c. Restricted Gifts for Existing Activities. A gift, other than an in-kind gift, may be restricted to an existing activity, purpose, or mission of

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1 The mission of is to share the love and grace of Jesus Christ with all people and to invite them to fullness of faith in God. 1. Purpose of the Policy a. To create and sustain positive donor relationships based upon a common understanding of acceptable types and forms of gifts that will advance the mission of (LCGS). b. To provide guidance to donors and their professional advisors in completing gifts. c. To define LCGS s role in administration of assets. d. To assist LCGS in being responsible stewards of the assets it receives. e. To protect LCGS and its Congregation Council from third party liability and IRS sanctions. f. To assist donors in achieving their charitable objectives in ministry. 2. General Principles a. The purpose of any gift should be consistent with the mission and ministries of LCGS. b. All gifts, whether gifts of money or otherwise, are irrevocable. No gift may be returned to a donor unless, after review of the facts of the gift, LCGS concludes that the gift was made because of the donor s mistake. c. Requests from donors to remain anonymous will be respected. 3. Unrestricted Gifts a. All gifts are assumed to be intended for the congregation s general operating purposes, unless the donor clearly expressed the intention to benefit a special fund or purpose or the donation was made in response to a solicitation or campaign with a limited purpose. b. Any of the following unrestricted gifts will be directed to the congregation s unrestricted endowment fund and used for the long-term benefit of the congregation and its missions: i. Any unrestricted gift of $1,000 or more that is not part of a ember s ordinary and regular contributions; ii. Any portion of a bequest or remainder gift that is unrestricted; iii. Any unrestricted gift given as a memorial gift; and iv. Any gift that the donor directs to be placed in the unrestricted endowment. c. Any unrestricted gift not described in paragraph 3.b. will be directed to the immediate benefit of the congregation and its missions and will be recorded as regular giving. 4. Temporarily or Permanently Restricted Gifts a. LCGS recognizes that some donors may wish to place restrictions on how their funds can be used to further the ministry of the organization. Gifts that include restrictions that are inconsistent with or beyond the scope of Lutheran Church of the Good Shepherd s mission and purpose will be declined. Donors are encouraged to consult with LCGS staff before making a restricted gift. b. Donors are encouraged to include language in their gift document that allows flexibility for LCGS if the restrictions placed upon the gift cannot be reasonably met in the specified period of time and how LCGS should provide adequate notice to the donor. Gift Acceptance Policy page 1

2 c. Restricted Gifts for Existing Activities. A gift, other than an in-kind gift, may be restricted to an existing activity, purpose, or mission of LCGS. d. Temporarily Restricted Gifts. Donors are encouraged to consider, as an alternative to an endowment or permanently restricted gift, a long-term restricted gift. For example, a donor might provide that a gift of $10,000 be used over a period of five years to support a general or specific mission of the congregation. e. Gifts to the General Purpose Permanent Endowment. A gift of any size may be made to the general purposes endowment fund. f. Gifts to Fund Scholarships. A gift of any size may be made to either of two scholarship funds. These funds consist of: i. LCGS Lutheran College Scholarship Fund (managed by the trustees of the LCGS Mission Endowment Fund), ii. Doris Trent Scholarship Fund (managed by the trustees of the LCGS Mission Endowment Fund), A gift that is designated for scholarships without specifying either of the two scholarship funds will be placed in the Doris Trent Scholarship Fund, which is the less restricted of the two scholarship funds. g. Gifts to Establish a New Named or Special Purpose Permanent Endowment. A gift to establish an endowment that carries a person s name or is restricted to a new purpose or activity is subject to acceptance and approval by the Congregation Council. Any such new fund would be managed by the trustees of the Mission Endowment Fund ( Trust Board ) for the benefit of the congregation. If the Trust Board determines that the gift would be inconsistent with the purpose of the Mission Endowment Fund, the new fund would be managed by the Congregation Council. h. Gifts to Existing Special Purpose Quasi-endowment Funds. LCGS maintains two funds that are restricted to specific purposes but are not permanent endowments. Gifts to these funds will be used for the identified purposes but will not be held in perpetuity. A gift of any size may be made to these funds. These funds are: i. LCGS Global Concerns Fund ii. LCGS Local Concerns Fund 5. Types of Gifts a. Cash is always an acceptable gift to Lutheran Church of the Good Shepherd. Donors may make gifts by cash, check, and money order or by credit card. For gifts made by credit card, the date the charge is accepted for processing by Lutheran Church of the Good Shepherd is the applicable date of the gift. Checks should be made payable to Lutheran Church of the Good Shepherd and sent to Lutheran Church of the Good Shepherd, 1601 North Street SE, Olympia, WA b. Testamentary charitable gifts (charitable bequests). Testamentary charitable gifts or bequests are gifts made by naming The Lutheran Church of the Good Shepherd in the donor s will or trust. The gift or bequest is payable according to the terms of the document. Bequests may provide for a specific dollar amount in cash or specific securities or real property. A gift in any amount may be accepted as a contribution to an existing fund, so long as the terms and conditions of the existing fund permit. i. For specific bequests the following language is recommended: I hereby give and bequeath $ from my estate to The Lutheran Church of the Good Shepherd, for its general purposes. Lutheran Church of the Good Shepherd is a Washington not for profit corporation with its primary address at 1601 North Street SE, Olympia, WA Its FEIN number is <>. ii. For a remainder gift the following language is recommended: I give and bequeath all (or %) of the rest, residue and remainder of my estate to The Lutheran Church of the Good Shepherd, for its general purposes. Gift Acceptance Policy page 2

