donation agreement

Donation - donation agreement

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A donation agreement, also called a charitable gift agreement, is a document that established proof of a donation or gift to a charitable organization. It is an important record for both the charitable organization (the receiver) and the person or entity donating (the donor) because it supports internal record-keeping and aids with tax preparation.

A donation agreement will include the names of the parties, a description of the donation, whether a receipt that was given, and possibly the intended use for the donation. The agreement should also include a revocability (whether the donation can be taken back) section and define expense responsibility.

According to the Law of the People’s Republic of China on Donations for Public Welfare, Contract Law of the People’s Republic of China, Regulation on Foundation Administration, the Rules of Shanghai East China Normal University Education Development Fund and the Administrative Regulations of Shanghai East China Normal University Education Development Fund, Party A and Party B, through the equal negotiation, have consensus on the following donation agreement:

Shanghai Key Laboratory of Pure Mathematics and Mathematical Practice, East China Normal University International Mathematical Olympic Research Center, department of mathematics and other relevant departments of East China Normal University

In order to carry out the goals and missions of the East China Normal University Core Mathematics and Practical Research special fund in a better manner, both parties agree upon, through fully negotiation, below donation agreement memorandum:

To support the education development of East China Normal University, Party A donates RMB100,000,000 (RMB100 million) to Party B, to set up the “Core Mathematics and Practical Research” special fund, for the purposes of education research and disciplines development of East China Normal University, department of mathematics and other departments of the university. Among the donated funds, a total of RMB 20,000,000 (RMB20 million) has no designated usage, while a total of RMB80,000,000 (RMB80 million) is designated to be used for supporting the education research and disciplines development of department of mathematics and other departments of the university.

The term of donation is 5 years, during which Party A will donate RMB10,000,000 (RMB10 million) in Year 1, RMB15,000,000 (RMB15 million) in Year 2, RMB20,000,000 (RMB20 million) in Year 3, RMB25,000,000 (RMB25 million) in Year 4, and RMB30,000,000 (RMB 30 million) in Year 5. A total of RMB4 million per annum has no designated usage, while the rest of funds is designated to be used for supporting the education research and disciplines development of department of mathematics and other departments of East China Normal University.

(ii) For the part of funds used in the “Core Mathematics and Practical Research” special fund, the management committee of the “Core Mathematics and Practical Research” special fund is entitled to manage and use. The committee consists of Professor Xiong Bin, the representative(s) of Donor and the “Core Mathematics and Practical Research” special fund, and Professor Xiong Bin acts as the chairman. The committee is responsible to formulate the administrative regulations and financial management rules of the “Core Mathematics and Practical Research” special fund. Professor Xiong Bin, as the finance manager, takes charge of the financial management of the special fund.

East China Normal University and the department of mathematics and other departments of the university will provide as many supports and services as possible to Party A, so long as it does not violate the laws and regulations and damage reputation of the university.

This memorandum is an appendix of the Donation Agreement entered into by both parties on , 2017. This memorandum, taking effect from the date of signing by both parties, has four originals and each party keeps two originals. All the originals enjoy the same legal effectiveness as the Donation Agreement.

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1. Prospects. Prospects are people who haven't yet donated but are prime candidates for supporting your organization in some way, large or small. They're people you want to make sure receive your mailings, from your quarterly newsletter to your annual appeal. Some day, when the right pieces come together--extra money in their pocket or a personal connection to your mission-- prospects have a high likelihood of sending you a donation.

2. Individual donors. Individual donors come to donate to your organization for myriad reasons. Perhaps they came to an open house or other event you held, were impressed with the event and your organization, and donated beyond just the admission fee. They may have become a member or donated to a specific cause being showcased by the event.

Perhaps your individual donor responded to a direct-mail piece. Your appeal spoke to an interest of theirs, they were impressed with your statistics, or they remembered a friend of theirs saying they were a member of your organization and really appreciated what you do, and the person donated a small amount for that reason alone.

Individual donors will collectively be the lifeblood of your donor base. No one individual donation brought in this way is going to make or break you, but together they form a large percentage of your annual operating income.

3. Major donors. Major donors rarely happen overnight. They might take years of cultivation, but once they decide to give, they give in large sums. Some may have the capacity to give a large sum annually; some may give only strategically when you are doing a special campaign.

Cultivation and stewardship are important to major donors. They don't want to be "sold to," but they also want to be kept apprised of what your organization is doing--i.e., how you're using their donation.

