Gift Acceptance Policy

Introduction

Purpose of Gift Acceptance Policy
Responsibility to Donors
Role of Staff and of Finance Committee
Legal Counsel
Conflict of Interest
Gift Restrictions
Types of Acceptable Gifts
Named Gifts
Pledges
Intellectual Property
Deferred or Planned Gifts
Real Estate
Gifts in Kind: Musical Instruments
Gifts in Kind: Tangible Personal Property Other Than Instruments
Gifts of Service
Other Non-Traditional Assets Not Described Above
Gift Acknowledgment
Gift Timing and Value
Professional Advisors
Appraisals
Payment of Fees
Moral Turpitude
Drafting and Review of Documents
Policy Amendment and Review
Approval of Gift Acceptance Policy

The San Francisco Conservatory of Music (“Conservatory” or “SFCM”) is a not-for-profit organization founded in 1917 and incorporated in 1923 as a California Public Benefit Corporation and a tax-exempt charitable organization. SFCM's tax ID number is 94-1156610. SFCM encourages the solicitation and acceptance of gifts that will support its mission to transform students artistically, intellectually, professionally, and individually through the study of music at the highest level.

The decision whether to accept a proposed gift must be made in light of the best interest of SFCM in accordance with the policies and procedures set forth herein. SFCM will give serious consideration in a timely manner to all gifts proposed by donors and reserves the right to refuse any gift, or modify any gift with the consent and cooperation of the donor. This Gift Acceptance Policy (“Policy”) is intended to set forth guidelines to protect the best interests of our donors as well as the welfare of the Conservatory, while recognizing that flexibility should be maintained for proposed gifts which may present complex situations and require careful consideration.

Deviations from this Policy may be approved only by a Gift Acceptance Committee (to be appointed by the Finance Committee; see paragraph III below), except where this policy specifically requires Finance Committee or Board approval, in which case only those bodies may approve deviations. Gifts that are consistent with this Policy may be accepted by staff without additional approval, unless otherwise required by this Policy. SFCM will only accept gifts that comport with applicable laws and IRS regulations.

SFCM may accept gifts of manuscripts, literary works, art, antiques, collections, equipment, furniture, jewelry, software, alcohol, and other tangible personal property. SFCM will accept these types of gifts only if a prior review indicates that the property is readily marketable and free of encumbrances, with the intent to sell the property for cash for the benefit of the Conservatory unless the property is deemed appropriate for use. The Conservatory will not take responsibility for disposing of gifts staff reasonably believe cannot be easily sold or utilized.

SFCM is also pleased to receive contributions to its library or archives of rare items and special collections. SFCM will only very rarely accept contributions of books, scores, or sheet music; the acceptance of any and all contributions to the library requires recommendation of the Library Director to the Gift Acceptance Committee, with special cases as necessary determined in partnership with the VPs for Advancement and Finance. Donors are encouraged to fill out the in-kind donation online form to begin an inquiry about donating such items.

Purpose of Gift Acceptance Policy

The Board of Trustees has authorized the organization to solicit charitable contributions from individuals, corporations, foundations, and public funders to secure the growth and mission of the Conservatory. The Policy provides guidance and counsel to staff and community members regarding the planning, promotion, solicitation, receipts, acceptance and disposition of gifts.

Responsibility to Donors

The Policy and guidelines have been developed to help ensure the accurate recording of gifts and pledges in accordance to Generally Accepted Accounting Practices, and compliance with applicable tax laws and IRS regulations, especially those related to non-profit organizations and charitable giving. SFCM endorses the Donor Bill of Rights created by the Association of Fundraising Professionals (AFP). Moreover, the Conservatory holds the following:
1. General. The staff and representatives of the Conservatory shall endeavor to assist donors in accomplishing their philanthropic objectives in providing support to SFCM.
2. Confidentiality. Specific information concerning all transactions between the donor and SFCM staff, volunteers, and representatives shall be held in strict confidence and may not be publicly disclosed without the express permission of the donor.
3. Anonymity. SFCM occasionally produces donor listings recognizing donors by name within a general range of their gift amounts. SFCM shall respect the wishes of donors wishing to make gifts anonymously and will take reasonable steps to protect their identity, except when such information is requested from the Board of Trustees, or as required by law. Donors must request to be anonymous at the time they make a gift, or otherwise contact Advancement staff to make their wish known.
4. Disclaimer. While SFCM provides information about the various gift options, it does not provide legal, accounting, tax or other such advice to donors. The donor is responsible for ensuring the proposed gift meets and furthers the donor’s charitable, financial, and estate planning goals. Donors are encouraged to consult with a professional advisor before making a gift to the Conservatory, and particularly a planned or estate gift.

