whistleblower procedure that

protects people who make good-faith reports of suspected ﬁnancial

wrongdoing within an organization and (2) a document retention/

Developing Fundraising Policies and Procedures

destruction procedure that forbids the destruction of documents during

any announced or pending government investigation and otherwise

indicates how long different types of documents should be retained and

when they can be destroyed.

CRA Regulations

In Canada, to calculate the gift part of a ticket to a fundraising event,

a charity can consider that it has received two payments:

• payment for the fair market value of the meal or entertainment

it is providing (not the actual cost of providing the meal or

entertainment)

• a gift

For example, say a hospital foundation sells tickets for $200 each to a

fundraising dinner-dance. The cost to the foundation of putting on the

event is $45 per person.

The foundation calculates the fair market value of the food and

entertainment provided to persons attending the event to be $75.

The gift to the foundation is the difference between the $200 ticket

price and the $75 value of the beneﬁt received. The actual cost to the

foundation, $45 per person, is not a factor in calculating the part of the

ticket price that is a gift.

Therefore, the foundation can issue a tax receipt indicating the

deductibility of $125 for each ticket purchased.

AFP’s Ready Reference Series

How to Proceed

The fundraising policies, procedures, guidelines, and suggested sample

language included in this booklet should help fundraisers and their

organizations prepare the documents needed for fundraising. For some

readers, this booklet may be the push needed to draft their own policies

and procedures manual. For others, it serves as a tool to help them

evaluate and revise their current policies and procedures. Whatever

the case, it is critical to make these documents a priority for your

organization.

Once the policies and procedures are approved by the senior staff

and governing board, the next step is to make sure these policies and

procedures are followed. The executive director, board chair, and

development director need to set an example for the rest of the staff and

volunteer leadership by following the set guidelines and emphasizing

their value to the organization, its donors, and the general public.

Training sessions for board members and staff reinforce the importance

of the policies and procedures and help people understand how the

guidelines apply to their work.

As previously mentioned, in today’s environment such policies and

procedures are mandatory to show that your organization adheres to

ethical fundraising practices while also enhancing relations with your

donors and funders and improving your development staff efﬁciency

and effectiveness.

AFP’s Ready Reference Series

References and

Resources

References

Ciconte, Barbara L., and Jacob, Jeanne G.(2011). Fundraising Basics:

A Complete Guide, Third Edition (Jones and Bartlett Publishers.

To order, visit the AFP bookstore (afpbookstore.org)

Minton, Frank, and Somers, Lorna. Planned Giving for Canadians,

Second Edition (Waterdown, ON: Somersmith, 1997, updated 2000).

To order, call 905-689-2538.

AFP Fundraising Dictionary. To access, AFP members can visit

https://afpglobal.org/search/node?keys=Fundraising+Dictionary

Other Resources

Association of Fundraising Professionals, Arlington, Virginia

(afpglobal.org)

Canada Revenue Agency, Ottawa, Ontario (cra-arc.gc.ca)

eScanlan Company, Bethesda, Maryland (escanlancompany.com)

Green Legacies, Victoria, British Columbia

(greenlegacies.ca/resources.asp)

Internal Revenue Service, Washington, D.C. (irs.gov)

Maryland Association of Nonproﬁt Organizations, Baltimore, Maryland

(mdnonproﬁts.org)

Miller Thomson LLP, Toronto, Ontario (millerthomson.com)

National Association of State Charity Ofﬁcials (nasconet.org)

Canadian Association of Gift Planners (cagp-acpdp.org)

Developing Fundraising Policies and Procedures

Conference Recordings

Sustaining Conﬁdence: Ethics in Fundraising presented by R. Scott

Fortnum, MA, CFRE, ACFRE and Mary Doorley Simboski, MS,

ACFRE

https://www.pathlms.com/afp/courses/9749/sections/13592

eCourse

AFP Fundamentals of Fundraising Module 7: Management &

Accountability

https://www.pathlms.com/afp/courses/6278/sections/9334/

scorm/921

Webinars

Ethics and Information Overload: What Do I Do with All this Data?

presented by Robbe Healey, MBA, NHA, ACFRE and Audrey Kintzi,

ACFRE

https://afpglobal.org/webinars/ethics-and-information-overload-

what-do-i-do-all-data

Gifts from Pablo Escobar & Other Ethical Dilemmas presented by

Robbe Healey, MBA, NHA, ACFRE

https://afpglobal.org/webinars/gifts-pablo-escobar-other-ethical-

dilemmas

AFP’s Ready Reference Series

Appendix A

AFP CODE OF ETHICAL PRINCIPLES

Adopted 1964

The Association of Fundraising Professionals (AFP) exists to foster

the development and growth of fundraising professionals and the

profession, to promote high ethical behavior in the fundraising

profession and to preserve and enhance philanthropy and volunteerism.

