Gift Acceptance Policy

In order to best meet caring community members' wishes, and fulfill the mission of our Community Foundations, we have adopted a gift acceptance policy.

Northern Indiana Community Foundation, Inc.
Gift Acceptance Policy
Approved 11-16-05

PURPOSE
The Northern Indiana Community Foundation, Inc. is a publicly supported philanthropic organization governed by a volunteer board from Fulton, Miami and Starke counties. The Northern Indiana Community Foundation, Inc. seeks to enrich the quality of life for each resident of these counties by administering funds entrusted to it, or of funds bequeathed by individuals, or gifted by corporations and other organizations and agencies. The Northern Indiana Community Foundation, Inc. provides sound management of these contributions as part of the permanent endowment for each separate county.

The purpose of this Gift Acceptance Policy is to govern the acceptance of gifts and to provide guidance to the donors and their professional advisors in completing gifts. This is to insure the Northern Indiana Community Foundation, Inc. fulfills its mission which is:

"To improve the quality of life in our communities by assisting donors in fulfilling their charitable wishes."

POLICY
In order to accomplish its mission, the Foundation seeks to serve the charitable interests of its donors and the community by informing, guiding and otherwise assisting the donor in fulfilling his or her philanthropic wishes.

The Foundation assures that the charitable intentions of each donor will be fulfilled. The interests of the donor shall come before these of the Foundation. No program, agreement, trust, contract or commitment shall be urged upon any prospective donor that would benefit the Foundation at the expense of the donor's interest and welfare.

Prospective donors shall be advised to seek the counsel of their attorney in any and all aspects of the proposed gift, whether by will, bequest, trust agreement, or outright gift. The donor will be advised to consult with their attorney or other advisors on matters related to the tax implications of the gift.

In addition to meeting the donor's charitable intent, all gifts must serve the charitable purposes of the Foundation and are subject to the approval of the Foundation Board of Directors. The Foundation Board has the right to accept or refuse any gift, based on this policy or other considerations. Gifts that are too restrictive, too difficult to administer, or gifts that are for purposes outside the mission of the Foundation will not be accepted.

The minimum gift amount to establish a "named" endowed fund is $5,000. The purpose or donor's intent of the gifts used to establish new endowment funds must be defined in a written fund agreement or deferred gift instrument signed by the donor, or their appointed representative, and if appropriate, an authorized representative of the Foundation. Standard fund agreements, as approved by legal counsel and Foundation Board of Directors will be used. Any deviation from these standard agreements must receive legal approval by Foundation counsel prior to execution. In most cases, additional gifts may be made to existing funds of the Foundation without restating the original purpose of the gift. All distributions from funds will be made in accordance with the Articles of Incorporation, Donor Advised Fund Guidelines, Investment Spending Policy and federal tax laws and regulations.

Gifts received in the following forms to any existing fund may be accepted by the Executive Director and will not require prior review and approval of the Board of Directors.

• Cash
• Checks
• Marketable securities
• Gifts of personal property for the Foundation's offices or programs.

Gifts that require review or approval by the Board of Directors include:

• Initial gifts that create a fund or that create a Fund Agreement.
• Stock in privately owned companies or subchapter S corporations
• Real Property
• Tangible personal property
• Deferred gifts

In conformance with Treasury Department regulations governing community foundations, gifts to the Foundation may not be directly or indirectly subjected by a donor to any material restriction or condition that prevents the Foundation from freely and effectively employing the transferred assets or the income derived there from, in furtherance of its exempt purposes.

Types of Gifts — Outright Gifts

Cash
The Foundation accepts cash, checks, and money orders. The donor needs only to communicate the intended purpose of the gift.

Marketable Securities
The Foundation accepts gifts of publicly traded stocks and bonds. The securities should be electronically transferred to the Northern Indiana Community Foundation, Inc. not the county foundation. Upon receipt into the Foundation's brokerage account the securities will be sold as soon as is practical. If a donor holds a stock certificate in their name, they will have to sign a stock power form with a signature guarantee. The forms are available at the Foundation office but the signature guarantee will have to take place at a bank or other financial institution. The donor may then bring the security to the Foundation office. The Foundation will value the gift for its purposes, at the average price per share on the date of receipt at the Foundation office or in the Foundation's brokerage account unless otherwise notified by the donor's brokerage firm.

