For Component Funds and Donor-Advised Funds
(Not Fiscal Sponsorship)
Thank you for your interest in raising money for a component fund* or donor-advised fund** within the Brookline Community Foundation (BCF). BCF establishes and maintains funds dedicated to organizations and programs of benefit to the town of Brookline.
BCF wants to assist such charitable efforts, when possible. Because a number of significant tax, accounting and other issues will arise, this Policy has been developed to protect donors, fundraising groups and BCF. It is important to understand and abide by the information presented in this Policy.
BCF reserves the right to amend, revise or change this Policy at any time or from time to time without notice.
Please note that there are different processes based on whether a fundraising group wants those who give a gift to support a fund to receive an acknowledgement or not. Please see:
- Section A. Donations (with no BCF Acknowledgement)
- Section B. Tax deduction
Section A. Donations (with no BCF Acknowledgement):
Some fundraising groups raise funds without giving individual contributors an acknowledgement for his/her gift. In most cases, the net income from a fundraiser is presented in a lump sum to BCF for deposit in a specific component fund. As noted, in such cases, individual contributors are not provided with an acknowledgment.
Any fundraising group that will NOT offer an acknowledgement to donors is asked to notify BCF at least 45 days prior to each event or effort so that BCF is aware of such efforts in case of inquiries by others. BCF:
- Will accept the net proceeds from the fundraising activity, event, effort or solicitation.
- Will not acknowledge individual contributors.
- Will generally not allow BCF's identity and/or logo to be used in promotion, publicity or other aspects of the fundraising effort.
- May allow, upon review of fundraising materials and with BCF's permission, the fundraising group to state in its fundraising materials that "The net proceeds of this event will be contributed to the XYZ Fund of the Brookline Community Foundation."
Section B. Tax Deduction:
Some fundraising groups may want to use BCF's tax-exempt status to offer contributors a charitable deduction for their support. They must keep in mind that for tax purposes, such fundraising is being done on behalf of, not by, the Brookline Community Foundation.
It is important that these activities be conducted under the observation and fiscal guidance of the Brookline Community Foundation to:
- ensure that fundraising groups comply with IRS and other governmental regulations so that donors to the fund are entitled to the appropriate tax deductions;
- protect donors, fundraising groups and BCF from unintended tax consequences and penalties to themselves;
- determine that BCF is not exposed to penalties for failing to make proper solicitation disclosures;
- ensure that BCF oversees any and all required filings; and
- ensure the proper portrayal of BCF to external audiences.
Foundation Approval of Fundraising Events or Efforts
Fundraising events or efforts, including the printing of materials, must be approved prior to the Community Foundation's receipt of contributions to a fund. Any fundraising group that wants to offer a charitable tax deduction to donors through BCF must submit the attached fundraising Application Form for approval at least 45 days prior to each event or effort. BCF will inform all applicants of acceptance or rejection of the application within 10 business days.
BCF allows and encourages promoting an existing fund through various forms of marketing including, but not limited to, brochures, posters, information sessions or a request of donations through an appeal letter to friends and associates. In general, the BCF staff is not able to provide assistance in the production of these materials, nor can BCF handle on-going administration of websites or pay for materials or postage.
If a fundraising group wants to use a for-profit fundraiser to solicit funds for a component fund of BCF, the group must first contact the executive director to discuss because the contract for the pro-profit fundraiser must be between BCF and the fundraiser for the work involved. This is especially important because of legal requirements related to the hiring of for-profit fundraisers.
Community Foundation Identification
- Materials must be approved in advance by BCF.
- If requested, an electronic logo will be provided for use on approved materials.
- All materials must clearly state "XYZ Fund of the Brookline Community Foundation"
- All fundraising materials must clearly state that funds are being raised on behalf of the component fund, not by, BCF.
Direct Gifts by Check, Cash, or Stocks
- In response to fundraising efforts, a donor may make a gift directly to the fund.
- Checks: The check should be made payable to the Brookline Community Foundation/(Name of Fund)or BCF/(Name of Fund).
- Cash: Cash donations may not be used to pay expenses such as prizes, food, etc., leaving the net cash amount for deposit in the fund.
- Stocks and Bonds: Gifts of stocks or bonds may also be made directly to BCF with indication of the fund to benefit. Please contact the BCF Executive Director for more information.
- All proceeds, checks and cash, must be delivered to BCF along with an accounting of all monies received within five business days following the fundraising event or effort.
