ARTICLE 1: OFFICE
Section 1.01: Principal Office. The Principal office of the Western Cover Society, hereafter referred to as the Society, for it transaction of business, shall be set from time to time by resolution of the Board of Directors.
ARTICLE 2: MEMBERS
Section 2.01: Classification of Members. The Society shall have only one class of voting member. Each member shall have one equal vote and one equal right to all other issues within the Society. No person or entity shall hold more than one membership in the Society. Subject to a majority vote of the membership, the Board of Directors may establish any categories of contributing, or honorary, or special memberships as it may deem desirable and appropriate. Groups, other societies, libraries, or other institutions may apply for membership in the Society. Such groups are regarded and viewed as a single entity and as such, are entitled to a single right of membership. A statement as to who will exercise the right of membership for such entities must be on file with the Secretary of the Society.
Section 2.02: Admission to Membership. Any person is eligible to be a member of the Society and shall be considered for membership upon completion of a membership application form and payment
of membership dues as prescribed by the Board of Directors. There shall be no limit to the number of members that the Society may admit. Acceptance of membership shall be at the discretion of the Board
Section 2.03: Dues. The annual dues, payable to the Society by members, shall be in such amounts as shall be determined from time to time by resolution of the Board of Directors. The amount of payment shall be equal for each member. Dues shall be payable on a calendar year basis and shall become due and payable on the first day of each year.
Section 2.04: Assessments and Non-Liability. Membership shall be non-assessable. A member of the Society shall not solely or in part, because of such membership, be personally liable for the debts, obligations, or liabilities of the Society.
Section 2.05: Transferability of Membership. Membership in the Society may be transferred only at the discretion of the Board of Directors. But, in no event, shall a membership be transferred for any value consideration.
Section 2.06: Membership Book. The Society shall keep a membership listing containing the names and addresses of all present and past members. The Society shall consider this listing to be proprietary to the Society. The Society reserves the right to publish the name or names of members. But, under no condition will the Society publish, print or divulge the name or names of members along with their mailing addresses.
Section 2.07: Termination of Membership for Cause. The membership and all rights of member shall automatically terminate on the occurrence of any of the following causes:
- The death of the member;
- The voluntary resignation of the member;
- The nonpayment of dues, subject to the limitation set forth in Section 2.07a of these Bylaws;
- The expulsion of a member as set forth in Section 2.07b of these Bylaws;
Section 2.07a: Termination for Nonpayment of Dues. The membership, and all rights as a member within the Society, will be terminated if a member fails to pay his or her dues within a sixty (60) days period starting from the first day of the new calendar year. The expired membership may be reinstated, subject to approval by the Board of Directors, without reapplying for membership if full payment for the calendar year is received within a six (6) month period from the first day of the calendar year. Payment of delinquent dues will not entitle the person to any rights of membership that occurred during the period that dues had not been received. After six (6) months a person will not be reinstated but may apply for membership as set forth in Section 2.02 of these Bylaws.
Section 2.07b: Expulsion and Suspension. A member may be expelled or suspended from the Society by a two-thirds vote of a quorum of the Board of Directors. The grounds for expulsion or suspension shall be conduct unbecoming a member of the Society of which the sound judgment of the Board of Directors shall be the sole standard. The Board will only react to a charge filed by a member of the Society. The charge against a member must be delivered in writing to the Secretary of the Society. A copy of the charge shall promptly be provided to the charged member. The charged member will be given the opportunity to respond to the charge in writing. The Board of Directors shall consider the charge against the member not less than thirty (30) days from the receipt of the charge by the Secretary. The Board has a two-fold responsibility in this matter: they are to consider if the conduct is unbecoming of a member and then to consider if said conduct warrants expulsion or suspension from the Society.
ARTICLE 3: MEETING OF MEMBERS
Section 3.01: Regular Meetings. The members shall meet annually in conjunction with the Western Philatelic Exhibition (WESTPEX) at such time and place as the President designates. The annual meeting shall be for the purpose of hearing reports from the officers and to conduct any other such business as may come before the membership.
