Bernheim Arboretum and Research Forest (“Bernheim”) accepts gifts from individuals, companies, foundations, and other entities to carry out its purpose of connecting people and nature through quiet, personal experiences with the outdoors; nature-inspired art and cultural activities; imaginative programs and exhibits; and innovative research in horticulture, natural areas management, and habitat restoration.
The intent of the gift acceptance policies in this document is to protect the interests of Bernheim and the individuals and entities who support its programs by ensuring that all gifts to or for Bernheim’s use are structured to maximize the benefits to all parties. The goal is to encourage donations without encumbering Bernheim with gifts that generate more costs than benefits, or which are restricted in a manner that does not comply with the primary purpose of Bernheim’s existence.
To encourage donations, Bernheim must be capable of responding quickly, affirmatively where possible, and in an appreciative manner in all situations.
II. GUIDELINES AND PROCEDURES
A. Conflict of Interest:
No program, trust, contract, pledge, gift, or commitment will be urged upon any prospective donor if this would benefit Bernheim at the expense of the donor’s interest. No agreement will be made between Bernheim and any individual or entity on any matter, whether regarding investments, management, or otherwise, which would knowingly jeopardize the donor’s interest.
B. Use of Legal Counsel:
Bernheim may seek the advice of legal counsel on any matters pertaining to the execution of agreements, contracts, trusts, or other legal documents. Furthermore, Bernheim will advise all donors or prospective donors to consult with their professional financial and/or legal advisor(s) regarding the estate planning, legal, and tax implications of a gift. If the donor does not have a professional advisor and requests a list of advisors, Bernheim will provide a list of local advisors from which the donor can select.
C. Rendering Legal or Tax Advice:
Any person who represents Bernheim (including, without limitation, any officer, director, employee, or volunteer) in dealing with donors or prospective donors will not render legal or tax advice.
D. Confidential Information:
E. Right to Decline Gifts:
Bernheim reserves the right to decline any gift, and will return any declined gift to the donor within one week of receipt.
Bernheim will cooperate fully in all matters related to IRS investigations of charitable gifts.
III. OUTRIGHT GIFTS
A. Cash and Cash Equivalent:
1. All gifts of cash or cash equivalent (such as check, cashier’s check, or money order) will be recorded at full value on the date Bernheim receives such gifts.
2. All checks, cashier’s checks, money orders, and similar instruments must be made payable to “Bernheim,” “Bernheim Forest,” “Bernheim Arboretum and Research Forest,” or a similarly acceptable name which manifests an intent to give to Bernheim. In no event shall Bernheim accept a check, cashier’s check, money order, or similar instrument if it is made payable to an officer, director, employee, or volunteer for the credit of Bernheim.
1. Pledges may be payable in a single payment or multiple installments.
2. All donors who wish to make a pledge must complete a pledge form, in substantially the form attached as Annex A to this document, or must confirm the pledge in writing which is signed by the donor and which indicates the amount of the pledge and the payment schedule.
3. Pledges may be satisfied by the donor giving cash or cash equivalent, or any other form of asset that is permissible under this document. The date of the gift is when Bernheim receives the gift (see other sections of this document regarding defining such date).
4. Per standard accounting practice, pledges will be considered irrevocable gifts and credited in the year that the pledge is received.
C. Publicly-Traded Securities:
1. Bernheim will accept securities that are publicly traded on recognized exchanges.
2. The date of the gift is the date Bernheim gains control of the securities. If the donor hand-delivers the securities by physical delivery of certificates properly endorsed by the donor representing the ownership interest in the securities, the date of receipt is the date Bernheim receives such certificates. If the donor mails such certificates, the postmark date is the date of the gift. If the securities are transferred electronically by the donor (or the donor’s stockbroker), the date of the gift is the date the securities are placed in Bernheim’s account.
3. The donor will not retain the voting rights over the gifted securities.
4. It is the donor’s sole responsibility to determine the value of the gift for tax purposes. However, Bernheim will provide the high, low, and average market price on the date of the gift.
5. Bernheim’s policy is to sell all gifts of securities immediately upon receipt.
D. Closely-Held Securities:
A “closely-held security” refers to stock or other ownership interest in a company that is not publicly traded on a recognized exchange:
1. Closely held securities, such as interests in corporations, limited partnerships, limited liability partnerships, and limited liability companies, may be accepted by Bernheim only after approval of the Finance and/or Executive Committee. Given the highly complex nature of these gifts, a donor must allow sufficient time for Bernheim to obtain competent legal and tax advice before a final determination on gift acceptance is made.
2. Before accepting a closely-held security, the Finance and/or Executive Committee may inquire as to the nature of the business, the underlying assets in the business, and any other information as may be relevant for determining whether to accept the gift.
3. Gifts of general partnership interests are not encouraged due to potential liability and the responsibilities associated with being a general partner.
4. Bernheim will not guarantee or pre-arrange a sale or make any other agreement that might imply or cause a material restriction to be imposed upon the contribution of the closely held security. As a general rule, Bernheim will immediately sell gifts of closely held securities. Bernheim will report to the IRS the actual sale proceeds of closely held securities that are sold within two years of the date of the gift.
