What policies are needed in a development department?

Summary:

Policies are needed to provide guidance to staff and backbone for the organization when dealing with (usually very welcome) donations.

Answer:

Michael L. Wyland of Sumption & Wyland, in Sioux Falls (http://www.sumptionandwyland.com) wrote on June 8, 2006, to ask:
An existing nonprofit organization, primarily funded through Federal
grants, has decided to formalize a heretofore *very* informal
development function. I was asked what policies they should adopt as
part of this process.

He offered a start to the answer to his own question:
My off-the-top-of-my-head response was:

1. verify integrity of current fiscal and audit processes;
   
2. design development plan;
   
3. design gift acceptance policies; and
   
4. design investment policies.
   

Obviously, there's a lot of detail included under each of these
categories.

Renata J. Rafferty, author of "Don't Just Give It Away: How To Make the Most of Your Charitable Giving" (http://www.raffertyconsulting.com) suggested adding:

5. donor recognition policies;
   
6. policy on acceptance of in-kind gifts (e.g. if someone tries to donate a moosehead, there should be a policy giving the board the option to reject the gift);
   
7. policy on handling gifts of stock (this may or may not be covered in the
   investment policy, e.g. must gifts of stock be sold within a certain
   timeframe after receiving the gift);
   
8. policy on conditions placed by major donors (e.g. want board seat in exchange for gift)
   

Putnam Barber added:
The policy on in-kind gifts needs to help staff deal with the quite complicated IRS rules about valuing and reporting gifts of automobiles, patent rights, conservations easements, works of art, and other tangible but difficult to "price" goods.

Many organizations struggle to align their gift policies with their membership programs, especially when the organization uses the term "member" to identify and give recognition to small donors. There need to be clear rules about when someone who makes a larger gift is automatically (also) considered a member. Some people may want to be; others may not. And there need to be policies about how to approach people who are already enrolled as members and are also good prospects for major gifts. Sometimes the lack of policies setting these and similar boundaries leads to damaging stress within the staff or between two departments. (There's more about this topic in the Nonprofit FAQ at http://www.idealist.org/npofaq/19/48.html.)

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Posted 6/8/06 -- PB