Role of Staff and of Finance Committee

Key staff who manage gift acceptance procedures include the Vice President for Finance, the Vice President for Advancement, the Director of Individual Gifts, and the Director of Legacy Gifts. Contact information for these staff members is readily accessible on the SFCM website.

The Finance Committee of the Board of Trustees shall empower a Gift Acceptance Committee to review any unusual gifts or any arrangements brought to their attention by the staff. The Gift Acceptance Committee shall ensure that all relevant facts have been developed, researched, and carefully considered, including the long-term implications entailed by the acceptance of the gift, and will, subject to ultimate supervision of the Board, decide whether to accept said gift. As speed of discussion and decision is frequently critical to the success of obtaining a gift, the Committee will endeavor to act expediently on the acceptability of any proposed contribution.

Legal Counsel

The Advancement and Finance staff or Trustees shall seek the advice of legal counsel on the Conservatory’s behalf in matters relating to acceptance of gifts when appropriate.

Conflict of Interest

The staff of the Conservatory shall maintain high ethical standards and comply with the Association of Fundraising Professionals (AFP) Code of Ethical Standards and the Partnership for Philanthropic Planning (PPP) Model Standards of Practice for the Charitable Gift Planner.

Gift Restrictions
1. Minimum Gift Levels. SFCM maintains minimum gift levels for certain types of restricted gifts, endowment gifts, and other categories of contribution. Advancement staff are happy to discuss minimum levels that may relate to a donor’s intended gift.
2. Unrestricted Gifts. To provide SFCM with maximum flexibility in the pursuit of its mission, donors shall always be encouraged to make unrestricted gifts. Gifts will be considered unrestricted in the absence of clear intent by the donor that the gift go to a specific purpose.
3. Gifts Restricted to Program or Purpose. SFCM will accept restricted gifts for specific programs and purposes, provided that such gifts are consistent with the Conservatory’s mission and priorities. SFCM will not accept gifts that are too restrictive in nature. Examples of such gifts include those that violate the terms of SFCM’s Articles of Incorporation and those that are too difficult or costly to administer. Final decisions on the restrictive nature of a gift, and its acceptance or refusal, shall generally be made by the Gift Acceptance Committee.
4. Gifts Restricted to Endowment. SFCM will accept gifts of any amount restricted toward existing Endowment Funds. SFCM may accept gifts to establish a named or restricted endowment fund, subject to applicable minimum gift levels. Subject to UPMIFA, SFCM’s Endowment Policy, and the terms of any Gift Agreement, earnings from such a fund will generally not be expended until the minimum gift amount is reached.

Types of Acceptable Gifts
1. Cash, Checks, Money Orders and Credit Cards. Cash, checks and money orders made payable to the San Francisco Conservatory of Music shall be accepted, as shall gifts through credit cards.
2. Marketable Securities. SFCM will accept gifts for registered securities that are actively traded on a recognized public securities exchange, including stocks, mutual funds, bonds, Government issues, agency securities and other readily marketable securities. Generally, all marketable securities are to be sold as soon as reasonably practicable following receipt.
  1. Publicly Traded Securities. Gifts of publicly traded securities will be accepted without approval of the Gift Acceptance Committee.
    1. General. SFCM will assist in the transfer of custody of marketable securities from the donor or the donor’s custodian to an account maintained by the Conservatory at a brokerage firm. If the securities are to be mailed, the stock certificates should be mailed separately from the signed stock power with signature guaranty. If the share certificates are hand delivered, the stock power may be attached. If the securities are in street name, the donor’s broker may transfer them to a brokerage account designated by the Conservatory.
    2. Reporting Policy. In accordance with IRS regulations, the value of the security for the purposes of gift crediting and accounting is the average of the high and low on the date the securities are delivered or credited to the Conservatory’s account or registered in the name of the Conservatory.
  2. Closely Held and Restricted Securities
    Closely held and restricted securities are securities which are not traded on a public securities exchange.
    1. General. Closely held securities include not only debt and equity positions in non-publicly traded companies but also interests in limited partnerships, limited liability companies, joint ventures, and other entities and enterprises. Restricted securities, also known as unregistered securities, include investment-letter stock, control stock or private placement stock.
    2. Role of Gift Acceptance Committee. Prior to accepting gifts of intangible assets that are not publicly traded, the Gift Acceptance Committee shall review the proposed gift and consider the following factors:
      1. Unrelated Business Income Tax consequences of holding the asset;
      2. Any potential costs or liabilities associated with owning the asset;
      3. Any transfer restrictions on the asset; and
      4. The likely cash flow arising from the asset, considering both income generated by the asset and proceeds from its potential sale.
    3. Restrictions. If the donor is a member of the Board of Trustees or a corporate officer of the Conservatory, the VPs for Advancement and Finance will determine whether sale of securities may be restricted under SEC Rule 144 or other provisions of law, and will notify the Finance Committee.
    4. Reporting. The donor is required by IRS regulations to obtain a qualified appraisal for closely held securities and, additionally, to provide IRS Form 8283 (appraisal summary) to the Conservatory. Upon disposition of the security, the Conservatory may be required to file IRS Form 8282.
    5. Requirements. The following must be provided by the donor to the Finance Committee for gifts of closely held or restricted securities.
      1. A “qualified appraisal,” as defined in the Internal Revenue Code and IRS Publication 561. The donor is responsible for all cost of the appraisal.
      2. Copies of any share restrictions, shareholder buy/sell agreements, partnership agreements, LLC operating agreements, and all other agreements which pertain to the closely held security under review, in terms of value and in terms of liquidity.
Named Gifts

