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FRIENDS OF THE AMERICAN UNIVERSITY OF AFGHANISTAN

GIFT ACCEPTANCE POLICY

EFFECTIVE February 9, 2018

1. Policy and Purposes

This Policy represents the policy of Friends of the American University of Afghanistan (the “Organization”) governing the solicitation and acceptance of gifts by the Organization. The board of trustees or authorized committee (“Governing Body”) of the Organization and its staff solicit current and deferred gifts from individuals, corporations, foundations and others for purposes that will further and fulfill the Organization’s mission.  Purposes of this Policy include: (a) guidance for the Governing Body, officers, staff and other constituencies with respect to their responsibilities concerning gifts to the Organization; and (b) guidance to prospective donors and their professional advisors when making gifts to the Organization.  The provisions of this Policy shall apply to all gifts received by the Organization. Notwithstanding the foregoing, the Organization reserves the right to revise or revoke this Policy at any time, and to make exceptions to the Policy.

The mission of the Organization is to support higher education in Afghanistan.

2. Use of Legal Counsel
3. The Organization. The Organization may seek the advice of legal counsel in matters relating to acceptance of gifts when appropriate. Review by legal counsel is recommended for:

(1)        Closely held stock transfers that are subject to restrictions or buy-sell agreements;

(2)        Documents naming the Organization as trustee;

(3)        Gifts involving contracts such as bargain sales, partnership agreements, or other documents requiring the Organization to assume an obligation;

(4)        Transactions with a potential conflict of interest;

(5)        Gifts of real estate;

(6)        Pledge agreements, other than those on forms that were previously reviewed; and

(7)        Gifts with restrictions.

1. Donor. For non-standard gifts, in order to avoid potential any conflicts or potential conflicts of interest, the Organization should encourage prospective donors to seek the assistance of their own legal and financial advisors in matters relating to their gifts and the resulting tax and estate planning consequences.
2. General Policy

The Organization shall not accept gifts that:

(1)        Violate the terms of the Organization’s organizational documents;

(2)        Would jeopardize the Organization’s status as an exempt organization under federal or state law;

(3)        Are too difficult or expensive to administer;

(4)        Are for purposes that do not further the Organization’s objectives; or

(5)        Could damage the reputation of the Organization.

Subject to Section 4 below, all final decisions on the acceptance or refusal of a gift, shallbe made by the Governing Body.

4. Policy Regarding Specific Types of Gifts
5. Gifts Generally Accepted Without Review (Unrestricted Gifts of Cash). The Organization will accept unrestricted gifts of cash without prior review by the Governing Body, provided that, for donations of $1,000 or more, the identity of the donor has been vetted with respect to any reputational or policy issues.  Unrestricted gifts of cash are acceptable in any form. Checks shall be made payable to the Organization.
6. Gifts Subject to Governing Body Review Prior to Acceptance. All gifts, other than unrestricted gifts of cash, must be reviewed by the Governing Body prior to acceptance, unless the Governing Body authorizes certain de minimis gifts or categories of gifts to be accepted without its review. The following guidelines also apply:

(1)        Restricted Gifts: A gift with restrictions will be accepted only if and when the restrictions are approved by the Governing Body.  Gifts to provide financial aid for students of higher education in Afghanistan cannot be accepted if the donor specifies the financial aid recipients or seeks to participate in the selection of the financial aid recipients.

(2)        Tangible Personal Property: The Governing Body shall review and decide whether to accept gifts of tangible personal property by considering the following factors:

1. Whether the property furthers the mission of the Organization;
2. The marketability of the property;

iii.        The restrictions on the use, display, or sale of the property; and

1. Carrying costs and possible liability for the property.

(3)        Marketable Securities:

1. Unrestricted marketable securities may be transferred to an account maintained by the Organization at one or more brokerage firms or delivered physically with the transferor’s signature or stock power attached. All marketable securities shall normally be sold as soon as practical following receipt, unless otherwise directed by the Organization’s Governing Body.
2. If the marketable securities are restricted by applicable securities laws, the Governing Body shall make the final determination on the acceptance of the restricted securities.

(4)        Closely-Held Securities: Closely-held securities, including debt and equity positions in non-publicly traded companies, interests in LLPs and LLCs, or other ownership forms, can be accepted subject to the approval of the Governing Body of the Organization. The Governing Body shall review and decide whether to accept closely held securities based on the following factors:

1. Restrictions on the security that would prevent the Organization from ultimately converting the securities to cash;
2. The marketability of the securities; and

iii.        Any undesirable consequences for the Organization from accepting the securities.

If potential problems arise on initial review of the security, further review and recommendation by an outside professional may be sought before making a final decision on acceptance of the gift. The final determination on the acceptance of closely held securities shall be made by the Governing Body of the Organization with advice of legal counsel when deemed necessary. Non-marketable securities shall be sold as quickly as possible.

(5)        Bequests: Donors may make bequests to the Organization under their wills and trusts. A bequest will not be recorded as a gift until the gift is irrevocable. When the gift is irrevocable, but is not due until a future date, the gift will be recorded in accordance with GAAP.

(6)        Charitable Remainder Trusts: The Organization may accept designations as remainder beneficiary of a charitable remainder trust.

(7)        Charitable Lead Trusts: The Organization may accept designations as income beneficiary of a charitable lead trust.

(8)        Retirement Plan Beneficiary Designations: The Organization may accept designations as beneficiary of donors’ retirement plans. Designations will not be recorded as gifts until the gift is irrevocable. When the gift is irrevocable, the gift will be recorded in accordance with GAAP.

(9)        Real Estate: Gifts of real estate may be accepted under limited circumstances if approved by the Governing Body.

5. Additional Provisions
6. Gift Agreements. Where appropriate, the Organization shall enter into a written gift agreement with the donor, specifying the terms of any restricted gift, which may include provisions regarding donor recognition.
7. Pledge Agreements. Acceptance by the Organization of pledges by donors of future support of the Organization (including by way of matching gift commitments) shall be contingent upon the execution and fulfillment of a written charitable pledge agreement specifying the terms of the pledge, which may include provisions regarding donor recognition.
8. Fees. The Organization will not accept a gift unless the donor is responsible for (1) the fees of independent legal counsel retained by donor for completing the gift; (2) appraisal fees; (3) environmental audits and title binders (in the case of real property); and (4) all other third-party fees associated with the transfer of the gift to the Organization.
9. Valuation of Gifts. The Organization shall record gifts received at their valuation on the date of gift, except that, when a gift is irrevocable, but is not due until a future date, the gift may be recorded at the time the gift becomes irrevocable in accordance with GAAP.
10. IRS Filings upon Sale of Gifts. To the extent applicable, the Governing Body shall file IRS Form 8282 upon the sale or disposition of any charitable deduction property sold within three (3) years of receipt by the Organization. “Charitable deduction property” means any donated property (other than money and publicly traded securities) if the value claimed by the donor exceeds $5,000 per item or group of similar items donated by the donor to one or more donee organizations (e.g., the property listed in Section B on Form 8283). The Organization shall file this form within 125 days of the date of sale or disposition of the asset.
11. Written Acknowledgement. The Governing Body of the Organization shall provide written acknowledgement of all gifts made to the Organization and comply with the current IRS requirements in acknowledgement of the gifts.
12. Changes to or Deviations from the Policy. This Policy has been reviewed and accepted by the Organization’s Governing Body, which has the sole power to change this Policy.