3 Lutheran Church of the Good Shepherd is a Washington not for profit corporation with its primary address at 1601 North Street SE, Olympia, WA Its FEIN number is <>. iii. Donors to Lutheran Church of the Good Shepherd are advised that if restrictions are placed upon bequests, these should be drafted as broadly as possible to avoid restricting the funds unduly. We suggest that the following clause be added to gifts that carry restrictions: If in the opinion of Lutheran Church of the Good Shepherd all or part of the funds cannot be applied in strict conformance with the purposes previously stated, Lutheran Church of the Good Shepherd, in its sole discretion may use these funds for other appropriate purposes as nearly aligned to the original intent of the donor as good conscience and need dictate within the authorized powers of Lutheran Church of the Good Shepherd. c. Beneficial interest in retirement accounts. Donors may designate Good Shepherd as the full or partial beneficiary of a qualified retirement account, such as a traditional or Roth Individual Retirement Account, a 401(k) or 403(b) plan, a deferred compensation 457 plan or another profit sharing plan. The gift language described in the testamentary gifts section above can be used for retirement account gifts. d. Tangible personal property, or in-kind gifts, is acceptable subject to the following conditions. i. All in-kind gifts are subject to approval by the church staff. An in-kind gift will not be accepted if the church does not have an immediate need for the item or if the church is likely to incur expenses as a result of owning the item. ii. LCGS will not accept in-kind gifts that are restricted to a specific purpose, mission, or program. The LCGS staff will make reasonable efforts to comply with a donor s wishes regarding use of an in-kind gift, but once the gift is accepted it becomes the property of the church and will be used in the way that best serves the overall mission of the congregation. iii. LCGS may sell, trade, or otherwise dispose of any in-kind gift. iv. Donors are encouraged, as an alternative to an in-kind gift, to sell such property and convert the proceeds into cash for contributions. e. Publicly traded securities. Marketable securities may be transferred to an account maintained by Lutheran Church of the Good Shepherd at one or more brokerage firms or delivered physically with the transferor s signature or stock power attached. Please obtain Stock Donation Procedures from LCGS staff. i. Donors of publicly traded securities should notify Lutheran Church of the Good Shepherd of their intention to make such donations as brokerage houses frequently make such transfers without identifying the source of the gift. ii. It is the intention of LCGS to sell all marketable securities as soon as practicable upon receipt. Any restrictions placed upon such sales must be approved by church staff. f. Closely held securities. Closely held securities which include not only debt and equity positions in non-publicly traded companies, but also interests in LLPs and LLCs or other ownership forms can be accepted subject to the approval of the Congregation Council. i. Gifts must be reviewed prior to acceptance to determine that: 1. There are no restrictions on the security that would prevent Lutheran Church of the Good Shepherd from ultimately converting these assets to cash; 2. The security is marketable; and 3. The security will not generate any undesirable tax consequences for Lutheran Church of the Good Shepherd. Gift Acceptance Policy page 3