Members of AFP are motivated by an inner drive to improve the

quality of life through the causes they serve. They serve the ideal of

philanthropy, are committed to the preservation and enhancement of

volunteerism; and hold stewardship of these concepts as the overriding

direction of their professional life. They recognize their responsibility

to ensure that needed resources are vigorously and ethically sought and

that the intent of the donor is honestly fulﬁlled.

To these ends, AFP members, both individual and business,

embrace certain values that they strive to uphold in performing their

responsibilities for generating philanthropic support. AFP business

members strive to promote and protect the work and mission of their

client organizations.

AFP members both individual and business aspire to:

• Practice their profession with integrity, honesty, truthfulness and

adherence to the absolute obligation to safeguard the public trust;

• Act according to the highest goals and visions of their

organizations, professions, clients and consciences;

• Put philanthropic mission above personal gain;

•

Inspire others through their own sense of dedication and high purpose;

• Improve their professional knowledge and skills, so that their

performance will better serve others;

• Demonstrate concern for the interests and well-being of individuals

affected by their actions;

Developing Fundraising Policies and Procedures

• Value the privacy, freedom of choice and interests of all those

affected by their actions;

• Foster cultural diversity and pluralistic values and treat all people

with dignity and respect;

• Afﬁrm, through personal giving, a commitment to philanthropy

and its role in society;

• Adhere to the spirit as well as the letter of all applicable laws and

regulations;

• Advocate within their organizations adherence to all applicable laws

and regulations

• Avoid even the appearance of any criminal offense or professional

misconduct;

• Bring credit to the fundraising profession by their public demeanor

• Encourage colleagues to embrace and practice these ethical

principles and standards; and

• Be aware of the codes of ethics promulgated by other professional

organizations that serve philanthropy.

ETHICAL STANDARDS

Adopted 1964; amended Oct. 2014

The Association of Fundraising Professionals believes that ethical

behavior fosters the development and growth of fundraising

professionals and the fundraising profession and enhances philanthropy

and volunteerism. AFP Members recognize their responsibility to

ethically generate or support ethical generation of philanthropic

support. Violation of the standards may subject the member to

disciplinary sanctions as provided in the AFP Ethics Enforcement

Procedures. AFP members, both individual and business, agree to abide

(and ensure, to the best oftheir ability, that all members of their staff

abide) by the AFP standards.

AFP’s Ready Reference Series

PUBLIC TRUST, TRANSPARENCY & CONFLICTS OF INTEREST

Members shall:

not engage in activities that harm the members’ organizations, clients

or profession or knowingly bring the profession into disrepute.

2. not engage in activities that conﬂict with their ﬁduciary, ethical and

legal obligations to their organizations, clients or profession.

3. effectively disclose all potential and actual conﬂicts of interest; such

disclosure does not preclude or imply ethical impropriety.

4. not exploit any relationship with a donor, prospect, volunteer,

client or employee for the beneﬁt of the members or the members’

organizations.

5. comply with all applicable local, state, provincial and federal civil

and criminal laws.

6. recognize their individual boundaries of professional competence.

7. present and supply products and/or services honestly and without

misrepresentation.

8. establish the nature and purpose of any contractual relationship at

the outset and be responsive andavailable to parties before, during

and after any sale of materials and/or services.

9. never knowingly infringe the intellectual property rights of other

parties.

10. protect the conﬁdentiality of all privileged information relating to

the provider/client relationships.

11. never disparage competitors untruthfully.

SOLICITATION & STEWARDSHIP OF PHILANTHROPIC FUNDS

Members shall:

12. ensure that all solicitation and communication materials are

accurate and correctly reﬂect their organization’s mission and use

of solicited funds.

13. ensure that donors receive informed, accurate and ethical advice

about the value and tax implications of contributions.

14. ensure that contributions are used in accordance with donors’

intentions.