One of the best ways to steward major donors is to assign each one to the most suitable board member. It's likely many of the major donors came through board member connections to begin with. Help your board members learn how to best steward donors if they don't already know. A plan should be in place for each major donor to receive a certain amount of correspondence each year--not asking for a donation but simply updating them on key initiatives or the overall status of the organization.

4. Corporate donors. Corporate donors require a completely different approach than individual and major donors. Although they certainly do exist, few corporations give large donations simply to be philanthropic. They expect certain marketing opportunities from their donation--a press release announcing a significant gift, a check presentation photo sent to the papers, naming of a key area in the building to which they're giving, publicity for sponsorship donations before, during and after an event.

Corporations should be key donors and donor prospects in any organization's development plan. The board should be enlisted to help identify corporations for whom your mission would appeal. Corporations don't just donate for their own or their owner's sake; help them understand that your organization's mission is near and dear to the hearts of their employees.

You'll want to figure out the fiscal year for the corporations you plan to approach as much as possible. As you try to gather this information, you might consider creating a corporate mailing piece that can be sent a few times a year to a certain number of corporations. Once you start to collect specifics about their fiscal year, you can group those twice-a-year mailings by the most logical mailing period for a company's fiscal year.

5. Foundations. Private foundations are pots of money set aside by a person, family or other entity for donation purposes. They typically fall under tax-free IRS laws which, for the tax-free status, require them to give away a certain amount of money--typically a percentage of the income or the principal of the fund itself, depending on how it's set up--each year. To do that, they often target types of charities they're interested in and open a grant proposal round once or twice a year during which organizations can appeal to them for funding.

Foundations often prefer to fund programs that actually result in accomplishing the mission of the organization. Few foundations offer funding to capital campaigns, and fewer tend to offer funding of general operating funds for the day-to-day business of the organization. Most require a post-grant report to give them the measurables that show how their funding helped you accomplish your mission.

Donation letters are some of the most effective ways to reach your donors and solicit a gift. However, it’s not enough to simply send the same appeal to your entire supporter base and ask them to make a donation.

Whether you’re just starting your donation letter strategy or seeking ways to improve it, it’s always a good idea to review the basics and make sure your communication strategies lay a solid foundation for growth.

As you’re first building out the recipient list for your donation letters, your best bet is to look at previous donors. They’re already familiar with your organization and your work, meaning they’re more likely to give again.

Donation letters are also a great way to engage supporters who have never given before. For instance, you can take a look at your database of past volunteers. Even though you know they’ve never given, you also know that they support your mission.

Make sure you open up your letter by greeting the recipient. It’s important that you include their name– donation letters without a name seem impersonal and are more likely to be ignored. When donors read direct mail appeals, the first thing they look for is a personalized salutation. Some studies show that emails including names in the salutation are 26% more likely to be opened! Whether you’re writing the letter by hand or through a communications tool, don’t forget this vital detail.

If the recipient hasn’t heard of your organization before, you definitely need to explain your mission at the beginning. This way, readers get a good understanding of what you’re fighting for and the goals you want to accomplish. One of the best ways to do this is by sharing a story from someone who’s benefited from your organization, and then sharing how donors helped make a difference in that person’s life. This connects donors to your mission and shows them the people they’ll help with a gift.

You’re likely sending out a donation letter for a specific reason, whether that’s a project, campaign, or event. Make sure to describe that reason clearly and include key details like dates or guidelines. The story at the beginning of your donation letter will reinforce your appeal!

Don’t forget to explain why it’s important for your donors to support this project. How does it help them make a difference? Why should they give to this program in particular? For instance, if you’re raising money to provide resources to schools around the world, tell your donors the exact school and community their donations will support. Giving a backstory is a great way to connect deeper with prospective donors.

Donors like knowing exactly where their money is going and how it will help make a difference. Within your donation request letter, make a strong donation ask by describing specifically what that gift will do. For example, stating that a donation of $100 provides a dog with food, shelter, and medicine helps donors understand their impact. It may also inspire more generosity—they might decide to increase their original $50 donation to $100!

End the letter by signing your name, including any contact information, and thanking your audience for their future gift. Anyone who makes a gift to your organization deserves to be thanked sincerely. Even if your donation letter is simply asking for a gift, thanking the recipient for their time and attention shows that you appreciate them taking the time to read your appeal.

