4.5 Gift Acceptance Policy
The Evanston Public Library (“the Library”) is a unit of local government and as such, encourages the proposal and acceptance of tax-deductible contributions to the Library for the purposes of furthering the Library’s mission. This policy is set forth: (a) to inform the Library’s donors and prospective donors; (b) to spell out hereinafter the working rules for the acceptance of gifts and pledges; and (c) to protect the Library, its Board of Trustees (the Board), staff and volunteers from inappropriate or undesirable gifts and pledges.
4.5.1 General Procedures and Guidelines
The Library welcomes expressions of interest and financial support, regardless of size or form, from any individual, family, business, corporation, foundation, or similar source.
The Library accepts both restricted as well as unrestricted gifts providing that donor restrictions do not significantly diminish the gift’s value to the Library.
Development Staff are available to meet with any prospective donor(s) and their financial advisors, without obligation, to discuss areas of interest, the plans of the Library, types of gift commitments, and options for payment. The Executive Director or designee will have authority to sign all giving agreements on behalf of the Library. Any agreement that does not meet the requirements of the current guidelines requires the approval of the Board.
Gifts to the Library should be made in the name of Evanston Public Library. All gifts to the Library should be directed to and received by the Office of Development where they will be accepted, acknowledged and administered in accordance with the policies of the Library.
No proposal of donations or gifts of funds or real property for the benefit of the Library may be made by anyone without the approval of the Director of Development or their designee.
Donors will be notified by the Library if they receive any benefits in exchange for the gift that will impact the value of the gift.
4.5.2 Definition of Acceptable Gift Types and Forms
A gift is generally defined as an irrevocable voluntary transfer of assets from a person or an organization to the Library. Gifts are usually in the form of, but are not limited to, cash, securities, real estate, or personal property. Commitments to the Library and/or payment of same may take the form of one, or a combination, of the following:
- Cash and other outright contributions
- Pledges for current year and multi-year commitments
- Securities or other personal assets
- Deferred or planned gifts including:
- Trusts
- Annuities
- Insurance policies
- Gifts of real estate such as gift of residence with or without a retained life interest
- Bequest intentions
The Library reserves the right to accept or decline any commitment that is offered.
4.5.3 Pledges
Major and/or multi-year pledges are made in writing and commit to a specific dollar amount that will be paid according to a fixed time schedule.
4.5.4 Planned Giving
The Executive Director or designee has authority to sign planned giving agreements on behalf of the Library. Any agreement that does not meet the requirements of the current guidelines requires the approval of the Board.
The Library will use the accepted IRS policies for determining the value of planned gifts.
4.5.5 Matching Gifts
Individuals making gifts and pledges that are eligible for matching gifts are encouraged to utilize these programs to maximize the value of their gift or pledge to the Library. A donor whose gift is matched by their company will be recognized for the total amount of their individual gift plus the matching portion on their gift record. The Library will recognize an individual donor for the matching gift associated with their personal gift at the time the matching gift form is received by the Library.
4.5.6 Gift Reporting
All gifts and pledges will be reported to internal and external constituencies of the Library on an on-going basis according to the gift acceptance and recognition policies of the Library.
The total of outright gifts and written pledges received will be reported at face value according to generally accepted accounting principles. A signed pledge card or letter of intent must be filed with the Director of Development before a pledge commitment is reflected on reports. Verbal pledges will not be reported for financial purposes or in reporting fundraising efforts.
The value of any canceled or unfulfilled pledges will be subtracted from totals after two years of non-response to pledge reminders.
Gifts will be valued on the date the donor(s) relinquish the control of the assets in favor of the Library.
In cases where gifts are made with assets other than cash, the decision on when to liquidate, report, credit and recognize these assets will be made on a case-by-case basis by the Executive Director or designee.
4.5.7 Publicly-traded Securities
Gifts of publicly-traded securities will be reported, credited, and recognized at the average of the high and low market value on the day electronic transfer is received by the Library. Such securities will be conveyed to the Library for sale, consistent with the established policies of the Library.
4.5.8 Closely Held Stock
Gifts of closely held stock exceeding $10,000 in value are reported at the fair market value placed on them by a qualified independent appraiser. Gifts of closely held stock valued at $10,000 or less will be acknowledged at the per-share cash purchase price of the most recent transaction. Normally, this will be the buy-back transaction of the donor. If no buy-back is consummated, a gift of closely held stock may be credited at the value determined by a qualified independent appraiser. Appraisals will be at the expense of the donor. All such gifts of closely-held stock will be held until liquidated, at which time the funds will be used consistent with the gift intentions of the donor and the established policies of the Library.
