Contributions will be accepted only if they support the Arts Council’s mission to foster the arts in Howard County.
Anonymous Gifts
The Executive Director is authorized to accept anonymous gifts, as long as no other restrictions are attached. If the Executive Director is uncertain about the desirability of accepting an anonymous gift, he/she shall consult with the Board of Directors. The Executive Director shall disclose to the Board of Directors, upon a request, the names of any anonymous donors.
Restricted Gifts
As stated in the Arts Council’s by-laws, “restricted gifts or donations the acceptance of which would commit HCAC or its funds to any special or restricted purpose shall be accepted only by or as approved by the board of directors.” The Executive Director is authorized to accept restricted gifts currently in place or for existing HCAC programs’ and fundraising campaigns, however, gifts with additional “strings attached” (e.g. a contribution is contingent upon the donor receiving a position on the Board of Directors or a contribution is contingent upon a “naming” right, etc.) need to be vetted and approved by the ’ Board.
Donor-designated restrictions on contributions accepted by HCAC shall be honored or renegotiated, unless a larger legal issue is related.
In-kind Gifts
An in-kind contribution is a contribution of goods or services that can be used to advance the mission of HCAC or can be readily converted to cash. Unsolicited contributions of in-kind goods or services shall be approved by HCAC management or the appropriate committee.
To qualify as an in-kind contribution, the contribution must be given to HCAC without charge or consideration.
Note 1: The value of a person’s or organization’s time or service is not considered a charitable contribution by the IRS. However, a donor of services may be able to deduct expenses incurred while performing said services. In such cases, the donor should be advised to consult with a tax accountant.
Note 2: Although contributed services cannot qualify as a charitable contribution, HCAC keeps track of contributed service hours because they constitute a significant part of HCAC’s ability to accomplish its mission, vision and goals for each year.
For HCAC to accept an in-kind contribution, the donor must provide a written description or estimate of the item or complete an HCAC In-Kind Contribution form. HCAC’s Board and staff cannot offer tax advice or dictate the value of the contribution. It is the responsibility of the donor to determine the value of a contributed item and to consult with a tax accountant to determine whether any portion of the contribution is tax deductible. Any value assigned to the contribution by the donor will be used internally by HCAC for tracking purposes only.
All paperwork associated with the contribution will be turned over to Development office for processing and acknowledgment. HCAC will issue an acknowledgment to the donor along with a copy of the provided written estimate or HCAC In-Kind Contribution form. The acknowledgment will contain only a description of the contribution and will not include a statement as to the value of the contribution. It will further contain a statement as to what, if any, goods or services were given in exchange for the contribution. HoCo Arts cannot send out an acknowledgment for contributions that cannot be used or readily converted to cash. (An example would be a contribution of broken or outdated equipment.)
For in-kind contributions with values exceeding $5,000, the donor must:
1) complete all parts of IRS Form 8282 and/or 8283 and submit the forms to the Executive Director for signature. [If HCAC has signed IRS Form 8283 and then sells, exchanges, or otherwise transfers the contribution within two years from the date of the contribution, HCAC must file IRS Form 8282, within 125 days of disposing of the property. HCAC will advise the donor if such a transaction occurs.]
2) obtain a certified appraisal. The appraisal cannot be dated more than 60 days from the date of the contribution. It must be prepared, signed, and dated by a qualified appraiser. The donor must pay for the appraisal; the donor should be advised to consult with a tax accountant to determine whether the cost of the appraisal is tax-deductible.
What constitutes a qualified appraisal:
The appraiser must hold her/himself out to the public as an appraiser and state credentials showing that s/he is qualified to appraise the type of property being valued.
The appraiser must value the property no more than 60 days before the date of the contribution.
The appraiser cannot be (1) the donor, (2) HCAC, (3) any party to the transaction, or (4) an appraiser used regularly by (1), (2), or (3) or anyone employed or related to (1), (2) or (3).
The appraisal must contain the following information: a description of the item, its physical condition, the date (or expected date) of the contribution, name, address and tax ID number of the appraiser, qualifications of the appraiser, including her/his background, experience and education, a statement that the appraisal was prepared for income tax purposes, the date the item was valued, the appraised fair market value of the item, the method of valuation (income approach, market data approach, replacement cost minus depreciation approach), the appraiser must complete Part IV of Section B on IRS form 8283.
For the Executive Director to sign IRS Form 8282 and/or 8283, the item has to be irrevocably turned over to HCAC and in HCAC’s possession at the time of signing. The Executive Director will notify the accountant and Treasurer, who will determine to assign it as an asset or income as is appropriate.
In-kind donors will be recognized as such in HCAC’s annual report.