Tell a story. It’s been proven that a captivating story is one of the best ways to connect with your donors. In your donation letter, make sure to include a personal story from someone that’s benefited from your programming. Instead of telling a donor what your organization does, show them! This is a great way to introduce your mission to those who haven’t heard about your organization before in a compelling way.

Know your audience. You’re going to be sending donation letters to a wide variety of supporters, whether they’re young or old, past donors or new donors, one-time or recurring donors. Your donation letter should reflect those differences by catering to those various donor segments. For instance, a donation letter to someone who previously gave before should include an acknowledgment of that fact as well as the impact of that gift.

Be specific. When asking for donations from supporters, you have to be specific about what you want them to do. Don’t just specify why your organization needs funds during this time— specify how much you want them to give by suggesting exact donation amounts. It’s also helpful to explain why donors should give now instead of waiting to make a gift. When your recipients understand the appeal’s urgency and have an idea of how much they should give, they’re more likely to donate immediately instead of waiting.

Track donation letter data. Each time you send a donation letter, whether it’s by email or direct mail, you should be collecting and storing data about that letter’s performance. Make sure your tools can track important data points like the recipient’s name, whether the recipient responded, and how often donation letters convert to gifts.

Pick the perfect time to send it. Try to send a direct mail donation letter at the beginning of your campaign. You don’t want to risk asking too late—the recipient may not have enough time to make a gift before your campaign ends! On the other hand, sending one too early can have its drawbacks, too. For example, if you’re sending a donation letter asking for gifts to your Giving Tuesday campaign, sending too early may result in the recipient forgetting about the event before it even happens. Carefully consider the perfect time to send donation letters and find that sweet spot between too late and early.

Your donation letter has one primary purpose: to inspire donors to give. But a great donation appeal letter does more! By following these donation letter best practices, you lay the foundation for future engagement. Sending an engaging, inspiring donation letter gives you the opportunity to get to know your supporters better and build long lasting relationships.

When sending a donation request letter, there’s a standard format you can follow or adjust to suit your unique voice and audience. Above all, your donation request letter should be personalized to the recipient and effectively explain how their donation will make a difference in the world.

This template is very generic and can be referenced for any type of fundraising effort. Use the template for guidance to ensure you hit the most important points, but feel free to add your own spin to it in order to better connect with your audience.

Every donation you receive should be answered with a heartfelt thank-you letter. After all, without the support from your donors, your organization wouldn’t be able to make the meaningful difference it has.

When crafting your thank-you donation letter, feel free to use this template to guide you. This way you know you’re keeping the content personal and effectively showing appreciation to the donor. Remember to include the impact of the gift so that donors know it was put to good use.

Writing a donation letter during times of crisis and instability may seem like a daunting task. When approaching delicate topics like this, your best bet is to acknowledge it right off the bat and let donors know you understand their situation. In the end, it’s important to remember that these letters should be donor-centric and focus on connecting the donor to the people they’ll help.

We’ve written about fundraising letters before, and have even more templates for different situations. If you’re curious about how to specifically write a school fundraising letter or a matching gift fundraising letter, we urge you to check out our other fundraising letter guide with templates.

A simple promise to donate may be all an organization needs from a donor. However, before investing substantial time, money, and credibility in a larger-scale project, an organization may want to minimize the potential for misunderstandings and make a donor’s promise to support the project a legally binding obligation. A carefully crafted donation agreement can accomplish this; it can ensure that there is a meeting of the minds between a donor and donee as to the amount and timing of the donation and other important issues that may need to be addressed to assure a mutually satisfactory experience.

This guide looks at the situations where it is desirable to create a legally enforceable promise to make a gift and describes ways to do so. It generally avoids covering material addressed in the guide Restricted Gifts: Issues to Consider Before Making or Taking a Gift for a Specific Purpose. Readers are encouraged to review that guide, particularly the section entitled “The Donation Agreement,” in conjunction with this guide.

Charitable organizations routinely solicit commitments for future contributions to support the organization or particular projects. These commitments are sometimes referred to as pledges. They may be oral or contained in an informal writing such as a signed pledge card or a letter. Promises to make a future donation may, if properly documented, be relied upon in Pennsylvania as a binding contract and, if the donor fails or refuses to satisfy its commitment, may be enforced by judicial action.

A donation agreement can provide this documentation. It can also set forth expectations and understandings to assure a satisfactory experience for both donor and donee. A challenge is to distinguish the set of circumstances calling for a donation agreement from the vast number of times a simple pledge will suffice.