4 ii. If deemed necessary upon initial review, LCGS may consult with outside legal counsel prior to acceptance of such gifts. Every effort will be made to sell non-marketable securities as quickly as possible. g. Real estate. Gifts of real estate may include developed property, undeveloped property or gifts subject to a prior life interest. i. Prior to acceptance of real estate, Lutheran Church of the Good Shepherd will require an initial environmental review of the property to ensure that it has no environmental damage. If an environmental inspection reveals some problems associated with the property, an environmental audit will be conducted and the cost of such audit shall generally be an expense of the donor. ii. Criteria for acceptance of real property shall include: 1. The usefulness of the property for the purposes of the charity; 2. The marketability of the property; 3. Any restrictions, reservations, easements or other limitations associated with the property; 4. The carrying costs which may include insurance, property taxes, mortgages or notes associated with the property; and 5. Evidence from the environmental audit concluding that the property is not damaged. iii. Gifts of real estate are subject to approval and acceptance by the Congregation Council. h. Remainder interests in property. Lutheran Church of the Good Shepherd will accept a remainder interest in a personal residence, farm or vacation property subject to the provisions indicated in paragraph f, above. The donor or other occupants may continue to occupy the real property for the duration of the stated life. At the death of the donor, Lutheran Church of the Good Shepherd may use the property or reduce it to cash. Where Lutheran Church of the Good Shepherd receives a gift of a remainder interest, expenses for maintenance, real estate taxes and any property indebtedness are to be paid by the donor or primary beneficiary. i. Life insurance. i. Lutheran Church of the Good Shepherd does not accept ownership of term life insurance policies. However, donors may name the church as the beneficiary of a term life insurance policy. ii. Lutheran Church of the Good Shepherd accepts donations of ownership of whole life insurance policies, including traditional whole life policies as well as universal life and universal life and variable universal life insurance policies. Donors may also name the church as the beneficiary of any type of whole life insurance policy. 1. Before a life insurance policy can be recorded as a gift, donors must name Lutheran Church of the Good Shepherd as both beneficiary and irrevocable owner of an insurance policy with the donor giving up all rights and interests in the policy. 2. The gift upon receipt is valued at its interpolated terminal reserve value as determined by the insurance company actuaries, not its cash surrender value. 3. If the donor contributes future premium payments, Lutheran Church of the Good Shepherd will include the entire amount of the additional premium payment as a gift in the year that it is made. 4. If the donor elects not to continue to make gifts to cover premium payments on the life insurance policy, Lutheran Church of the Good Shepherd may: a. Continue to pay the premiums; b. Convert the policy to paid up insurance; or Gift Acceptance Policy page 4

5 c. Surrender the policy for its current cash value. 6. Planned gifts. Lutheran Church of the Good Shepherd works cooperatively with the Lutheran Community Foundation and the ELCA Foundation to assist donors who wish to make designations of Lutheran Church of the Good Shepherd as the beneficiary of charitable gift annuities. Lutheran Church of the Good Shepherd will also accept designation as a remainder beneficiary in a charitable remainder trust, as an income beneficiary of a charitable lead trust, or as a beneficiary of a retirement plan. Other planned gift vehicles are also offered through the Lutheran Community Foundation and the ELCA Foundation. 7. Miscellaneous Provisions: a. Securing appraisals and legal fees for gifts to Lutheran Church of the Good Shepherd. It will be the responsibility of the donor to secure an appraisal (where required) and independent legal counsel for all gifts made to Lutheran Church of the Good Shepherd. b. Valuation of gifts for development purposes. Lutheran Church of the Good Shepherd will record a gift received at its valuation for gift purposes on the date of the gift. c. Gift acknowledgement Policies. i. Effective in 1994, the Omnibus Budget Reconciliation Act of 1993 (OBRA) added Internal Revenue Code section 170(f)(8) which denies donors a charitable deduction for any contribution of $250 or more unless the donor obtains a written acknowledgement of the contribution from the charity. Lutheran Church of the Good Shepherd acknowledges all gifts regardless of their size. ii. The law also requires charities to provide written disclosure about the solicitation or receipt of quid pro quo contributions that exceed $75. The disclosure must inform the donor that the amount of the contribution that is tax deductible for federal income tax purposes is limited to the excess of the amount on any money or other property contributed by the donor, over the value of the goods and services provided by the charity and provide the donor with a good faith estimate of the value of such goods and services. iii. There are three situations in which such a disclosure is not required: where the goods or services are insubstantial (i.e., token or otherwise de minimus); where no donative intent is present; where only an intangible benefit is provided to the donor such as participants in a religious ceremony. d. Responsibility for IRS filings upon sale of gift items. The staff of Lutheran Church of the Good Shepherd is responsible for filing IRS Form 8282 upon the sale or disposition of any asset sold within two years of receipt by Lutheran Church of the Good Shepherd when the charitable deduction value of the item is more than $5,000. LCGS staff will file this form within 125 days of the date of sale or disposition of the asset. Changes to Gift Acceptance Policies. These policies and guidelines are adopted by the Congregation Council of Lutheran Church of the Good Shepherd. The Congregation Council must approve any changes to or deviations from these policies. 8. Use of Legal Counsel a. Lutheran Church of the Good Shepherd will seek independent legal counsel as appropriate as part of the fiduciary responsibility of staff and Congregation Council members to protect the organization s assets. Counsel will be sought for: i. Reviewing certain gifts such as closely held stock that is subject to buysell agreements or other donor initiated restrictions; ii. Review of all transactions governed by contracts or legal documents; iii. Review of all transactions with potential conflicts of interest; and Gift Acceptance Policy page 5

6 iv. Other circumstances where staff or Congregation Council members believe the use of counsel is appropriate. b. Donor Conflicts of Interest. Lutheran Church of the Good Shepherd advises donors to seek independent professional counsel prior to making a major gift. Gift Acceptance Policy page 6