Charitable Gifts – Types and Acceptance


The purpose of this policy is to define the scope, standards, responsibilities, and approach for charitable gift types and charitable gift acceptance.

The College for Creative Studies encourages alumni and friends of the College to use private philanthropy to preserve and enhance educational excellence and further the College’s mission. Philanthropy is an integral part of the College’s success, aiding its educational, research, and service activities now and in generations to come. To ensure the integrity and practice of philanthropy, this policy defines the types of gifts the College may receive and the conditions under which those gifts may be received.

This policy outlines the standards and procedures for approval, acceptance, and maintenance of charitable gifts, in accordance with general College for Creative Studies policies, related policies of Institutional Advancement, and in general keeping with guidelines of the Council for Advancement and Support of Education (CASE).

This policy is complementary to other charitable gift policies beyond the scope of this particular policy.


This policy applies to all units, departments, faculty, staff, and other interests using the name of the College for Creative Studies and participating in philanthropy on the College’s behalf.

This policy defines the types of charitable gifts the College may accept, conditions relating to gifts, authorization to solicit and accept gifts, and donor relations standards.

Many charitable gifts, especially structured gifts, include an actual or potential liability for the organization. This policy describes the benefits and possible risks related to charitable gifts.

The College will acknowledge all gifts of cash and marketable securities with a written description of the donated assets and the date upon which the assets were received. The College will receipt gifts of tangible personal property with a description of the assets. If an estimated value for the assets is available, the College may include that in its description if the source of the estimated value is specified. The College will establish a value for internal purposes only. Publicly traded stocks and bonds will be accepted at fair market value as determined by the Internal Revenue Service. Stocks in a closely held corporation may be accepted if a qualified, independent accounting or appraisal company has made a valuation of the stock. Bond specialists will value bonds that are not routinely reported in financial journals.

Under no circumstances will the College’s staff knowingly agree to inflate the value of a gift above its true fair market value nor change the official date of the gift in order to obtain a tax advantage or other consideration for a donor.

Approval and Compliance

All gifts must meet the legal/statutory requirements of the State of Michigan and the state of a donor’s permanent residence.

The Board of Trustees authorizes the Vice President for Institutional Advancement, in consultation with the President of the College for Creative Studies, to accept charitable gifts that meet the definitions and requirements in this policy.

In cases where there is concern about the donor’s wherewithal or competence, the Vice President for Institutional Advancement will appropriately investigate, document, and resolve such issues. The Vice President may consult with the College’s President or others, as necessary.

The College’s staff and legal counsel will conform to existing laws and regulations in recommending the terms of all agreements to prospective donors; however, it is the donor’s responsibility to establish documented tax benefits. The College is not qualified to provide appraisals or value for contributed property for purposes of the donor’s tax deductibility.

Donors must have the legal authority to give any cash, security, asset, or other property.

The College’s staff or counsel will recommend to the donor that the donor is represented by competent legal and tax advisors. The College may provide sample documents for illustrative purposes only. The College cannot act as the attorney or dispense legal or tax counsel for donors. The College may offer a list of qualified legal and tax advisors, but does not recommend a specific individual or company on the list. The College will seek to work cooperatively with advisors to serve the needs and interests of the donor.

The College reserves the right to redirect gifts when the original purpose or intent of such gifts is no longer practical or the use for such gift no longer exists. In such cases, the College will match the donor’s purpose and intent to existing uses within the organization as nearly as possible.

Gifts are considered received when they meet the criteria set forth in these and related policies and are acknowledged as gifts upon the date the College receives control of the gifted asset. When gifts cannot be accepted, the Vice President for Institutional Advancement will represent the reason or reasons to the donor and decline or return the asset.

The College of Creative Studies does not accept gifts that are:

  • Based on a quid pro quo agreement;
  • Directed to specific individuals;
  • Illegal, result from illegal activity, or violate laws and statutes;
  • In expectation of a commission;
  • In the form of timeshare interests;
  • In violation of the College’s ethical standards;
  • Likely to have significant or possible conflicts of interest;
  • Limiting in seeking charitable gifts from other donors;
  • Not aligned to the College’s policies and practices;
  • Not in the best interests of the College;
  • Not of sufficient benefit to the College to offset the extent of administrative, legal, or financial commitments involved; and/or
  • Where donor control is expected or implied outside of a Gift Agreement.

The College must disclose to the donor all aspects of benefits and disadvantages that could reasonably be expected to influence the decision of the donor in making an agreement with the College. In particular, items subject to variability (such as market value and income payments) will be disclosed. It is the responsibility of each College representative to keep detailed written notes to supplement written correspondence as evidence of fair and honest behavior in negotiation with each donor. All Gift Agreements will be held in confidence, with information disclosed only to those who require it in performance of their authorized duties, unless expressly allowed by the donor(s).