A donation agreement is always necessary when the donor will impose, and donee will accept, certain conditions or continuing obligations pertaining to the gift. For example, formal, written agreements are needed for:

Under these and similar circumstances, both the donor and the donee have a heightened interest in having the terms of the gift clearly evidenced to avoid future misunderstanding. The donation agreement is not discretionary and, thus, the arguments for and against set forth below are irrelevant.

What are the consequences if a donor fails to deliver on a pledge? If the likely outcome is little or no financial hardship or other substantial damage to the organization and its work, then there’s no need to insist upon a donation agreement.

A donor could be offended by a request for a donation agreement formalizing their pledge, believing that such a request questions their trustworthiness or financial capacity. While this can be viewed as cause to forego a request, it alternatively can be viewed as a reason for careful communication of the request. When donor sensitivity could be an issue, it is important for the conservation organization to have an inoffensive rationale for the requested agreement and a strategy for clearly communicating it to the donor.

An excellent reason for a donation agreement is that, in the event of a donor’s premature death, the donor’s estate may not be willing or able to honor a promise of a gift not properly documented so as to constitute a legally binding contract. The estate is always permitted—and legally obligated—to honor contracts made during the lifetime of the decedent. This justification for requiring a donation agreement is highly useful because it applies universally and without regard to the trustworthiness or creditworthiness of the donor.

A promised contribution may incentivize an organization to take steps or adopt a plan of action desired by the donor. Motivated by the magnitude of the anticipated contribution, the organization might move forward with an otherwise infeasible program or project. It may make public announcements, solicit other donors to contribute to the effort, and otherwise stake its reputation on the expectation that the necessary funding is in hand. An organization may want a donation agreement to protect it from these vulnerabilities.

Example: The conservation organization wants to acquire a parcel of land important to its mission. It has sufficient funds for the deposit but must rely on donor contributions to pay the balance. Before it risks losing a non-refundable deposit or invests other substantial sums in due diligence investigations, the conservation organization needs assurance via donation agreements that the donor will keep promises to contribute funds needed for closing.`
Example: Conservation organizations commit staff time and incur a variety of out-of-pocket expenses to bring a conservation easement donation to fruition. The organization needs protection to ensure it is fully reimbursed whether the easement is consummated or not. Furthermore, the organization must consider that each easement added to its portfolio increases the risk of future enforcement action. Before investing in easement preparation work, the organization needs a firm agreement regarding the amount and timing of contributions to defray the organization’s expenses, both short-term (through the easement closing date) and long-term (for administration and enforcement of the easement in perpetuity).

A review of court cases indicates that actions for failure to make a promised donation are rare. The reason may be that potential donors do not make promises that they won’t keep. Another may be that charitable organizations deem the cost of enforcement—not only in litigation but in public and donor relations—not worth the benefit of collecting the promised gift. Sometimes, however, the harm to an organization from a donor failing to honor a commitment outweighs the costs and risks of enforcement.

”Consideration” is a legal term that means something of value received for a promise. When a person who makes a promise receives nothing in return, the law does not require the promise to be kept unless the court finds a legally sufficient substitute for consideration. To maximize the enforceability of a promise, the donation agreement should include at least one, and preferably all, of the following substitutes for consideration:
As illustrated by the examples in the preceding section, a donation promise may, and often does, result in the conservation organization taking steps in reliance on receipt of the donation. If the donation doesn’t materialize, and a court finds that such steps were reasonable and taken in good faith in reliance on the donation, the court can find:

A well-drafted donation agreement will include a description of the investment in time and money or other prospective detriment that the conservation organization is likely to incur in reliance on the promised donation.

Contracts (whether or not donation agreements) often begin with a recitation of nominal consideration such as “in consideration of $1.00” and may continue to add a phrase such as “and other good and valuable consideration the receipt of which is hereby acknowledged.” The purpose of reciting nominal consideration is to assure that, if there is no actual consideration passing between the parties (as, for example, in a donation agreement), the promises contained in the document will be recognized as a binding contract.

If both parties are making promises in the agreement, then a more specific recitation of consideration may be included. The following recital of consideration in a stewardship funding agreement is one example:

in consideration of the mutual promises of [easement holder] to accept responsibility for administration of a conservation easement on donor’s property and the promises of donor to make the stewardship funding available as and when required under this agreement.

