Planned gifts, also called legacy gifts or deferred gifts, is an agreement to give a donation at a later date and come in all shapes and sizes. Nonprofit organization can choose to offer simple planned giving vehicles such as outright gifts: bequests, gifts of stock, etc. to more structured giving vehicles such as Split-interest Agreements.
Nonprofit organizations should establish accounting records and control procedures adequate to identify, measure, record, and segregate the cash, investments, and other assets received under split-interest agreements and the obligations, if any, for payments to beneficiaries.
Generally, management and the board will be involved in authorizing all split-interest agreements. Control procedures are necessary to ensure that the organization receives and records all distributions to which it is entitled under those agreements. If the assets in the split-interest agreement are held by a third-party trustee, procedures for reviewing account statements and other periodic reports will help ensure the trustee is complying with the terms of the agreement.
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The accounting records and procedures also need to be adequate to facilitate monitoring of compliance with the terms of the split-interest agreement, related restrictions (including, possibly, restrictions or regulations by local governmental agencies relating to annuity arrangements), and the termination of payments. Procedures need to be in place so that management is notified timely of the death of a beneficiary that is receiving payments from the organization under a split-interest agreement.
The donor relations or fund-raising personnel typically would be among the first in the organization to know about such an occurrence. Separate registers and files may be maintained for each gift to record the related assets, liabilities, and activity and to maintain copies of the gift agreements, correspondence with donors and beneficiaries, etc.
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