Developing Fundraising Policies and Procedures

15. ensure proper stewardship of all revenue sources, including timely

reports on the use and management of such funds.

16. obtain explicit consent by donors before altering the conditions of

ﬁnancial transactions.

TREATMENT OF CONFIDENTIAL & PROPRIETARY INFORMATION

Members shall:

17. not disclose privileged or conﬁdential information to unauthorized

parties.

18. adhere to the principle that all donor and prospect information

created by, or on behalf of, an organization or a client is the

property of that organization or client.

19. give donors and clients the opportunity to have their names

removed from lists that are sold to, rented to or exchanged with

other organizations.

20. when stating fundraising results, use accurate and consistent

accounting methods that conform to the relevant guidelines

adopted by the appropriate authority.

COMPENSATION, BONUSES & FINDER’S FEES

Members shall:

21. not accept compensation or enter into a contract that is based on a

percentage of contributions; nor shall members accept ﬁnder’s fees

or contingent fees.

22. be permitted to accept performance-based compensation, such

as bonuses, only if such bonuses are in accord with prevailing

practices within the members’ own organizations and are not based

on a percentage of contributions.

23. neither offer nor accept payments or special considerations for the

purpose of inﬂuencing the selection of products or services.

24. not pay ﬁnder’s fees, commissions or percentage compensation

based on contributions.

25. meet the legal requirements for the disbursement of funds if they

receive funds on behalf of a donor or client.

AFP’s Ready Reference Series

Appendix B

APRA Statement of Ethics

Apra members shall support and further the individual’s fundamental

right to privacy and protect the conﬁdential information of their

institutions. Apra members are committed to the ethical collection and

use of information. Members shall follow all applicable national, state,

and local laws, as well as institutional policies, governing the collection,

use, maintenance, and dissemination of information in the pursuit of the

missions of their institutions.

Any reproduction of the Apra Ethics Statement must include

recognition of Apra.

Ethics Guidelines

These guidelines are designed to help each organization develop

a tailored system that will ensure the conﬁdentiality and security

of information and materials involved in the work of development

professionals and the organization(s) for which we work. Reference our

Ethics Tool Kit for more information.

Code of Ethics

Advancement researchers must balance an individual’s right to privacy

with the needs of their institutions to collect, analyze, record, maintain,

use, and disseminate information. This balance is not always easy to

maintain. To guide researchers, the following ethical principles apply:

Preamble

All Apra members shall support and further an individual’s fundamental

right to privacy and protect the conﬁdential information of their

institutions. All members agree to abide by this Statement of Ethics in

the daily conduct of all professional activity encompassing the gathering,

dissemination, and use of information for the purposes of fundraising or

other institutional advancement activity.

Developing Fundraising Policies and Procedures

Four fundamental principles provide the foundation for the ethical

conduct of fundraising research, relationship management, and

analytics: integrity, accountability, practice, and conﬂict of interest.

Integrity

Members shall be truthful with respect to their identities and purpose

and the identity of their institutions during the course of their work.

They shall continually strive to increase the recognition and respect of

the profession.

Accountability

Members shall respect the privacy of donors and prospects and conduct

their work with the highest level of discretion. They shall adhere to the

spirit as well as the letter of all applicable laws and all policies of their

organization. They shall conduct themselves in the utmost professional

manner in accordance with the standards of their organization.

Practice

Members shall take the necessary care to ensure that their work is as

accurate as possible. They shall only record data that is appropriate to

the fundraising process and protect the conﬁdentiality of all personal

information at all times.

Conicts of Interest

Members shall avoid competing professional or personal interests and

shall disclose such interests to their institutions at the ﬁrst instance. A

conﬂict of interest can create an appearance of impropriety that can

undermine conﬁdence in the member, their organization, and the

profession.

AFP’s Ready Reference Series

Apra Social Media Ethics Statement

Preamble

In the conduct of their work, Apra members must balance an

individual’s right to privacy with the needs of the institution to collect,

analyze, record, maintain, use, and disseminate information. Social

media outlets create extraordinary opportunities for the practice

of prospect research. However, because members are not passive

participants in social media, but engage and participate in it both

personally and professionally, the use of social media presents unique

challenges to the ethical conduct of research. These guidelines have

been created to assist Apra members in making ethical choices about the

use of social media in their fundraising research activities.