A naming opportunity provides a donor with the prospect of naming a facility, fellowship, scholarship, financial aid fund, faculty position, or program in recognition of a gift in the amount set by SFCM. Contributions qualifying for naming opportunities may be utilized for any purpose consistent with the mission of the Conservatory and as set forth in the Gift Agreement. A list of available named gift opportunities can be made available by the SFCM Advancement office. If a naming gift is to be made in installments or fulfilled at some point in the future, the Board of Trustees will decide when and under what circumstances the name shall be formally conferred.
1. Modification of Naming. If the facility, fund, position, or program is significantly altered, redesigned, closed, transferred or conveyed from SFCM, then the naming will cease. In such event, the donor, if available, and in mutual agreement with Trustees and staff, shall have the right to select another available and equivalent facility, fund, position, or program on which to confer the name.
2. Termination of Naming. In addition to any rights and remedies available at law, the Trustees may terminate a naming agreement and all rights and benefits of the donor thereunder:
  1. In the event of a default in payment of the Gift as described in the agreement, or
  2. In the event the Trustees determine that circumstances have changed such that the name chosen by the donor would adversely impact the reputation, mission, or integrity of SFCM or the Trustees. Upon any such termination, SFCM shall have no further obligation or liability to the donor and shall not be required to return any portion of the gift already paid. The Trustees, at their sole discretion, may determine an appropriate alternative recognition.
Pledges

Pledges are binding written commitments to donate a specific dollar amount according to a fixed time schedule. SFCM will generally accept pledges in any amount, without approval of the Finance Committee. The donor who wishes to make the donation in installments over time is required to document this commitment and sign the Conservatory Pledge Agreement that will create a binding legal obligation on the part of the donor and the donor’s estate if the commitment remains unpaid at his or her death. The following conditions are required:
1. The amount of the pledge must be clearly specified.
2. A clearly defined payment schedule must be outlined.
3. There shall be no contingencies or conditions.
4. The pledge must state the intent of the donor to be legally bound.
5. The donor must be considered financially capable of making the gift.

Intellectual Property

SFCM will consider gifts of intellectual property such as royalties, copyrights, patents, contract rights, and similar intangible interests only after review and approval by the Gift Acceptance Committee. The appraised value of the intellectual property, the administrative costs involved in accepting such a gift, and whether the donor agrees to assign full or fractional interests with respect to the copyright or royalty shall be considered in the decision to accept the gift.

Deferred or Planned Gifts

SFCM encourages donors to consider making provisions for the institution in their estate plans. Generally, planned gifts do not result in the Conservatory assuming present ownership of the asset that is the subject of the gift. The acceptable methods of creating planned gifts are described below. Authorization for crafting planned gifts as well as evaluating the potential of assets are vested with the Planned Giving Officer in consultation with the VPs for Advancement and Finance, and legal counsel as appropriate. The Gift Acceptance Committee reserves the right to refuse any gift that does not provide sufficient financial benefit to the Conservatory, is incompatible with the Conservatory’s mission, puts the assets or reputation of the Conservatory at risk, or is prohibited by law.

Donors who desire to make gifts of musical instruments or other tangible personal property through their estate should consult Sections XIII and XIV, below.

