AFP Ready Ref Develop Fund Policies 0119 - 1

Developing
Fundraising
Policies and
Procedures
Best Practices for Accountability
and Transparency
AFP’S READY REFERENCE SERIES

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Developing
Fundraising
Policies and
Procedures
Best Practices for Accountability
and Transparency
By Barbara L. Ciconte, CFRE

Updated by R. Scott Fortnum, ACFRE
AFP’s Ready Reference Series
Developing Fundraising Policies and Procedures:
Best Practices for Accountability and Transparency
By Barbara L. Ciconte, CFRE
Updated by R. Scott Fortnum, ACFRE
© 2018 by the Association of Fundraising Professionals
All rights reserved. No part of this report may be reproduced or

transmitted in any form or medium or by any means electronic or
mechanical (including photocopying, recording, or by an information
storage and retrieval system) without permission in writing from the
copyright holder.
Association of Fundraising Professionals

4300 Wilson Boulevard, Suite 300
Arlington, VA 22203
www.afpglobal.org
Acknowledgments
This is the first update of AFP’s Ready Reference Series title
Developing Policies and Procedures: Best Practices for Accountability
and Transparency, originally published in 2007. The Ready Reference
Series is meant to be a comprehensive and easily digestible resource
on the major topics of fundraising. AFP wishes to thank those who
made this series possible. First and foremost, we are grateful to the
author, Barbara L. Ciconte, for her hard work and generous sharing of
her experience and expertise. We also recognize the work of R. Scott
Fortnum in updating this text. Thanks also to the task force that helped
update the series: D.C. Dreger, ACFRE; Nina Berkheiser, CFRE;
Thomas Campbell, ACFRE; Peggy Calhoun, ACFRE; and
R. Scott Fortnum, ACFRE.
© 2018 ASSOCIATION OF FUNDRAISING PROFESSIONALS • WWW.AFPGLOBAL.ORG • iii

Table of Contents
Why Fundraising Policies and Procedures Are Necessary ........... Page 1
Gift Policies and Procedures ......................................................Page 7
Donor Policies and Procedures ............................................... Page 23
Complying With Governmental Regulations ........................... Page 33
How to Proceed ..................................................................... Page 37
Resources
References and Resources ....................................................... Page 39
Appendix A: AFP Code of Ethical Standards ............................ Page 41
Appendix B: APRA Statement of Ethics ...................................Page 45
Appendix C: Sample Pledge Commitment Form ......................Page 49
Appendix D: Sample Gift of Personal Property Policy ............. Page 51
A Donor Bill of Rights ............................................. Inside back cover
Sample Documents
Fundraising Policies and Procedures Checklist ...........................Page 2
Gift-Acknowledgment Policy and Procedures ............................Page 9
Gift-Entry and Recording Policy and Procedures .....................Page 10
Gift-Acceptance Policy and Procedures ....................................Page 11
In-Kind Gifts Policy .................................................................Page 15
© 2018 ASSOCIATION OF FUNDRAISING PROFESSIONALS • WWW.AFPGLOBAL.ORG • v

Developing Fundraising Policies and Procedures
XYZ Organization Principles for Corporate Support

or Donations .......................................................................... Page 19
Donor Recognition Policy, Brief Version ..................................Page 24
Donor Naming Opportunities .................................................Page 27
Donor Privacy Policy, Brief Version...........................................Page 30
Donor Privacy Policy ...............................................................Page 30
Confidentiality Policy ...............................................................Page 31
Solicitation Disclosure Statement .............................................Page 34
Direct-Mail Disclaimer .............................................................Page 34
Language for Acknowledgment Letter and Receipt ..................Page 35
Language for Special Event Contribution ................................Page 35
vi • © 2018 ASSOCIATION OF FUNDRAISING PROFESSIONALS • WWW.AFPGLOBAL.ORG

Why Fundraising
Policies and
Procedures Are
Necessary
In recent years, with the overwhelmingly generous response of the
public to global and national tragedies and disasters, coupled with
the ongoing needs of non-disaster relief organizations, fundraising
challenges have multiplied. In addition, the nonprofit sector has faced
increased yet appropriate scrutiny by government regulators and
individual donors alike. In the United States, the passage in 2002 of the
Sarbanes-Oxley Act created an environment of greater self-examination
and accountability within nonprofits. This American law, while focusing
on corporate governance and financial accounting practices, has led
many nonprofits around the world to review, evaluate, and change the
ways they operate.
POLICY: AS DEFINED BY THE AFP FUNDRAISING

DICTIONARY
n.—as adopted by a governing board, broad and general statements that
are guiding principles designed to influence and determine the decisions
and actions of an organization
Nonprofit leaders must understand that public trust is vital to the

sector’s mission, and their organizations must be transparent and
accountable to donors, stakeholders, government agencies, and future
patrons to succeed. Research and media reports throughout the world
suggest the importance of donor trust and indicate a direct correlation
between public confidence in an organization and its level of support.
© 2018 ASSOCIATION OF FUNDRAISING PROFESSIONALS • WWW.AFPGLOBAL.ORG • 1

Key to gaining that donor trust is keeping to established guidelines for

handling donations and other business practices. Written policies and
procedures for nonprofit organizations’ development-related activities
are critical not only for showing they adhere to ethical fundraising
practices but also for enhancing relations with donors and funders and
improving development staff efficiency and effectiveness.
This booklet offers samples of key fundraising policies and procedures

that nonprofit organizations should consider adapting and using for
their fundraising programs. Organizations also should have other
policies and procedures related to board governance, conflicts of
interest, staffing, and working with outside vendors and contractors, but
these are beyond the scope of this publication.
SAMPLE DOCUMENT
FUNDRAISING POLICIES AND PROCEDURES

CHECKLIST
Is your organization registered where it raises funds?* Yes ____ No ____
Does your organization have:
1. A gift solicitation and acceptance policy? Yes ____ No ____
2. A procedure for processing gifts and maintaining database

accuracy? Yes ____ No ____
3. A policy and/or procedure for:

o gifts of securities? Yes ____ No ____
o gifts of personal property? Yes ____ No ____
o gifts of real estate? Yes ____ No ____
o gifts of intellectual property? Yes ____ No ____
o restricted gifts? Yes ____ No ____
o establishing endowments? Yes ____ No ____
o planned/deferred gifts? Yes ____ No ____
o accepting in-kind gifts? Yes ____ No ____
2 • © 2018 ASSOCIATION OF FUNDRAISING PROFESSIONALS • WWW.AFPGLOBAL.ORG

4. A donor privacy policy? Yes ____ No ____
5. A donor recognition policy? Yes ____ No ____
6. A written procedure for entering and recording gifts?

Yes ____ No ____
7. A written procedure for acknowledging gifts? Yes ____ No ____
8. Internal Revenue Service/Canada Revenue Agency language on

receipts? Yes ____ No ____
9. A state disclosure statement on letters? (U.S. requirement for

certain states) Yes ____ No ____
10. A charitable registration number publicly available? (Canada only)

Yes ____ No ____
11. A permission policy for sending email communications to

members/donors? Yes ____ No ____
12. A policy for conducting new special events? Yes ____ No ____
* This is a complex area requiring an increasingly greater level of attention from
nonprofits, paid fundraisers, and fundraising consultants. In the United States,
charitable organizations may be required to register in states where they raise funds, but
requirements vary from state to state. In Canada, although charities can be incorporated
provincially, a fundraising organization must register a charitable registration number
or business number (BN) with the federal Canada Revenue Agency (CRA). If you are
uncertain about state/provincial and federal registration issues potentially affecting your
organization, consult with a qualified professional adviser.
In 1960, a group of development officers established what is now the

Association of Fundraising Professionals (AFP) in response to the need
for a codification of best practices in fundraising. Since adopting its
first Code of Ethical Principles and Standards of Professional Practice in
1964, AFP has led the nonprofit sector in fostering the development
and growth of fundraising professionals and promoting high ethical
standards in the fundraising profession. All members of AFP agree
to uphold and abide by the values articulated in today’s AFP Code of
Ethical Standards.

An excellent resource for development professionals, the AFP Code of

Ethical Standards serves as a valuable teaching tool for educating an
organization’s staff and board leadership on ethical fundraising practices
and how to incorporate them into development programs
(see Appendix A).
In addition to the AFP Code, the Association of Professional

Researchers for Advancement (APRA) Statement of Ethics also
addresses issues of donor privacy and research (see Appendix B).
MAKING THE CODE OF ETHICS YOUR OWN

Divided into four sections, the AFP Code of Ethical Standards addresses
key nonprofit issues: professional obligations, solicitation and use of
philanthropic funds, presentation of information, and compensation.
Reviewing the standards in the code will help you determine whether
your organization’s policies and procedures already include these
principles or if they need to be integrated into your business guidelines.
For example:
• Standard No. 9 under Solicitation and Use of Philanthropic Funds

states: “Members shall take care to ensure that contributions
are used in accordance with donors’ intentions.” This standard
should be incorporated into your gift acceptance and stewardship/
management policies.
• Standard No. 14 under Presentation of Information states:

“Members shall give donors the opportunity to have their names
removed from lists that are sold to, rented to, or exchanged with
other organizations.” This standard should be incorporated into
your donor privacy policy.


