Lives in the Balance, a non-profit organized under the laws of the State of Massachusetts, encourages the solicitation and acceptance of gifts for purposes that will help further and fulfill its mission. The following policies and guidelines govern acceptance of gifts made to Lives in the Balance or for the benefit of any of its programs.
I. Purpose of Policies and Guidelines
The Board of Directors and Advisory Committee of Lives in the Balance and its staff solicit current and deferred gifts from individuals, corporations, and foundations to secure the future growth and mission of Lives in the Balance (hereafter referred to as “the Charity”). These policies and guidelines govern the acceptance of gifts by the Charity and provide guidance to prospective donors and their advisors when making gifts to the Charity. The provisions of these policies apply to all gifts received by the Charity for any of its programs or services.
II. Use of Legal Counsel
The Charity seeks the advice of legal counsel in matters relating to acceptance of gifts when appropriate. Review by counsel is recommended for:
- Closely held stock transfers that are subject to restrictions or buy-sell agreements
- Documents naming the Charity as Trustee
- Gifts involving contracts, or other documents requiring the Charity to assume an obligation
- Transactions with potential conflict of interest that may invoke IRS sanctions
- Other instances in which use of counsel is deemed appropriate by the Board of Directors.
III. Conflict of Interest
The Charity urges all prospective donors to seek the assistance of personal legal and financial advisors in matters relating to their gifts and the resulting tax and estate planning consequences. The Charity complies with the laws of the states of Maine and Massachusetts Development Best Practices on Planned Giving. The Charity does not advise the donor on legal matters nor does the Charity utilize the Charity’s legal team to advise donors on their planned giving gift.
IV. Restrictions on Gifts
The Charity accepts unrestricted gifts and gifts for specific programs and purposes, provided that such gifts are not inconsistent with its stated mission, purposes, and priorities. The Charity does not accept gifts that are too restrictive in purpose. Gifts that are too restrictive are those that are too difficult to administer or gifts that are for purposes outside its mission. All final decisions on the restrictive nature of a gift, and its acceptance or refusal, are made by the Board of Directors.
V. The Gift Acceptance Committee
The gift acceptance committee consists of the Founding Director, Executive Director, and one member of the Advisory Committee, and is charged with the responsibility of reviewing all gifts made to the Charity, properly screening and accepting those gifts, and making recommendations to the Board on gift acceptance issues when appropriate.
VI. Types of Gifts
The following gifts are acceptable:
- Tangible Personal Property
- Real Estate
- Remainder Interests in Property
- Life Insurance
- Charitable Gift Annuities
- Charitable Remainder Trusts
- Charitable Lead Trusts
- Retirement Plan Beneficiary Designations
- Life Insurance Beneficiary Designations
The following criteria govern the acceptance of each gift form:
1. Cash is acceptable in any form. Checks shall be made payable to Lives in the Balance and should be delivered to the Executive Director in the administrative offices.
2. All other gifts of tangible personal property shall be examined in light of the following criteria:
- Does the property fulfill the mission of the Charity?
- Is the property marketable?
- Are there any undue restrictions on the use, display, or sale of the property?
- Are there any carrying costs for the property?
- The final determination on the acceptance of other tangible property gifts shall be made by the Gift Acceptance Committee
3. Securities: The Charity can accept both publicly traded securities and closely held securities.
4. Marketable securities may be transferred to an account maintained at one or more brokerage firms or delivered physically with the transferor’s signature or stock power. As a general rule, all marketable securities shall be sold upon receipt unless otherwise directed by the Gift Acceptance Committee. The Executive Director and all Development staff are not permitted to sell or otherwise direct stock securities. In some cases marketable securities may be restricted by applicable securities laws; in such instance the final determination on the acceptance of the restricted securities shall be made by the Gift Acceptance Committee.
5. Closely held securities, which include not only debt and equity positions in non-publicly traded companies but also interests in LLPs and LLCs or other ownership forms, can be accepted subject to the approval of the Gift Acceptance Committee. However, gifts must be reviewed prior to acceptance to determine that there are no restrictions on the security that would prevent the Charity from ultimately converting those assets to cash,the security is marketable, and the security will not generate any undesirable tax consequences for the Charity.
If potential problems arise on initial review of the security, further review and recommendation by an outside professional may be sought before making a final decision on acceptance of the gift. The final determination on the acceptance of closely held securities shall be made by the Gift Acceptance Committee and legal counsel when necessary. Every effort will be made to sell non-marketable securities as quickly as possible.
6. Gifts of real estate may include developed property, undeveloped property, or gifts subject to a prior life interest. Prior to acceptance of real estate, the Charity shall require an initial environmental review of the property to ensure that the property has no environmental damage. In the event that the initial inspection reveals a potential problem, the Charity shall retain a qualified inspection firm to conduct an environmental audit. The cost of the environmental audit shall generally be an expense of the donor.