SFCM will make every effort to fulfill the donor’s intentions. Donors are encouraged to make known their bequest intention in writing to ensure that the Conservatory can carry out their wishes. Confirmation is encouraged by filling out an Ada Clement Legacy Society Intent Form; donors are further encouraged to share with SFCM any formal documents, trust instruments, and the like that they feel comfortable making available. Sharing of documents is encouraged so that the Conservatory can be as prepared as possible to fulfill the wishes of the donor.
1. Will or Revocable Living Trust.
  Gifts made by will or revocable living trusts or bequests are completed only at the death of the donor and/or surviving beneficiary(ies). Because a bequest does not take effect until death, a donor retains control of the property or assets for their entire life.
  1. General. Donors are encouraged to make unrestricted bequests to the Conservatory under their wills and trusts, and may be provided suggested approved language. However, donors can also restrict their bequests to a program, purpose, or endowment fund that is in keeping with the Conservatory’s mission and purpose; as with all gifts, the designation must not be too restrictive in nature, and should always include a contingency clause. The donor can designate a specific amount, a percentage, or the remainder of an estate.
  2. Recording. Such bequests shall not be recorded as gifts until such time the gift is irrevocable. When the gift is irrevocable but is not due until a future date, the present value of that gift may be recorded at the time it becomes irrevocable.
  3. Recognition. Bequests designated to create named funds, faculty chairs and positions, and scholarship and financial aid funds will be recognized at the time the gift is received. Such bequests must generally conform to the policies surrounding other types of named gifts.
2. Decline Bequests. SFCM reserves the right to decline gifts from estates or trusts that are not in conformity with the terms of this Policy. Staff will always endeavor to come to a mutually agreeable solution with the estate’s representative.
3. Insurance Beneficiary Designation. Donors are encouraged to name the Conservatory as a beneficiary or contingent beneficiary of their life insurance policies. Such designations will not be recorded as gifts until the gift is irrevocable. If the donor retains ownership of the policy, this will not be until the death of the owner. Written confirmation is encouraged by filling out an Ada Clement Legacy Society Intent Form. SFCM will accept gifts of life insurance policies, including whole life, variable, and universal life policies that meet the following criteria:
  1. The policy is paid in full by the donor(s).
  2. SFCM is designated as both the irrevocable owner and beneficiary of the insurance policy.
  3. If intended to create a new endowment, the face value of the policy must meet any funding requirement in place; donors are advised to discuss their plans with staff.
4. Retirement Plan. Donors are encouraged to name the Conservatory as the primary beneficiary or contingent beneficiary of their retirement plans, such as IRA’s, 401(k)’s, and other qualified plans. Such designation will not be recorded as a gift to the Conservatory until such time the gift is irrevocable. This will normally be upon the death of the owner.
5. Charitable Gift Annuity. A Charitable Gift Annuity (CGA) is an agreement between a donor and an organization in which the donor agrees to make a gift of cash or property and the organization agrees, in return, to provide the donor or beneficiary with a fixed payment, or annuity. Annuity payments never change in size or frequency and the assets of the organization back up the payments. CGAs can be an effective way for a donor(s) to make a gift that can have a substantial tax benefit while providing income during the donor or beneficiary’s life. A CGA can only be funded once; donors wishing to make additional gifts by this means must open additional CGAs.
  
  SFCM has partnered with the Silicon Valley Community Foundation (SVCF) to offer CGAs to our donors. If a donor enquires about opening a CGA, Conservatory staff will put them in touch with a representative of the SVCF and initiate a joint conversation.
  1. Minimum Gift. The recommended minimum gift to establish a current or Deferred Charitable Gift Annuity (DCGA) through SVCF is $15,000 for donors who have not yet established a CGA and $10,000 for donors who have existing gift annuities in place. If the CGA is established through another entity or foundation, that organization may have a different threshold.
  2. Minimum Age. The recommended minimum age to establish a current CGA is 65. Other types of CGA can be established at 50, with payout to begin at age 65. Again, if the annuity is established through another organization, thresholds may be different and will apply.
6. Charitable Remainder Trust.
  A gift of cash, stock, or other acceptable property can be used to establish a Charitable Remainder Trust (CRT). There are several types of CRTs, with the most common type being the Charitable Remainder Unitrust; donors are advised to speak with a financial advisor or attorney to learn more. In a CRT, the donor designates herself or someone else to be the trustee who manages the assets. The donor or other beneficiaries receive an income, with annual payouts of at least 5% of the initial gift, for life or for a specified period of no more than twenty years. The donor generally receives a charitable tax deduction in the year the trust is established. Upon the termination of the trust, SFCM receives what’s left in the trust. A CRT is a way to dispose of highly appreciated, low-yielding assets without capital gains tax, in favor of assets that will produce higher levels of cash flow and appreciation, all while seeing an immediate income tax deduction.
  