In 1993, AFP, the American Association of Fundraising Counsel (now
The Giving Institute), the Association for Healthcare Philanthropy,
and the Council for Advancement and Support of Education
developed A Donor Bill of Rights so that donors and prospective
donors could have full confidence in the nonprofits they support.
Since then, thousands of organizations have adopted A Donor Bill of
Rights. The 10 rights listed also should be reflected in your policies
and procedures (see inside back cover).
Protecting Donor Rights

A Donor Bill of Rights is also a valuable teaching tool for staff and board
leadership and, most importantly, donors. By promoting A Donor Bill of
Rights, your organization can integrate its principles into your mission
values and show donors that you are committed to protecting their
interests and gifts.
Advancing A Donor Bill of Rights can be accomplished easily by:
• incorporating it in board orientation and board training sessions
• printing a copy on your organization’s letterhead
• posting it in a prominent location on your website
• including a copy in your media or public relations packet
• featuring it in your newsletter or magazine
By properly stewarding donors and charitable contributions, you will

help ensure continued support for your organization. Policies and
procedures for acknowledging gifts, thanking and recognizing donors,
and guarding privacy and the confidentiality of donor information
form the foundation of a successful stewardship program for your
organization.

Improving Staff Efficiency and Effectiveness

Policies and procedures also help your staff to work more efficiently.
Being creative is important when thinking of new and better ways
to raise increased funds for your organization. However, some
development-related tasks, such as recording gifts and preparing
receipts, are more effectively handled when standardized because then
anyone completing these tasks will know how to do them properly.
In Canada, the standardization of gift receipts is not just recommended

but required. Visit the CRA website (canada.ca/en/revenue-agency.
html) for information on the regulations governing the issuance of
receipts.
Adhering to policies and procedures for administering gift-entry and

acknowledgment systems allows staff to be more efficient, giving them
more time for relationship-building activities with donors. Written
policies and procedures also preserve institutional knowledge and
shorten the learning curve for new staff.
WHEN TO SAY “NO” TO A GIFT

Having clear policies on what types of major gifts your
organization will accept and how they will be accepted also is
essential. Your nonprofit may be presented with a donation that
does not fit the organization’s mission, has too many strings
attached, or whose maintenance costs outweigh its value. This
can be true of gifts of real estate and tangible property, such as
boats or stamp collections, and gifts with unusual or unpalatable
restrictions. A board-approved policy regarding how such
gifts will be handled is an effective way to maintain positive
relationships with major donors and help them to understand
that some restrictions on gifts may actually render them less
useful to your organization and its stakeholders.

Gift Policies and

Procedures
No matter what type of software program database you use to manage
donor data, focusing on three key factors will help your organization
most efficiently use data for your development program:
• Organization
When using one of the various commercial fundraising database
systems, be sure to work with your vendor to organize your data
properly from the start. First, your organization must decide what
donor information to record and track and what kinds of reports you
will need. In the United States, the Health Insurance Portability and
Accountability Act (HIPAA) prohibits organizations from recording
information about a patient’s illness(es), treatment, or services provided
without prior authorization from the patient. Also, your nonprofit
should identify and train a few key employees who will have permission
to enter and change data, limiting others to read-only access. By taking
the time to evaluate database needs and requirements at the outset,
your organization can build a system that will be a valuable fundraising
tool—not just the organization’s mailing list.
• Consistency
Develop consistent standards for your employees to follow when entering
data. These guidelines should be clearly documented in the vendor’s manual
or an in-house manual. Include proper procedures for such items as:
o name capitalization and use of periods
o telephone numbers
o addresses, with abbreviations for street types
o gifts, pledges, in-kind gifts, and planned gifts
o attendance at events and meetings
o board and volunteer services
o volunteering

• Accuracy
Be sure you maintain the accuracy of the data through address-
correction requests, website address-change submissions, and internet
research and information provided by board members, employees,
and volunteers. Document the date and who makes changes to a data
record. Periodically review groups of records to ensure employees
are following the data-management standards. Make corrections as
necessary. If some records have bad data that require time-consuming
changes, archive records for attention later.
When you write the procedures for data management, make sure you
train all the users to follow these standards. The standards are only as
effective as they are followed, so periodically review the guidelines,
solicit comments from the users, and revise the policies as needed.
Also remember to back up your data regularly to protect the database’s
integrity.
Recording and Acknowledging Gifts

One important key to an organization’s success is how well it manages
the back end of gift receipts. Are staff members recording gifts properly
in the database? Are they entering donations into the accounting system
quickly and accurately? Are they thanking donors appropriately and
meaningfully? Who is responsible for these various tasks? Having clear
guidelines for recording and acknowledging gifts will help staff in this
essential administration.
Most organizations will want to have various levels of database access

and ability to change information based on job function.
Your development department should have pertinent policies and

procedures in a physical or online manual that is easily accessible for
staff. This manual, which should outline how gifts are to be recorded
and acknowledged, also can be used to train new employees. Be sure
to include sample copies of the various types of thank-you letters that
should be sent to donors in acknowledgment of their contributions.

When developing gift-acceptance policies for your organization, it

is important to anticipate the kinds of gifts your charity’s mission or
program might attract. Having a procedure for reviewing major gifts by
the executive director/president, development committee, and board
of directors will help your organization not only get the most out of
its current and planned donations but also decline gifts that would
not be a good fit with your organization’s mission and work. Many
organizational boards establish a gift-acceptance committee to review
gifts and contributions.
SAMPLE DOCUMENT
GIFT-ACKNOWLEDGMENT POLICY AND

PROCEDURES
(Note: Charities should determine gift levels and staff involvement that
correspond to organizational needs and culture.)
1. Acknowledge all gifts within three business days using appropriate

thank-you letters based on gift level. If receipts are included, they
must feature the wording required by the IRS or CRA.
2. A gift of $249 or less will be acknowledged with the appropriate

thank-you letter or preprinted card signed by the executive
director.
3. A gift of more than $250 will be acknowledged with the

appropriate thank-you letter signed by the executive director and
include the required IRS language. (Canada only regulates the
language used on gift receipts, not thank-you notes.) If no goods
or services were received in exchange for the gift, insert “No goods
or services were received in exchange for your gift. Therefore,
the full amount of your contribution is tax-deductible as allowed
by law.” If a good or service was received, the organization must
inform the donor of its fair market value in order for the donor
to know the tax-deductible portion of the contribution: “In
exchange for your contribution of $500, you received a book with
an estimated fair market value of $75, so $425 may be treated as a
charitable donation.”

4. The board chair will send an additional thank-you letter for a gift
of $500 or more.
5. The director of development will call donors of $500–999 to thank

them personally.
6. The executive director will call donors of $1,000 or more to thank

them personally.
SAMPLE DOCUMENT
GIFT-ENTRY AND RECORDING POLICY AND

PROCEDURES
1. Send all checks to the development department for recording.
Then forward them to the finance department for accounting and
depositing.
2. Update donor information in the database if the information on

the check and/or response form is different. Note the date of
change in the record.
3. Record gifts according to the donor’s intended use (e.g.,

unrestricted, restricted [specific program or project], endowment,
etc.).
4. Record in the system the source of the gift (e.g., direct-mail appeal,
special event, personal solicitation, etc.).
5. Prepare a daily report of gifts to be circulated to appropriate

staff to keep them in the loop and for special acknowledgment
attention.
6. Acknowledge all gifts within three business days using appropriate

thank-you letters based on gift level.

Soliciting and Accepting Gifts

Noncash Gift Policies and Procedures
Additionally, it is recommended that noncash gifts be reviewed prior
to acceptance because of challenges they create. Some gifts, such as
stock, real estate, life insurance, or personal property, impose special
obligations on an organization.
For noncash donations, the charity and the donor must each complete
IRS Form 8283 in the United States. The charity does not appraise the
value of the property. As set forth in the form and its instructions, who
does the appraisal and how it is done varies with the type and value of
the donated property.
In Canada, a third-party appraisal is strongly recommended by the CRA

for in-kind gifts of $1,000 or more.
In addition, in the U.S., if an organization receives property that was

subject to a charitable deduction and within two years sells, exchanges,
or disposes of the property, the organization has to file IRS Form 8282,
Donee Information Return, unless (a) the property is valued at $500 or
less or (b) the property is distributed for charitable purposes.
SAMPLE DOCUMENT
GIFT-ACCEPTANCE POLICY AND PROCEDURES

The XYZ Organization seeks outright gifts and future gift commitments
that are consistent with its mission. Donations generally will be accepted
from individuals, partnerships, corporations, organizations, government
agencies, or other entities without limitations—unless the acceptance
of gifts from a specific source is inconsistent with the organization’s
beliefs, values, and mission. The XYZ Organization will not accept gifts
from companies whose products may be harmful to our clients or from
donors whose requests for public recognition are incompatible with our
philosophy of appreciation.
In processing, all gifts will be coded in the donor database for the
constituency source from which the gifts were given (e.g., individual,
corporation, foundation, organization, etc.).