If a contribution is not voluntary, it is not a donation deductible for federal income tax purposes. This raises the question: if someone enters into a legally binding agreement to donate property or cash to an organization, is the contribution still considered voluntary? Fortunately, the courts have confirmed that a donation may be voluntary notwithstanding that its terms of payment are governed by a legally enforceable donation agreement.

A fundamental purpose of any agreement evidencing a cash donation is to set the amount of the donation and the time or times of required payment. Typically, the promised sum is to be paid in full on or before a specific date. Other payment arrangements may work well in other instances; for example, a donation may be more affordable if made in accordance with a schedule of payments over time or upon the occurrence of a future event. The guide An Introduction to Stewardship Funding Arrangements and the Model Stewardship Funding Covenant furnish examples of arrangements for deferred funding of a cash donation that may be adapted to apply to cash donations (whether or not the donations are for the stewardship purposes that are the focus of that guide and model).

Donations are to be forwarded to the organization at the address set forth below. All donations become the property of the organization upon delivery and are non-refundable unless otherwise specifically provided in this donation agreement. This donation agreement is the entire agreement of donor and the organization and supersedes in full any prior or contemporaneous written or oral statements of the parties or any course of conduct of the parties.

A provision may be included in the donation agreement to establish that the donation will be returned to the donor if the cash or other item delivered never became the property of the donee. For example:

Cash donations raised for the project will be delivered to and held in escrow by ____, as escrow agent, and disbursed only to fund acquisition of the Property. If the acquisition fails to close on or before a certain date, the donation amount deposited by the donor under this agreement will be returned to the donor. The donation will not be acknowledged as received by the donee unless the donor waives in writing any right to a refund of the donation either pursuant to this agreement or otherwise under applicable law.

If there is an understanding that the donation is being delivered conditionally depending upon a certain future event happening, the agreement may include a provision that the donation may be refunded. For example:

The donation is given conditioned upon the donee receiving grant commitments of not less than $______ (the “required grant funding”) to fund the project within a maximum time period of one year following receipt of the donation. If the required grant funding is not received within the maximum time period, the donor has the right to reimbursement in full of the donation for failure of condition unless the donor, without any obligation to do so, extends the maximum time period in writing.

If a donation is made for a specific purpose, nothing is said about whether it can be used for other purposes, and the specified purpose fails to occur, the disgruntled donors may claim they were misled to their detriment by the organization’s representations. Or, they may claim that the donation was conditioned upon occurrence of an event which failed to occur, and, due to the failure of that condition, they are entitled to a refund. A provision crafted to provide the donee a right to make alternative use of the donation avoids those claims. It is also useful in the happy circumstance that more cash is raised than needed. For example:

Donations for Save the Park are to be used for the purposes described in this agreement and other purposes identified by the organization to conserve open space and provide opportunities for outdoor recreation in Greene Township.

The section “Donation Agreement Needed to Evidence Restrictions” includes examples of instances which call for clear documentation of the rights and obligations of both the donor and the organization with respect to the use and management of the donation. Each situation is different and legal assistance is needed not only to assure accuracy in the donation agreement as to the understandings of the parties, but also to avoid adverse tax consequences.

Most conservation projects begin with a series of communications, often face-to-face conversations, between the interested landowners and representatives of the conservation organization. In these communications, everyone is exploring what the project might look like and trying to ascertain whether their respective needs and goals can be met. The time and resources spent by landowners and organizations in these initial explorations tend to be modest. However, there comes a point—if the parties have a serious interest in proceeding and have essentially finished conceptualizing and determining the feasibility of the project—when the next easement planning steps will require substantial investments of time and money. At this stage, an organization may want assurance that it won’t get stuck covering the expenses of moving forward with the project if the landowners decide later not to complete the easement. And landowners may want assurance that the organization is truly committed to the project before they incur further expense.

While the landowners and organization may believe, based on their less formal exchanges of information, that they share the same understanding of the project, this may not be so. The process of completing a donation agreement can smoke out potential differences in perspectives and minimize the potential for disputes as the project approaches completion.

Landowners sometimes come to think that they are the customer and any good service provider should recognize that “the customer is always right.” An agreement can help dispel this notion, clarifying that the organization, although friendly and reasonably accommodating, is serving its conservation mission, not the landowner.