  SFCM encourages donors to establish CRT’s and provide an irrevocable remainder interest to SFCM. SFCM will generally not serve as trustee of a CRT unless otherwise agreed upon by the Board of Trustees. However, SFCM will provide resources to donors who are interested in establishing a CRT. SFCM encourages the donor to submit a fully executed copy of the CRT document and/or complete a Legacy Society intent form.
  
  We recommend that SFCM be named as a beneficiary of at least 50% of the remainder. The recommended minimum age of an individual beneficiary is 55 if such a beneficiary is named in addition to SFCM.
7. Charitable Lead Trust.
  A Charitable Lead Trust (CLT) is effectively the reverse of a CRT. Assets in the trust generate immediate support to the Conservatory for a period, after which time the assets pass back to the donor or other beneficiaries. A CLT can be an effective way for a donor to reduce taxes and leave assets to family members such as children and grandchildren, who typically have lower taxes.
  
  SFCM encourages donors to establish CLT’s and provide irrevocable gift of income to the Conservatory for a period of years. SFCM will generally not serve as trustee of a CLT. However, the Conservatory will provide resources to donors who are interested in establishing a CLT.
  
  In addition to the Ada Clement Legacy Society Intent Form, SFCM encourages donors to provide a copy of the fully executed CLT document that provides the following:
  1. A trust valuation that is less than one year old;
  2. The income payout rate;
  3. The payout term for the CLT (e.g. 5, 10, 15 years or longer);
  4. Written confirmation of the donor’s preferred designation.
8. Pooled Income Fund
  A pooled income fund is a trust established and maintained by a public charity; SFCM’s pooled income fund is currently managed by Comerica. The fund receives contributions from individual donors that are commingled, with each donor assigned "units of participation" based on the relationship of their contribution to the fund’s overall value.
  
  Each year, the fund's entire net investment income is distributed to fund participants according to their units of participation. Income distributions are made to each participant for their lifetime; after which, the portion of the assets attributable to the participant passes to SFCM. Contributions to pooled income fund qualify for charitable income, gift, and estate tax deduction purposes. The donor's deduction is based on the discounted present value of the remainder interest; donors can also avoid capital gains tax on transfer of appreciated property to the fund.

