It sounded so wonderful. A donor of long standing gave an undeveloped tract of land in Florida to the seminary — decades ago, in an era when it seemed half the world was retiring to the Sunshine State and driving real estate prices skyward.

It didn’t sound so wonderful when the otherwise attractive wooded acreage turned out to be already occupied by full-time residents — many on the endangered species list. The seminary eventually made some profit from the sale of the land, but nothing near what had been anticipated when the land had been thought suitable for development. And, of course, nothing near the amount on the receipt that the seminary had given the donor for tax purposes. Counting the time and trouble invested in making the land available for sale as a nature preserve, the net was probably negative.

It was a sad but valuable lesson for this theological school, which graciously will remain unnamed. They have policies in place to avoid repeats of this story, including a requirement that the donor, not the institution, establish the monetary value of the gift, backed up by reliable appraisals.

But other stories of more recent gifts to seminaries carry the same lesson: Recipient beware. Philanthropic advisors diplomatically but emphatically stress that it sometimes makes sense to say no.

It’s a particularly important lesson for trustees, who may forget that ultimate responsibility for gift acceptance rests with them. While a typical institution places its confidence in experienced fundraisers to ensure that gifts are appropriate and meet all legal guidelines, ultimately the board of trustees is accountable.

The all-important gift acceptance policy

The first line of defense against inappropriate gifts is a strong gift acceptance policy, reviewed often and affirmed regularly by the trustees. “It’s a real safety net,” says Kathleen Hansen, vice president for seminary relations at Luther Seminary and executive director of the Luther Seminary Foundation. Rosemary Mitchell, vice president for seminary relations at Princeton Theological Seminary, calls a gift acceptance policy “the most important document for a not-for-profit. It provides the basic parameters for everyone (staff, board members, and donors). It provides a gracious way to say ‘no, thank you’ when a gift is one you don’t want or just cannot accept.”

Another safety valve is ensuring that there is a strong and supportive relationship between the seminary’s development office and its business offices, in conjunction with the president and board of trustees, says Kurt A. Gabbard, vice president for business affairs at Austin Presbyterian Theological Seminary. In addition to its gift acceptance policy, Austin also has a gift acceptance committee charged with handling potentially troublesome gifts.

Odd gifts

Stories are plentiful about problematic gifts. The most common are endowments for courses or lectureships for which donors have specific agendas that don’t mesh with a school’s mission. Another no-no: endowed chairs for which donors not only want a specific title attached but also want to name the recipients.

Barbara G. Wheeler, director of the Center for the Study of Theological Education at Auburn Theological Seminary, calls them “donors who won’t let go.” In Wheeler’s experience as a consultant to numerous seminaries, the overbearing donor is the most common problem with potentially inappropriate gifts. “Some (presidents) have had enormous pressure from donors,” she says, because donors sometimes have “a vision that is so specific, it restricts the right of the president, the faculty, and the board to make appropriate — and the best — decisions.”

Other examples abound. Many well-meaning alumni, especially pastors, want to donate their libraries, says Rebekah Burch Basinger, a fundraising expert who created many of In Trust’s assessment instruments for boards. “But seminaries can only use so many out-of-date commentaries,” she says. And old sermon collections are usually even less welcome. “Librarians wring their hands” at such gifts, she avers.

Fine art poses special problems. In one case I know of, the donated art turned out to be stolen — an especially shocking issue that few seminaries expect to face. But art is difficult to market, and there may be a long lag time between receipt of the gift and its sale. Art of dubious quality can be especially problematic, says Martha Horne, dean and president emerita of Virginia Theological Seminary, even though donors usually have the best intent in offering their gifts. In many cases, art becomes more of a donor relations problem than an asset.

Cultivating relationships

Donor relations, and relationships with donors’ relatives, can be an issue even when the art is not “dubious.” Restrictions on where the art will be displayed — and how it will be shown, and when — are often placed on gifts of art. And it’s very hard to estimate the value of art without selling it.

Endowed scholarships can also harbor pitfalls. The most obvious is the highly restrictive eligibility requirements that have often accompanied them. Some scholarships given years ago restricted the recipients’ race or gender, but even more recent scholarship donations have sometimes included inappropriate restrictions. I know of one donor who wanted to fund a scholarship that could only be awarded to his own child!

Gifts of real estate almost always pose complicated issues. In the past, theological schools have accepted gifts of property encumbered by outstanding liens, beset with environmental problems, or restricted by zoning laws. Kathleen Hansen of Luther Seminary calls such property “gifts that eat,” because they cost the recipient institution more than they’re worth. One solution to the potential headaches of gifts of real property: In the gift acceptance policy, insist on appropriate pre-acceptance reviews like an environmental report and an appraisal. But even with such safeguards in place, an institution may find itself (as my institution once did), as reluctant landlord of a multifamily residential building. It took quite a while before a buyer could be found.

The silver lining: Our lesson with the apartment building made it much easier to decline another donor’s idea of a splendid gift to our seminary — an operating shoelace factory. The trustees are still smiling about that one.

Can we accept it? Check the policy

Paulette V. Maehara, president and CEO of the Association of Fundraising Professionals, lives and breathes excellence in fundraising practices. She told In Trust that she always, always stresses the importance of gift acceptance policies. She remembers her hard-won experience as a fundraiser for a university foundation. Back then, she was directed to get rid of helicopter parts that had lain for years in an Arizona warehouse. The parts had been donated to the foundation, but they were costing the university more to store than they were worth.

Gift acceptance policies must be appropriate to the institution, she says. And the board should be involved in setting the policy. She reiterates that the university that had accepted the helicopter parts had no reason to accept them other than to please the donor. And their eventual sale never made up for the storage costs. A good gift acceptance policy can help save a school from accepting gifts that might end up being liabilities.

“Donors are usually more understanding of the institution not being able to take their gift if there is a policy that prohibits such gifts,” says Maehara. “They may not like it, but they will accept it.”

In an article published at, advisers from Wachovia Trust Nonprofit and Philanthropic Services pointed out that a gift acceptance policy should be a formal, written document that covers three bases: “First, it should identify the types of assets your nonprofit will accept (e.g. cash, real estate). Next, it should provide guidelines as to the forms of gifts that are acceptable (e.g. charitable trusts, gift annuities). Finally, it should define your nonprofit’s role in administering the gifts.

“But that’s not all,” the authors continue. "To meet the needs of your nonprofit and to help protect your resources and reputation, your gift acceptance policy should also:

  • State that your nonprofit will obtain legal input and advice when appropriate. 

  • Specify limits your nonprofit may want to impose, such as maximums or minimums in regard to charitable gift annuities. 

  • Detail any restrictions that donors will be permitted to place on gifts. 

  • Outline the responsibilities that donors have with respect to obtaining appraisals for their own tax purposes. 

  • Identify the specific circumstances under which your nonprofit organization will obtain an independent appraisal. 

  • Outline how your nonprofit plans to acknowledge gifts. 

  • Note the time frame for communicating with donors. 

  • Specify the procedures for amending the gift acceptance policy."

Examples of such policies are abundant. Three from In Trust’s member institutions:

These gift acceptance policies are offered with the permission of the schools as samples only. Your own policy should be written with your own legal and fundraising counsel.

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