Gift Acceptance Policies for Planned Giving: Why You Need One Before You Market CGAs or CRTs

Here's a scenario that happens more often than it should: A nonprofit starts marketing charitable gift annuities (CGAs) or charitable remainder trusts (CRTs) to donors because they've heard these vehicles can bring in major gifts. Three months later, a donor offers a commercial property with environmental concerns, or wants to establish a CRT with your organization as trustee, and suddenly nobody knows what to say. The development director looks at the board. The board looks at the executive director. Everyone's Googling frantically.

Don't be that organization.

Before you put a single piece of planned giving marketing out into the world, before you mention CGAs in your newsletter or talk about CRTs at a donor lunch, you need a gift acceptance policy. Not next quarter. Not "when we get around to it." Now.

What's a Gift Acceptance Policy (and Why Should You Care)?

A gift acceptance policy is basically your organization's rulebook for what gifts you'll accept, how you'll accept them, and under what conditions. Think of it as your nonprofit's bouncer, it decides what gets in and what stays out.

For planned giving specifically, this policy establishes clear criteria for reviewing and accepting complex giving vehicles like charitable remainder trusts, charitable gift annuities, real estate with retained life estates, and other deferred gifts that sound great in theory but can create headaches (or worse) in practice.

Without this policy in writing, you're flying blind. Staff members make inconsistent decisions. Board members say yes to gifts the organization can't actually handle. Donors get mixed messages. And worst case? You end up stuck with assets that cost more to manage than they're worth, or legal arrangements that tie your hands for decades.

Why CGAs and CRTs Demand Extra Attention

Charitable gift annuities and charitable remainder trusts aren't like cash donations or even stock gifts. They're complex planned giving vehicles with long-term legal and financial obligations.

A charitable gift annuity creates a binding contract between your organization and the donor. You're promising to pay them a fixed amount for life. If you miscalculate the rates, accept funding from someone with a longer life expectancy than you planned for, or don't have the reserves to back these payments, you've got a serious problem.

Charitable remainder trusts are even more intricate. The donor transfers assets into a trust, receives income for a set period or for life, and then the remaining assets come to your organization. Sounds straightforward, but here's where it gets sticky: Who serves as trustee? What if the donor wants you to serve as trustee? What types of assets can fund the trust? What happens if the assets decrease in value?

These aren't hypothetical concerns. Organizations have accepted real estate in CRTs only to discover the property had environmental contamination. Nonprofits have agreed to serve as trustees without understanding the fiduciary responsibilities involved. Some have accepted CGAs without adequate reserves and found themselves unable to meet payment obligations.

Your gift acceptance policy is what prevents these disasters before they start.

What Happens When You Market Without a Policy

Let's walk through what can go wrong when you start promoting planned giving options without clear policies in place.

Scenario 1: The Awkward Conversation
Your development team creates beautiful brochures about charitable gift annuities. A loyal donor calls, excited to establish a $50,000 CGA. During the conversation, she mentions she's 95 years old. Your team has no policy guidance on minimum funding amounts or age considerations. Do you accept? What rate do you offer? Who makes this decision?

Scenario 2: The Real Estate Nightmare
You've been marketing the benefits of charitable remainder trusts. A donor offers to fund a CRT with a commercial building worth $2 million. Sounds amazing, right? But your organization has no policy on accepting real estate, conducting environmental assessments, or evaluating ongoing property expenses. Six months later, you discover the building needs $400,000 in repairs and has potential asbestos issues.

Scenario 3: The Trustee Trap
A wealthy donor wants to establish a $1 million charitable remainder trust with your small nonprofit serving as trustee. Your board is thrilled about the eventual gift. But nobody considered that serving as trustee creates fiduciary duties, requires investment expertise, demands ongoing tax reporting, and could create conflicts of interest. You have no policy addressing whether you'll serve as trustee or under what circumstances.

Each of these scenarios creates stress, wastes time, potentially damages donor relationships, and could expose your organization to legal or financial risk. A gift acceptance policy prevents all of it.

What Your Gift Acceptance Policy Should Cover for CGAs and CRTs

A strong gift acceptance policy for planned giving doesn't need to be 50 pages long, but it does need to address specific situations. Here's what to include:

Charitable Gift Annuities

Minimum funding amounts: Many organizations set minimums of $10,000 to $25,000 to ensure the gift makes financial sense after covering costs.

Age requirements: Most policies require annuitants to be at least 60 or 65 years old to align with standard CGA rates and life expectancy calculations.

Rate structures: Specify that you'll follow American Council on Gift Annuities (ACGA) rates or explain your methodology.

Reserve requirements: Establish what percentage of CGA funding you'll hold in reserves to ensure payment obligations.

Acceptable funding assets: Will you accept only cash and publicly traded securities, or also real estate, closely held stock, or other assets?

Charitable Remainder Trusts

Trustee policy: Clearly state whether your organization will serve as trustee, and if so, under what circumstances and with what minimum trust values.

Minimum remainder value: Many organizations won't accept CRTs unless the projected remainder to charity exceeds a certain amount (often $100,000 or more).

Asset evaluation requirements: Establish that all real estate must undergo environmental assessments, title reviews, and appraisals before acceptance.

Legal counsel requirements: Specify that donors must use qualified legal counsel (not your organization's attorney) to establish the trust.

General Provisions for Complex Gifts

Expense responsibility: For gifts with retained interests (like life estates in real property), require donors to adequately provide for ongoing expenses including mortgages, property taxes, insurance, and maintenance.

Appraisal and documentation: Require qualified appraisals for gifts-in-kind and clear ownership documentation before acceptance.

Review process: Establish who reviews complex gift proposals (development director, finance committee, full board) and what the approval process looks like.

Conditional gifts: Set time limits for meeting conditions and specify what happens if conditions aren't satisfied.

Right to refuse: Explicitly state that your organization reserves the right to decline any gift that doesn't serve its mission or creates undue burden.

Creating Your Policy: Practical Steps

You don't need to reinvent the wheel here. Start by reviewing sample gift acceptance policies from organizations similar to yours. The Partnership for Philanthropic Planning offers excellent model policies.

Involve your key stakeholders: development staff, finance team, executive leadership, board members, and legal counsel. This isn't just a development department document: it affects your entire organization.

Address these questions as a team:

• What types of planned gifts are we equipped to handle right now?
• What minimum gift sizes make sense for our organization's capacity?
• Who has authority to accept various gift types?
• What professional advisors do we need to consult for complex gifts?
• How will we handle gifts that fall outside our normal parameters?

Once drafted, have your attorney review the policy to ensure it complies with state regulations (especially for charitable gift annuities, which are regulated at the state level).

Finally, make sure everyone who might encounter planned gift inquiries knows the policy exists and where to find it. Train your development team, educate board members, and create a simple one-page summary for quick reference.

The Bottom Line

Marketing charitable gift annuities and charitable remainder trusts without a gift acceptance policy is like offering to build someone a house before you know how to use a hammer. You might get lucky, but you're probably going to create problems for yourself and disappoint people who trusted you.

Your gift acceptance policy isn't bureaucratic red tape: it's a tool that protects your organization, sets clear expectations for donors, and ensures that planned gifts actually serve your mission rather than becoming administrative nightmares.

Before you send that next email about legacy giving programs or post about the benefits of CRTs on social media, take the time to get your gift acceptance policy in place. Your future self (and your board, and your donors, and your finance team) will thank you.