Gift Programs come by many names, and are sometimes used by unconscionable individuals to build complex and illegal pyramid schemes (often also called gifting programs). But gift programs are legitimate and can be a very good way to raise a continuous funding base for your organization. Gifting programs also fulfill the philanthropic desires of the donors by providing them a worthwhile and legal outlet for donating their hard earned money.
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What Is A Gift Program?
Gift in itself is very basic. Gifting consists of a donor donating a gift of some kind, usually financial, to an organization in need. In its simplest form, gifting is a simple cash transaction. Some people also consider in-kind gifts of goods as falling under the definition of a gifting program.
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Why Would Donors Want To Give To Your Gift Program?
Donors have many reasons for generously giving to organizations through gifting programs. Many do so purely for philanthropic reasons – they want to help those less fortunate, those in need, or give back to those who helped them get where they are today.
But there are other motivations for donors to give gifts through a qualified gifting program. Great tax advantages can be enjoyed when donations fit state and federal gifting guidelines. Private individuals are allowed to donate up to $10,000 to an organization or individual tax free. Also, donors can reduce the size of their estate, and thus their tax burden, by donating to gifting programs. Many people would simply prefer to give their money away to a worthwhile cause and know where they are doing good than to pay into a tax base and have no control over their contribution.
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Where Should I Start To Organize A Gift Program?
To begin, you’ll need the help of very knowledgeable and qualified professionals such as a lawyer and an accountant. They will help you file for appropriate non-profit designations and set up accounts into which donations can be received. They can also help you plan long-term for expenditures made with gifted donations.
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What Are Some Basics I Can Expect To Undertake To Organize a Gift Program?
To protect yourself, your organization, your donors, and your gifted funds, you can expect that you might need to file federally for non-profit status (this may not be necessary, but may to avoid losing funds to taxes for both you and your donors). You can also expect that you will need to set up appropriate bank accounts and investments to keep and grow the gift(s). Expect that your organization will have a need for excellent accounting, and plan ahead accordingly.
Once you have set up your gift program, you cannot expect to receive gifts if people do not know about your program. Write a donation request letter and contact prospective donors. Get the word out and get the funds flowing!