Multiyear pledges for major gifts are encouraged, but for no more than
three to five years. A donor should complete and sign a gift or pledge
agreement form detailing the purpose of the gift, the payment schedule,
and how they wish their name to appear in donor recognition materials.
(See Appendix C for a sample pledge commitment form.)
Donors are encouraged to support areas reflecting their interests. The

XYZ Organization’s priorities include gifts for unrestricted, restricted,
and endowment purposes.
A selection of named or commemorative gift opportunities may be

made available to each donor. Such opportunities represent a tangible
means of demonstrating an individual donor’s investment in the XYZ
Organization.
When gifts with restrictions are accepted, restrictions will be honored.

These restrictions will be detailed in the donor’s gift or pledge
commitment letter.
Donor information that should be private and confidential will not be

made public.
Nonprofits also should develop policies regarding how the following

gifts will be handled:
• Publicly Traded Securities
Stocks, bonds, and other securities should be accepted only upon

approval of the executive director. Many organizations make it their
policy to sell all publicly traded securities within a specified time frame.
In the United States, a gift of stocks or bonds held for more than
six months, having grown in value, not only qualifies for a charitable
contribution deduction (based on the fair market value) but also avoids
tax on the appreciated portion of the gift. A broker must determine
the value of stocks and bonds, which is assessed as the mean between
the high and the low price on the date of the gift. The date of the gift
will be calculated as (1) the date the certificate is personally handed
to a representative of the charity, (2) the date on the certificate if it’s
changed to the name of the charity or its designated fiscal agent, or
(3) the postmark date if mailed or the date and time of transfer if
electronically transferred to an account at the charity’s broker’s office.

• Closely Held Securities

Nonpublicly traded securities may be accepted in the United States,
but a nonprofit is advised to first consult with its treasurer and/or legal
counsel. A qualified appraiser must determine the fair market value of
the securities. Organizations should explore methods of immediate
liquidation of the securities through redemption or sale before
accepting the gift. Nonprofits also should not commit to repurchase or
sell closely held securities until the gift of the securities is complete, as
the transaction might be viewed by the IRS/CRA as a sale rather than
a gift, with adverse tax consequences for the donor. In Canada, the
government discourages the gifting and receipt of nonpublicly traded
securities. Additionally, Canadian charities are well advised to sell gifts
of publicly traded securities immediately, although they are not bound
by law to do so.
• Real Estate
Gifts of real estate should be reviewed by an organization’s board of

directors or gift-acceptance committee before acceptance. Typically, the
donor should be responsible for obtaining and paying for an appraisal of
the fair market value and an environmental audit of the property. Before
making a presentation to the board or gift-acceptance committee, a staff
member needs to inspect the property. If the property is geographically
isolated, a local real estate broker can do the inspection. Property
that carries a mortgage should not be accepted. Should there be any
continuing concerns about the status and ownership of real estate being
offered as a donation, the organization can arrange for a title search.
That will reveal any mortgages, court judgments, or other liens that
may be on the property.
• Life Insurance
Many charities allow the executive director to accept a life insurance
policy as a gift when the organization is named as the owner and
beneficiary of the policy.

In Canada, charitable receipts for income tax purposes can only be

issued for life insurance policies when the charity is named as the owner
and beneficiary. If the charity is named as the owner and beneficiary,
official receipts also can be issued for premiums paid to fund the policy.
• Tangible Personal Property
Gifts of jewelry, artwork, collections, equipment, and software should

be approved by designated senior staff and board members or by the
gift-acceptance committee and presented to the board for final approval.
These gifts must be used by or sold for the benefit of the organization.
If gift items are sold, the organization must follow all IRS/CRA
requirements for disposing of gifts of tangible personal property and
filing the appropriate tax reporting forms. Any gift of property worth
more than $5,000 in the United States requires an authorized appraisal,
which should be paid for by the donor. In Canada, gifts of art or
cultural property worth more than $1,000 should be appraised by a
registered appraiser. (For a sample gift of personal property policy, see
Appendix D.) Special incentives, rules, and procedures apply to gifts of
cultural property and to ecological gifts.
As part of its gift-acceptance policy, a charity may elect to refuse gifts

of cash, securities, real estate, or other items of value if it believes that
such gifts are incompatible with the mission of the organization, conflict
with its core values, or would create a financial, administrative, or
programmatic burden. The executive director should refer questionable
gifts to the executive committee or the board of directors for guidance
on a case-by-case basis.
CANADA REVENUE AGENCY (CRA) REGULATIONS

The tax status of noncash gifts is different in Canada than in the United
States in many respects, so a professional adviser must be consulted. For
example, the tax receipt for a gift of securities in Canada is the stock
market value of the shares at the close of business the day the securities
were transferred to the charity, regardless of whether or not the stock
is sold. Charities are strongly discouraged from receiving nonpublicly
traded securities. There is no capital gains exemption for nonpublicly
traded securities in Canada.

The CRA has recently updated many of its regulations, which can be
found on the agency’s website (www.cra-arc.gc.ca). Form T1170 (05)
on the CRA website lists the types of gifts that are eligible for capital
gains exemptions. An electronic newsletter is also available.
SAMPLE DOCUMENT
IN-KIND GIFTS POLICY

The purpose of this policy is to ensure that the XYZ Organization
accepts gifts-in-kind that support its mission, are consistent with its
policies, and are properly accounted for and acknowledged.
A gift-in-kind is an item such as equipment, software, or a product that

a donor voluntarily transfers to the XYZ Organization without charge
or consideration.
Only the XYZ Organization’s executive director and board of directors

have the authority to accept in-kind gifts.
Donors must complete a gift-in-kind form that includes the name of the
donor, a description of the item(s), the retail value of the item(s), and
permission to publicly recognize the donation.
Once accepted, the donated item(s) becomes the property of the XYZ
Organization, which retains the right to dispose of a gift-in-kind as it
sees fit, unless another arrangement has been made with the donor.
• Car Donation Programs
The IRS has issued specific guidance that restricts how a charity can
accept and valuate the donation of motor vehicles, boats, and airplanes
(see IRS Publication 4302) and imposes an obligation on the charity to
use Form 1098-C.
In Canada, these items are treated as any other gift-in-kind.

Planned Giving
In the both Canada and the United States, mechanisms such as
charitable remainder trusts, unitrusts, charitable gift annuities, bequests,
and gifts of life insurance policies often provide a donor with significant
tax relief while at the same time providing for the future of charities.
In Canada, the categories and terminology for planned giving are

different than in the United States, as are many of the laws of what is
acceptable. A good reference book for this kind of donations is Planned
Giving for Canadians by Frank Minton and Lorna Somers.
The following planned gifts are means of funding charities in the United
States while offering benefits to donors. Some of these include receiving
an income or passing assets on to heirs. Minimum gifts mentioned are
derived from charity best practices.
• Charitable Gift Annuity: a contract between the organization

and the donor paying a guaranteed lifetime income to one or
two beneficiaries in return for a gift of cash, securities, or real
estate. The rates of payout on gift annuities should follow the
rates established by the American Council on Gift Annuities.
There should be no more than two beneficiaries. The minimum
gift accepted to establish a charitable gift annuity is $10,000. No
income beneficiary for a charitable gift annuity should be younger
than 50 years of age.
• Deferred Gift Annuity: an annuity tailored to meet the needs of

the donor who prefers to receive income at a future date (at least
one year after the date of the gift) but also claims a substantial
charitable contribution in the year of the gift. The principal value
of a charitable deferred gift annuity can be pledged over a period
of years prior to when payments are scheduled to begin. The donor
will not receive income until the entire pledge is fulfilled. There can
be no more than two beneficiaries. The minimum gift accepted to
establish a deferred gift annuity is $10,000. No income beneficiary
for a deferred gift annuity should be younger than 40 years of age.