In accounting for structured commitments, the College will follow the Financial Accounting Standards Board rules for accounting and the Council for Advancement and Support of Education’s CASE Reporting Standards & Management Guidelines for Educational Fundraising, 4th Edition (2009). Structured gifts will be calculated at present value for the general ledger. For purposes of fundraising recognition and campaign totals, the face value of a structured gift may be counted. In this case, the calculated present value, fundraising recognition value, and campaign totals must be reported publicly.

All gifts will be in compliance with the laws of the state where the donor resides.

Donor recognition is defined in Policy – Charitable Gifts – Donor Recognition and Policy – Charitable Gifts – Donor Naming Opportunities.

Guidelines and Definitions

The types of charitable gifts may take a variety of forms, including but not limited to:

  • Anonymous gifts
  • Auctions
  • Bargain sales
  • Bequest, testamentary gifts, or estate gifts
  • Bonds
  • Cash
  • Certified checks
  • Charitable gift annuities
  • Charitable trusts
  • Checks
  • Closely held stocks
  • Credit cards
  • Debit cards
  • Direct mails
  • Documented pledges
  • Gas, oil, and mineral rights
  • Gift through a donor-advised funds
  • Gifts in-kind
  • Gifts of art
  • Grants by a corporation, business, organization, or foundation
  • Intellectual property
  • Irrevocable gifts
  • Life insurance
  • Living trusts
  • Matching gifts
  • Money orders
  • Personal property
  • Pledges
  • Pooled income funds
  • Real estate
  • Retained life estates in real property
  • Retirement plan assets
  • Royalties
  • Securities
  • Special event sponsorships
  • Special event tickets
  • Split-interest gifts
  • Sponsorships by an individual, corporation, business, organization, or foundation
  • Stocks
  • Structured gifts
  • Third-party gifts
  • Traveler’s checks
  • Tribute gifts (memorial or honorial)

It is the general policy of the College to liquidate charitable gifts of assets and property upon receipt, rather than retain it, unless a related use is possible. Gifts of property valued at $5,000 or more require a qualified, independent appraisal, the costs of which are borne by the donor. A donor may give personal property such as works of art, books, automobiles, collectibles, and so on. Non-publicly traded stocks, such as privately held S Corporate or Limited Liability Partnership stocks, also fit this category. With privately held S and LLC corporations, the College will secure a qualified, independent appraisal. The College may authorize its own qualified, independent appraisal. It is important to determine that personal property or assets offered are owned by the donor, if it is encumbered, or if it has value or related use for the College. If the College receives and sells property within three years of the gift date, it must file Internal Revenue Service Form 8282.

The College accepts gifts of public currency, cash, checks, traveler’s checks, money orders, and certified checks. For currency and/or cash not of United States origin, proper value will be determined according to the Bureau of the Fiscal Service of the United States Department of the Treasury rules and guidelines. Gifts by credit card and debit card are treated as cash. There is low risk for accepting cash, checks, and most foreign currency (following applicable rules and guidelines for each country’s currency), assuming the donor has the legal right to give such property. Checks are sometimes returned for Insufficient Funds, in which case the College will contact the donor to resolve the issue. In rare cases, the source of cash gifts (typically third-party events) may cause some public relations concerns.

A pledge is a written commitment by a donor to pay a specified amount of philanthropic contribution. This is acceptable by signed letter, verifiable e-mail from the donor, signed pledge form, or Gift Agreement document. Documented pledges are recorded as receivables in the general ledger as new gifts in the year in which the pledge is made. Payments on pledges are not considered new gifts. Verbal pledges are acceptable for phonathon calls. Other verbal pledges are not considered to be firm pledges for accounting purposes, though they may accurately reflect a donor’s intent. Annual fund pledges, especially phonathon pledges, are to be reviewed within 15 days of the end of the College’s fiscal year. At that time, unpaid pledges should be written off. For pledges are payable over a period of time, it is recommended that an initial payment be received as part of the pledge commitment, as well as a schedule of payments. Some documented pledges may not be fulfilled, in whole or in part. In these cases, pledge collection will be pursued through Institutional Advancement. The pledge may be written off and properly reflected in the general ledger as direct write-offs or losses. There is potential for pledges to remain unpaid upon a donor’s death. This remains a debt payable by the donor’s estate; however, the College will decide if and how to collect such obligations. In some cases, especially where substantial recognition has already been given to the donor for large gifts, it may be in the College’s best interests to collect from the estate, negotiate a settlement with the estate, or litigate to collect the pledge debt, assuming the estate has the ability to pay the debt. The Vice President for Institutional Advancement has the authority to negotiate, limit, receive, and collect pledges, in consultation with the College’s President.

