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  • 1.  Donor as Agent for Gift in Kind

    Posted 05-03-2023 01:05 PM

    Good afternoon

    I am having a hard time wrapping my head around this one.  We have a donor who would like to fund a scholarship through a gift of gold coins. this donor has a rather extensive collection and buys and sells with frequency.  The donor is proposing that:
    1. He (donor) provides a detailed list of the coins that would fund the gift.  (our gift policy does not preclude us from accepting gold to fund the gift)
    2. If we choose to accept the gift in kind as listed for the purpose stated (to establish a scholarship), the donor would like for us to appoint him as our agent.
    3. The agent/donor would then sell the coins to a broker on our behalf.
    4. The broker who purchases the coins will issue a check to our institution and a receipt that affirms he received the coins that the donor reported in the gift in kind
    5.  We would be asked to receipt the gift in kind, sign the 8283, and issue as 8282 as well. 

    The donor contends that it is impractical/unadvisable to send us the asset.  Has anyone encountered a situation like this before? 

    I am unfamiliar with a donor serving as an agent for a charitable gift.
    Is it legal? (seems like it should be prohibited since the donor is a party to the transaction, yet I cannot find the language I am looking for).
    or, should I be looking at this kind of like a gift through a DAF?
    What additional steps/consequences do I need to be mindful of?



    ------------------------------
    Tracy Rush
    Otterbein University
    trush@otterbein.edu
    ------------------------------


  • 2.  RE: Donor as Agent for Gift in Kind

    Posted 05-03-2023 01:45 PM
    I've had this happen, but not with the donor serving as the agent. The coins were delivered to a broker of our selection.

    This might work out if the donor does not earn a commission. However, this feels like a situation your Counsel will need to advise on.

    John


    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987




    Original Message


  • 3.  RE: Donor as Agent for Gift in Kind

    Posted 05-03-2023 03:47 PM
    It's unclear to me why the donor needs to be appointed as an agent who can bind the university formally. Why does the donor need agency? Can't they present the offering to the broker, receive a price, and then await your authorization? You would also need an independent appraisal of the coins, and presumably would only sell the coins for a price commensurate with the appraised value. If the donor is not formally exercising authority, and is simply a volunteer helping to facilitate an independent transaction, this seems fine. However, note that even if the donor is not an agent, if the gift itself is contingent on you agreeing to sell the coins to a specific broker, that isn't really a gift. I would also be concerned about conflict-of-interest re the choice of broker. There's a substantial commission in this transaction, and if the donor is specifically trying to steer the transaction to a specific broker as an outright condition of the gift or an implied condition, that raises flags too.


    Thank you,
    Isaac Shalev
    Data Strategy Expert
    Sage70, Inc.
    (917) 859-0151
    isaac@sage70.com

    Schedule a 30-minute consultation now:




    Original Message


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