Section 3.02: Notice of Meeting. Written notice of every meeting of members shall be given not less than thirty (30) days before the date of the meeting to each member. The notice shall state the place, date and time of the meeting and the matters which the Board of Directors, President or members of the Society are expected to present.
Section 3.03: Quorum. A quorum at any meeting of members shall consist of five percent (5%) of the voting members.
Section 3.04: Loss of a Quorum. Members may continue to conduct business until adjourned by a simple majority of members or until withdrawal of enough members’ constitutes the loss of a quorum.
Section 3.05: Voting. Each member is entitled to one vote on each matter submitted to the vote of the members subject to Section 3.05a and Section 3.05b. There shall be no vote by proxy.
Section 3.05a: Entitlement to vote. The record date, for the purpose of determining a members entitlement to vote is thirty (30) days prior to the date of the vote. Members with dues that are not paid or are under suspension are not entitled to vote.
Section 3.05b: Entitlement to notification. The record date, for the purpose of determining a member’s entitlement to notice of any meeting of members, is sixty (60) days before the date of the meeting of the members.
Section 3.06: Conduct of Meetings. The President, or in his absence the Vice-President, or in their absence the Secretary, or in their absence the Treasurer, or in their absence any Director shall preside over a meeting of members. This person will function as the Chairman of the meeting.
Section 3.07: Secretary of Meeting. The Secretary shall act as the secretary of all meetings of members. In his or her absence the Chairman will appoint another person to act as secretary of the meeting.
Section 3.08: Rules of Order. Robert’s Rules of Order, as amended from time to time, shall govern the meeting of the members insofar as those rules are not inconsistent with or in conflict with these Bylaws. A courteous, polite manor is expected of all members during meeting of the members.
Section 3.09: Inspector of Elections. In advance of any meeting of the members or any action by written ballot the Secretary, subject to approval by the President, will appoint any person or persons, other than the candidates for office, as inspectors of the election. The inspector or inspectors will perform all appropriate acts to determine the results of the election and report the results to the Secretary. The Secretary will inform the members of the results in a timely manner.
ARTICLE 4: BOARD OF DIRECTORS
Section 4.01: Powers of the Board. Except as otherwise provided within these Bylaws all decision-making power regarding the Western Cover Society, referred herein as the Society, will reside in and with the Board of Directors.
Section 4.02: Number of Directors. The Society shall have a minimum of eight (8) Directors of which four (4) will be the standing officers. The immediate past president will be invited to fill a Director’s position. This group of Directors will constitute The Board of Directors, hereafter also referred to as the Board.
Section 4.03: Officer Titles. The officers of the Society shall be a President, a Vice-President, a Secretary, and a Treasurer. Collectively they shall be known as the “Standing Officers” of the Society. The President is the general manager and chief executive officer of the Society. Any number of offices may be held by the same person, except that neither the Secretary nor the Treasurer may serve concurrently as President. Other officers with such titles and duties as may be determined by the Board may be established. These may include but are not limited to Membership Chairperson, Advertising Chairperson, Web Site Chairperson, and Publication Chairperson.
Section 4.04: Qualification for Directorship. Directors shall have been a member of the Society for a minimum of two (2) consecutive years.
Section 4.05: Terms of Office. Each Director shall hold office for three (3) years and may succeed themselves in office, without limitation on the number of terms they may serve until such Director’s successor is elected. The exception is that of President, no member is allowed to serve more than three (3) elected terms as President.
Section 4.06: Nomination of Directors. Directors shall be nominated by a Nominating Committee, hereafter also referred to as the Committee. The committee shall consist of at least two (2) and not more than five (5) members of the Society. Only one (1) member of the standing Board of Directors is allowed to serve on the Nominating Committee. The power to appoint members to serve on the Committee resides with the President. The committee will render its report of nominations to the Secretary and the Secretary will draft an appropriate ballot.