- You are welcome to promote BCF's online giving platform as a convenient method for donors to give to a component fund. If you do so, please note in your solicitation materials that donors who choose to give this way should select the appropriate fund in the drop-down menu which can be found on the "Give Now" page. Donors will see the charges attributed to BCF on their credit card statements. All credit card transactions are charged merchant services fees per current policy and unless the donor opts to pay the charges, the fees will be deducted from the component fund's balance. BCF will send acknowledgement letters for these gifts. The correct website to put on your materials is: www.brooklinecommunity.org/give
Tax Requirements and Acknowledgments
The IRS has imposed strict requirements that impact any fundraising. If the steps outlined below are not taken, donors will be denied a tax deduction, and the fundraising group might find itself unexpectedly subjected to taxes on funds raised.
The IRS requires that donors who contribute $250 or more will need a written acknowledgment in order to claim a tax deduction for the contribution; please note that BCF's policy is to acknowledge all donors who contribute any amount. The Brookline Community Foundation will provide the appropriate acknowledgment to the donors but will require certain detailed information, provided by the fundraising group, in order to do so, such as:
- The donor's complete name and address;
- The date and the amount of the contribution;
- Whether the contribution was in cash or property;
- If property, a description of the type of property and a good faith estimate of the fair market value from the donor (please ask BCF for in-kind donation form); and
- A detailed description of any goods and services provided in exchange for the contribution.
Donors will receive a gift acknowledgement/receipt letter from BCF indicating the gift is tax deductible as permitted by law. BCF plans to issue acknowledgements within ten business days of receiving the gift, assuming all documentation related to the gift is received.
Special Considerations for Tax Deductibility
- Contributions of services, while appreciated, are not generally tax deductible.
- A donor must receive a receipt stating the value of goods or services of more than nominal value received in exchange for a donation of $75 or more. For example, if the group is sponsoring a dinner, the donor can only deduct the excess of the ticket price above the fair market value of the dinner.
- This limitation on the deduction, known as a "quid pro quo disclosure," must be disclosed at the time of the solicitation. Disclosure on the ticket to the event is a typical method for making this disclosure.
- Prior to the solicitation activity, the fundraising group must work with the Brookline Community Foundation to provide information pertaining to the event or effort such as the ticket prices and the value of the goods or services that donors are to receive in determining the fair market value amounts and the appropriate disclosure language for the event or effort.
The fundraising group must confirm that the required quid pro quo disclosures are made at the time of the solicitation.
Raffle Tickets are not tax deductible. This must be clearly stated on the face of the distributed ticket. Groups wishing to sell raffle tickets must check all local, state and federal laws pertaining to the selling of such tickets, and provide evidence of compliance including, but not limited to, applications for raffle permits and all required reporting to BCF.
Rummage or garage sale purchases are not tax deductible.
Auctions: The Community Foundation shall review, on a case-by-case basis, any proposed ideas for an auction. The Community Foundation is not responsible for valuing charitable deductions for items purchased at an auction or similar event.
Notification of Gifts to Fundraising Groups
BCF generally will report to Fund Advisors noted in the fund agreement the names of donors, unless anonymity is requested. Individual gift amounts are reported.
Solicitation and Promotional Materials
- BCF must approve, in advance, any use of its name and/or logo in advertising and promotional materials. At least five (5) working days must be allowed for review.
- If BCF's legal or financial advisors need to review materials, allow an additional five (5) working days.
- All fundraising materials must state, where applicable, that:
- Funds are being raised on behalf of, not by the Brookline Community Foundation for the (Name of Fund).
- The purpose of the fundraising effort must be clearly stated on all materials, ads, media releases, etc. and must adhere to and comply with the accounting guidelines and requirements in this document.
The fundraising group must also supply a final copy of all printed materials, scripts, videos, etc. that are used to publicize the fundraising effort to BCF's Development Department.
BCF and Fundraising Groups' Responsibilities
BCF will be responsible for:
- The management of such money and property as it may accept from donors, other contributors and sources;
- The application of income and principal to charitable uses, all in accord with the governing documents of BCF;
- Providing appropriate acknowledgments to donors in compliance with IRS guidelines and regulations.
Fundraising groups will retain responsibility for all public fundraising events or efforts and matters related to them including:
- Compliance with laws;
- Reporting and other requirements of every kind, such as licensing, tax payments, and liability insurance covering BCF;
- Payment of all costs and expenses (How expenses will be paid must be arranged and approved by BCF prior to the event or effort. Regardless of who pays for expenses, copies of invoices and receipts must be provided to BCF for its record keeping. Unauthorized expenditures will be the responsibility of the fundraising group.)