5. It is the donor’s sole responsibility to determine the value of the closely held security for tax purposes. An independent expert appraisal can usually establish this value for the donor. A qualified appraisal complying with IRS regulations is required when the value of the assets exceeds $5,000. The donor should submit a copy of such appraisal to Bernheim together with the closely held securities being donated.
6. The date of the gift shall be determined pursuant to Section IV. C. 2 above.
E. Real Property:
Gifts of real property may be given outright or as an undivided partial interest in the real property.
1. No gift of real property will be accepted without prior approval of the Finance and/or Executive Committee.
2. No gift of real property will be accepted without first having a qualified appraisal conducted by a party chosen by or acceptable to Bernheim who will have no business or other relationship with the donor. The donor and Bernheim will determine payment for the appraisal.
3. Before accepting a gift of real property, Bernheim and the donor must agree in writing on arrangements for paying expenses associated with the real property, such as establishing title, commissions, taxes and assessments, appraisal fees, environmental evaluations and assessments, insurance coverage, and maintenance costs. Bernheim may choose to pay some or all of these expenses, based on the anticipated net benefit to Bernheim. Real property that is encumbered by a trust, deed, loan, lien, or mortgage will be accepted only in exceptional circumstances.
4. Bernheim will not accept gifts of real property with a value under $50,000 unless otherwise determined by the Executive Committee.
5. Generally, real property that is received by gift will be sold as soon as possible. Except under extraordinary circumstances, real property will only be accepted if there is a reasonable certainty that it will be sold within one year.
6. In order to avoid potential liability for environmental cleanup and toxic and hazardous waste issues relating to real property, in most situations Bernheim will require a Phase One Environmental Assessment of all proposed gifts of real property and interests in closely-held businesses that own real property prior to accepting the gift. For any real property identified as having potential environmental hazards, certain findings may necessitate a Phase Two Environmental Assessment or additional environmental review of the property.
7. The date of the gift is when the donor delivers to Bernheim (or its agent) a properly executed deed to the real property or, if no delivery occurs, the date the deed is properly recorded.
8. As a general rule, Bernheim will sell gifts of real property immediately. Bernheim will report to the IRS the actual sale proceeds of real property that is sold within two years of the date of the gift.
F. Tangible Personal Property:
“Tangible Personal Property” includes gifts of personal property, such as art objects, jewelry, furs, automobiles, etc. Bernheim classifies gifts of tangible personal property in two categories: property Bernheim intends to keep as a permanent addition to its assets and collections, and property it intends to sell to convert to cash for use towards its mission.
1. Gifts of tangible personal property such as art; rock, fossil, plant, artifact, or other collection; or any other tangible property intended by the donor as a permanent addition to Bernheim’s assets must be approved by the appropriate Bernheim advisory committee (Art, Education, Horticulture, Natural Areas, etc.) and by Bernheim’s Executive Committee. Donors must allow sufficient time for committees to review and obtain any outside advice needed before a final determination on gift acceptance is made. Gifts of tangible personal property intended for resale by Bernheim will be accepted upon approval of the Executive Committee.
2. It is the sole responsibility of the donor to value the gift. IRS regulations require that gifts of tangible personal property be accompanied by a qualified appraisal if such property value exceeds $5,000.
3. An appraisal may not be required for gifts in kind, such as new equipment that can be used by Bernheim, if the donor is other than an individual. For such gifts in kind, the fair market value may be determined at the time the gift is transferred. For gifts-in-kind exceeding $5,000, Bernheim must complete the donee acknowledgment portion of any IRS form presented to Bernheim by the donor. The Executive Director is authorized to sign such forms on behalf of Bernheim. If Bernheim disposes of such gifts within two years of receipt, Bernheim will notify the IRS.
4. In general, Bernheim will not accept gifts of tangible personal property unless it is an approved addition to collections or assets as defined in Section IV. F. 1 above or there is reason to believe the property can be disposed of quickly or used in the operations of Bernheim. No personal property will be accepted that obligates Bernheim to ownership of it in perpetuity.
5. The date of the gift is when Bernheim receives dominion and control over the personal property.
G. Miscellaneous Property:
Other property of any description — including mortgages, promissory notes, copyrights, royalties, and easements — whether real or personal, will only be accepted by approval of the Executive Committee.
IV. DEFERRED GIFTS
A deferred gift primarily deals with gifts of substantial assets, as opposed to gifts from one’s income. The majority of gifts in this area come when the donor no longer has any use for the assets, which typically occurs at his or her death. Most deferred gifts are made in one’s Will or other estate planning documents. The term “deferred gift,” however, also includes lifetime gifts of property, such as stock, real estate and life insurance. In addition, it encompasses contributions where the donor receives income back from gift vehicles, such as annuities or various charitable trusts.
A donor may make a gift to Bernheim through a bequest in his or her Will.
1. Where possible, intended bequests of property other than cash or marketable securities should be brought to the attention of the staff or Planned Giving Advisory Committee. The purpose is to encourage the prospective donor to conform their estate plans to Bernheim’s gift acceptance policies.