Integrity

Members shall exercise transparency with respect to their identities,

the identity of their institution and their relation to it, and to the

purpose of their online presence and communication. Members shall

be authorized by their institution to conduct business on its behalf on

social media sites. They shall keep all information truthful, and respect

all laws governing copyright, trademarks, and other third-party rights in

online space. Members shall be mindful of cultural differences globally

that might lead to misunderstanding or offence. Content shared must

be respectful of all individuals, races, religions, gender and sexual

orientation, and avoid derogatory or libelous statements. Members shall

remember that content is public and permanent.

Accountability

Members shall respect the privacy of individuals and conduct their

work with the highest level of professionalism and discretion. They

shall maintain appropriate boundaries when gathering and sharing

information, taking care to distinguish between professional and

personal addresses, communications, uses, and behavior. Information

gathered from social media sites shall remain conﬁdential and be

Developing Fundraising Policies and Procedures

shared only with authorized organizational staff as part of standard

business operations. No private or conﬁdential institutional or

individual information should be posted, shared, or disclosed to the

public without speciﬁc authorization. Members shall comply with all

organizational guidelines for computer use and social media behavior.

Practice

When gathering, communicating, storing, and protecting information,

members shall take all necessary precautions, and comply with federal,

state, and institutional regulations. Members shall record and disclose

only information appropriate to fundraising activities which is legally

available to be maintained in a secure database of record. They shall

insure information gathered via social media is further conﬁrmed by

other sources to guarantee that it is as accurate as possible. Members

shall make certain that they understand the privacy policies of their

institution and of the social media channels they use. In the absence of

internal policies, members shall adhere to this statement of ethics and

social media policies.

Conduct

Because social media is highly relational and public, member’s conduct

shall adhere to the highest standards of professional communication.

Members shall conduct themselves in a manner that encourages a

positive relationship to the institution which they represent and assists

in achieving its goals. They should not “friend” or be “friended” or

enter into personal relations with prospects or donors in the conduct

of their work. Members should be mindful that information posted in

one context may be publicized in another. Should information obtained

on social media sites jeopardize the reputation of the prospect or have

a negative impact on the organization, the member should ensure

its review before use to protect both the individual and institution.

Members should always conduct themselves with the awareness they

are accountable for all online behavior, and adhere to all standards of

professional conduct and business practices.

*Approved August 2013

AFP’s Ready Reference Series

Appendix C

SAMPLE PLEDGE COMMITMENT FORM

Donor name: ________________________________________________

Address: ____________________________________________________

Telephone number: (H) _______________________________________

(O) ________________________________________________________

Gift/Pledge commitment: ______________ to be paid over ____ years

Purpose of gift (how the gift is to be used—to fund a building,

scholarship, program support, etc.): _____________________________

____________________________________________________________

Donor recognition (how the donor will be recognized as per the

agreement [e.g., name a physical space, scholarship fund, program, etc.]

and whose name will appear, etc.): ______________________________

____________________________________________________________

Preference for listing in donor recognition materials: _______________

____________________________________________________________

Payment Schedule:

Amount $____________ to be given:

o Annually o Quarterly o Monthly

Signature of Donor ____________________________Date ___________

Signature of Organization Representative ________________________

Date _______________________________________________________

AFP’s Ready Reference Series

Appendix D

SAMPLE GIFT OF PERSONAL PROPERTY POLICY

For a gift of personal property valued in excess of $5,000, a donor must

pay for an appraisal by a qualiﬁed appraiser. The organization must

acknowledge the appraisal in writing, to be attached to the donor’s tax

return. The organization is required to notify the IRS/CRA of the sale

price of any property gift sold within two years of the date of the gift.

APPRAISALS IN CANADA

In Canada, for a gift of personal property valued in excess of $1,000,

the charity can pay for the appraisal if it wishes, but the typical practice

is that the donor should pay.

Furniture:

• Gifts of furniture will be accepted if the furniture is usable in

the organization’s facilities or can be quickly sold for an amount

approximate to the amount the donor wished to take as a tax-

deductible contribution. A donor is responsible for establishing

their own deduction.

• The organization will ask a furniture dealer to give an estimate of

value so that it can be booked as an asset in cases where the items

are to be used by the organization.

• The development department will maintain a list of other charities

that accept gifts of furniture for those donors whose furniture

cannot be used by the organization.

