Montalvo Arts Center

Gift Acceptance Policies

Gift Acceptance Policies

STATEMENT OF PRINCIPLES

This section establishes the philosophy and principles under which Montalvo
Arts Center shall accept gifts. It commits Montalvo Arts Center to disclosure,
adherence to law, avoidance of conflict-of-interest, and preservation of the
interests of the donors. All activity in pursuit of gifts shall reflect honor upon
Montalvo Arts Center. To that end,

1) ACCEPTANCE OF GIFTS

This section establishes guidelines for acceptance of gifts and the protection
of Montalvo Arts Center from unwanted legal and financial liabilities and
undue influence on the part of donors.

a. Montalvo Arts Center shall, subject to certain restrictions, accept

the following:

• Bequests
• Charitable lead trusts
• Charitable remainder truss
• Life insurance policies
• Pooled income funds
• Remainder interest in real property
• Gifts In-kind

These gifts may be funded by:

• Cash
• Bonds, securities, and stock
• Real estate
• Life insurance
• Outright gifts of appreciated property or other assets

b. Contributions shall be accompanied by document that includes,

at a minimum, the name and address of the donor, date
established, provisions for acceptance, purpose, utilization
procedures, reporting requirements and distribution
authorization.

1
 c. The Executive Director shall have final authority of the approval
of acceptance of any gift (that falls within the general guidelines
of these policies).

d. Prior to acceptance, gifts of real estate or personal property shall

be reviewed by the Development Director or the Executive
Director and by appropriate specialists for statements as to the
value of the gift and any attendant encumbrances or burdens.
Unless approved, in advance, by majority vote of the Board,
acceptance of real or personal property shall be limited to that
which is debt-free and title clear. Acceptance of gifts of real
estate shall be delayed until the property is certified to be free of
hazardous waste and not unduly subject to regulatory restriction
(s).

e. Prior to acceptance, each agreement or contract shall be

reviewed by Montalvo Arts Center’s legal counsel.

f. Prior to acceptance, each restricted gift shall be reviewed by the

Treasurer, the Development Director, or the Executive Director
to assure that such gift is consistent with the mission and
purposes of Montalvo Arts Center and that the restriction will not
pose a future burden on Montalvo Arts Center.

g. A minimum of $100,000 shall be required to establish a

charitable remainder trust, paying no less than the minimum
required by law and no more than 2% percentage points less
than the current prime interest rate.

2) GIFTS THROUGH LIFE INSURANCE POLICIES OWNED BY THE

ORGANIZATION

This section determines the procedures under which Montalvo Arts Center
shall accept gifts of life insurance, including ownership, premium payments,
and accounting for such gifts.

a. Contributed insurance policies must be purchased by the donor.

b. Montalvo Arts Center shall be the owner of contributed life

insurance policies but shall not act as a purchaser.

c. Montalvo Arts Center shall be the agent of payments on behalf of

the insured in cases where Montalvo Arts Center is the owner
and beneficiary and the insured has made premium payments
through Montalvo Arts Center. Such payment shall constitute the
value of the contribution.

2
 d. In the event a donor shall cease to make premium payment
through Montalvo Arts Center, the Finance Committee shall
decide, on a case-by-case basis, the efficacy of paying the
premium from operating funds. The Finance Committee shall
report such decisions to the Board of Directors.

e. Accounting shall keep a schedule of anniversary dates to be

aware of the cash surrender value that shall be reported as the
asset.

f. The Executive Director shall ensure that premiums are paid in a

timely manner.

3) VALUATION AND NOTIFICATION

This section establishes the ways in which Montalvo Arts Center shall value
gifts and notify the donor of the value.

Montalvo Arts Center shall comply with all federal and state laws regarding
valuation and acknowledgement of philanthropic donations.
Gifts of Cash or Cash Equivalent

All donors of cash of its equivalent shall receive notification of their

contribution, including:

• Date
• Purpose of the gift
• Amount of gift
• Payment amount received, if different
• Tax deductible portion of the amount if different than the amount
received
• Whether Montalvo Arts Center provided any goods or services in
exchange for all or part of the contribution, and if so, a
description and good faith estimate of the fair market value
(FMV) of the goods and services provided to the donor

Gifts of Stocks, Bonds, or Other Negotiable Securities

Gifts made by transfer of assets other than cash or its equivalent shall
be valued and recorded as of the date the donor relinquished control of
their asset in favor of Montalvo Arts Center.

All donors of stocks, bonds, or other negotiable securities shall receive

notification of their contribution, including:

3
 • Date of the unconditional delivery (transfer of control) to
Montalvo Arts Center or its agent
• Purpose of the gift
• Description of the asset
• Value of the asset (stated as an average of the high and low
values on the date the donor transferred control)
• Whether Montalvo Arts Center provided any goods or services to
the donor in exchange for all or part of the contribution, and if
so, a description and good faith estimate of the fair market value
of the goods and services provided

a. Gifts of Real Estate or Tangible Personal Property

All donors of real estate or tangible personal property shall receive

notification of their contribution, including:

• Date that possession of the property and the benefits and

burdens of ownership are transferred (usually by executed deed)
• Purpose of the gift
• Description of the property but not the value
• Whether Montalvo Arts Center provided any goods or services to
the donor in exchange for all or part of the contribution, and if
so, a description and good faith estimate of the fair market value
of the goods and services provided

INFORMATIONAL NOTE: If the value of an item or group of like items

exceeds $5,000, the donor must a) obtain a qualified appraisal and b)
submit an appraisal summary with the return claiming the deduction.

4) DONOR ACKNOWLEDGEMENT AND RECOGNITION

This section establishes the right of donors to receive appropriate

recognition for gifts.

6.1 Appropriate recognition shall be provided to all donors to Montalvo

Arts Center.

6.2 Gifts of $50 or more will receive written acknowledgement using

valuation standards listed above.

6.3 At a minimum, an acknowledgment over the signature of the Assistant

Director shall be mailed for each contribution. Gifts of $1000 and
above will be acknowledged by the Executive Director and/or the
Board President.

4
 6.4 Every attempt will be made to process and acknowledge receipt of
gifts within three business days.

6.5 Gifts from the staff will be acknowledged by the Board president.

5) ACCOUNTING FOR PHILANTHROPIC GIFTS

This section stipulates that Generally Accepted Accounting Principles be

followed in accounting for contributed funds and provides for an annual audit
by an independent CPA firm. It also sets forth policies for the recording and
dating of contributions when they are received.

7.1 Valuation of all assets and holdings, including endowed, planned, and
deferred gifts, shall be according to Generally Accepted Accounting
Principles (GAAP) as promulgated by the Financial Accounting
Standards Board (FASB).

7.2 Gifts shall be accounted for in accordance with Generally Accepted

Accounting Principles (GAAP) as promulgated by the Financial
Accounting Standards Board (FASB) and shall be reported to the Board
at its regular meetings.

7.3 Montalvo Arts Center shall manage and disburse gifts in accordance
with donor intent.