• Pooled Income Fund: a fund that operates similarly to a mutual

fund. Administrative fees are paid from the income earned on the
pooled income fund. No income beneficiary in the fund should
be younger than 55 years of age, and no more than two income
beneficiaries may be named. The minimum initial contribution to
the fund is $10,000. Additional gifts may be added for amounts
beginning at $1,000. This kind of fund is not obtainable in
Canada.
• Charitable Trust: a trust for which the nonprofit organization
does not act as trustee. The administration of this trust should be
performed by a bank trust department or other trustee selected by
the donor.
• Charitable Remainder Unitrust: an individual trust providing
annual income to a donor and/or named beneficiaries that
can increase or decrease year to year, depending on the annual
valuation of the trust’s assets. A unitrust is well suited to a donor
seeking income growth, though with some downside risk. A
net-income-only unitrust is well suited to donors of real estate.
Unitrusts are not used in Canada.
• Charitable Remainder Annuity Trust: a trust offering the assurance
of a fixed-dollar income. The donor and/or beneficiary receive
annually an amount of money fixed irrevocably at the time the gift
is established and stated in the trust agreement. The minimum gift
is $100,000.
• Lead Trust (Income to Charity for a Term Certain): a trust whose
income, or “lead” interest, is given to the nonprofit recipient.
The remainder interest is given to one or more noncharitable
beneficiaries, which can be the donor and/or their family. This gift
option offers current income to the organization, but the assets can
be retained by the donor or passed to heirs at a later time, often
at considerable tax savings. This kind of trust is not available in
Canada.
• Bequest: a gift bequeathed to an organization in a donor’s will.
Unless the donor specifies its use, the organization may direct this
gift to an endowment fund or to the general fund to be used for
current purposes.

Developing an Endowment Policy Manual

Endowment donors are deeply committed to your organization’s
mission and want to help guarantee its financial future. To gain
their confidence and trust in making gifts to an endowment, your
organization must develop an endowment policy manual. A guide for
internal policies and procedures, this manual also is an effective donor
relations tool and can be shared with current and potential donors.
Your endowment policy manual should include guidelines for the

following issues:
• investment and spending policy
• types of gifts accepted
• purposes for which endowment gifts are accepted
• minimums for naming funds
• process for accepting and administering gifts
• who has the authority to accept gifts
• donor recognition
• board policy to place unrestricted gifts in the endowment
• how and when endowment policies are reviewed
As with any major gift, it is important that the donor completes a

formal gift agreement defining the type and terms of the gift to the
endowment.
Special Policy for Corporate Support

Frequently, educational, children and youth, and health-related
organizations have policies not to accept donations and support from
certain types of corporations, such as those that manufacture, promote,
and/or sell tobacco, alcohol, and/or other potentially harmful
products. When developing your principles for corporate support, you
should determine whether there are companies whose contributions
would not be acceptable.

Having such a policy also can be useful to nonprofits that wish to enter
into cause-marketing agreements with corporations. Keep in mind when
negotiating potential partnerships that your organization’s name and
reputation are its greatest assets.
SAMPLE DOCUMENT
XYZ ORGANIZATION PRINCIPLES FOR

CORPORATE SUPPORT OR DONATIONS
Introduction
The XYZ Organization believes that it can best fulfill its mission
through a broad base of support from various sources. However,
to maintain its independence and objectivity, it seeks to identify any
areas where there may be real or apparent conflicts of interest or
where the mission, programs, projects, and independence of the XYZ
Organization could be compromised.
As part of expanding its base of support, the XYZ Organization is

willing to consider partnerships with and gifts from the corporate sector.
The XYZ Organization recognizes that corporations, as profit-centered
organizations, have obligations to their shareholders, boards, and
employees to be successful. The XYZ Organization also recognizes that
companies support the nonprofit sector not only out of a desire to be
helpful but also with the hope of a return or benefit.
Given these realities and both legal and ethical considerations, the XYZ
Organization is willing to negotiate partnerships and accept support
from the corporate sector in ways that will benefit and recognize the
supporting companies while enabling the XYZ Organization to better
achieve its mission without compromising its principles.

General Guidelines
The XYZ Organization, as an independent nonprofit organization, will
accept no cash or real property gift or pledge of support or noncash
gift or services or enter into any partnership with any company or
other organization that produces products that are or may be harmful
to the XYZ community. Nor will the XYZ Organization accept any of
the above or support from any company or organization that, in the
judgment of the XYZ Organization, exploits students or teachers in its
product lines, advertising, marketing, or workforce, or in any other way.
Principles
The XYZ Organization will at all times maintain an independent

position on educational issues and concerns.
The XYZ Organization will solicit and accept support only for activities
that are consistent with its mission.
The XYZ Organization will accept funds for research, informational,

and educational activities only when the content is to be determined by
the XYZ Organization or an independent group designated by the XYZ
Organization.
The XYZ Organization will maintain complete control, consistent with

any donor restrictions acceptable to the XYZ Organization, of all funds
provided by corporations, organizations, and individuals.
The XYZ Organization will not accept any support that implies or
requires endorsements of products.
Acknowledgments of corporate support will be limited to a company’s

name, logo, or slogan that is an established part of the supporter’s
identity, trade name, address(es), and telephone number(s).
Recognition of major corporate support will be developed in

cooperation with the corporate donors and will be consistent with the
level of support and the XYZ Organization’s mission and purposes. The
XYZ Organization will seek to develop recognition opportunities that
are appropriate and meaningful for both the supporting companies and
the XYZ Organization.

The XYZ Organization’s intangible intellectual assets, including its

name, research, and other work, will be protected at all times. Donors
will not be permitted to use the XYZ Organization’s name or other
items for commercial purposes or in connection with the promotion of
any product.
The XYZ Organization’s board and staff reserve the right to refuse
any donation of cash or other real property, services, noncash gifts, or
any other forms of support if such support is not in keeping with the
above principles or for other reasons that the XYZ Organization deems
appropriate.

Donor Policies and

Procedures
One of the best ways to encourage continued support from your donors
is to recognize and thank them for their generosity. You should take
advantage of the many opportunities for thanking your supporters
throughout the year, such as recognizing donors at special events, in
public settings, in print materials, in an annual honor roll of donors, in a
prominent display in your office, and on your website.
When establishing your donor recognition program, first take an inven-

tory of your organization’s annual events and printed materials to see
which can be incorporated into this special program. Keep in mind that
recognizing donors not only builds good relationships with current do-
nors but also motivates other donors to give and increase their giving.
Developing a comprehensive recognition program for your donors

will ensure your nonprofit does not to miss a chance to honor
these important supporters. As with other significant organizational
programs, you should have clear policies and procedures for how to
recognize donors at various gift levels.
RECOGNIZING CORPORATIONS IN CANADA

In Canada, corporate donors are handled differently. If a corporation is
given a tax receipt for a charitable gift, it cannot receive an “advantage”
as defined by the CRA. Any recognition beyond being listed with other
donors could be considered by the CRA to be a marketing benefit
to the corporation. If a company chooses a noncharitable or business
receipt, there are no legal restrictions related to recognition.
Before publicly recognizing your donors, be certain you have their

permission. You also should know the exact way they wish to be
listed (e.g., individually, with professional credentials, as a couple, or
anonymously). To find out, include a request for this information in
your various response devices organization uses. (See Appendix C for a
sample pledge commitment form.)

WHAT’S IN A NAME?
Sample Text:
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
So that we may recognize you properly, please write in the space above
how you would like to be listed.
For those donors who wish to remain anonymous, you must have
procedures in place that address how anonymous donors will be coded
in your database, how they will continue to receive mailings, and how
their gifts will be included in fundraising reports.
While more commonly used for capital campaigns, the sample policy
below can easily be adapted for annual donors to your organization.
SAMPLE DOCUMENT
DONOR RECOGNITION POLICY, BRIEF VERSION
Category and Ways to Recognize
Platinum ($1 million-plus)

Recognition at campaign gala, profile in annual report and campaign
publications, prominent display at top level on donor recognition wall,
naming opportunity to be selected, and website recognition
Diamond ($500,000–999,999)
publications, prominent display at second level on donor recognition
wall, naming opportunity to be selected, and website recognition

Gold ($250,000–499,999)
publications, prominent display at third level on donor recognition wall,
Silver ($100,000–249,999)
publications, prominent display at fourth level on donor recognition
wall, naming opportunity to be selected, and website recognition
Bronze ($50,000–99,999)
Recognition at campaign gala, listing in annual report and campaign
publications, prominent display at fifth level on donor recognition wall,
Patron ($25,000–49,999)
publications, prominent display at sixth level on donor recognition wall,
and website recognition
Partner ($10,000–24,999)
publications, and recognition on donor wall and website
Supporter ($5,000–9,999)
publications, and recognition on donor wall and website
Friend ($1,000–4,999)
Listing in annual report and campaign publications and recognition on
donor wall

Naming Opportunities and Policies

As a part of your donor recognition program, an organization may
wish to offer major donors special opportunities to have their names,
or the name of a loved one, associated with a specific facility space or
program. In a capital campaign that involves raising funds to build
a new facility or renovate an existing one, the building itself offers
many opportunities for recognizing donors for their generosity. Other
opportunities include naming scholarships, research funds, publications,
conferences, seminars, programs, and new initiatives.
In developing naming opportunities and related policies, include the

following:
• process for formalizing commitment agreements
• morals clause and procedure for removing name(s) in certain
situations
• naming opportunities available with minimum gift amount required
• how and when gifts will be recognized
• sample language for naming and plaques
• payment schedule
• process for handling a merger
• process for replacement of property
• recognition time frame (in perpetuity or for a defined time period)

SAMPLE DOCUMENT
DONOR NAMING OPPORTUNITIES

Overview
For all gift levels of $5,000 and above, a signed letter of intent and
payment schedule must be received before the gift will be included in
any recognition materials or campaign publications.
Gifts of less than $5,000 will be mentioned in the first update published
after the gift or pledge is received and then in the final donor honor roll
listing.
Before ordering, all plaque language must be approved by the donor,

but it should conform to basic standards adopted by the organization.
Building Campaign
$1,000,000 Gift Level—Renovated Wing of Building

The gift can be made as a multiyear pledge but must be at least two-
thirds completed before any signage will be installed. The donor will
be recognized with signage in the renovated wing of the building.
Language for the plaque must be approved by the donor but should be
along the lines of “The renovation of this space was made possible by
the generosity of Mr. and Mrs. John T. Smith.”
Additionally, the gift will be listed in all other campaign recognition

materials, such as campaign reports and updates, and in any cumulative
campaign recognition efforts, including the full campaign recognition
wall. Such recognition will begin as soon as a signed letter of intent for
the pledge is received.
Program Development
$500,000—Child Development Center

The gift can be made as a multiyear pledge but must be at least two-
thirds completed before any signage will be installed. The donor will be
recognized with signage on the property, such as “ABC Corporation
Child Development Center.” Naming rights will be secured in
perpetuity.

