GIFT ACCEPTANCE POLICIES AND DONORS RIGHTS

Transcription

1 GIFT ACCEPTANCE POLICIES AND DONORS RIGHTS AUTHORIZATION The Jewish Community Foundation of Montreal is authorized to encourage donors to make both outright and deferred gifts. The types of gifts include, but are not restricted to: Cash Securities Real property Gifts in kind Deferred gifts (also known as planned gifts) Other gift arrangements can be made, from time to time, as approved by the Executive Director. All programmes, solicitation plans, and activities shall ultimately be subject to the oversight of the Executive Director and the board of directors (hereinafter the Board). POLICIES FOR FINANCIALLY SIGNIFICANT GIFTS The policy of The Jewish Community Foundation of Montreal (JCF) is to inform, serve, guide, or 1) otherwise assist donors who wish to create funds at the JCF, but never under any circumstances to pressure or unduly persuade. In particular, whenever a gift involving an irrevocable transfer of assets is under consideration, every effort should be made to ensure that completing the gift would not jeopardize the donor s personal or financial security. 2) Persons acting on behalf of The Jewish Community Foundation shall in all cases strongly advise that the donor discuss the proposed gift with independent legal and/or tax advisors of the donor's choice so as to ensure that the donor receives a full and accurate explanation of all aspects of the proposed charitable gift. Furthermore, the donor will also be advised to consult with their own family as to the potential impact of the gift. 3) All significant gifts must be reviewed and approved by the Executive Director. Before acceptance, relevant information about the property shall be ascertained, including a copy of any appraisal secured by the donor. The Jewish Community Foundation also reserves the right to secure its own appraisal before accepting the property and issuing a donation receipt. For gifts of shares of private companies, the President or First Vice President must also approve. 4) The Jewish Community Foundation will not issue gift annuities. 5) The trustee of a charitable remainder trust may be a trust institution, or other qualified trustee, selected by the donor. To assist the donor in selecting the trustee, The Jewish Community Foundation may refer donors to trust institutions which are known to provide this service and with which The Jewish Community Foundation may have arranged favourable fees. Though fully cognizant of the inherent conflict of interest, The Jewish Community Foundation believes that it can fairly serve both the income and remainder beneficiary, and is thus also willing to act as Administrator and trustee of the trust. 6) The JCF shall not be involved in business activities, lotteries and mail campaigns.

2 GUIDELINES 1. Gifts of Shares in Privately Owned Companies and Other Business Interests Donors may make gifts of privately owned shares and partnership interests. These can be accepted by the JCF so long as the JCF assumes no liability in receiving them and would not be subject to penalties. In some instances the corporation is willing to redeem privately owned shares, or other stockholders are willing to purchase them. Privately owned shares may be accepted if they will not subject the JCF to penalties or adverse consequences and can likely be sold in the future to the corporation, to other stockholders, or to others interested in acquiring the corporation or the shares can produce a fair annual income return. The JCF shall follow the same appraisal procedure as for real estate, and shall issue a donation receipt based on the appraisal it considers reflective of the value of the shares. The JCF shall complete the worksheet Policy re: Gifts of Private Company Shares. 2) Gifts in Kind Gifts in Kind involve a tangible, non cash donation that could include real property (e.g., jewellery, art, etc.) or an intangible, non cash donation (e.g., a patent, copyright, royalty, contract rights, software licensing, etc.). Acceptance of Gifts in Kind requires that there be no cost to the JCF associated with these gifts. To be accepted, Gifts in Kind must be accompanied either by an independent appraisal establishing the fair market value (FMV) of the gift or an invoice or other documentation satisfactorily establishing the purchase price of the gift. A charitable tax receipt may be issued only after the JCF determines that a Gift in Kind can be received and the value of the gift has been determined, either by reference to an appraisal or by depreciating the purchase price based on the age and expected useful life of the gift. Generally the JCF does not accept jewellery, art, time shares, inventory or equipment. Services or volunteer time is not considered a receiptable gift. 3) Gifts of Real Estate Gifts of real estate may be made in various ways: outright, through a residual interest in the property, or to fund a charitable remainder trust. The following guidelines pertain to gifts of real estate in general. Where real estate is transferred to a charitable remainder trust, additional requirements of the trustee must be met. a. The JCF shall secure a qualified appraisal of the property. The appraiser secured by the JCF may take into consideration any appraisal secured by the donor and may, in some instances, confirm that appraisal, but he JCF shall ultimately rely on its independent appraisal. b. A gift receipt will be issued for the appraised value (or present value of the residual interest computed on the appraised value in the case of residual interest gifts) less any advantage received by the donor as a result of the gift.

3 c. The JCF shall determine if the donor has clear title to the property. d. The JCF shall review other factors, including zoning restrictions, marketability, current use, and cash flow, to ascertain that acceptance of the gift would be in the best interests of the Charity. e. The Jewish Community Foundation shall ordinarily conduct an environmental assessment, which may include an environmental audit, and accept the property only if (a) it contains no toxic substances, or (b) the JCF assumes no liability or limits its liability to an acceptable level. f. The cost of adhering to these guidelines may be considerable. It is expected the costs will be borne by the prospective donor. 4) Third Party Fundraising Monies raised by an outside individual or entity are not allowed. 5) Planned Giving (Deferred Gifts) BEQUESTS A charitable bequest refers to a disposition in a will to the JCF of a particular amount of money, specific property, or a percentage of the estate. Guideline s a. Sample bequest language for restricted and unrestricted gifts, including endowments, will be made available to donors and their professionals to ensure that the bequest is properly designated. Donors will also be invited to provide information about their bequest provisions and, if they are willing, to send a copy of that section of their will naming The Jewish Community Foundation, 1 Carré Cummings Square, Montreal, Quebec H3W 1M6. b. During the administration of estates containing a bequest to the JCF the Executive Director, in consultation with the Foundation s legal counsel, shall represent the JCF with reference to the bequest. c. The bequest may be assigned to the JCF subject to the contract entered into between the testator and the JCF, which shall be created separately. GIFTS OF RETIREMENT PLAN ASSETS Many potential financial supporters of the JCF likely have RRSPs, RRIFs, or other retirement plans, and the value of the assets involved can be considerably more than the donor would ever need during retirement. In some cases it can be appropriate for donors to use these assets to make current outright gifts, whereas in other cases it may be preferable to have retirement plan assets contributed upon death.

