Take the Guess Work Out of Non-Profit Gift Giving

Here and there throughout the operating year, a non-profit will give different kinds of gifts. It might be a gift when an employee reaches a work milestone. It might be a gift to thank a summer student. It might be a farewell gift for a departing board member. There is nothing like the holidays, when the number of gifts needed, increases significantly, that an executive director starts to get a little nervous about what to give and to whom.

Gift giving can be complicated and since it is natural for people to compare what they’ve received, there is the potential for hurt feelings because someone got more / got better / got different. Factor in how a non-profit’s supporters, members, and funders evaluate the cost of a gift, and the decision can be challenging. Go a little further and consider legislative rules, and the gift giving decision can be intimidating.

A gift giving policy is 1 chart with 4 columns and a wee bit of preamble.

The easiest solution is a gift policy, and the holidays are the best time to write one. Here's how to get started, using a simple 4-column chart and a bit of long-term thinking.

COLUMN #1 – EVENT

In the first column, list all the milestone events for which a gift might be given. This is a list that is more than just the holidays, it might include when someone leaves the organization, births/deaths, sick leave, short/long term disability, weddings, general congratulations, the holidays, and years of service.

COLUMN #2 – WHO

For each type of milestone event, think of everyone in, or linked to, the organization who might get a gift. Likely most categories will apply to both board members and employees, but sometimes employees get gifts that board members don’t. Don’t forget to include vendors and colleagues at other organizations in the list, if applicable.

COLUMN #3 – TYPE of GIFT

The type of gift will vary from something as simple as a card, to a gift card, or even a cash bonus.

Gift cards and cash bonuses are going to require a bit of research. For example, right now in Canada there are very specific rules about when a gift card can be given to an employee as a true gift and when it must be a taxable benefit. A quick internet search for your legislative area (province/country) will help provide details.

Cash bonuses are something that should be discussed with an accounting professional, but a simple phone call to your auditor, or an accountant, will likely provide some guidance. Cash bonuses are usually only given to employees and paid through payroll to allow for tax deductions.

Cash gifts (actual cash inside a card) are almost always frowned upon by the auditor, and really, any funder or donor. So, for now, I suggest leaving cash off the list. Consider, instead, gift cards or an actual gift. 

COLUMN #4 – AMOUNT

For each event, recipient, and type of gift, decide the amount that will be spent. Use the operating budget’s limitations to select amounts that are reasonable.

Here is a sample chart to help get you started.

It will take some time to get the whole chart filled in and it may need to be taken to the board for approval as well as having them filling their own amounts. While gifts are nice to receive, the organization still needs to be able to afford to spend the funds, so, make sure the operating budget can handle the expenses.

Here's a tip. Fill in only the employee amounts and make the board select the amounts they want for their own recognition. Board members are unlikely to choose amounts higher than what employees receive, and because they selected the amounts, that can’t get angry with anyone if they don’t like their gift. 

When writing the policy, consider these notes.

Note in the policy preamble that gifts are not tied to performance or evaluations, just to make it clear that a good annual review doesn’t get an employee any special recognition. 

Note the process for purchasing and giving the gift. I find it is easiest if the executive director (or one designated employee) handles the purchase and giving of gifts, but that doesn’t mean it has to be cold and clinical. Be up front with folks that, as per policy, the organization gives them a gift for [fill in major event] and that they can choose from [the list of pre-determined options]. Most people will welcome the opportunity to pick something that works well for them and won’t care that there is no surprise when the gift is presented.  

Don't feel bad if your non-profit is new and can’t afford gifts. A card with a sincere sentiment is still a very nice way to recognize a milestone.

A policy = no stress.

A gift giving policy will make the decisions for when to give a gift, to whom, and how much to spend. It will eliminate comparisons because everyone will get the same type of gift for the same type of event, and they will understand the details well in advance.

Having a gift giving policy will take a huge stressor off the shoulders of the employee who handles the job. There will be no more guessing, or worrying about how to thank the summer student, how much to spend on a retiring board member, or what to give the employee team each holiday.

Event | Who | Type | Amount