Life Insurance
Under certain circumstances, life insurance may be a donor's most practical method of making a gift to the Foundation. Although the benefits of such a gift vary, two significant factors can come into play through a gift of life insurance:

• The conversion of a "dormant" source of wealth into an active gift.
• The activation of a potentially sizeable gift through annual tax-deductible gifts that can be used to make premium payments.

A gift of life insurance may provide two forms of tax relief — a current charitable income tax deduction and an estate tax reduction at death. The donor will be entitled to a charitable income tax deduction only when the charity is named as both the owner and beneficiary of the policy. The various methods of giving life insurance can fit a wide range of individual circumstances. There are numerous methods by which a life insurance policy may be contributed to the Foundation with attractive benefits to be gained.

a. Assign irrevocably a paid-up life insurance policy to the Foundation, naming the Foundation owner and beneficiary of the policy. Charitable income tax deduction generally equals the replacement value of the policy. Replacement value is the cost of purchasing the same amount of paid up insurance at one's age and state of health when making the gift.

b. Name the Foundation as primary beneficiary, but retain ownership of life insurance policy. The donor may reserve the right to revoke the beneficiary designation should family circumstances necessitate. While there are no federal income tax savings, proceeds paid to the Foundation upon death qualify for an estate tax charitable deduction.

c. Name the Foundation as successor beneficiary to receive the proceeds if other beneficiaries are not living. The donor reserves the right to revoke the beneficiary designation. Again, there are no federal income tax savings, but in the event the proceeds are paid to the Foundation, they will qualify for an estate tax charitable deduction.

Stock in privately owned companies or subchapter S corporations
Gifts of this type may or may not be accepted. Only securities which will not create a liability for the Foundation will be considered. To be accepted, such stocks must have a qualified appraisal performed by an independent professional appraiser. Prior to approval by the Board, such gifts are reviewed by the Foundation's executive director and legal counsel.

Real Estate
See Real Estate Gift Policy.

Tangible Personal Property
The Foundation will consider the acceptance of tangible personal property on a case by case basis. When personal property can be used in the course of the Foundation's business, a donor may receive the appraised value for the gift. In all other cases, the donor's gift value is the historic cost of the gifted items.

The Foundation will consider the difficulty and expense of selling the items, the expertise required to sell the items, issues of storage interim to sale, and the general overall benefit to the Foundation in deciding whether to accept the gift.

Deferred Gifts
The Foundation accepts different types of gifts whose benefits do not fully accrue to the Foundation until some future time (such as the death of the donor or other income beneficiaries, or the expiration of a predetermined period of time), or whose benefits to the Foundation are then followed by the interests of noncharitable beneficiaries. The Foundation requests that all deferred gifts be coordinated through the Executive Director. All donors contemplating a deferred gift should consult their own financial, legal, and tax advisors. Types of deferred gifts and Foundation procedures follow:

Types

Charitable Bequests
A charitable gift made by a will that is revocable during the donor's life and operable only upon the donor's death. A bequest can be for a specific gift, a specific asset, or a percentage of the donor's estate.

Charitable Remainder Trust A charitable remainder trust is a contractual agreement between a donor and the Foundation under which the donor makes an irrevocable gift of cash, securities or property to the Foundation. In exchange for the donated property, the Foundation agrees to provide income for a specific period (the donor's lifetime or a period not to exceed 20 years). There are several types of charitable remainder trusts.

Charitable Remainder Trust Agreement
The legal document that establishes the terms of the agreement between the Foundation and the donor. It will specify the charitable purpose of the gift, as well as the duties of the Foundation to the beneficiary(s).

Charitable Remainder Annuity Trust (CRAT)
A CRAT provides the donor with a fixed, annual annuity calculated as a percentage of the initial fair market value of all property contributed to the trust. No further contributions to the trust are permitted.

Charitable Remainder Unitrust (CRUT)
A CRUT provides the donor with a fixed percentage of the net fair market value of the trust's assets, valued annually. Additional contributions may be made to a CRUT.

Charitable Lead Trust (CLT)
A CLT provides income to the Foundation during the donor's lifetime. At the end of the trust term, the remainder of the trust is distributed to the donor's named beneficiaries.