4.5.9 Real Estate
Outright gifts of real estate will be credited, recognized, and/or commemorated at fair market value at the time it is transferred to the Library, less any encumbrances.
4.5.10 Tangible Personal Property
Outright gifts of tangible personal property for which donors qualify for a charitable gift deduction under current IRS rules will be credited, recognized, and/or commemorated at the appraised value of the property at the time it is transferred to the Library, less any encumbrances, so long as the property has been held by the donor for more than one year. If the donor has held the property for less than one year it will be reported, credited, and recognized at the level of the original cost basis. Appraisals will be at the expense of the donor. Gifts of personal property (jewelry, paintings, antiques, rare books, etc.) exceeding $5,000 in value will be reported at the fair market value placed on them by an independent, expert appraiser at the time the donor relinquishes control in favor of the Library. Appraisals will be at the expense of the donor. Gifts of $5,000 and under may be reported at the value declared by the donor or a qualified expert.
The Library’s acceptance of such gifts cannot involve significant additional expense for their present or future use, display, maintenance, or administration. Unless otherwise authorized by the Board, the Library will seek to liquidate such assets.
The Library will not accept gifts of tangible personal property (such as books, paintings, etc.) if such gifts are to be made on the condition, understanding, or expectation that the gifted items will be loaned to the donor or to persons designated by the donor for life or for an extended period of time as determined by the donor.
4.5.11 In-kind Gifts
Gifts of materials, products or services, will be accepted when the form of the gift is immediately available and is either directly usable for the mission of the Library or can be used in direct support of an official Library service. Donated services must either create or enhance the non-financial assets of the Library or require skills that would typically need to be purchased if not provided by donation. It is the sole responsibility of the donor to determine the value of the gift for their tax purposes. The Library will count the gift the same as cash at the fair-market value which will be determined in consultation with the donor. The same rules for tax deductibility that apply for gifts of tangible personal property apply to gifts in-kind of materials, products or services.
4.5.12 Insurance
Fully paid up, or otherwise vested, insurance policies for which the Library is owner and sole beneficiary will be credited and recorded as future expectancies of the Library at the unrealized death benefit (face value) of the policy in cases when the insured is age 65 or greater and at the replacement value for donors younger than 65 or discounted per schedule of actuarial life expectancy at the time of the donation.
Gifts of whole life insurance to the Library will be made by either designating the Library as the beneficiary of the policy or as both owner and beneficiary. When the gift is irrevocable because the Library is the owner and beneficiary, the donor will receive gift credit for the cash surrender value as well as the discounted present value of the unrealized death benefit minus the cash surrender value at the time the policy is transferred. As payments are made to the Library for the policy premiums, they will also be credited to the donor. The Library will report the cash value of the policy as gift income at the time the policy is transferred. The Library will report payments made by the donor for policy premiums as gift income at the time they are received.
Where the Library is named as the beneficiary, but the gift is revocable because the donor still owns the policy, premium payments made directly to the insurance company will be credited and recognized to the donor if the donor sends evidence to the Library of the payment of the policy. The gift will be tracked internally as a revocable bequest. No gift income will be reported.
Gifts of term life insurance will be tracked internally as revocable bequests, however no gift income will be reported, credited, or recognized unless the policy is executed. Because of the time limits on this type of insurance policy, no donor credit will be given unless the policy is executed.
4.5.13 Bequests
Bequest intentions, commitments of unpaid insurance policies, and other revocable deferred gifts will be recorded as future expectancies of the Library at the value established in writing by the donor through a bequest intention form, a deferred pledge agreement, a contract to make a will, a letter, or a copy of appropriate sections of the will or of the insurance or trust document, or similar.
Such revocable gift commitments will be reported, credited, and recognized, subject to the donor’s specific request and intent, only when the funds are irrevocably committed to the Library or when the gift matures.
Bequest intentions for which the donor does not indicate a specific gift value and/or does not provide an estimate of residuary bequest will be credited as future expectancies with no dollar value or payment schedule.
Bequests will be credited to campaign attainment figures as specified by the donor at the time of documentation. Such bequests will be credited, recognized and/or commemorated at the value established at the time of probate and/or at the fair market value on the date of the transfer of the asset(s). New bequest expectancies will be tracked and donors will be recognized at the face value of the bequest for stewardship purposes. Non-binding, revocable expectancies will not count toward campaign attainment figures.
4.5.14 Gifts Requiring the Expenditure of Funds
All gifts that will, or may, require expenditure of funds either at the time of the gift or at some future date (e.g., assets that require care, maintenance, security, etc. that may impose obligations on the Library) will require the approval of the Board.
4.5.15 Gift Receipt Date
For purposes of current income tax deductions such gifts will acknowledge the charitable deduction value as established by law.