Real Estate

Gifts of real estate may include developed or undeveloped property, whether residential, commercial, industrial, or agricultural; mineral rights; or gifts subject to a retained life interest. Any gift of real estate must be reviewed and approved by the Gift Acceptance Committee. In all cases involving real estate gifts, a written agreement (whether for a donation or a bargain sale) must be used. The agreement will require the owner to make relevant disclosures and warranties about the real estate. Legal counsel agreed upon by both parties will prepare the agreement.
1. General. SFCM will accept gifts of real estate with the intent to sell within 12 months if it is determined that the cash benefits to the Conservatory will significantly exceed transaction costs, or unless the Gift Acceptance Committee recommends that SFCM retain ownership. Therefore, any gift of real estate to be considered should be readily marketable at or close to the appraised value. Proposed real estate gift should be free and clear of any unacceptable encumbrances and environmental damage.
2. Required Documentation. The donor must provide the following documentation for review in order for a gift of real estate to be considered:
  1. The copy of the deed conveying the property to the donor.
  2. The copy of the current property tax bill.
  3. A title report and preliminary title insurance commitment performed by a reputable title insurance company.
  4. A MAI “qualified appraisal” as defined by the Internal Revenue Code, by a qualified appraiser at the expense of the donor.
  5. A copy of each promissory note, mortgage, deed of trust or other liens on the property.
  6. A copy of each lease or other contract affecting the property.
  7. If the property is income producing, a copy of the profit and loss statements for the two most recent years.
  8. A summary of current insurance coverage for the property.
  9. Copies of correspondence with governmental authorities, tenants, or prospective purchasers concerning the property.
  10. A phase one environmental audit if applicable.
  11. A current market analysis of the property.
  12. On-site evaluation by Conservatory official.
  13. Evidence of compliance with ADA, if applicable.
  14. A structural engineering report, if applicable.
  15. Full disclaimer from the donor on any restrictions, reservations, easements or other limitations.
3. Environmental Review. If, after reviewing the preceding information, it is determined that the sale of the real estate is likely to provide sufficient net proceeds to the Conservatory within the time frame set forth above, the Conservatory shall conduct an environmental review of the property to ensure that the property and the surrounding area is not subject to environmental liability statutes. SFCM will select a qualified environmental consulting firm and engage it to provide an environmental audit.
4. Physical Inspection. Along with a professional inspector, a Conservatory staff representative will physically inspect the property, walk the boundary lines and take photographs. A written summary will be presented to the Gift Acceptance Committee.
5. Title Insurance. If a decision is made to move forward with accepting the property, the Conservatory shall obtain a policy of insurance protecting its title to the real property received from the donor.
6. Gifts of Real Estate with a Retained Life Estate
  A gift of real estate with a retained life estate involves the transfer of the title to a personal residence, farm, or vacation property whereby the donor or another person retains the use of the property for a term of years of the life/lives of the donor and/or another person. Gifts of real estate with a retained life estate may be accepted by the Conservatory only after review and approval by the Gift Acceptance Committee.
  1. General. Such gifts are subject to both the general conditions and the guidelines for acceptance of outright gifts of real estate as set forth in this section. The retained life interest cannot exceed a “joint and survivor” life estate. At the death of the donor or designated life tenant, SFCM may use the property for its own purposes or reduce the property to cash. Where the Conservatory receives a gift or a remainder interest, expenses for maintenance, real estate taxes, and any property indebtedness are to be paid by the donor or primary beneficiary.
  2. Documentation. The gift shall be documented with a deed and a life estate agreement approved by legal counsel, with the written life estate agreement clearly delineating responsibility for the expense of taxes, insurance, and maintenance of the property. While SFCM should not accept responsibility for contributions for capital improvements such as plumbing or roof repairs, it should retain the right to perform maintenance or make required repairs if the Conservatory determines it in necessary to protect its economic interest in the property.
  3. Costs. The donor or the donor’s estate shall pay for all of the following costs during the donor’s or another person’s lifetime:
    1. Maintenance costs.
    2. Real estate taxes.
    3. Insurance.
    4. Real estate broker’s commission and other costs of sale.
    5. Appraisal costs.
    6. Any other carrying costs.
7. Bargain Sale. A bargain sale is a sale of property to the Conservatory for an amount less than the property’s current fair market value as determined by a recent, qualified appraisal. The excess of the value over the sale price generally represents a contribution to the Conservatory. Gifts from a bargain sale of property may be accepted by the Conservatory only after review and approval by the Gift Acceptance Committee. The following criteria shall be considered for a bargain sale:
  1. SFCM may consider the bargain sale of real estate if such a sale will generate significant net income to the Conservatory with minimal risk and as long as the purchase price to the Conservatory does not exceed 30% of fair market value.
  2. SFCM must determine that the property is readily marketable within twelve months of receipt.
  3. SFCM must consider costs to safeguard, insure and expense the property, including property taxes, if applicable, during the holding period.
  4. An independent appraisal has substantiated the value of the property.
  5. The debt on the property is a reasonable (the debt ratio must be less than 50% of the appraised market) in relation to the appraised market value.
8. Oil, Gas and Mineral Rights. SFCM may accept oil, gas, and mineral interests with the approval of the Gift Acceptance Committee only after a careful examination, including but not limited to environmental assessments and audits, determines that the gift is appropriate and will not compromise the Conservatory’s mission or create an administrative burden. The property must not have extended liabilities or other considerations that make the receipt of the gift inappropriate. The donor must provide an environmental review to ensure that SFCM has no current or potential exposure to environmental liability.

