As you and your team build momentum implementing your 2024 fundraising plan, keep in mind that many individual donors look at the same criteria used by foundations to determine whether to support a charitable organization.
The role of community foundations in donor due diligence
In fact, many donors working with Rancho Santa Fe Foundation (RSFF) conduct due diligence and our community foundation supports them in their discovery. This rings especially true when a donor is considering a large gift or setting up a bequest. Gaining a donor’s trust is key.
The team at RSFF is happy to serve as a sounding board to our nonprofit fundholders and partners to continuously improve organizational governance and operational documentation.
Here are three items you might consider reviewing as you do a little spring cleaning
Governing documents
Ensure your articles of incorporation are up-to-date and reflective of your current mission. Donors who are considering a large gift will want to see that your legal documents are in ship shape, especially with respect to the language required to achieve Section 501(c)(3) status. If you’re in doubt, consult the IRS’s suggested language.
You will also want to review your bylaws. Bylaws can become outdated, in some cases due to technology. For example, you will want your bylaws to include permission to use up-to-date mechanisms to gain board approval, such as through an online poll in lieu of an in-person meeting.
Tax returns
You’re no doubt on top of the need to file the annual Form 990, 990-EZ, or 990-N. Make it a point to check for consistency between your Form 990 and the Form 1023 you filed (likely years ago) to secure the IRS Determination Letter granting charitable status. Make sure your organization’s charitable purpose is still stated correctly. Consistency across key documents is important to many large donors. Indeed, a considerable number of donors review Form 990 carefully before they decide to make a gift.
Make sure yours is accurate and compelling. The 990 is a powerful tool that can be used to tell your organization’s story and demonstrate impact in numbers.
Gift acceptance
Verify that you have recently reviewed your policies for how your organization handles the acceptance of certain gifts, especially if they fall in the category of “Non-Standard Contributions” as defined by the IRS. Gifts of hard-to-value assets should not be undertaken lightly.
Once policies are in place, RSFF can facilitate the transaction of complex gifts. For nonprofits without a current policy, the National Council of Nonprofits has easily digestible information on gift acceptance policies and how Form 990 can help inform your donors.
How can RSFF help you?
RSFF offers nonprofit organizations the ability to establish endowments and reserve funds. One of the benefits to holding funds with RSFF is expert governance and oversight, especially related to accepting complex gifts, as well as relying on RSFF for all the policies and administration associated with an endowment or reserve.
And to our donors, we equally offer our expertise for any complex gifts and large donations you may be planning. We look forward to working with you! If you would like to connect with RSFF, please contact us at info@rsffoundation.org.