Recognition will include signage on the property and prominent

mention in the annual report and on the website. Once the signage
is in place, the building will then be referred to in all organization
publications by its appropriate name (for example, the “ABC
Corporation Child Development Center”).
Fellowship Program
$250,000—Endowed Fellows Program

This is a one-time gift to establish a named endowed fund to support
an international journalism fellowship program. Recognition will
include prominent mention in all materials related to the fellowship
program, as well as in the annual report and on the website. Once the
fund is established, participants in the program will be referred to as the
“[Donor Name] Fellows.”
Research
$100,000—Named Research Fund

This is a one-time gift to establish a named research fund to focus on
a specific area of greatest need as identified by the XYZ Organization.
Recognition will include prominent mention in all print materials
related to the research, as well as in the annual report and on the
website.
Scholarships
$25,000 (minimum)—Named Endowment Scholarship

This is a one-time gift to establish a named scholarship fund.
Recognition will include prominent mention in the annual report and
scholarship program materials, as well as participation in the annual
scholarship ceremony and reception.

Donor Privacy Policy

Most nonprofits treat donor information with the utmost
confidentiality. However, it is still necessary to establish a donor privacy
policy to assure donors of their privacy when contributing to your
organization. Your donor privacy policy should explain how donor
information will be used, whether donor information is ever shared, and
how a donor’s name can be removed from your mailing list. Publicize
your organization’s full policy or a brief donor privacy statement on
your website, in your annual report, and in fundraising appeal packages
on the response device.
In developing the policy for protecting donor privacy, keep in mind that
the information your nonprofit keeps on donors should only be:
• what is required for fundraising purposes
• what is appropriate for the donor or prospect to see, if he or she
requests to see the donor record
• made available to the staff, board members, and volunteers on a
“need-to-know” basis
Again, in the United States, healthcare organizations must be certain

they are not in violation of HIPPA. In Canada, organizations must
adhere to several regulated privacy policies. All provinces have Freedom
of Information Protection and Privacy (FOIP) legislation that governs
the privacy of information for public organizations, and there is also
the federal Personal Information Protection and Electronic Documents
Act (PIPEDA). PIPEDA supersedes any provincial policy that does not
meet the federal standard.

SAMPLE DOCUMENT
DONOR PRIVACY POLICY, BRIEF VERSION

All information concerning donors or prospective donors (including
their names, addresses, and telephone numbers; the names of their
beneficiaries; the amount of their gift, etc.) shall be kept strictly
confidential by the XYZ Organization, its staff, and volunteers, unless
permission is obtained from donors to release such information.
SAMPLE DOCUMENT
DONOR PRIVACY POLICY

The XYZ Organization is committed to respecting the privacy of
donors. The types of donor information that it collects and maintains
are as follows:
• contact information (name, address, telephone number, and email
address)
• giving information
• information on events attended, publications received, and special
requests for program information
• information provided by the donor in the form of comments and
suggestions
The XYZ Organization uses donors’ information to understand their
interests in its mission and to update them on the organization’s plans
and activities. It is shared with staff, board members, volunteers, and
consultants only on a “need-to-know” basis.
The organization also assures donors that their names and addresses will
not be shared with any third party unless permission has been granted.
For those who do not wish to be included on a mailing list that might
be sold, rented, or leased to other organizations, donors should contact
the XYZ Organization to have their names removed.
If you have comments or questions about the XYZ Organization’s donor

privacy policy, please email info@XYZ.org or call 800-111-2222.

Confidentiality Policy
Staff, board members, and volunteers involved in fundraising often are
privy to personal information about a donor’s giving history, family,
wealth, and assets. They must understand how vital it is to donors and
the organization that they keep this information confidential, as detailed
in the AFP Code of Ethical Standards and A Donor Bill of Rights. One
way to do this is to have the staff, board members, and volunteers read
and sign a confidentiality policy agreement. Violation of such a policy
would be grounds for discipline and/or removal of the offending
people from their positions with the organization.
SAMPLE DOCUMENT
CONFIDENTIALITY POLICY
In performing their duties, XYZ Organization staff, board members,
and volunteers are privy to information about individuals and families,
such as giving history, assets, wealth, and family relationships. This is
especially true for staff, board members, and volunteers involved in
fundraising and development activities. Due to the sensitivity of this
information, it is important that all XYZ Organization staff, board
members, and volunteers adhere to the policy that information shared
with them remains confidential, is not discussed with others in private
or public settings, and is not disclosed or used for any other purposes.
I agree to comply with this policy.
____________________________________________ _______________
NAME DATE
Necessary Policies for New or Joint Special Events

Often, volunteers or other organizations in the area present nonprofits
with ideas for new fundraising events. Although your organization
may appreciate their interest, many times it is not possible for staff
to take on new time-intensive events, given their current duties and
responsibilities. This is especially true when you are uncertain of the
return on investment for the event.

To be able to respond systematically to such inquiries, you need to

develop policies that address the following:
• Who in the organization should evaluate proposals for new events?
• Is there a minimum net profit goal for an event (such as 50 percent

of gross proceeds or a specific dollar amount)?
• What are the demands on staff time?
• Are volunteers available to work on the event?
• What is the public relations value for the organization?
• What are the estimated fixed costs to produce the event?
• Is this event similar to others in the area?
• How much is at risk financially?
• How much is estimated to be raised before the event?
If you choose to move forward on a new event, it is best that your

organization and the volunteer group or other parties involved sign an
agreement stipulating such items as:
• Who is sponsoring the event? Who is the beneficiary of the funds

raised?
• Who is authorized to sign contracts with vendors and suppliers?

• Who is the official spokesperson for the event?
• Will any publicity that uses your organization’s name in connection

with the event be cleared first by your organization? Who is
authorized to release its use?
• Does your organization have any restrictions regarding possible

event sites, specific sponsors, and/or donor recognition?
• How will the post-event evaluation be conducted?

Complying With
Governmental
Regulations
Conforming to U.S. State and IRS Regulations
Many states require the registration of charitable organizations,
fundraising counsel, and professional solicitors. Complying with
registration requirements for those organizations that are not exempted
is necessary—not optional. Be certain your organization is registered
with the proper agency in your state or province and the states and
provinces in which you solicit funds. In most U.S. states, registration is
handled by the secretary of state or the attorney general. In a few states,
it is handled by the consumer protection department or agriculture
department. Visit the National Association of State Charity Officials
(NASCO) website (nasconet.org) for useful information and links to
state charity regulators within the United States.
In this time of heightened accountability for nonprofits, you must

be certain your organization complies with two other regulations
stipulating items that many states require:
• A solicitation disclosure statement that is conspicuously printed on

solicitation materials and receipts or wherever the governmental
jurisdiction dictates
• A required disclaimer in all direct-mail pieces

Be certain you know and follow the regulations for all states in which
you solicit funds. Below as a sample, you will find the secretary of state’s
disclosure statement for the State of Maryland. All written solicitation
materials and receipts must contain the following disclosure statement,
required under Maryland’s Solicitations Act.

SAMPLE DOCUMENT
SOLICITATION DISCLOSURE STATEMENT

A copy of our current financial statement is available upon request by
contacting [name of organization] at [address and telephone number
of organization]. Documents and information submitted to the State of
Maryland under the Maryland Solicitations Act are available from the
Office of the Secretary of State for the cost of copying and postage.
SAMPLE DOCUMENT
DIRECT-MAIL DISCLAIMER
When printing a direct-mail disclaimer, you need to determine the
best placement for the text. One acceptable place is on the back of the
response card. In some states, no editing of the text is permitted, and
the disclaimer statement must contain the specific text required by
the state.
Check with your state government for specific requirements.
[Name of organization] was established in [state] on [date] and

incorporated on [date]. [Organization] has a 501(c)(3) classification
from the Internal Revenue Service, and donations are tax deductible.
You may send a written request for our annual report to [name and
address of organization].
(alternately)
Residents of the following states may request information from the

offices indicated here [list of states]. Registration with any state does not
imply endorsement by that state. A copy of the latest financial statement
and/or registration statement for [organization] may be obtained by
contacting us at [address and telephone number] or by contacting the
state agencies as noted above. [Organization] is in compliance with all
state registrations required.