Gifts in Kind: Musical Instruments

SFCM welcomes gifts of musical instruments, especially fine instruments that may be loaned to students and faculty. These are accepted solely at the Conservatory’s discretion, after a thorough evaluation process that may include an in-person assessment by a member of SFCM faculty or staff. Once an instrument donation is formally received by SFCM, it is no longer under the donor’s control. This policy does not control the terms of short- or long-term instrument loans to students or faculty.
1. Pianos. The Conservatory only accepts donations of Steinway or Boston pianos. The donor is encouraged to share the model and serial number of the piano in initial communications, as well as information about the condition and history of the instrument.
2. Donation Process. Donors are encouraged to follow the procedure below.
  1. Fill out the informational form on the SFCM website.
  2. Arrange for an assessment by SFCM staff, if requested.
  3. Have the instrument appraised, no more than 60 days prior to the date of the contribution and before the due date of the tax return. It is the donor’s responsibility to consult with a tax advisor to clarify the tax deductibility of the gift; IRS regulations prohibit a recipient organization from making a formal appraisal. For instruments believed to be valued at $5,000 or more, donors must have the instrument appraised to confirm the value and documentation for tax records, before making the donation. A copy of the appraisal must be provided to the Conservatory so that the formal description used in the appraisal can also be used in the acknowledgment letter that the Conservatory provides to the donor. In addition, the Conservatory will provide to the donor an IRS Form 8283 (Noncash Charitable Contribution). The donor must complete this form and send a completed copy to the Conservatory.
  4. Provide for moving costs if the instrument is accepted, either by making the arrangements directly or getting an estimate for moving expenses and making a comparable cash contribution to SFCM.
3. Acknowledgment. When the Conservatory has received the instrument in good condition, Advancement staff will send an acknowledgement letter recognizing receipt. The letter will identify the instrument using the terms from the appraisal, if an appraisal was included with the donation. The acknowledgment letter, appraisal and IRS Form 8283 serve as the necessary documentation for the donor’s tax records for instrument donations over $5,000. Donations without an appraisal will be acknowledged with descriptive information about the instrument and without a statement of valuation.
4. Estate Gifts. SFCM highly recommends that donors contact Conservatory staff before making an estate plan involving the disposition of musical instruments to ensure that our faculty and students will be able to use the instrument appropriately. SFCM reserves the right to sell such instruments if the proceeds are of greater benefit to the organization.

Gifts in Kind: Tangible Personal Property other than Instruments

SFCM may accept gifts of manuscripts, literary works, art, antiques, collections, equipment, furniture, jewelry, software, alcohol, and other tangible personal property. SFCM will accept these types of gifts only if a prior review indicates that the property is readily marketable and free of encumbrances, with the intent to sell the property for cash for the benefit of the Conservatory unless the property is deemed appropriate for use. The Conservatory will not take responsibility for disposing of gifts staff reasonably believe cannot be easily sold or utilized.

SFCM is also pleased to receive contributions to its library or archives of rare items and special collections. SFCM will only very rarely accept contributions of books, scores, or sheet music; the acceptance of any and all contributions to the library requires recommendation of the Library Director to the Gift Acceptance Committee, with special cases as necessary determined in partnership with the VPs for Advancement and Finance. Donors are encouraged to fill out the form on our website to begin an inquiry about donating such items.
1. General. Gifts of tangible personal property must be easily liquidated and must be of sufficient value to cover holding, maintenance, sale and administrative costs. As noted, if SFCM plans to retain the property for its own use, different analysis will apply.
2. Valuation. Establishing fair market value is the responsibility of the donor. For those gifts exceeding $5,000, IRS regulations require the donor who seeks a charitable deduction to obtain a qualified independent appraisal no more than 60 days prior to the date of the contribution and before the due date of the tax return.
3. Form 8283 Non-Cash Contributions. If a donor wishes to claim an income tax deduction of $500 or more in any year for non-cash gifts, the donor must file IRS Form 8283 with his or her federal income tax return. A donor that wishes to claim a tax deduction for a non-cash gift of $5,000 must obtain and qualified appraisal (see above) and also submit Form 8283 with his/her federal tax return. If contributed property on Form 8283 is sold, exchanged or otherwise disposed of within two years of the date of the gift, the Conservatory will file IRS Form 8282 (information return) with the IRS and the donor within 90 days of the disposition.
4. Restrictions: There should be no donor-imposed restrictions on the timing of the gift or the minimum sale price of the gift.
5. Fees. The donor is responsible for any packing, shipping, in-transit security, insurance, and all other associated costs in transferring the gift to the Conservatory.
6. Requirements. SFCM may request that the donor provide:
  1. A written document clearly describing the property in detail and stating their intent to transfer all rights of ownerships to the Conservatory.
  2. Proof of ownership.
  3. Donor’s cost basis and date of acquisition.
  4. A plan for selling the property for cash, including anticipated time frame and marketing expense for the proposed sale.
  5. A “qualified appraisal” as defined by the Internal Revenue Code.
7. Related Use. While most tangible personal gifts are intended to be sold soon after receipt, the VPs for Advancement and Finance, in consultation with the Gift Acceptance Committee, may consider a gift of tangible personal property for use by SFCM. The decision to accept the gift will be based on the whether the property furthers the mission of SFCM and whether the donor has requested any restrictions on the use or display of the property. The following documentation must be provided to SFCM for the gift to be considered:
  1. Same documentation as outlined in section F, Requirements.
  2. A description of its use and who is responsible for continuing use of the property.
  3. The benefit(s) to the Conservatory.
  4. The estimated carrying costs for the property, including insurance, storage, curatorial services, maintenance, etc.
  5. A description of any special requests on how to use or display the proposed gift. Donors may make special requests on the use or display of the proposed gift and the Conservatory will make every effort to honor the requests as long as they are consistent with the mission and needs of the Conservatory. However, no representation should be made to the donor as to a related use without prior approval of the Board of Trustees.
Gifts of Services

