A peer in another art college recently called me seeking guidance with the following situation. We debated how this should / could be handled but I wanted to see what this group would advise:
There is a donor who was on a panel to judge which of 11 students who applied for a Prize/ Award would receive a named $1,000 gift. That is all that was available to award, $1,000. There were 11 students who applied for this Prize / Award. It was in person, the students identities were not anonymous to the panelist judges.
After the panel decided on the winner/recipient, a panelist (also a current donor to the college) was inspired to make a gift of $10,000 so that the 10 students who did NOT win the prize could also receive an award. The donor cut a check to the College for $10,000 with the desire that each of the remaining applicants receive a prize of $1,000 each. The donor desires to be anonymous.
CFO says the College cannot accept the check as a charitable gift, because the donor was on the panel and knows the identities of the students that the funds would be awarded to.
What do you think? Is there specific language a gift agreement should include that would qualify it as a charitable gift? Please advise.
Thank you,
Katie
P.S. Ignore for a moment the fact that by all applicants receiving the same award amount of $1,000 (like a participation trophy) it kind of takes out the elite nature / feeling of pride of being the winner of the prize in the first place.
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Kathryn Rusak
College for Creative Studies
krusak@collegeforcreativestudies.edu------------------------------