IRS Substantiation and Quid Pro Quo Rules

If a contribution is $250 or more, the donor may not claim a tax
deduction without a receipt. When a donor makes a contribution
of $75 or more and receives something in return, such as a book,
entertainment, or a dinner, the IRS requires the charity to provide the
donor with the fair market value of any goods or services the donor may
receive. Only a donation that exceeds the fair market value of the goods
or services the donor receives is tax deductible.
SAMPLE DOCUMENT
LANGUAGE FOR ACKNOWLEDGMENT LETTER

AND RECEIPT
“No goods or services were received in exchange for your contribution,
so the entire donation qualifies for a charitable deduction.”
“We very much appreciate your gift of $________ [or description

of property]. In consideration of your gift, we have provided you
with _________ [insert description], which we estimate has a value
of $_______. The amount of your contribution that is deductible for
federal income tax purposes is limited to the excess of your contribution
over the value of goods and services we provided to you.”
SAMPLE DOCUMENT
LANGUAGE FOR SPECIAL EVENT CONTRIBUTION

“The ticket price is $100 ($75 is tax deductible).”
Complying With the Sarbanes-Oxley Federal Law

As noted earlier, the Sarbanes-Oxley law applies mostly to publicly
traded, for-profit companies. However, all business entities, including
nonprofits, are expected to have (1) a whistleblower procedure that
protects people who make good-faith reports of suspected financial
wrongdoing within an organization and (2) a document retention/

destruction procedure that forbids the destruction of documents during

any announced or pending government investigation and otherwise
indicates how long different types of documents should be retained and
when they can be destroyed.
CRA Regulations
In Canada, to calculate the gift part of a ticket to a fundraising event,

a charity can consider that it has received two payments:
• payment for the fair market value of the meal or entertainment

it is providing (not the actual cost of providing the meal or
entertainment)
• a gift
For example, say a hospital foundation sells tickets for $200 each to a
fundraising dinner-dance. The cost to the foundation of putting on the
event is $45 per person.
The foundation calculates the fair market value of the food and
entertainment provided to persons attending the event to be $75.
The gift to the foundation is the difference between the $200 ticket
price and the $75 value of the benefit received. The actual cost to the
foundation, $45 per person, is not a factor in calculating the part of the
ticket price that is a gift.
Therefore, the foundation can issue a tax receipt indicating the

deductibility of $125 for each ticket purchased.

How to Proceed
The fundraising policies, procedures, guidelines, and suggested sample
language included in this booklet should help fundraisers and their
organizations prepare the documents needed for fundraising. For some
readers, this booklet may be the push needed to draft their own policies
and procedures manual. For others, it serves as a tool to help them
evaluate and revise their current policies and procedures. Whatever
the case, it is critical to make these documents a priority for your
organization.
Once the policies and procedures are approved by the senior staff
and governing board, the next step is to make sure these policies and
procedures are followed. The executive director, board chair, and
development director need to set an example for the rest of the staff and
volunteer leadership by following the set guidelines and emphasizing
their value to the organization, its donors, and the general public.
Training sessions for board members and staff reinforce the importance
of the policies and procedures and help people understand how the
guidelines apply to their work.
As previously mentioned, in today’s environment such policies and

procedures are mandatory to show that your organization adheres to
ethical fundraising practices while also enhancing relations with your
donors and funders and improving your development staff efficiency
and effectiveness.

References and
Resources
References
Ciconte, Barbara L., and Jacob, Jeanne G.(2011). Fundraising Basics:
A Complete Guide, Third Edition (Jones and Bartlett Publishers.
To order, visit the AFP bookstore (afpbookstore.org)
Minton, Frank, and Somers, Lorna. Planned Giving for Canadians,

Second Edition (Waterdown, ON: Somersmith, 1997, updated 2000).
To order, call 905-689-2538.
AFP Fundraising Dictionary. To access, AFP members can visit

https://afpglobal.org/search/node?keys=Fundraising+Dictionary
Other Resources
Association of Fundraising Professionals, Arlington, Virginia
(afpglobal.org)
Canada Revenue Agency, Ottawa, Ontario (cra-arc.gc.ca)
eScanlan Company, Bethesda, Maryland (escanlancompany.com)
Green Legacies, Victoria, British Columbia

(greenlegacies.ca/resources.asp)
Internal Revenue Service, Washington, D.C. (irs.gov)
Maryland Association of Nonprofit Organizations, Baltimore, Maryland

(mdnonprofits.org)
Miller Thomson LLP, Toronto, Ontario (millerthomson.com)
National Association of State Charity Officials (nasconet.org)
Canadian Association of Gift Planners (cagp-acpdp.org)

Conference Recordings
Sustaining Confidence: Ethics in Fundraising presented by R. Scott
Fortnum, MA, CFRE, ACFRE and Mary Doorley Simboski, MS,
ACFRE
https://www.pathlms.com/afp/courses/9749/sections/13592
eCourse
AFP Fundamentals of Fundraising Module 7: Management &
Accountability
https://www.pathlms.com/afp/courses/6278/sections/9334/
scorm/921
Webinars
Ethics and Information Overload: What Do I Do with All this Data?
presented by Robbe Healey, MBA, NHA, ACFRE and Audrey Kintzi,
ACFRE
https://afpglobal.org/webinars/ethics-and-information-overload-
what-do-i-do-all-data
Gifts from Pablo Escobar & Other Ethical Dilemmas presented by

Robbe Healey, MBA, NHA, ACFRE
https://afpglobal.org/webinars/gifts-pablo-escobar-other-ethical-
dilemmas

Appendix A
AFP CODE OF ETHICAL PRINCIPLES
Adopted 1964
The Association of Fundraising Professionals (AFP) exists to foster

the development and growth of fundraising professionals and the
profession, to promote high ethical behavior in the fundraising
profession and to preserve and enhance philanthropy and volunteerism.
Members of AFP are motivated by an inner drive to improve the

quality of life through the causes they serve. They serve the ideal of
philanthropy, are committed to the preservation and enhancement of
volunteerism; and hold stewardship of these concepts as the overriding
direction of their professional life. They recognize their responsibility
to ensure that needed resources are vigorously and ethically sought and
that the intent of the donor is honestly fulfilled.
To these ends, AFP members, both individual and business,

embrace certain values that they strive to uphold in performing their
responsibilities for generating philanthropic support. AFP business
members strive to promote and protect the work and mission of their
client organizations.
AFP members both individual and business aspire to:

• Practice their profession with integrity, honesty, truthfulness and
adherence to the absolute obligation to safeguard the public trust;
• Act according to the highest goals and visions of their
organizations, professions, clients and consciences;
• Put philanthropic mission above personal gain;
• Inspire others through their own sense of dedication and high purpose;
• Improve their professional knowledge and skills, so that their
performance will better serve others;
• Demonstrate concern for the interests and well-being of individuals
affected by their actions;

• Value the privacy, freedom of choice and interests of all those

affected by their actions;
• Foster cultural diversity and pluralistic values and treat all people
with dignity and respect;
• Affirm, through personal giving, a commitment to philanthropy
and its role in society;
• Adhere to the spirit as well as the letter of all applicable laws and
regulations;
• Advocate within their organizations adherence to all applicable laws
and regulations
• Avoid even the appearance of any criminal offense or professional
misconduct;
• Bring credit to the fundraising profession by their public demeanor
• Encourage colleagues to embrace and practice these ethical
principles and standards; and
• Be aware of the codes of ethics promulgated by other professional
organizations that serve philanthropy.
ETHICAL STANDARDS
Adopted 1964; amended Oct. 2014
The Association of Fundraising Professionals believes that ethical

behavior fosters the development and growth of fundraising
professionals and the fundraising profession and enhances philanthropy
and volunteerism. AFP Members recognize their responsibility to
ethically generate or support ethical generation of philanthropic
support. Violation of the standards may subject the member to
disciplinary sanctions as provided in the AFP Ethics Enforcement
Procedures. AFP members, both individual and business, agree to abide
(and ensure, to the best oftheir ability, that all members of their staff
abide) by the AFP standards.