4 a. The JCF may encourage current outright gifts of assets distributed from retirement plans, provided the donor, upon consultation with his or her professional advisor, determines that he or she can part with such assets without compromising the financial security of his or her retirement years and that the tax consequences are acceptable. b. The JCF may also encourage beneficiary designations, again provided that the donor, upon consultation with his/her advisors and family, determines that this is compatible with the overall estate plan. GIFT OF A RESIDUAL INTEREST A gift of a residual interest refers to an arrangement where real property is irrevocably committed to the JCF, but the donor retains use of the property for life or a term of years. For example, the donor might give a residual interest in a residence and continue to live in it. The donor is entitled to a gift receipt from the JCF for the present value of the residual interest (assuming that the asset appraisal is deemed satisfactory and the gift is accepted). The donor shall continue to be responsible for real estate taxes, insurance, utilities, and maintenance after transferring title to the property unless the JCF, upon prior approval of the Executive Director, agrees to assume responsibility for any portion of these items. The JCF s interest in the property shall be conveyed by deed, and there shall be an agreement that specifies the respective rights and responsibilities of the JCF and of the person(s) for whose benefit the life estate has been retained. The JCF reserves the right to inspect the property from time to time to assure that its interest is properly safeguarded. CHARITABLE REMAINDER TRUSTS The charitable remainder trust is a form of a residual interest gift. The donor ("settlor") transfers property to a trustee who holds and manages it. The net income will be paid to the donor and/or other named beneficiary. When the trust terminates (either at the death of the beneficiary(ies) or after a term of years), the trust remainder is distributed to the JCF. If the trust is irrevocable, the donor is entitled to a gift receipt for the present value of the residual interest. a. A charitable remainder trust may be funded with cash, securities, or real estate. Gifts of the real estate will be subject to a thorough review. b. The trust agreement shall be either drafted by or reviewed by the donor's own legal counsel. The JCF may make prototype agreements available to the donor's legal advisor, but shall execute no agreement until that person has determined that the trust agreement is in the proper form and that the gift is appropriate for the donor's situation.

5 LIFE INSURANCE There are various methods by which a life insurance policy may be gifted to the JCF. A donor may: a. Assign irrevocably a paid up policy to the JCF; b. Assign irrevocably a life insurance policy on which premiums remain to be paid; c. Name the JCF as a primary or successor beneficiary of the proceeds. When ownership is irrevocably assigned to the JCF, the donor is entitled to a donation receipt for its value (if any) and for any premiums subsequently paid. a. Any of these types of life insurance gifts are acceptable to the JCF. In the event a policy is contributed on which premiums remain to be paid, the donor will be encouraged to pay any premiums directly. b. The JCF reserves the right to pay premiums, surrender the policy for cash, or elect a reduced paid up policy. 6) The JCF will not conduct online solicitation, use third party providers do door to door or street campaigns, cause related fundraising or any public campaign. Although volunteers may introduce donors to the JCF, all gifts must be completed with the Executive Director. 7) Conforming to the Law No gift will be accepted if it will contravene any Federal or Quebec statutes, especially the Income Tax Act and Canada Revenue Agency (CRA) rules. Tax receipts are to be issued according to Income Tax Act Regulations. 8) Amendments These Policies and may be amended at any time by a majority vote of the Board.

6 DONORS RIGHTS 1) A donor or prospective donor (the Donor) has the right to request the JCF s Annual reports, financial statements, tax returns, board lists, policies and costs of the JCF. 2) A Donor should be informed if any fees will be charged by the JCF on a fund to be created by the Donor. 3) The Donor should be advised to obtain professional advice with regard to any planned gift contemplated with the JCF, or if the proposed gift is significant in terms of the donor s financial position. 4) A Donor may avail him/herself of the JCF s Complaints and Financial Affairs Whistle blowing Policy. 5) A fund established by a Donor can only be used for charitable purposes as set out in the contract established between the JCF and the Donor. 6) The JCF honours Donors requests to remain anonymous. 7) Although a Donor my see their own record and may challenge its accuracy, the JCF will respect the privacy of Donors. Donor lists are not sold or distributed in any manner. 8) The JCF honours Donors requests not to be communicated with by the JCF (newsletters, blogs, e letters, etc). 9) Recognition mechanisms shall not be arbitrarily changed or withdrawn. 10) The JCF adheres to Imagine Canada s Code of Ethics and Donors have a right to see a copy of this Code. 11) Donations are restricted and will be used according to the agreement with the Donor, or unrestricted and thus utilized for charitable purposes at the discretion of the Board. 12) The Executive Director is responsible to all Donors. 13) The JCF or its staff cannot receive finder s fees or remuneration from a third party provider, e.g. insurance if the donor has purchased a product or service from the provider as a result of interaction by the Donor with the JCF.