Section 4.07: Election of Directors. Elections shall be conducted by secret ballot which shall be supplied to each member entitled to vote, subject to Section 3.05a at least 30 (30) days prior to the voting date. The Secretary will appoint a non director member of the Society to act as Inspector of the Ballots. Ballots shall be return to the Inspector of the Ballots at least five (5) days before the annual meeting. The candidates receiving the highest number of votes, up to the number of Directors to be elected, shall be elected. The Inspector of the Ballots shall announce the results of the election at the annual meeting and the persons so elected shall thereupon immediately take office.
Section 4.07a: Election of Standing Officers. The Standing Officers shall be nominated by the Nominating Committee in the manner described in Section 4.07 of these Bylaws. The election of the Standing Officer shall be held concurrently with the election of the members of the Board of Directors.
Section 4.08: Vacancies. A vacancy in the office of President shall be filled by the succession of the Vice-President. Any other vacancy in the Board may be filled, subject to Section 4.02, by a simple majority vote of the Board of Directors.
Section 4.09: Compensation. All Directors shall serve freely and without compensation.
Section 4.10: Call to Meeting. A meeting of the Board of Directors may be called by the President, or the Vice-President, or the Secretary, or any two (2) Directors of the Board. Upon such call, the President shall set a place, date and time for the meeting which is convenient to the members of the Board.
Section 4.10a: Regular Meeting: A regular annual meeting of the Board shall be held in conjunction with the Western Philatelic Exhibition (WESTPEX). The President shall announce to members of the Board, in advance of WESTPEX, the place, date and time of the meeting.
Section 4.10b: Special Meeting. A meeting of the Board of Directors, subject to Section 4.10 shall be held within two (2) days and not more than ten (10) days after notification of Board members by first-class mail, or by telephone, or by electronic mail of the date and time. Special Meetings of the Board of Directors may be held, as deemed appropriate, by telephone conference or at a specified location.
Section 4.10c: Action without a Meeting. Any singular action required or permitted to be taken by the Board may be taken without a meeting if a majority of the Board consents in writing to such action. Such written consent and the resulting action shall be filed with the minutes of the proceedings of the Board.
Section 4.11: Quorum. A simple majority of Board of Directors shall constitute a quorum of the Board for the transaction of business.
Section 4.12: Loss of a Quorum. Except as otherwise provided by these Bylaws, or by law, or by an act of decision done or made by a majority of the Board of Directors present at a meeting duly held in which a Quorum is present. The Board may continue to transact business, not withstanding the withdrawal of Directors, if approved by the majority of Directors in advance of the withdrawal of Directors which constitute a loss of majority.
Section 4.13: Conduct of Meetings. The President, or in his absence the Vice-President, or in their absence the Secretary, or in their absence the Treasurer, or in their absence any Director shall preside over a meeting of the Board of Directors. This person will function as the Chairman of the meeting.
Section 4.14: Secretary of Meeting. The Secretary shall act as the secretary of all meetings of the Board of Directors. In his or her absence the Chairman will appoint another person to act as secretary of the meeting.
Section 4.15: Rules of Order. Robert’s Rules of Order, as amended from time to time, shall govern the meeting of the Board of Directors insofar as those rules are not inconsistent with or in conflict with these Bylaws. A courteous, polite manor is expected of all Directors. A vote of Proxy will only be allowed if said Proxy is declared when a meeting is first called to order.
Section 4.16: Resignation of a Director. Any Director may elect to resign at any time by submitting written notice to the Secretary of the Society. The resignation will take affect upon receipt of the written notice by the Secretary.
Section 4.17: Removal of a Director. A Director may be removed for failure to attend duly noted meeting of the Board without adequate cause or for other good cause by two-third vote of the entire Board of Directors.