- Submission of a budget for approval to the Community Foundation prior to the fundraising effort;
- Approval by BCF of deviations from the approved budget of more than 10% in each line item;
- Provision to BCF of the names of one or two people who will authorize expenditures for the fundraising effort;
- Maintenance of appropriate financial controls and records related to fundraising efforts.
Liability Insurance and Liability for Losses
- The fundraising group must contact the Community Foundation prior to having a fundraising event or effort to assess the need to secure liability insurance for the group and for the Community Foundation. Insurance coverage must be reviewed and approved by the Community Foundation. Fundraising groups may be required to purchase additional insurance.
- The fundraising group will be responsible for all losses incurred by events. The Community Foundation will not be held responsible for such losses. The Community Foundation may require the fundraising group to purchase a letter of credit or provide a written personal guarantee.
- Alcohol: The Brookline Community Foundation will not be responsible for the sale of alcoholic beverages. The fundraising group may have to purchase single event dram shop insurance.
Certificate of Solicitation
The Brookline Community Foundation has a certificate of solicitation that is issued by the Office of the Attorney General of the Commonwealth of Massachusetts. A copy is available from BCF at the fundraising group's request.
The undersigned acknowledges receipt of the Brookline Community Foundation's Donor-Initiated Fundraising Policy and further agrees to adhere to the terms of said policy in conducting fundraising activities.
Fundraising Group/Organization Name
Received by the Brookline Community Foundation
Fundraising Application & Budget
Must be submitted at least 45 days prior to a proposed event or effort to obtain approval to offer a charitable tax deduction through the Brookline Community Foundation for public fundraising done on behalf of the Brookline Community Foundation.
- Name of Fund that will benefit from proposed fundraising effort _______________________________
- Date of Fundraising Effort: ___________________________________
- Location for Fundraising Effort: _______________________________
- Description of Fundraising Effort (Activities, number of participants expected, etc.)
- Responsible Parties (Group or Individuals who will conduct fundraising event or effort).
- Contact person (This person will serve as the main source of communication between BCF and the fundraising group.)
Individual(s) who will authorize expenditures. (No more than two individuals.)
Gross Amount expected to be raised: ___________
Amount expected for fundraising expenses: __________
Net proceeds expected: ___________
Submit an estimated budget
(expenses/revenues) for the fundraising effort. See attachment as an example. NOTE: Unauthorized expenditures will be the responsibility of the fundraising group.
Personal or Business Benefit
Do any of the above named individuals expect to gain monetarily from the event or effort? If so, explain.
Do any of these persons have connections to a business that will benefit from the proposed event or effort? If so, explain.
Fundraising Group/Organization Name
Name of Contact (Printed)
Signature of Contact
Name of Authorized Expenses Contact
1st Signer (Printed)
Signature of Contact
Name of Authorized Expenses Contact
2nd Signer (Printed)
Signature of Contact
Please submit this form and all attachments to:
Jenny Amory, Executive Director via email at firstname.lastname@example.org
OFFICE USE ONLY
__________ Policy and application provided to fundraising group
__________ Date Application & Budget received
Approved/Denied on __________ (Date) by Community Foundation
Fundraising group has supplied:
__________ Proof of Licensing*
__________ Proof of Liability Insurance covering Community Foundation
__________ Proof of Dram Shop Insurance (If alcohol to be served.)
__________ Other: ___________________
*Fundraising group is responsible for in-kind or service donations made to its fundraising effort as either a gift or to be used to solicit cash donations. The fundraising group will ensure that all such donations will have proper documentation, which includes, but is not limited to, contracts, licensing, permits and/or insurance.
Sample Estimated Budget
Total Estimated Gross Revenue
Please show how you arrived at this amount. For example:
100 dinners @ $100
5 sponsors @ $1,000
Total Estimated Expenses
Please provide cost of items and vendor. For example:
100 dinners @ $35 (The Restaurant)
Brochure Printing (Copy Place)
Advertising (The Ad Place)
Door Prizes (Donated)
5 Awards (Award Place)
FUNDRAISING GOAL: $10,424
(Revenue minus Expenses)
*A component fund is an individual fund considered by the Internal Revenue Service to be part of the exempt assets of a foundation. The foundation's governing body, the Board of Trustees, must have total control over all assets of a component fund. (Council on Foundations Community Foundation Handbook: What You Need to Know, 2006)
**A donor-advised fund is a fund held by a community foundation where the donor, or person or committee appointed by the donor, may recommend eligible charitable recipients for grants from the fund. The community foundation's governing body must be free to accept or reject the recommendations. (Council on Foundations Community Foundation Handbook: What You Need to Know, 2006)