Washington County Community Foundation Policy and Procedure on Fundraising by Donor Groups
The primary responsibility of the development staff of the Washington County Community Foundation is to raise endowment through the acquisition of major and planned gifts. The Foundation is not staffed to operate public fundraising events for its component funds. However, we recognize that occasionally groups wish to increase the visibility and monetary value of a particular fund at the WCCF by undertaking some form of marketing or fundraising activity to benefit that particular fund.
Legal precedent has made it clear that community foundations are fully responsible for all donor-initiated fundraising undertaken on its behalf. This Policy on Fundraising by Donor Fundraising Groups has been approved by the Foundation Board of Trustees to clarify the types of fundraising activities donor fundraising groups may utilize to raise money for component funds of the WCCF and to define the process donor fundraising groups are required to follow to have appropriate fundraising activities pre-approved by the WCCF.
This policy is necessary to ensure that the Foundation and its component funds meet all applicable laws and regulations regarding fundraising activities and to guard against having multiple donor fundraising groups undertaking activities which solicit support from the same or similar target group of contributors in the same or similar time period.
Guidelines for Marketing Activities
- Required disclosures: All marketing material shall include the following statement: “The official registration and financial information of Washington County Community Foundation, Inc. may be obtained from the Pennsylvania Department of State by calling toll-free, within Pennsylvania, 1-800-732-0999. Registration does not imply endorsement, approval or recommendation by the state.”; All marketing material, except that for donor-advised funds, must state “The (insert name of fund) is a component fund of the Washington County Community Foundation, Inc.”; All marketing material for donor-advised funds must state that the “The (insert name of fund) is a donor-advised component fund of the Washington County Community Foundation, Inc. and the Foundation has exclusive legal control over the contributed assets.”
- Instructions to Potential Contributors: Potential contributors shall be instructed to make all checks payable to the “WCCF” and shall be instructed to forward checks directly to the Foundation. To ensure credit to the proper fund, contributors should be instructed to include the name of the component fund on the memo line of the check. Contributors wishing to contribute other types of assets, such as securities, life insurance or physical assets, should be instructed to contact the Foundation directly.
- Acknowledgement and Reporting: The Foundation shall provide a contemporaneous written acknowledgement to all contributors making contributions in response to such marketing activities and the Foundation shall also provide a list of contributors to the donor fundraising group. The contributor list shall provide the total amount of the contributions received but shall not detail specific amounts for individual contributors unless prior permission has been granted by the contributor.
- Professional Services: The WCCF may, from time to time and at its sole discretion, choose to assist donor fundraising groups in the design, production, or distribution of marketing materials. Any out-of-pocket expenses incurred by the WCCF to design, produce, or distribute marketing materials shall be covered by the fundraising group.
Donor Fundraising Groups are not permitted to engage the services of any paid outside professional or outside professional firm to design, produce, or distribute marketing materials. Fundraising groups may consult with such professionals or professional firms provided that any and all consultation services are performed gratis, in which case the WCCF may choose, at its sole discretion, to acknowledge such professional or firm as an in-kind contributor to the Foundation.
- Limitations: No marketing materials for any component fund of the WCCF are permitted to be sent out of state, as the WCCF is only registered to solicit contributions in Pennsylvania.
- Approval Process: Prior to the production of any marketing materials, donor fundraising groups are required to submit to the Foundation in writing: An overview of the project; A draft of the marketing material(s) which the group would like to distribute; Budget detailing projected revenues and expenses; A description of the target audience; A projected time-frame for the marketing effort; A schedule listing any requested services by the Foundation
Guidelines for Solicitation Letters
- Required disclosures: All solicitation letters shall include the following statement: “The official registration and financial information of Washington County Community Foundation, Inc. may be obtained from the Pennsylvania Department of State by calling toll-free, within Pennsylvania, 1-800-732-0999. Registration does not imply endorsement, approval or recommendation by the state.”; All solicitation letters, except that for donor-advised funds, must state “The (insert name of fund) is a component fund of the Washington County Community Foundation, Inc.” ; All solicitation letters for donor-advised funds must state that the “The (insert name of fund) is a donor-advised component fund of the Washington County Community Foundation, Inc. and the Foundation has exclusive legal control over the contributed assets.”
- Instructions to Potential Contributors: Potential contributors shall be instructed to make all checks payable to the “WCCF” and shall be instructed to forward checks directly to the Foundation. To ensure credit to the proper fund, contributors should be instructed to include the name of the component fund on the memo line of the check. Contributors wishing to contribute other types of gifts, such as securities, life insurance or physical assets, should be instructed to contact the Foundation directly.
- Acknowledgement and Reporting: The Foundation shall provide a contemporaneous written acknowledgement to all contributors making contributions in response to solicitation letters and the Foundation shall also provide a list of contributors to the donor fundraising group. The contributor list shall provide the total amount of the contributions received but shall not detail specific amounts for individual contributors unless prior permission has been granted by the contributor.
- Limitations: No marketing materials for any component fund of the WCCF are permitted to be sent out of state, as the WCCF is only registered to solicit contributions in Pennsylvania.
- Professional Services: The WCCF may, from time to time and at its sole discretion, choose to assist donor fundraising groups in the design, production, or distribution of solicitation letters. Any out-of-pocket expenses incurred by the WCCF to design, produce, or distribute solicitation letters shall be covered by the donor fundraising group.