Section 4.17a: Director in Emeritus. Any Director who is unable to attend the Board of Directors Meeting in the foreseeable future due to personal matters may be retained by the Society as a Director in Emeritus. Directors in Emeritus will be regarded by the Society as a Board Member but will not have a vote at Director Meeting and will not count in regards to a quorum.
Section 4.18: Responsibilities of Standing Officers. The Standing Officers of the Society are chartered with roles and responsibilities which are unique to each office.
Section 4.18a: Responsibilities of the President. The President will have the responsibilities for the following items.
- Act as the senior spoke person for the Society.
- Act as a lead in the development of a future vision for Western Cover Society that will insure the Society carries out its mission, attracts new members and is financially sound.
- Prepare an agenda for Board of Directors meeting.
- Present an annual report to the members of the Society at the annual meeting. This may be presented orally and in conjunction with other officer reports.
- Work with the Treasurer to develop an annual budget that will insures the financial future of the Society.
- Insure that the Western Express is published in a timely manner.
Section 4.18b: Responsibilities of the Vice-President. The Vice-President will have the responsibilities for the following items.
- Work with and provide assistance to the President on issues as he or she deems necessary.
- Assume the role, along with the responsibilities, of the President if he or she is unable to fulfill the duties of President.
- Arrange for a speaker to present a topic of discussion at the annual meeting of members at WESTPEX.
Section 4.18c: Responsibilities of the Secretary. The Secretary will have the responsibilities for the following items.
- Act as the focal point for all communications with other groups or persons.
- Document the minutes of annual meeting.
- Maintain a listing of all past and current members.
- Assist the President with written matters.
Section 4.18c: Responsibilities of the Treasurer. The Treasurer will have the responsibilities for the following items.
- Act as the primary manager of the Society’s monetary funds.
- Insure that the Society’s debts are settled in a timely manner.
- Prepare an annual financial statement for the Board of Directors meeting.
- Prepare, with the concurrence of the President, an annual budget statement.
- Mail out dues assessments and collect returning funds.
- Maintain an annual listing of members and supply mailing instruction for the distribution of the journal.
- Insure that proper documentation is filed to maintain the Society tax-exempt status.
- Prepare documentation for members to support non-taxable donations.
ARTICLE 5: CORPORATE RECORDS, REPORTS, LIFE MEMBERSHIPS, NOTICES, OFFICIAL JOURNAL, AMENDMENTS.
Section 5.01: Records. The Society shall keep adequate and correct records of accounts of the proceedings of its Board and of the meeting of its members. The minutes shall be kept in a format that is capable of being converted into a written form. Other books and records shall be kept and preserved in a format that is capable of being converted into a written form.
Section 5.02: Notices. Any notice required or permitted to be given in these Bylaws shall be given by First-Class mail addressed to the member’s last known address as shown on annual membership list or by timely publication in the mailing of the official journal of the Society. It is the responsibility of each member to notify the Secretary of any change in mailing address.
Section 5.03: Official Journal. The official journal of the Society shall be known as “Western Express”. The journal shall be published on a quarterly basis and a copy shall be supplied to each member.
Section 5.04: Life Membership. The Board of Directors may establish, subject to the conditions stated herein, condition for Life membership within the Society.
Section 5.04a: Dues Life Membership. Any member may apply for Life Membership, subject to the approval of the Board of Directors, by payment of dues as prescribed by the Board of Directors. In no event can a Life Membership be transferred. Life Members will have all rights as described by these Bylaws for the complete term of membership. Life Members are still subject to expulsion or suspension as described in Section 2.07b of these Bylaws. If expelled or suspended no compensation, in part or whole, will be granted to the member.
Section 5.04b: Honorary Life Membership. The Board may grant a member who has rendered long and outstanding service to the Society an Honorary Life Membership by a two-third vote of the entire members of the Board of Directors. No dues shall be required of Honorary Life Members, who shall have all the rights of voting members for the complete term of the membership. Honorary Life Members are still subject to expulsion or suspension as described in Section 2.07b of these Bylaws.