Gifts of stocks and securities that are publicly traded and sold under the authority of the Securities and Exchange Commission are eligible for contribution. It is in the donor’s best interests, and poses no disadvantage to the College, to give appreciated stocks, which may minimize capital gains taxes for the donor. It is the policy of the College to liquidate stocks and securities upon receipt from the donor, with cash from the sale applied to the purposes promised to or indicated by the donor. The College prefers electronic transfer of gifts of stocks and securities. Gifts may be made by signed transfer involving certified paper certificates. Each donor/owner of such property or interest will indicate approval of transfer or sale by written or verbal authorization that is suitable for trading and selling agents. It is the donor’s responsibility to establish the value of gifted stocks and securities to the Internal Revenue Service. The College will provide a description of the stocks and/or securities received and the date of receipt. The Internal Revenue Service standard for valuing stock transfers is to declare the mean of the asset’s trading high and low for the day the donor released control of the asset. The College reserves the right to adjust its internal gift crediting and/or offer soft credits, and adjust donor recognition, accordingly, depending on the selling agent’s fees and the date of subsequent sale by the organization, each being considered a cost of doing business. United States Savings Bonds are acceptable as gifts through bequest, but not permitted by law during the donor’s lifetime. Gifts of stocks and securities impose potential obligations and liabilities related to the costs of owning and disposing of property. These include complications of transfer, marketability of the assets, solvency of the company issuing the stock or bond, and timing of liquidation of assets.

The College may accept in-kind gifts of goods and services, software, materials, supplies, equipment, volunteer services, items for raffle or auction, and so on. The College may accept or decline any such gift for a variety of reasons, including potential use, marketability, quality, or quantity. These gifts are recorded in a separate line item on the general ledger. It is the donor’s responsibility to demonstrate the value of gifts to the Internal Revenue Service. The College is not permitted to place a value on in-kind gifts for purposes of tax deductibility. For internal purposes, The College will record the receipt, quantity, condition of, and value estimation for the gift, according to valuation standards set forth by the Internal Revenue Service. Gifts of services are not considered as charitable gifts by the Internal Revenue Service.

A proposal is required for all structured gifts, cash/equivalent gifts, or in-kind gifts of $50,000 or more. When a donor makes clear their intention to provide a gift of $50,000 or more, a Gift Agreement is required. The Gift Agreement documents the obligations of the donor, as well as the requirements for the College for Creative Studies. The Gift Agreement requires a general description of the terms of the gift. Donors may also receive a gift letter to the donor describing the terms of a gift more broadly.

There are five forms of charitable trusts:

  • Charitable Remainder Unitrust (CRT). This trust pays a set percentage of the trust’s principle as calculated annually to the income beneficiary for life or a set term of years, i.e. the amount of the annual payments fluctuate. Additions to the trust may be made at any time. When the income beneficiary dies or the term of years expires, the principle goes to one or more charitable beneficiaries. Trust assets must be managed separately for each trust.
  • Charitable Remainder Unitrust (CRUT). This trust pays the stated percentage from the net-income earned by the trust. Any excess income over the agreed upon percentage in later years of the trust will be used to make up any deficit from previous years before being added to the principal. In some cases, this form of trust is suitable for use with donated real estate. When real estate is sold, the CRUT converts into a Flip Unitrust with a standard payout.
  • Charitable Remainder Annuity Trust (CRAT). This differs from the Charitable Remainder Unitrust in that the annual income payment is a set dollar amount determined when the trust is established. No additions to the trust are allowed after the trust is established. Trust investments are managed separately for each trust.
  • Charitable Income Lead Trust (CLT). This pays the College (and, perhaps, another charitable organization) a stream of payments for a specified period of years, at the end of which time the assets of the trust will be distributed to non-charitable remaindermen (such as the donor’s children or grandchildren). The payments to the College are eligible for charitable deduction. The assets of this trust must also be managed separately.
  • A Pooled Income Fund is a trust to which many individual donors contribute assets, with each donor receiving a prorated share for his or her life of the income earned in the fund’s pooled investment account. When a donor dies, his or her share of the principle of the trust is distributed to the College.
  • A donor may choose to place any amount in a charitable trust; however, if the College is to pay a part or all of the legal fees for establishing the trust and/or management fees, the following apply: limits a charitable trust to two income beneficiaries, both of whom must be at least age 55 on the date the trust is executed, and with a trust value of at least $50,000.
  • The College may elect to serve or not serve as trustee for a charitable trust. For a trust for which the College is not the trustee, there is low liability for the College. In some cases, the beneficiary of a trust can be changed. The College may act as trustee as requested by donors in cases in which the trust meets certain criteria. This creates a long-term obligation and potential liability.