Procedures

It will be the policy of the Northern Indiana Community Foundation, Inc. to review and accept any of the above named planned giving instruments that fall within the guidelines listed below. These guidelines reflect the Foundation's prudent practice that takes into consideration the needs of the donor as well as the needs of the Foundation.

Minimum Gift
The Foundation recommends the minimum gift to establish a Charitable Remainder Trust at the Foundation will be cash or the fair market value of an asset valued at $50,000.

Minimum Age
The Foundation recommends the minimum age required to be 55 years for each income beneficiary when the trust is established.

Number of Beneficiaries
The Foundation recommends limiting the number of income beneficiaries to two.

Maximum Trust Rate
The Foundation Board establishes the maximum trust rate to be paid to each income beneficiary in a fair and prudent manner, and will not exceed the Uniform Gift Annuity rates established annually by the American Council on Gift Annuities. Each potential income beneficiary will be informed of the Uniform Gift Annuity Rate based upon the actuarial age of the income beneficiary(s).

Payments
The Foundation will provide semi-annual payments unless otherwise designated by the donor not to exceed twelve payments per year.

Charitable Deduction
The annuity rates must provide a charitable deduction of at least 10% of the value of the assets given. The trust agreement should be written with the fair market value of the donation on the gift date.

Administration and Fees
The Foundation may administer the trust or have a second party administer the trust. Each individual planned gift will be reviewed by the Foundation Board's legal counsel and a recommendation will be made to the Foundation Board for approval, including the fee structure. Such fees will be deducted from the earnings of the fund or the fund corpus, and not from the payment to the beneficiary(s).

Bequests
The Foundation board has the authority to accept or refuse bequest gifts. Most designations in wills should fit within Foundation guidelines; however, complicated or restrictive instructions may prevent the Foundation from accepting certain gifts. Donors and/or their legal counsel should contact the Foundation staff regarding any unusual administrative provisions. The name of the donor need not be disclosed. Such contact at the time of the gift's creation will help avoid any problems when the gift is implemented.

Sample language for a will is: "I give, devise and bequeath to the Northern Indiana Community Foundation, Inc. an Indiana nonprofit corporation, for the benefit of ___________county, ___________, (describe devise — for example, 'Ten thousand dollars' or 'all of the residue of my estate' to be used in all furtherance of the charitable purposes of the Northern Indiana Community Foundation, Inc. as defined in and subject to the provisions of its Articles of Incorporation and Bylaws." In addition, a donor may specify that his bequest be used for a particular purpose such as scholarship or to benefit the youth of Fulton, Miami or Starke County or for the support of United Way, for example. The bequest can name any current fund within the Northern Indiana Community Foundation, Inc., however it is recommended that a Fund Agreement be prepared at the time the will is prepared if the donor wishes to establish a new fund within the Foundation.

Additional Policy Information

Confidential Information
All information concerning prospective donors, including names and addresses, names of beneficiaries, nature and worth of estates, amounts of provisions, etc. shall be kept strictly confidential by the Foundation and its authorized personnel unless the donors grant permission to use selective information for purposes of referral, testimonial or example at the discretion of the donor or authorized representatives.

Investment of Gifts
The Foundation reserves the right to make any or all investment decisions regarding gifts received. In making a gift to the Foundation, donors give up all right, title, and interest to the assets contributed. In particular, donors give up the right to choose investments and investment managers, brokers, or to veto investment choices for their gifts.

Acknowledgement and Reporting of Gifts
The Foundation's staff will prepare and send to each donor a letter of acknowledgement The Finance Administrator will send IRS form 8283 to a donor for a noncash gift over $500 when the Foundation has proper documentation as to the value of the gift. The Finance Administrator will send IRS form 8282 to a donor of property that is disposed of within two years of the date of the original contribution.

Gift Acceptance Committee
The Foundation's executive committee will be considered the gift acceptance committee in times where a Board meeting cannot be scheduled within 30 days of the gift needing approval. All gifts of real estate will need the approval of the Real Estate Committee before being presented to the Board or gift acceptance committee for approval.

Annual Review of Gift Acceptance Policy
The Gift Acceptance Committee shall review this policy annually to determine if any amendments are necessary to reflect changes in the law or the Foundation and to address new situations not previously addressed by the Board.