2. Gifts from the estates of deceased donors consisting of property which is not acceptable to Bernheim may be rejected only by an action of the Executive Committee or Board of Trustees.
B. Charitable Remainder Trusts:
A donor may make a gift to Bernheim through a charitable remainder trust.
1. Charitable Remainder Unitrust (“CRUT”): A CRUT is created when a donor during his/her lifetime irrevocably transfers money, securities, real estate and/or other assets to a trustee who pays the income to one or two beneficiaries for life or for a fixed term of years. The donor receives payments based on a fixed percentage of the fair market value of the trust assets valued each year.
2. Charitable Remainder Annuity Trust (“CRAT”): A CRAT is created when a donor during his/her lifetime irrevocably transfers money, securities, real estate, and/or other assets to a Trustee who pays the named beneficiary(ies) for life (or a fixed term of years) a fixed dollar amount annually. The trust can also provide income for the donor’s survivor (a spouse) for life or for the lifetime of others.
In either trust, at the death of the last income beneficiary the trust assets become the sole property of the charitable beneficiary. The donor determines at the outset the annual fixed or percentage dollar amount he or she wishes to receive. The amount must be at least 5%, but no more than 50%, of the initial fair market value of the assets to create the trust.
Donors get an income tax charitable deduction on their income tax return in the year they create the unitrust or the annuity trust. The amount of the deduction is determined by taking into consideration the length of the trust, the fixed percentage and other factors. The income received by the donor each year is often taxed as ordinary income or capital gain income or can even be tax-free income.
C. Charitable Lead Trusts:
A donor may make a gift to Bernheim through a Charitable Lead Trust.
1. Non-Grantor Lead Trust Description: Donors may make a gift to Bernheim in trust and provide that the trustee will pay income to Bernheim for a fixed period of years. The donor can further provide that at the end of the period of years the trustee will transfer the property to children, grandchildren, or other specified non-charitable beneficiaries. These gifts produce gift and estate tax savings, and thus provide a way to make a gift and also preserve assets for the donor’s family and other heirs.
2. Grantor Lead Trusts Description: Donors may make a gift to Bernheim in trust and provide that the trustee shall pay income to Bernheim for a fixed term of years and further provide that the property will return to the donor at the end of the fixed term of years. These gifts provide a way to make future gifts, and receive a generous income tax deduction, and also receive the gift back.
D. Charitable Trust Policies:
1. Bernheim will not serve as trustee or co-trustee of a charitable trust.
2. No person representing Bernheim will render an opinion to a donor or prospective donor on whether a trust qualifies as a charitable trust under the Internal Revenue Code, or on any other tax matters relating to the trust.
E. Gift Annuities:
A gift annuity is a contractual agreement whereby the donor donates property, cash or securities to Bernheim and Bernheim agrees to pay the donor and/or their designee an income for life. A gift annuity generates a charitable deduction that is determined by numerous factors, such as age, rate of return, etc.
1. No gift annuity will be accepted which names an income beneficiary under 55 years of age without prior approval of the Executive Committee.
2. There will not be more than two income beneficiaries for each gift annuity.
3. The minimum initial contribution for a gift annuity will be $10,000.
Subsequent contributions from the same donor shall have a $1,000 minimum.
4. Rates for gift annuities will be those established by the American Council on Gift Annuities. The Executive Committee must approve any variation in payout rates.
F. Life Estate Gifts:
Donors can contribute a personal residence or farm to Bernheim and continue to occupy the property until death.
1. Donors will generally not be encouraged to make gifts of real property to Bernheim under which they maintain a life interest in the property, unless the property is an important addition to Bernheim’s lands.
2. The same guidelines discussed in Section IV. E. will apply to such gifts of real property.
3. The gift agreement will include responsibilities to be retained by the identified tenant(s). These generally include maintaining the premises, insuring the property against loss and liability, repairing the premises in the event of damage, and prohibiting any additional liens or encumbrances to be secured by the property without the permission of Bernheim or permitting any existing lien or encumbrance to increase.
4. The agreement will permit Bernheim access to the property for periodic inspection.
G. Gifts of Life Insurance:
1. Donors will be encouraged to name Bernheim as beneficiary to receive benefits of life insurance policies they have already purchased on their lives.
2. In order to contribute an insurance policy on the life of the donor, the donor must irrevocably transfer the ownership of the policy to Bernheim and must name Bernheim as the sole beneficiary of the policy.
3. Bernheim does not endorse any specific insurance products from any one insurance company for use in funding gifts to Bernheim.
4. Gifts of life insurance products must be reviewed and accepted by the Executive Committee.
H. Gifts of retirement plan assets
1. Donors will be encouraged to name Bernheim as beneficiary to receive full or partial assets of retirement plans.
V. AUTHORIZATION POLICIES
A. The Board of Trustees has final authority to authorize acceptance of any gift to Bernheim. The Executive Committee may act on behalf of the Board if needed to meet time constraints.
B. The Development and/or Finance Committee may review proposed gifts when