There are three types of charitable gift annuities:

  • With an Immediate Payment Charitable Gift Annuity (CGA), the donor is guaranteed a fixed annual income for the lifetime(s) of the annuitant(s) or for a fixed term of years in exchange for a charitable gift. In exchange, the College is legally permitted to: (a) use all of the gift immediately and pay annual payments out of its general budget; (b) use a part of the gift while setting aside and investing a portion of the gift in a reserve from which to pay annual payments; or (c) pay a single premium to reinsure the annuity which fees the remainder for immediate use. It is the policy of the College to invest the entire corpus of the annuity gift until the annuity is ended.
  • A Deferred Payment Gift Annuity (DCGA) is governed by the same rules described in the preceding subparagraph, except that the first annuity payment to the annuitants is delayed for one or more years following the effective date of the agreement, and earnings in the interim are credited to the contract, which increases the amount of the annuity. This generally offers more advantageous tax considerations.
  • A Flexible Charitable Gift Annuity (FCGA) has a flexible start date for annuity payments, determined by a possible starting date for payments.
  • If self-managed, charitable gift annuities impose a general obligation against the general assets and credit of the College and are guaranteed against the assets of the College. Community foundations and some financial institutions will manage charitable gift annuities for an administrative fee.
  • Charitable gift annuity minimums are based upon the understanding that the financial benefit that the College will realize from a deferred gift depends largely on: (a) the nature of the assets contributed; (b) the length of the management period before the remainder value becomes the property of the College; (c) the annual management costs; and (d) certain economic factors which can only be approximated at the time of the gift. The College limits a gift annuity contract to two income beneficiaries, unless special circumstances warrant consideration of up to four income beneficiaries. The recommended minimum age will be age 60 for immediate payment gift annuitants; age 35 for deferred gift annuitants. A gift of at least $10,000 is required in exchange for a gift annuity. The College will offer to gift annuitants the option of receiving their payment annually or quarterly.
  • Charitable gift annuity rates for all ages will not exceed those suggested by the American Council on Gift Annuities, which recommends annuity rates and provides other information for charitable organizations. The College is not required to abide by these rates but elects to do so.

In a Bargain Sale arrangement, a donor may elect to sell a piece of real property (such as a plot of land or a house) to the College at a price less than fair market value. The difference between the fair market value and the selling price is considered a charitable gift. The College benefits by acquiring property it wishes to use at a below market price or by selling the property to a third party at market value. Bargain sales impose potential obligations and liabilities related to the costs of owning and disposing of property. Other potential liabilities also may exist. Bargain sales must also comply with the requirements of other gifts of real estate listed in this policy.

A Retained Life Estate in Real Property, donors may gift the remainder interest in a personal residence or farm. In such an arrangement, the donor gives the property to the College, but retains the right to occupy the property until death, at which time all rights to the property pass to the College. The donor usually pays all expenses related to the property during his or her lifetime, including insurance, repairs, maintenance, improvements, and so on, though various alternative arrangements can be negotiated.

A Life Insurance Policy may be gifted to the College. For policies where premiums are no longer paid, the donor may sign a life insurance policy over to the College and receive credit for the death benefit value of the policy. The College becomes the owner of the policy and is free to retain it for the death benefit or terminate the policy in order to receive the cash benefit value. If the gifted policy requires premium payments, the donor is expected to contribute gifts to the College sufficient to pay the premiums, which are typically tax deductible. If the donor elects to give a single premium policy or paid-up policy, further premiums will not be required. The College must be the owner of such policies. If the gifted policy requires premium payments, the donor is expected to contribute gifts to the College sufficient to pay the premiums, which are typically tax deductible. (Note: It is general practice for CCS not to accept such terms for a policy.) If the donor is unable or unwilling to continue premium payments, the College will decide whether or not to continue such payments. In that case, there is no tax deduction allowed and previous recognition provided for a larger gift may be revised appropriately. A Life Insurance Policy may be gifted to the College.

A structured gift of Bequest by Revocable Testamentary Gift or Will is the most popular type of planned gift for donors. A donor may designate the College as a beneficiary of a percentage of an estate’s remainder or a set dollar amount of the remainder. Because the gift is revocable, it is not counted on the general ledger. Institutional Advancement may list the gift as an expectancy. If reliable information is available, Institutional Advancement may add an estimated value upon the donor’s death as a way to track commitments. Gifts by bequest contain the same liabilities described of a gifted asset as indicated in this policy. A donor or surviving spouse has the ability to change beneficiaries of a revocable will. A family or other interest may litigate the validity of a will.