SFCM gratefully accepts gifts of professional services and the time of professionals and consultants, when needed and upon mutual agreement. SFCM follows IRS policy discouraging formal acknowledgments of such gifts, which are generally not deductible. Advancement staff is pleased to discuss arrangements with professionals who wish to donate services to SFCM.

Other Non-Traditional Assets Not Described Above

Gifts of non-traditional assets are complicated and can carry risks and costs to the donor and the Conservatory. This Policy is meant to ensure that SFCM makes prudent decisions regarding the acceptance of these types of gifts and that maximum benefit for the Conservatory is achieved. Such gifts will be accepted only after review and approval by the Gift Acceptance Committee.

Gift Acknowledgment

SFCM will acknowledge the receipt of all gifts in writing as promptly as possible, and in such a way as to satisfy IRS substantiation requirements and/or disclosure requirements that the Conservatory may have (See Internal Revenue Code Section 170 (f) and Section 6115). A donor may request a copy of an acknowledgment by contacting the Advancement Assistant or other staff member, whose contact information is available on the SFCM website.

Gift Timing and Value

It is the responsibility of the donor and the donor’s advisors to establish the effective date of any gift and the value of the assets on that date. SFCM will assist the donor by providing an estimate of the amount of the charitable contribution available for a new planned gift or a gift of publicly traded securities, based on SFCM’s best understanding of the facts and the value used by the donor. The donor should confirm this estimate with their own advisors.

Professional Advisors

All prospective donors are urged to seek their own counsel in manners of estate planning, taxes, and other planned and deferred gifts. It is not appropriate for the Conservatory to give legal advice or provide formal counsel to the donor.

Appraisals

All appraisals of real and personal property contributed to the Conservatory are the responsibility of the donor.

Payment of Fees
1. Finder’s Fees or Commissions. SFCM will not pay any person or party a finder’s fee or commission of any type as consideration for directing a gift to the Conservatory.
2. Professional and Administrative Fees. SFCM may incur and pay reasonable fees for professional services related to the completion of gifts. Fees for professional advice and services must be directly related to the completion of a gift. Payment for fees is limited to the following:
  1. Legal advice and preparation of documents for the Conservatory;
  2. Accounting fees incidental to gift transactions;
  3. Fees for “fee for service” financial planners, provided such persons affirm in writing that they are compensated only through fees for services rendered and that they are not compensated for the sale of products to clients.
Moral Turpitude

Recognition bestowed on a donor may be rescinded if a donor has engaged in an activity which may adversely affect the operation, reputation, or good will of the Conservatory, or in the event of the donor’s conviction or pleas of guilty or nolo contendere to a criminal act which adversely affects the operation, reputation, or good will of SFCM and its community.

Drafting and Review of Documents

When a donor has had his or her own attorney prepare a legal document or agreement regarding a gift to the Conservatory, the Conservatory’s legal counsel shall review the document before the gift is accepted. SFCM will not review and comment on wills or lifetime trusts except to ensure that the Conservatory is properly named in the instrument and that the proposed restrictions are acceptable and enforceable. SFCM will not draft wills or lifetime trusts for donors.

Policy Amendment and Review

The Finance Committee is responsible for reviewing and recommending amendments and exceptions to this Gift Acceptance Policy. The policy should be reviewed regularly to ensure that it remains consistent with IRS regulations and other applicable state and federal laws, and applicable best practices as indicated in the AFP Code of Ethics, Donor Bill of Rights, and PPP Model Standards for the Charitable Gift Planner. To amend the Policy, a written amendment shall be prepared and submitted to the Finance Committee. The Finance Committee should make the presentation to the Board of Trustees for approval. The minutes of the Board of Trustees meeting should reflect the Board’s approval of the continued use of the policy with any agreed-upon modification.

Approval of Gift Acceptance Policy

This Gift Acceptance Policy has been reviewed by the Board of Trustees and has been approved as of December 5, 2018.

Gift Acceptance Policy

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