Developing Fundraising Policies and Procedures

Automobiles:

• Gifts of automobiles will be accepted by the organization if the

vehicles are in working order and saleable. According to recent

U.S. legislation, for a vehicle with a value of more than $500 or

that generates proceeds of more than $500, the donor’s deduction

is determined in one of two ways:

1. If the car is sold without any signiﬁcant intervening use or

material improvement by the organization, the deduction is

limited to the amount of gross proceeds received from the sale.

2. If the organization intends to make signiﬁcant intervening

use of or materially improve the car, the donor generally can

deduct its fair market value.

Other:

• Other gifts of personal property will be accepted if they are usable

to the organization or are easily saleable. The donor is responsible

for establishing the value of the contribution. If the organization

decides to sell the item but thinks the noted value is higher than

what could be realized by its sale, the development department will

inform the donor.

• Before accepting personal property gifts, the following also will be

considered: transportation costs, storage costs, the cost of selling,

and maintenance and repair costs.

AFP’s Ready Reference Series

THE AUTHORS

Barbara L. Ciconte, CFRE, is a senior vice president of consulting

services for Donor Strategies, Inc. Located in Chevy Chase, Maryland,

Donor Strategies is a professional and technical services ﬁrm providing

consulting services to the nonproﬁt sector in nonproﬁt management,

fundraising, development planning, board and staff training, and

information systems.

Barbara has worked in the nonproﬁt sector for more than 30 years

and has experience in all facets of nonproﬁt management and resource

development. Her last position before becoming a consultant in 1999

was associate dean for development and alumni relations at American

University’s Washington College of Law in Washington, D.C.

A leading national educator, she conducts workshops and seminars

for international, national, regional, and community-based nonproﬁt

organizations. Barbara is the co-author of Fundraising Basics: A

Complete Guide, Third Edition, published by Jones & Bartlett.

During her career, she has been active in AFP, serving on the board

and as president of AFP’s Washington DC Metro Area Chapter.

More recently, she was a past board member and vice chair of AFP’s

professional advancement division. She also is a charter member of

AFP’s Leadership Society and a past recipient of the AFP DC Chapter’s

Outstanding Fundraising Professional award.

Editor’s Note: Barbara L.Ciconte authored the ﬁrst edition of this

Ready Reference booklet.

R. Scott Fortnum, ACFRE, CFRE, MA is president and CEO of

Children’s Health Foundation in London, Ontario, and has worked

as a professional fundraiser since 1990. As staff and consultant

he has worked with major organizations across Canada including

universities, hospitals, and national nonproﬁts. He has held the Certiﬁed

Fundraising Executive (CFRE) designation continuously since 1995,

and is currently chair of the ACFRE Certiﬁcation Board.

Developing Fundraising Policies and Procedures

SPECIAL THANKS

For their contributions to the original 2007 edition of this Ready

Reference, AFP wishes to acknowledge and thank Peter C. Wolk, Esq.,

for his pro bono services in reviewing and editing this publication,

ensuring that the information provided complies with current U.S. best

practices. The founder and executive director of the National Center for

Nonproﬁt Law, a 501(c)(3) organization in Washington, D.C., Peter

is an author and trainer on a wide range of nonproﬁt organizational

and legal topics. As a nonproﬁt law attorney, he works with national,

regional, and local nonproﬁts of all kinds.

AFP also is most grateful to Bill Hallett, Ph.D., ACFRE, and Andrea

McManus, CFRE, for their generous contribution of information

pertaining to Canada.

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 assure that philanthropy merits the respect and trust of

the general public, and that donors and prospective donors can have full conﬁdence in the not-for-proﬁt

organizations and causes they are asked to support, we declare that all donors have these rights:

A DONOR BILL OF 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 eectively for their

intended purposes.

To be informed of the identities of those

serving on the organization’s governing board,

and to expect the board to exercise prudent

judgment in its stewardship responsibilities.

III

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 acknowledgment and

recognition.

To be assured that information about their

donations is handled with respect and with

conﬁdentiality to the extent provided by law.

VII

To expect that all relationships with

individuals representing organizations of interest

to the donor will be professional in nature.

VIII

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.

DEVELOPED BY:

Association of Fundraising

Professionals (AFP)

Association for Healthcare

Philanthropy (AHP)

Council for Advancement and

Support of Education (CASE)

Giving Institute: Leading

Consultants to Non-Proﬁts

www.afpglobal.org

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