Sometimes projects don’t work out as anticipated. The agreement can address the circumstances when the donor or organization may withdraw and, in either case, what conditions (such as reimbursements) may be needed to avoid hardship.

An early and mutual understanding of a proposed easement’s conservation objectives is key to the planning and documentation process. These objectives are developed through site visits and discussions between the landowner and conservation organization. To understand the universe of possible objectives, the landowners may find it helpful to review the conservation objectives provided in article 1 of the Model Grant of Conservation Easement and Declaration of Covenants and the model’s commentary.

The landowner may also have tax planning, estate planning, or land planning objectives. The donation agreement affords both parties the opportunity to discuss these objectives, the extent to which the organization assumes any obligation to further them, and the circumstances under which the landowner may withdraw if not met. Some potential easement donors do not desire to, or cannot afford to, fund easement stewardship or permanently reduce their property value without the availability of a federal income tax deduction. The donation agreement furnishes them the opportunity to negotiate rights to withdraw if they are not satisfied with the prospective tax benefit estimated by their tax advisors and appraisers. The donation agreement provides the conservation organization the opportunity to clarify that it takes no responsibility whatsoever to agree to easement provisions that do not further its objectives or are otherwise inconsistent with the its policies and procedures.

Some landowners are interested in granting an easement for personal reasons, such as a desire to commemorate their family history. The discussion of mutual objectives gives the landowners the opportunity to make their expectations about the future known and allows the conservation organization to educate the landowners about its conservation mission and explore whether some of landowners’ interests may be accommodated without imposing restrictions having little or nothing to do with conservation of natural, scenic, or historic resources.

A candid discussion of objectives at the project’s inception may result in the organization accommodating some landowner objectives that may not fully square with its goals. But if the discussion reveals that the organization can’t accommodate to the landowner’s satisfaction, the organization can decline the opportunity before it invests significant time or resources in the project.

The Model Grant of Conservation Easement and Declaration of Covenants provides users with a state-of-the-art legal document together with an expansive commentary. Built on practitioner experiences and feedback, no easement document in the nation has benefited from more cycles of peer review. Downlo…

Used to secure payment of deferred contributions and other conservation commitments made by present landowners and to be paid by either them or future owners. The model offers ten basic ways to structure stewardship funding arrangements in conjunction with conservation easement projects. Download …

The Model Conservation Easement Donation Agreement helps land trusts avoid getting stuck with unreimbursed major expenses if a would-be easement donor walks away from a project. It outlines the steps to completing a project and the responsibilities of the land trust and donor. It also helps the par…

Conservation transactions may involve substantial planning and execution costs. Some of those expenses clearly benefit one or the other party to the transaction. Who benefits from other expenses may be quite ambiguous. Accurate assignment of financial responsibility for these various transactional…

Landowners can convey a future interest in real property to a conservation organization or government but continue to live on or otherwise enjoy using the property during their lifetimes. If the property ia a personal residence or a fiarm, a donation of a future interest can generate immediate tax…

The Pennsylvania Land Trust Association published this guide with support from the Colcom Foundation, the William Penn Foundation, and the Community Conservation Partnerships Program, Environmental Stewardship Fund, under the administration of the Pennsylvania Department of Conservation and Natural Resources, Bureau of Recreation and Conservation.

Several sample agreements are provided below to facilitate the acquisition by museums, archives and libraries of recorded sound materials from private collectors, recording studios, record companies, radio stations, private businesses, and other entities.

In addition to gift, purchase, and combination gift/purchase agreements, a sample deposit agreement and a sample cooperative agreement are provided below. A deposit agreement may be used to accept a loan of recorded sound materials, often with the intention that the loan will later be converted to a gift. A cooperative agreement may be used to memorialize a joint project in which both parties participate to achieve a mutual benefit, such as a project to jointly digitize recorded sound materials, with a digital copy to be kept by each party.

This resource includes helpful information on why a gift agreement can be necessary and important, and how to get started with one. The section below titled “Gift Agreement Template” includes a templated gift agreement modeled from one created by Community Foundation of Collier County.

As a nonprofit organization must keep accurate records on donations received, so must a donor keep records of donations they’ve made — especially when it comes to tax time. Having an accurate gift agreement and other financial records on file will help keep the nonprofit and the donor on the same page.

