Since a not-for-profit organization must keep accurate records of donations received, a donor must keep a donation record, especially when it comes to the tax period. A specific agreement on gifts and other financial documents will help keep the non-profit organization and donor on the same page. Here are the steps to take when developing an agreement: This agreement is necessary if a person wishing to make a donation to another person or organization wishes to document their intention through an agreement. A donation contract is required whenever the donation is subject to certain restrictions on the future use of the gift or when the donation should only be used by the donor in accordance with certain pre-defined conditions. In such cases, the terms of the donation must be clearly defined in order to avoid misunderstandings between the parties in the future. «A donation agreement [or gift] can be used to ensure that a donor`s promise can be abandoned, that donor and donor expectations can be put in place, and avoid misunderstandings.» – ConservationTools.org, Pennsylvania Land Trust Association This resource contains useful information on why a donation agreement may be necessary and important. , and how to start with an agreement. The following section, entitled `Gift Template Agreement`, contains a gift agreement that has been modelled by an agreement established by the Community Foundation of Collier County. This was also included in section 11 of the template for the gift arrangement above. Donation agreements in the United States are governed by the internal income code, which is overseen by the Internal Revenue Service (IRS). In particular, section 501 (c) (3) of the internal income code refers to non-profit organizations. The AICPA.org play is part of a reflection here in the negotiation and development of gift contracts. The purpose of this agreement is to define the terms of the donation and determine how it is implemented.
The agreement must set out the expectations and understanding of both parties. A written agreement helps to reduce misunderstandings between the parties and also makes the donor`s pledge a legally binding obligation. This helps to protect the interests of the event. In some cases, if a promise to make a future donation is not kept, the other party may keep such a promise through legal action. To do so, it is necessary that the commitment be properly documented by a binding contract. Some other issues and points from Philanthropy Works that must be taken into consideration when drawing up your formal agreement, written: the agreement must clearly state the names of the parties between which the agreement is concluded. These include the names of the party that makes the donation (the donor) and the party that accepts the donation (the donor). It is worth mentioning the date on which the agreement was reached, as well as the area in which the agreement is enforceable. This agreement has no valid consideration cannot be confirmed in court, therefore the agreement should include a nominal consideration or other replacement of the counterparty. An agreement for the public recognition of the donor or the designation of a building according to the donor may be considered a valid consideration. If, at any time, the donor does not behave himself without proper consideration of public morality and decency, or if the donor commits an act or is involved in a situation, or if an event tends to degrade the donor in the Community, or which places the donor in public contempt or a public scandal or which seriously and negatively carries the reputation or activity of the charity , whether information is made public or not, the charity has the right to withdraw the donor`s recognition rights, as required by this donation contract.
Here is a model gift scheme created for real estate by Tulsa County.