PUBLIC TRUST, TRANSPARENCY & CONFLICTS OF INTEREST

Members shall:
1. not engage in activities that harm the members’ organizations, clients
or profession or knowingly bring the profession into disrepute.
2. not engage in activities that conflict with their fiduciary, ethical and
legal obligations to their organizations, clients or profession.
3. effectively disclose all potential and actual conflicts of interest; such
disclosure does not preclude or imply ethical impropriety.
4. not exploit any relationship with a donor, prospect, volunteer,
client or employee for the benefit of the members or the members’
organizations.
5. comply with all applicable local, state, provincial and federal civil
and criminal laws.
6. recognize their individual boundaries of professional competence.
7. present and supply products and/or services honestly and without
misrepresentation.
8. establish the nature and purpose of any contractual relationship at
the outset and be responsive andavailable to parties before, during
and after any sale of materials and/or services.
9. never knowingly infringe the intellectual property rights of other
parties.
10. protect the confidentiality of all privileged information relating to
the provider/client relationships.
11. never disparage competitors untruthfully.
SOLICITATION & STEWARDSHIP OF PHILANTHROPIC FUNDS

Members shall:
12. ensure that all solicitation and communication materials are
accurate and correctly reflect their organization’s mission and use
of solicited funds.
13. ensure that donors receive informed, accurate and ethical advice
about the value and tax implications of contributions.
14. ensure that contributions are used in accordance with donors’
intentions.

15. ensure proper stewardship of all revenue sources, including timely

reports on the use and management of such funds.
16. obtain explicit consent by donors before altering the conditions of
financial transactions.
TREATMENT OF CONFIDENTIAL & PROPRIETARY INFORMATION

Members shall:
17. not disclose privileged or confidential information to unauthorized
parties.
18. adhere to the principle that all donor and prospect information
created by, or on behalf of, an organization or a client is the
property of that organization or client.
19. give donors and clients the opportunity to have their names
removed from lists that are sold to, rented to or exchanged with
other organizations.
20. when stating fundraising results, use accurate and consistent
accounting methods that conform to the relevant guidelines
adopted by the appropriate authority.
COMPENSATION, BONUSES & FINDER’S FEES

Members shall:
21. not accept compensation or enter into a contract that is based on a
percentage of contributions; nor shall members accept finder’s fees
or contingent fees.
22. be permitted to accept performance-based compensation, such
as bonuses, only if such bonuses are in accord with prevailing
practices within the members’ own organizations and are not based
on a percentage of contributions.
23. neither offer nor accept payments or special considerations for the
purpose of influencing the selection of products or services.
24. not pay finder’s fees, commissions or percentage compensation
based on contributions.
25. meet the legal requirements for the disbursement of funds if they
receive funds on behalf of a donor or client.

Appendix B
APRA Statement of Ethics
Apra members shall support and further the individual’s fundamental
right to privacy and protect the confidential information of their
institutions. Apra members are committed to the ethical collection and
use of information. Members shall follow all applicable national, state,
and local laws, as well as institutional policies, governing the collection,
use, maintenance, and dissemination of information in the pursuit of the
missions of their institutions.
Any reproduction of the Apra Ethics Statement must include

recognition of Apra.
Ethics Guidelines
These guidelines are designed to help each organization develop
a tailored system that will ensure the confidentiality and security
of information and materials involved in the work of development
professionals and the organization(s) for which we work. Reference our
Ethics Tool Kit for more information.
Code of Ethics
Advancement researchers must balance an individual’s right to privacy
with the needs of their institutions to collect, analyze, record, maintain,
use, and disseminate information. This balance is not always easy to
maintain. To guide researchers, the following ethical principles apply:
Preamble
All Apra members shall support and further an individual’s fundamental
right to privacy and protect the confidential information of their
institutions. All members agree to abide by this Statement of Ethics in
the daily conduct of all professional activity encompassing the gathering,
dissemination, and use of information for the purposes of fundraising or
other institutional advancement activity.

Four fundamental principles provide the foundation for the ethical

conduct of fundraising research, relationship management, and
analytics: integrity, accountability, practice, and conflict of interest.
Integrity
Members shall be truthful with respect to their identities and purpose
and the identity of their institutions during the course of their work.
They shall continually strive to increase the recognition and respect of
the profession.
Accountability
Members shall respect the privacy of donors and prospects and conduct
their work with the highest level of discretion. They shall adhere to the
spirit as well as the letter of all applicable laws and all policies of their
organization. They shall conduct themselves in the utmost professional
manner in accordance with the standards of their organization.
Practice
Members shall take the necessary care to ensure that their work is as
accurate as possible. They shall only record data that is appropriate to
the fundraising process and protect the confidentiality of all personal
information at all times.
Conflicts of Interest
Members shall avoid competing professional or personal interests and
shall disclose such interests to their institutions at the first instance. A
conflict of interest can create an appearance of impropriety that can
undermine confidence in the member, their organization, and the
profession.
Copyright © 2009 by Apra • Revised December 2009

Apra Social Media Ethics Statement
Preamble
In the conduct of their work, Apra members must balance an
individual’s right to privacy with the needs of the institution to collect,
analyze, record, maintain, use, and disseminate information. Social
media outlets create extraordinary opportunities for the practice
of prospect research. However, because members are not passive
participants in social media, but engage and participate in it both
personally and professionally, the use of social media presents unique
challenges to the ethical conduct of research. These guidelines have
been created to assist Apra members in making ethical choices about the
use of social media in their fundraising research activities.
Integrity
Members shall exercise transparency with respect to their identities,
the identity of their institution and their relation to it, and to the
purpose of their online presence and communication. Members shall
be authorized by their institution to conduct business on its behalf on
social media sites. They shall keep all information truthful, and respect
all laws governing copyright, trademarks, and other third-party rights in
online space. Members shall be mindful of cultural differences globally
that might lead to misunderstanding or offence. Content shared must
be respectful of all individuals, races, religions, gender and sexual
orientation, and avoid derogatory or libelous statements. Members shall
remember that content is public and permanent.
Accountability
Members shall respect the privacy of individuals and conduct their
work with the highest level of professionalism and discretion. They
shall maintain appropriate boundaries when gathering and sharing
information, taking care to distinguish between professional and
personal addresses, communications, uses, and behavior. Information
gathered from social media sites shall remain confidential and be

shared only with authorized organizational staff as part of standard

business operations. No private or confidential institutional or
individual information should be posted, shared, or disclosed to the
public without specific authorization. Members shall comply with all
organizational guidelines for computer use and social media behavior.
Practice
When gathering, communicating, storing, and protecting information,
members shall take all necessary precautions, and comply with federal,
state, and institutional regulations. Members shall record and disclose
only information appropriate to fundraising activities which is legally
available to be maintained in a secure database of record. They shall
insure information gathered via social media is further confirmed by
other sources to guarantee that it is as accurate as possible. Members
shall make certain that they understand the privacy policies of their
institution and of the social media channels they use. In the absence of
internal policies, members shall adhere to this statement of ethics and
social media policies.
Conduct
Because social media is highly relational and public, member’s conduct
shall adhere to the highest standards of professional communication.
Members shall conduct themselves in a manner that encourages a
positive relationship to the institution which they represent and assists
in achieving its goals. They should not “friend” or be “friended” or
enter into personal relations with prospects or donors in the conduct
of their work. Members should be mindful that information posted in
one context may be publicized in another. Should information obtained
on social media sites jeopardize the reputation of the prospect or have
a negative impact on the organization, the member should ensure
its review before use to protect both the individual and institution.
Members should always conduct themselves with the awareness they
are accountable for all online behavior, and adhere to all standards of
professional conduct and business practices.
*Approved August 2013

Appendix C
SAMPLE PLEDGE COMMITMENT FORM
Donor name: _________________________________________________
Address:_____________________________________________________
Telephone number: (H)________________________________________
(O)_________________________________________________________
Gift/Pledge commitment: _______________ to be paid over ____ years
Purpose of gift (how the gift is to be used—to fund a building,

scholarship, program support, etc.): ______________________________
____________________________________________________________
Donor recognition (how the donor will be recognized as per the

agreement [e.g., name a physical space, scholarship fund, program, etc.]
and whose name will appear, etc.):_______________________________
____________________________________________________________
____________________________________________________________
Preference for listing in donor recognition materials:________________

____________________________________________________________
____________________________________________________________
Payment Schedule:
Amount $____________ to be given:
o Annually o Quarterly o Monthly
Signature of Donor_____________________________Date ___________
Signature of Organization Representative_________________________
Date ________________________________________________________

Appendix D
SAMPLE GIFT OF PERSONAL PROPERTY POLICY
For a gift of personal property valued in excess of $5,000, a donor must
pay for an appraisal by a qualified appraiser. The organization must
acknowledge the appraisal in writing, to be attached to the donor’s tax
return. The organization is required to notify the IRS/CRA of the sale
price of any property gift sold within two years of the date of the gift.
APPRAISALS IN CANADA
In Canada, for a gift of personal property valued in excess of $1,000,
the charity can pay for the appraisal if it wishes, but the typical practice
is that the donor should pay.
Furniture:
• Gifts of furniture will be accepted if the furniture is usable in

the organization’s facilities or can be quickly sold for an amount
approximate to the amount the donor wished to take as a tax-
deductible contribution. A donor is responsible for establishing
their own deduction.
• The organization will ask a furniture dealer to give an estimate of

value so that it can be booked as an asset in cases where the items
are to be used by the organization.
• The development department will maintain a list of other charities

that accept gifts of furniture for those donors whose furniture
cannot be used by the organization.