Donor fundraising groups are not permitted to engage the services of any paid outside professional or outside professional firm to design, produce, or distribute solicitation letters. Donor fundraising groups may consult with such professionals or professional firms provided that any and all consultation services are performed gratis, in which case the Foundation may choose, at its sole discretion, to acknowledge such professional or firm as an in-kind contributor to the Foundation.
- Approval Process: Prior to the production of any solicitation letters, donor fundraising groups are required to submit in writing: An overview of the project; A draft of the solicitation letter which the group would like to distribute; A budget detailing projected revenues and expenses; A list of the individuals and businesses to receive the solicitation letter; A projected time-frame in which the letter will be distributed; A schedule listing any requested services by the Foundation.
The Foundation will review all requests promptly and will provide a written response indicating approval or denial to the donor fundraising group within 30 days of receipt of the request. Reasons for denial include but are not limited to: The solicitation letter is not compliant with this policy; The solicitation letter would conflict with other solicitation activities of the Foundation being conducted during the same or similar time period; The solicitation letter would conflict with other solicitation activities of the Foundation seeking support from the same individuals or businesses.
Guidelines for Fundraising Events for Component Funds other than Donor Advised
Events such as golf tournaments, auctions or dinners may be held by donor fundraising groups to benefit component funds (with the exception of donor advised funds) provided that the fundraising event is in compliance with this policy, is in compliance with all governmental rules and regulations, and that the event has been pre-approved by the WCCF.
- Required disclosure: Any donor fundraising group that plans and executes a fundraising event to support a component fund of the Foundation must state in all written and verbal communications that “the net proceeds of the event (or portion of the net proceeds if a collaborative fundraising event) will be deposited into the (insert name of fund), a component fund of the Washington County Community Foundation, Inc.”
- Federal and State Tax Exemption: The donor fundraising group may not use the Foundation’s Federal tax exempt number in connection with the event. Contributions made as a result of an event will not qualify as a tax deductible charitable gift to the Foundation. The donor fundraising group may, at the discretion of the Foundation, utilize the Foundation’s Pennsylvania Sales Tax Exemption to purchase goods or services related to the event.
- Insurances and Licenses: The donor fundraising group is responsible for obtaining and paying for any necessary insurance, permits, licenses, etc. Neither the name of the Foundation nor the name of the component fund may appear on any contract or agreement and the donor fundraising group may not sign any contracts obligating the Washington County Community Foundation. Raffles and other games of chance are regulated by the state and local government and must be specifically reviewed and authorized by the appropriate branch of government. The Foundation maintains a small games of chance license which may, at the Foundation’s discretion, be utilized for pre-approved auctions, raffles or other small games of chance undertaken by a donor fundraising group. There is no charitable deduction for items purchased below fair market value at auctions nor is there a charitable deduction for raffle tickets.
- Receipt of Revenues: Individuals participating in the event, including ticket purchasers, sponsors, golf players, etc., shall make their payments to the donor fundraising group. Event payments are not to be made to the Washington County Community Foundation or to the component fund. The donor fundraising group may record the contributors’ name and address and may provide a courtesy acknowledgement. The acknowledgement letter must not include any language stating that the letter serves as an official receipt for IRS purposes nor include any reference to tax deductibility, nor to the contribution being made to the WCCF or to the component Fund.
- Payment of Expenses: The donor fundraising group is responsible for paying all expenses related to the event. Within 90 days of the event, the donor fundraising group is required to send the net proceeds of the fundraiser to the Foundation for addition to the Fund. The Foundation shall provide a receipt to the donor fundraising group and record the gift as coming from the proceeds of the event. If the fundraising event results in a net loss, the donor fundraising group is solely responsible for paying any and all unpaid expenses incurred for the event. Neither the Foundation nor the component fund shall be responsible for any losses incurred.
- Approval Process: Prior to incurring any expenses for an event, donor fundraising groups are required to submit in writing: An overview of the project; Budget detailing projected revenues and expenses; A list of the individuals and businesses that will be solicited to attend or contribute; A projected time-frame in which the event will be held; A schedule listing any requested services by the Foundation
The Foundation will review all requests promptly and will provide a written response indicating approval or denial to the donor fundraising group within 30 days of receipt of the request. Reasons for denial include but are not limited to: The fundraising event is not compliant with this policy; The fundraising event would conflict with other solicitation activities of the Foundation being conducted during the same or similar time period; The fundraising event would conflict with other solicitation activities of the Foundation seeking support from the same individuals or businesses; The budget for the fundraising event is unreasonable.
Special Limitations for Donor Advised Funds:
The Pension Protection Act of 2006 added new section 4966 to the Internal Revenue Code. The new provision imposes severe penalties on the sponsoring charity and fund managers if certain distributions are made out of a donor advised fund. Under this new provision, donor-advised funds are prohibited from making distributions to non-charitable entities, including payments to vendors for goods or services or reimbursements to individuals for goods or services, whether or not such payments or reimbursements are in conjunction with a fundraising event. To be compliant with this new law, the Foundation must and does prohibit donor fundraising groups for donor advised funds of the WCCF from organizing any type of fundraising event, including but not limited to golf tournaments, auctions or dinners. Donor fundraising groups may not use the name of the component fund or the name of the Foundation itself in conjunction with any fundraising event. Further, the Foundation will not accept the net proceeds of fundraising events hosted by donor fundraising groups in which the name of the component fund or the name of the Foundation was or was not used.
Other
The Foundation may, from time to time and at its sole discretion, choose to host a fundraising event to create a new fund at the Foundation or to augment an existing one. Also, the Foundation may, from time to time, organize fundraising events or activities which will permit component funds to participate.
Date of Adoption: October 28, 2008