For many not-for-profit organizations, a complex gift can be an opportunity to expand programs, strengthen long-term sustainability or accelerate your mission’s impact. At the same time, charitable gifts are not always as straightforward as cash or publicly traded securities. Organizations are increasingly being asked to consider gifts involving real estate, closely held business interests, split-interest arrangements, cryptocurrency and other nontraditional assets.
These conversations are both a governance matter and a leadership opportunity. For example, a gift of appreciated real estate or a closely held business interest may have substantial value while also creating obligations that extend well beyond the initial donation. The question is not simply whether your organization can accept a gift, but whether accepting it aligns with your organization’s mission, capacity, values and long-term strategy. For boards and finance or audit committees, thoughtful oversight helps ensure generosity translates into lasting impact without introducing new risks.
While accounting teams are essential to recording and reporting contributions appropriately, your organization should consider complex gifts well before they reach the financial statements. These gifts often touch strategy, risk, donor relationships, operations and reputation, making board engagement especially important. A strong gift acceptance policy provides a useful foundation, but its real value comes from how consistently your organization applies it and how clearly leaders understand the decisions being made.
Before moving forward with a complex gift, boards can help management pause to ask (and answer) a few practical leadership questions:
This kind of review is not intended to create unnecessary barriers to philanthropy. Rather, it helps protect the donor’s intent, your organization’s mission and the confidence of your stakeholders who expect leadership to make informed decisions.
A well-designed gift acceptance policy gives leaders a common framework for evaluating opportunity and risk. It should help distinguish between gifts that can be accepted through normal procedures and gifts that deserve additional conversation because of their size, complexity, restrictions, valuation uncertainty or ongoing obligations.
In practical terms, the policy should do more than identify which asset types are acceptable. It should guide your leadership on:
The goal is to make sound decisions with the right people at the table. Boards should also revisit these policies periodically to ensure they remain relevant as fundraising strategies evolve, the organization's risk profile changes and new asset classes emerge. Regular review helps maintain board engagement and effective stewardship aligned with current realities.
While every gift requires a facts-and-circumstances evaluation, several categories regularly call for more rigorous board and committee oversight:
Real Estate Contributions. In addition to appraisal considerations, real estate can carry title, environmental, maintenance, insurance and disposition risks. For example, a donated commercial building may appear highly valuable but require significant upkeep or environmental review before it can be sold or used. Be sure to understand the due diligence performed and whether the organization intends to use or sell the property before approving acceptance.
Closely Held Business Interests. Private company interests can involve transfer restrictions, redemption rights, marketability limitations, valuation complexity and potential ongoing ownership considerations. Your organization should understand both the economics of the interest and the obligations associated with holding it.
Split-Interest Agreements. Charitable gift annuities can create contractual payment obligations and actuarial complexity for the issuing organization. Charitable remainder trusts and other split-interest arrangements may create valuation, administration, investment, reporting and monitoring considerations for not-for-profits, depending on your organization’s role in the arrangement.
Donor-Restricted Endowments. These types of endowment gifts create long-term stewardship responsibilities. It’s important to understand donor restrictions, spending and investment policies, appropriation decisions, and the organization’s process for monitoring underwater funds and required disclosures. Oversight should also consider compliance with applicable state laws governing the management, investment and spending of endowment funds.
Cryptocurrency and Other Digital Assets. Digital asset gifts can introduce custody, security, valuation, volatility and liquidation considerations. Ensure policies and controls address how these assets will be accepted, safeguarded and converted when appropriate.
Many complex gift issues begin with a simple but important question: What did the donor intend? For example, a donor may view a contribution as support for a future building project or permanent endowment, even when those expectations are not fully documented in the original gift discussions. A contribution may be recorded as revenue, but still carry expectations or restrictions related to purpose, timing, capital projects, endowment or other donor-specified requirements.
For that reason, development, finance and leadership teams should share a clear process for documenting donor intent, communicating restrictions, monitoring compliance and generally keeping the board informed. Material or unusual restrictions are best understood before acceptance, while the organization still has the opportunity to clarify expectations and determine whether it can responsibly fulfill them.
Complex gifts frequently require significant valuation judgments. Real estate, privately held securities, beneficial interests in trusts and other illiquid assets may require qualified valuation specialists. Because fair value can affect contribution revenue, recorded assets and financial statement disclosures, boards and audit committees should understand when significant estimates are involved and whether management has obtained appropriate support.
Directors should ask whether management has the right expertise, documentation, internal controls, and outside support to make and sustain well-reasoned conclusions.
Your organization should also evaluate complex gifts through a tax lens before acceptance. For donors, the amount and timing of a charitable deduction can depend on numerous factors:
Noncash gifts may trigger Form 8283 and qualified appraisal requirements. Donors, not the recipient organization, are generally responsible for supporting the value claimed for tax purposes. Appreciated property can offer additional planning opportunities, because a qualifying charitable gift may allow a deduction while avoiding recognition of some or all of the appreciation that would have been taxable upon a sale. The review should also identify mortgages, liens and other liabilities associated with the property, as accepting encumbered property can create additional tax, economic and legal consequences for both the donor and organization. The specific result, however, depends heavily on the facts, particularly for closely held interests, split-interest arrangements and other nontraditional assets.
The recipient organization can have its own tax and reporting obligations. Depending on the gift and what happens after acceptance, these may include:
Closely held business and other ownership interests may require additional analysis. For example, analysis may be needed for unrelated business taxable income, debt-financed income, partnership or S Corporation activities, and excess business holdings rules applicable to private foundations, donor-advised funds and certain supporting organizations.
Boards should therefore expect tax due diligence to occur alongside legal, valuation and financial reporting review. Your organization should avoid providing the donor with tax or valuation advice, clearly document which party is responsible for appraisals and filings, and involve qualified tax counsel or advisers when a proposed gift raises unusual issues.
Accepting a complex gift may be only the beginning of your governance responsibility. Depending on the asset, organizations may need ongoing processes for:
It’s important to scale board reporting to the significance and risk of the arrangement. The more consequential the gift, the more important it becomes to clearly define responsibilities among management, committees and outside advisers so the organization can continue to steward the gift with confidence.
Complex gifts can be transformational, but the most successful outcomes rarely happen by chance. They result from thoughtful leadership, disciplined governance, and a shared commitment to honoring both the donor’s intent and the organization’s mission.
For not-for-profit leaders, the takeaway is to approach complex gifts with the same care and strategic discipline used for other significant organizational decisions: clear policies, defined approval authority, and thorough due diligence and coordination among all stakeholders. When approached thoughtfully, complex gifts allow organizations to convert donor generosity into lasting mission impact. Effective governance helps ensure those opportunities are embraced with confidence rather than avoided because of uncertainty.
Contact Carlos Lopez, Pargat Singh or a member of your service team to discuss this topic further.
In this blog Cohen & Co is not rendering legal, accounting, investment, tax or other professional advice. Rather, the information contained in this blog is for general informational purposes only. Any decisions or actions based on the general information contained in this blog should be made or taken only after a detailed review of the specific facts, circumstances and current law with your professional advisers.