Section 5.05: New Members. New members to the Society will be provided with a letter of welcome, an invitation to attend the next meeting of members, a copy of the Bylaws, and a membership number. The start date of membership will be determined by the date of when the application and dues are received by the Treasure.
Section 5.06: Amendments. These Bylaws may be amended by a two-third vote of the Board of Directors followed by ratification by a majority of the voting members at any meeting of the membership where a quorum of members is present or by written ballot in connection with the election of Directors. The proposed amendments shall be provided to the membership no later than thirty (30) days prior to the vote on the proposed amendments.
Western Cover Society (the “Society”) expects all persons associated with it to conduct business on behalf of the Society with integrity and a high ethical standard. In particular, the Society’s directors, officers and employees should attempt to avoid activities or conduct which involve a conflict of interest, recognizing that even the appearance of a conflict of interest could harm the Society. Any activity should be able to be justified and withstand public scrutiny, and care should be taken to avoid adversely affecting the integrity or the reputation of the Society.
In considering whether a conflict of interest exists, directors, officers and employees should remember that relationships of their business, business associates, family and friends may give rise to a potential conflict of interest even if such director, officer or employee is not involved directly. A potential conflict can exist where the parties in the relationship give or receive, or could reasonably be perceived to give or receive, unfair advantage or preferential treatment because of the relationship.
While it is impossible to list every circumstance that may suggest a possibility of a conflict of interest, the following are examples of potential and actual conflicts of interest:
- Using the individual’s position with the Society, including the use of non-public information that is obtained through the individual’s position with the Society, for his/her direct or indirect personal gain or advantage, or for the personal gain or advantage of another.
- Competing directly or indirectly with the Society.
- Having a direct or indirect significant financial or other interest in, or financial or other relationship with, any competitor, customer, vendor or supplier of the Society (what constitutes a “significant” interest or relationship will depend upon the specific factual situation; however, an interest of less than one percent of any publicly held company shall not be considered a “significant” interest).
- Improper disclosure or use of the Society’s confidential or proprietary information or trade secrets.
- Acceptance or solicitation of gifts from any person or company having or seeking a business relationship with the Society.
- Participation in activities or conduct that conflict or are inconsistent with any activity of the Society, or that would cause a reasonable person to believe that the participant’s judgment, loyalty or objectivity might be influenced in a way that is adverse to the Society’s interests.
- Involvement in any political activities without making clear that such involvement is personal and not based upon the director’s, officer’s or employee’s affiliation with the Society.
- Using the foregoing principles and guidelines of this Policy on Business Ethics and Conflict of Interest (the “Policy”), all directors, officers and employees of the Society shall act in good faith and use their best judgment to bring to the attention of the President or Secretary of the Society any conflict of interest, real or perceived, whether financial or otherwise, between any of them and the Society. The President or Secretary, acting jointly or alone, shall determine whether an actual conflict of interest exists and make a determination on the proposed action, transaction or other activity (the “Activity”).
- If, in the judgment of the President, there is a potential conflict and the Activity is sufficiently material, the matter shall be presented to the Board of Directors. At the discretion of the Board of Directors, the interested party may attend the meeting of the Board of Directors and answer questions and provide information about the potential conflict of interest and the Activity; provided, however, the interested party shall otherwise recuse himself or herself from the meeting and shall not be present during debate and voting on the matter. In connection with conflicts related to financial transactions, all actions of the Board of Directors shall be undertaken in compliance with applicable federal law relevant to “intermediate sanctions” and applicable California law relevant to self-dealing transactions.
- In any situation in which a majority of the directors present at a Board of Directors meeting would be disqualified because of this Policy, after full disclosure of the potential conflict, the Board of Directors may by a majority affirmative vote suspend this Policy and proceed to approve the Activity. All discussion and action with respect to actual or potential conflicts of interest in connection with the Activity shall be duly entered into the minutes of meeting where such an action takes place.