When appropriate, a title binder shall be obtained by the Charity prior to the acceptance of the real property gift. The cost of this title binder shall generally be an expense of the donor. Prior to acceptance of the real property, the gift shall be approved by the Board of Directors and by the Charity’s legal counsel. Criteria for acceptance of the property shall include:
- Is the property useful for the purposes of the Charity?
- Is the property marketable?
- Are there any restrictions, reservations, easements, or other limitations associated with the property?
- Are there carrying costs, which may include insurance, property taxes, mortgages, or notes, etc., associated with the property?
- Does the environmental audit reflect that the property is not damaged?
7. The Charity will accept a remainder interest in a personal residence, farm, or vacation property subject to the provisions of the paragraph above. The donor or other occupants may continue to occupy the real property for the duration of the stated life. At the death of the donor, the Charity may use the property or reduce it to cash. Where the Charity receives a gift of a remainder interest, expenses for maintenance, real estate taxes, and any property indebtedness are to be paid by the donor or primary beneficiary.
8. The Charity must be named as both beneficiary and irrevocable owner of an insurance policy before a life insurance policy can be recorded as a gift. The gift is valued at its interpolated terminal reserve value, or cash surrender value, upon receipt. If the donor contributes future premium payments, the Charity will include the entire amount of the additional premium payment as a gift in the year that it is made. If the donor does not elect to continue to make gifts to cover premium payments on the life insurance policy, the Charity may:
- continue to pay the premiums,
- convert the policy to paid up insurance, or
- surrender the policy for its current cash value
9. The Charity may offer charitable gift annuities. The minimum gift for funding is $5,000. The Executive Director may make exceptions to this minimum. The minimum age for life income beneficiaries of a gift annuity shall be 55. Where a deferred gift annuity is offered, the minimum age for life income beneficiaries shall be 45. No more than two life income beneficiaries will be permitted for any gift annuity. Annuity payments may be made on a quarterly, semi-annual, or annual schedule. The Founding Director may approve exceptions to this payment schedule. The Charity will not accept real estate, tangible personal property, or any other illiquid asset in exchange for current charitable gift annuities. The Charity may accept real estate, tangible personal property, or other illiquid assets in exchange for deferred gift annuities so long as there is at least a 5 year period before the commencement of the annuity payment date, the value of the property is reasonably certain, and the Board President approves the arrangement. Funds contributed in exchange for a gift annuity shall be set aside and invested during the term of the annuity payments. Once those payments have terminated, the funds representing the remaining principal contributed in exchange for the gift annuity shall be transferred to the Charity’s general endowment funds, or to such specific fund as designated by the donor.
10. The Charity may accept designation as remainder beneficiary of a charitable remainder trust with the approval of the Gift Acceptance Committee. The Charity will not accept appointment as Trustee of a charitable remainder trust.
11. The Charity accepts a designation as income beneficiary of a charitable lead trust. Neither the members of the Board of Directors nor the members of the Gift Advisory Committee will accept an appointment as Trustee of a charitable lead trust.
12. Donors and supporters of the Charity are encouraged to name the Charity as beneficiary of their retirement plans. Such designations are not recorded as gifts to the Charity until such time as the gift is irrevocable. When the gift is irrevocable, but is not due until a future date, the present value of that gift will be recorded at the time the gift becomes irrevocable.
13. Donors and supporters of the Charity are encouraged to make bequests to the Charity under their wills and trusts. Such bequests are not recorded as gifts to the Charity until such time as the gift is irrevocable. When the gift is irrevocable, but is not due until a future date, the present value of that gift will be recorded at the time the gift becomes irrevocable.
14. Donors and supporters of the Charity are encouraged to name the Charity as beneficiary or contingent beneficiary of their life insurance policies. Such designations shall not be recorded as gifts to the Charity until such time as the gift is irrevocable. Where the gift is irrevocable, but is not due until a future date, the present value of that gift is recorded at the time the gift becomes irrevocable.
VII. Miscellaneous Provisions
A. Securing appraisals and legal fees for gifts to the Charity: It is the responsibility of the donor to secure an appraisal (where required) and independent legal counsel for all gifts made to the Charity.
B. Valuation of gifts for development purposes: The Charity records gifts at their valuation for gift purposes on the date of gift.
C. Responsibility for IRS Filings upon sale of gift items: The Board of Directors is responsible for filing IRS Form 8282 upon the sale or disposition of any asset sold within two years of receipt by the Charity when the charitable deduction value of the item is more than $5,000. The Charity files this form within 125 days of the date of sale or disposition of the asset.
D. Acknowledgement of all gifts made to the Charity and compliance with the current IRS requirements in acknowledgement of such gifts is the responsibility of the Board of Directors.