This Gift Agreement (“Agreement”) is made this ____ day of _______ between [Donor’s Names] and their assignee (hereinafter referred to as “the Donor”), and [Your Organization] an [arts nonprofit organization located in Indianapolis, Indiana]. The Donor and [Your Organization] agree as follows:
Donor Purpose. Purpose. It is understood and agreed that the gift will be used for the following purpose or purposes: To establish an endowment from which the annual interest earnings will be used to [state purpose].

It is also understood and agreed that the gift funds as received may be invested by a third-party that shall best determine investment options for this endowment fund (see item #4 below). The spending policy for the endowment will be the policy set forth and approved by [Your Organization] Board of Directors which will likely include the use of annual interest earnings only and not invade the principal of the fund to protect and perpetuate growth.

Endowment. The gift specified above shall be used for the purpose of creating an endowment fund to be known as the [Fund Name] (“Fund”). The assets of the Fund may be merged or pooled for investment and investment management purposes with the general endowment or other assets of [Your Organization] and managed and invested in accordance with [Your Organization] policy and procedure, but shall be entered on the books and records of [Your Organization] as the [Name of Fund]. Distributions in support of the above gift purpose and reasonable fees associated with securing, raising, investing, and administering such funds shall be charged to the said Fund administered in accordance with the policies and procedures of [Your Organization] then in effect.

Intent. It is the agreement of the parties and the intention of the Donor that this gift and any unpaid promised installment under this Agreement shall constitute the Donor’s binding obligation and shall be enforceable at law and equity, including, without limitation, against the Donor and the Donor’s estate, heirs and personal representatives, and their successors and assignees. The Donor acknowledges that [Your Organization] has substantially relied, and shall continue to rely, on the Donor’s gift being fully satisfied as set forth herein. The Donor acknowledges that [Your Organization] has committed substantial resources toward the match.

Recognition by [Your Organization]. To honor the Donor, and to express the appreciation of [Your Organization], publicity in the form of news announcements, both internal and external, will be made in the annual report with the permission of the Donor.

Additional Gifts. The Donor reserves the right to increase the Fund through additional gifts and hereby consents to additional contributions to the Fund by any individual, corporation, foundation, trust, estate or other legal entity through individual gift, bequest or other gift vehicle, and all gifts so designated shall be subject to the provisions of this Agreement.

Future Changed Circumstances. If, in the opinion of the Board of Trustees of [Your Organization], all or part of this gift cannot at some time in the future be usefully or practically applied to the above purposes or if the purpose cannot be achieved because of a future change in law or unforeseeable circumstances, it may be used for any related purpose which in the opinion of the Board of Trustees will most nearly accomplish the Donor’s wishes.

Amendment. By mutual consent of [Your Organization] and the Donor, the Donor’s legally or duly appointed agent or attorney-in-fact, or the personal representative of the Donor’s estate, any provision of this Agreement may be amended, modified, or deleted. Any such changes, deletions or additions shall be recorded in written signed addenda, which shall form part of this Agreement.

Morality Clause. If at any time the donor or his or her name may compromise the public trust or the reputation of the institution, including acts of moral turpitude, the institution with the approval of the board of trustees has the right to remove the name or return the gift.

Entire Agreement. This Agreement contains the entire understanding of the parties with respect to the subject matter of the Agreement and is subject to the laws of the State of [Your State]. This Agreement also supersedes all other agreements and understandings, both oral and written, between the parties relating to the subject matter of the Agreement.

A morality clause or morals clause is a small, but important segment to add to your gift agreements. A morality clause is used to define particular circumstances that would be embarrassing or harmful to an organization’s reputation and values. According to Lynne Wester, nonprofits must protect their organizations from undue risk. Most nonprofits depend on public goodwill to attract donors. Close association with someone whose name has been badly tarnished can taint the nonprofit’s reputation and harm its ability to attract support.

If at any time the donor or his or her name may compromise the public trust or the reputation of the institution, including acts of moral turpitude, the institution with the approval of the board of trustees has the right to remove the name or return the gift.

If at any time the donor fails to conduct himself or herself without due regard to public morals and decency, or if the donor commits any act or becomes involved in any situation, or occurrence tending to degrade the donor in the community, or which brings the donor into public contempt or scandal, or which materially and adversely affects the reputation or business of the charity, whether or not information in regard thereto becomes public, the charity shall have the right to remove donor’s recognition rights as required pursuant to this gift agreement.

ConservationTools.org administered by the Pennsylvania Land Trust Association was very thorough in creating a helpful donation agreement guide from a conservation organization perspective. You can check it out here.

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