Automobiles:
• Gifts of automobiles will be accepted by the organization if the

vehicles are in working order and saleable. According to recent
U.S. legislation, for a vehicle with a value of more than $500 or
that generates proceeds of more than $500, the donor’s deduction
is determined in one of two ways:
1. If the car is sold without any significant intervening use or

material improvement by the organization, the deduction is
limited to the amount of gross proceeds received from the sale.
2. If the organization intends to make significant intervening

use of or materially improve the car, the donor generally can
deduct its fair market value.
Other:
• Other gifts of personal property will be accepted if they are usable

to the organization or are easily saleable. The donor is responsible
for establishing the value of the contribution. If the organization
decides to sell the item but thinks the noted value is higher than
what could be realized by its sale, the development department will
inform the donor.
• Before accepting personal property gifts, the following also will be

considered: transportation costs, storage costs, the cost of selling,
and maintenance and repair costs.

THE AUTHORS
Barbara L. Ciconte, CFRE, is a senior vice president of consulting
services for Donor Strategies, Inc. Located in Chevy Chase, Maryland,
Donor Strategies is a professional and technical services firm providing
consulting services to the nonprofit sector in nonprofit management,
fundraising, development planning, board and staff training, and
information systems.
Barbara has worked in the nonprofit sector for more than 30 years
and has experience in all facets of nonprofit management and resource
development. Her last position before becoming a consultant in 1999
was associate dean for development and alumni relations at American
University’s Washington College of Law in Washington, D.C.
A leading national educator, she conducts workshops and seminars

for international, national, regional, and community-based nonprofit
organizations. Barbara is the co-author of Fundraising Basics: A
Complete Guide, Third Edition, published by Jones & Bartlett.
During her career, she has been active in AFP, serving on the board
and as president of AFP’s Washington DC Metro Area Chapter.
More recently, she was a past board member and vice chair of AFP’s
professional advancement division. She also is a charter member of
AFP’s Leadership Society and a past recipient of the AFP DC Chapter’s
Outstanding Fundraising Professional award.
Editor’s Note: Barbara L.Ciconte authored the first edition of this

Ready Reference booklet.
R. Scott Fortnum, ACFRE, CFRE, MA is president and CEO of

Children’s Health Foundation in London, Ontario, and has worked
as a professional fundraiser since 1990. As staff and consultant
he has worked with major organizations across Canada including
universities, hospitals, and national nonprofits. He has held the Certified
Fundraising Executive (CFRE) designation continuously since 1995,
and is currently chair of the ACFRE Certification Board.

SPECIAL THANKS
For their contributions to the original 2007 edition of this Ready
Reference, AFP wishes to acknowledge and thank Peter C. Wolk, Esq.,
for his pro bono services in reviewing and editing this publication,
ensuring that the information provided complies with current U.S. best
practices. The founder and executive director of the National Center for
Nonprofit Law, a 501(c)(3) organization in Washington, D.C., Peter
is an author and trainer on a wide range of nonprofit organizational
and legal topics. As a nonprofit law attorney, he works with national,
regional, and local nonprofits of all kinds.
AFP also is most grateful to Bill Hallett, Ph.D., ACFRE, and Andrea
McManus, CFRE, for their generous contribution of information
pertaining to Canada.

A DONOR BILL OF RIGHTS
DEVELOPED BY:
Association of Fundraising Association for Healthcare Council for Advancement and Giving Institute: Leading
Professionals (AFP) Philanthropy (AHP) Support of Education (CASE) Consultants to Non-Profits
PHILANTHROPY is based on voluntary action for the common good. It is a tradition of giving and
sharing that is primary to the quality of life. To assure that philanthropy merits the respect and trust of
the general public, and that donors and prospective donors can have full confidence in the not-for-profit
organizations and causes they are asked to support, we declare that all donors have these rights:
I VI
To be informed of the organization’s mission, To be assured that information about their
of the way the organization intends to use donations is handled with respect and with
donated resources, and of its capacity confidentiality to the extent provided by law.
to use donations effectively for their
intended purposes.
VII
To expect that all relationships with
II individuals representing organizations of interest
To be informed of the identities of those to the donor will be professional in nature.
serving on the organization’s governing board,
and to expect the board to exercise prudent
judgment in its stewardship responsibilities.
VIII
To be informed whether those seeking
donations are volunteers, employees of the
III organization, or hired solicitors.
To have access to the organization’s
most recent financial statements.
IX
To have the opportunity for their
IV names to be deleted from mailing lists that
To be assured their gifts will be used for an organization may intend to share.
the purposes for which they were given.
X
V To feel free to ask questions when making
To receive appropriate acknowledgment and a donation and to receive prompt, truthful, and
recognition. forthright answers.
ADOPTED IN 1993 • COPYRIGHT AFP, AHP, CASE, GIVING INSTITUTE 2015 • ALL RIGHTS RESERVED
www.afpglobal.org
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Developing

AFP’S READY REFERENCE SERIES

By Barbara L. Ciconte, CFRE

© 2018 by the Association of Fundraising Professionals

All rights reserved. No part of this report may be reproduced or

Association of Fundraising Professionals

© 2018 ASSOCIATION OF FUNDRAISING PROFESSIONALS • WWW.AFPGLOBAL.ORG • iii

Gift Policies and Procedures ......................................................Page 7

Donor Policies and Procedures ............................................... Page 23

Complying With Governmental Regulations ........................... Page 33

How to Proceed ..................................................................... Page 37

Appendix A: AFP Code of Ethical Standards ............................ Page 41

Appendix B: APRA Statement of Ethics ...................................Page 45

Appendix C: Sample Pledge Commitment Form ......................Page 49

Appendix D: Sample Gift of Personal Property Policy ............. Page 51

A Donor Bill of Rights ............................................. Inside back cover

Gift-Acknowledgment Policy and Procedures ............................Page 9

Gift-Entry and Recording Policy and Procedures .....................Page 10

Gift-Acceptance Policy and Procedures ....................................Page 11

In-Kind Gifts Policy .................................................................Page 15

© 2018 ASSOCIATION OF FUNDRAISING PROFESSIONALS • WWW.AFPGLOBAL.ORG • v

XYZ Organization Principles for Corporate Support

Donor Recognition Policy, Brief Version ..................................Page 24

Donor Naming Opportunities .................................................Page 27

Donor Privacy Policy, Brief Version...........................................Page 30

Donor Privacy Policy ...............................................................Page 30

Confidentiality Policy ...............................................................Page 31

Solicitation Disclosure Statement .............................................Page 34

Direct-Mail Disclaimer .............................................................Page 34

Language for Acknowledgment Letter and Receipt ..................Page 35

Language for Special Event Contribution ................................Page 35

vi • © 2018 ASSOCIATION OF FUNDRAISING PROFESSIONALS • WWW.AFPGLOBAL.ORG

POLICY: AS DEFINED BY THE AFP FUNDRAISING

Nonprofit leaders must understand that public trust is vital to the

© 2018 ASSOCIATION OF FUNDRAISING PROFESSIONALS • WWW.AFPGLOBAL.ORG • 1

Key to gaining that donor trust is keeping to established guidelines for

This booklet offers samples of key fundraising policies and procedures

FUNDRAISING POLICIES AND PROCEDURES

Does your organization have:

1. A gift solicitation and acceptance policy? Yes ____ No ____

2. A procedure for processing gifts and maintaining database

3. A policy and/or procedure for:

2 • © 2018 ASSOCIATION OF FUNDRAISING PROFESSIONALS • WWW.AFPGLOBAL.ORG

4. A donor privacy policy? Yes ____ No ____

5. A donor recognition policy? Yes ____ No ____

6. A written procedure for entering and recording gifts?

7. A written procedure for acknowledging gifts? Yes ____ No ____

8. Internal Revenue Service/Canada Revenue Agency language on

9. A state disclosure statement on letters? (U.S. requirement for

10. A charitable registration number publicly available? (Canada only)

11. A permission policy for sending email communications to

In 1960, a group of development officers established what is now the

© 2018 ASSOCIATION OF FUNDRAISING PROFESSIONALS • WWW.AFPGLOBAL.ORG • 3

An excellent resource for development professionals, the AFP Code of

In addition to the AFP Code, the Association of Professional

MAKING THE CODE OF ETHICS YOUR OWN

• Standard No. 9 under Solicitation and Use of Philanthropic Funds

• Standard No. 14 under Presentation of Information states:

4 • © 2018 ASSOCIATION OF FUNDRAISING PROFESSIONALS • WWW.AFPGLOBAL.ORG

1. A gift solicitation and acceptance policy? Yes No

4. A donor privacy policy? Yes No

5. A donor recognition policy? Yes No

7. A written procedure for acknowledging gifts? Yes No