A donor may contribute retirement plan assets by means of testamentary bequests, transfers to charitable remainder trusts, or in the case of Individual Retirement Accounts, through direct gift, by charitable rollover, or by naming the College as a beneficiary. When a donor considers transferring retirement plan assets to a testamentary charitable trust or name the College as a beneficiary, care must be taken to make sure that the transaction is in accord with the Internal Revenue Service, Treasury Regulations, and applicable state regulations. In some cases, the donor’s state of residence has laws that impact such gifts and the College as a charitable beneficiary. The risks and liabilities of such transactions are primarily borne by the donor and his or her estate.

The College may receive U. S. Savings Bonds by bequest but not directly during the donor’s lifetime.

Gifts of income received from royalties are acceptable. Gifts are booked only as they are received, not as anticipated.

Gifts of gas, oil, and mineral rights are acceptable and booked as fair market value.

Gifts of intellectual property are acceptable, including patents, copyrights of cultural, artistic, and literary works, and computer software under development.

Gifts of property and buildings have many potential obligations and liabilities related to the costs of owning and disposing of property. Other potential liabilities also may exist.

When a gift of real property has been offered to the College, all available information on the property and any conditions of the gift will be assembled by Institutional Advancement. At a minimum, this will include a copy of the deed by which the prospective donor originally acquired the property, a copy of the title insurance policy, and a copy of the latest property tax statement.

The Vice President for Institutional Advancement will decide if the gift is clearly unacceptable. (See below for Standards to Determine Unacceptability.) If the gift is determined to be unacceptable, the donor will be notified in writing. A file will be prepared by Institutional Advancement, which contains all of the information that was collected on the property and an explanation of the finding as to why the property was clearly unacceptable.

If the gift appears to be potentially acceptable, Institutional Advancement will obtain the following information:

  • A current appraisal of the property by a qualified appraiser substantiating the fair market value of the property;
  • A title search covering the property, issued by a licensed title insurance company, covering the period from the date of the most recent title insurance policy, if any, and if none, the last recorded warranty deed.

If the property includes buildings, a physical inspection report including structural and mechanical systems, and, unless the property is contained in a subdivision, a boundary survey, or if distance and logistical concerns make inspection impractical, in which cases a qualified representative of the College will conduct a physical inspection;

A statement as to the current zoning and a copy of the zoning ordinance that applies;

  • If the property is used for rental purposes: (a) a copy of all of the current leases on the property; (b) a copy of the payment record of all tenants; (c) a statement of all expenses during the preceding 24 months; and (d) the occupancy records for the past three years;
  • Once the fair market value and marketability of the property have been established by the Vice President for Institutional Advancement and representative from the Board of Trustees may make an on-site inspection of the property and any structures thereon. Based on all of the data collected on the property, the legal opinion, and appraisal and marketability projections, the Board of Trustees will decide whether the property should be accepted. If relevant, the Board of Trustees will decide when the donated property should be sold, taking into consideration any operating expenses such as taxes, insurance, maintenance, legal matters, etc. If the taxes on the property are unpaid, the Board of Trustees will determine whether the value of the property justifies accepting the property and paying delinquent taxes;
  • If the potential donor wishes to make a deferred gift of the property (i.e. secure a life income from the property), Paragraphs 1-4 above should be followed and a proposal setting forth the terms of the transfer and the features of the deferred gift should then be prepared for submission to the donor;
  • The potential donor will be informed of the decision in writing by the Vice President for Institutional Advancement; and
  • All information, correspondence and reports that have been prepared or obtained concerning the property will be retained by Institutional Advancement.

Reasons for determining “clearly unacceptable” real estate/property include:

  • Non-marketability;
  • Fair Market Value by an outside appraiser is lower than the value the donor would like to claim as a deduction;
  • Expected development or deterioration of the area surrounding the property;
  • Poor physical condition of both the outside and inside of any structures;
  • Inability to get a zoning variance for a proposed use;
  • Encumbered Property – Property that has an outstanding mortgage liability;
  • Title is not marketable;
  • Excessive expenses related to real property gift (i.e. real estate taxes, insurance, mortgage, management fees, and general operating expenses); and/or
  • The property is being purchased by a third party on an installment basis.


The Office of Institutional Advancement is responsible for assuring this policy’s standards, compliance, and implementation.

February 10, 2021

March 5, 2021

Institutional Advancement