The date of any contribution is defined as the date the asset(s) is irrevocably transferred to the Library. In some instances, determining that date may be difficult or impossible in the absence of relevant physical evidence. If property is personally delivered to the Library by the donor, the gift date is defined as the date of delivery of the gift. Gifts received by Library staff should be delivered to the Development Office on the date of receipt or on the next day of business following receipt. Gifts of tangible property, no matter how delivered, will be documented as received upon arrival at the Library. A gift of real estate is accepted at the time a properly executed deed to the property is delivered by the donor to the Library or the date the deed is recorded by the Office of the Recorder of Deeds (or similar office) in the country in which the property is located, whichever is first.
4.5.16 Named Endowment Funds
For the purposes of this policy statement, “endowment fund” refers to any fund, or any part thereof, not wholly expendable by the Library on a current basis under the terms of the applicable gift instrument. The Library endowment may be defined as a special reserve of money and/or assets that were given with some form of stipulation or restriction on the use of the earnings generated by the endowed fund. The endowment funds are invested in a manner conducive to appreciation of capital and in accordance with the Library Investment Policy established by the Investment Committee. Endowment funds are traditionally invested for long-term growth, but must also provide sufficient income for immediate needs. Gifts to support the endowment may be used to establish a special endowment fund or may be added to an existing endowment fund. When establishing an endowed fund, an Endowed Fund Agreement is used to specify the name of the donor(s) and the amount of the gift, the name of the fund and the donor’s intended purpose for the use of the earnings. This Agreement is dated and executed with the signature of the Executive Director or their designee and the donor(s) or their approved designates.
In designating an endowment gift for a specific purpose, the donor is encouraged: (a) to describe that purpose as broadly as possible and (b) to avoid detailed limitations and restrictions. In the event the specific purpose is no longer applicable, the Library will apply the funds in a manner consistent with donor intentions and the Library mission as approved by the Board. All agreements relating to endowed funds should provide a balance between the specific terms as to how the Library will administer the endowed fund and flexibility as to the future conditions which may impact the intended use of the funds.
Types of Endowment
Endowments have commonly been defined as either a “pure endowment,” or a fund that has been invested in perpetuity restricting that the principal may never be invaded); a “quasi-endowment” which is also a fund in perpetuity, however in accordance with the donor’s intentions the principal may be accessed with Board approval); and a “term endowment” involving donor and donee agreed upon restrictions of the use of principal which will lapse after a donor-designated period of time or event. Today, in accordance with accounting practices established by the Financial Accounting Standards Board of Trustees (FASB), when referring to endowment funds the following definitions are in effect: “permanently restricted,” which are permanently limited by donor-imposed stipulations; “temporarily restricted,” whose use by the organization is limited by donor imposed requirements that may expire within an established period of time or can be fulfilled and/or removed by actions of the Board; and ”unrestricted” funds that have neither been permanently restricted or temporarily restricted by donor-imposed stipulations.
As funds are received with the intention of designated support of the endowment, the donor agreement accompanying the funds must accurately reflect the donor’s intentions and the appropriate nature of the endowed fund. The understanding and proper use of these terms is critical for accounting and fundraising purposes. Each endowment fund must be supported by such documentation.
Minimum to Establish a Named Endowed Fund of the Library
Gifts to establish a named endowment fund for specific purposes must meet the minimum dollar requirement as established in the Library’s Donor Recognition Policy. The principal amount of the original gift need not meet the minimum dollar requirement if the donor agrees to fully fund the endowment at the minimum dollar requirement within a period of time less than five years specified by the donor and approved by the Executive Director. The minimum dollar requirement to establish a named endowed fund from this date forward is $50,000.
The Library reserves the right to review the minimum amounts required for named endowments periodically and to amend the minimum amount required so as to ensure that endowment proceeds are sufficient to fund the intended purpose(s) of the endowment. When the Library acts to increase the minimum amount required to establish a particular named endowment fund, such action will not be retroactive to funds already established and named.
4.5.17 Donor Responsibilities
Although representatives of the Library will provide all appropriate assistance, the final responsibility regarding asset evaluations, tax deductibility, and/or similar federal, state, and/or local legal compliance issues rests with the donor(s) and/or with such advisors as the donor(s) secure. The Library recommends that all donors consult with their legal tax counsel when planning all gifts, especially non-cash gifts or future planned gifts.
4.5.18 Policy Amendment and Review
The current policy was approved by the Library Directors and its Board on March 16, 2022. An attorney or other qualified individual and the Board will review this policy no less frequently than every five years in order to ensure accurate reflection of current laws. Any prospective gifts not covered by this policy must come before the Board for consideration.