- All persons who enter into an “excess benefit transaction” under Internal Revenue Code Section 4958 or who otherwise violate this Policy may be subject to discipline up to and including discharge or removal from his or her position with the Society by a vote of the Board of Directors; provided, however, nothing in this Policy is intended to characterize a relationship or involvement as a conflict of interest or as unethical conduct on the part of any director, officer or employee if such person has no actual knowledge of such relationship or involvement.
- Directors, officers and employees of the Society may be required from time to time to respond to questionnaires substantially in the form attached hereto as Exhibit A (or such other form as is approved by the Board of Directors from time to time) about their relationship with outside persons or companies that might affect the Society, and are expected to be forthright in their responses, even if they do not believe that the situation poses a conflict of interest, so that potential conflict situations may be avoided before any material problem arises.
- Each director, officer and employee of the Society shall sign a statement substantially in the form attached hereto as Exhibit B (or such other form as is approved by the Board of Directors from time to time) which affirms that such person:
- has received a copy of the Policy;
- has read and understands the Policy;
- has agreed to comply with the Policy; and
- understands the Society is a charitable organization and in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes.
I have read and understand Western Cover Society (the “Society“), Policy on Business Ethics and Conflicts of Interest and am committed to its full implementation.
To the best of my knowledge, a member of my immediate family (i.e., my spouse and any ancestor, sibling and descendant (and their spouses)) or I (a) am presently a general partner, trustee, director, officer or employee of or (b) have a direct or indirect significant financial or other interest in, or financial or other relationship with the following Society(s), partnership(s), trust(s) or other entity that has entered into or is likely to enter into a financial transaction with the Society:
POLICY ON BUSINESS ETHICS AND CONFLICTS OF INTEREST
I acknowledge and hereby certify that:
- I have received a copy of Western Cover Society (the “Society”), Policy on Business Ethics and Conflicts of Interest (the “Policy”);
- I have read the Policy and understand it;
- I agree to comply with all of the provisions of the Policy; and
- I understand that the Society is a charitable organization and in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes.
If I am engaged currently in any activity that ought to be disclosed in accordance with the Policy, I have appended to this Certification a complete description of such activity. If at any time hereafter I contemplate engaging in such activity, I agree to provide the Society with notice in accordance with the Policy.
Western Cover Society (the “Society”), is committed to the highest standards of financial reporting and lawful and ethical behavior. Additionally, the Society is committed to full compliance with all state and federal statutes, rules and regulations by all employees, officers and members of the Board of Directors (the “Board”).
The Society encourages all Board members, officers, employees, grantees, grant seekers and others affiliated with the Society to report any illegal or unethical conduct in connection with the Society finances or other aspects of its operations.
Should any person know or have a reasonable belief that persons associated with the Society plan to engage, or have engaged, in illegal or unethical conduct in connection with the finances or other aspects of the Society’s operations, that person should immediately report his or her concerns (the “Complaint”) to the Society’s President. An individual making such a Complaint may request anonymity or submit an anonymous written Complaint to the President. If the Complaint concerns the President or the individual is not comfortable reporting to the President, then the Complaint may be made to or be filed with the Vice President of the Board
Upon receipt of a Complaint, the Complaint shall be reported (and the resolution, if applicable) to the Board at its next regularly scheduled meeting. If the President (or the Vice President, as the case may be) believes it is warranted, the Complaint shall be promptly report full Board (except to Board members who may be the subject of the Complaint), and the Board shall promptly investigate and respond to the individual filing the Complaint.
All credible allegations will be followed up promptly, with further investigation conducted if needed to resolve disputed facts. In conducting any investigation, the Society will respect any person’s request for confidentiality and/or anonymity and will strive to keep the identity of other complainants as confidential as possible, consistent with the need to conduct a thorough review and investigation. All records of Complaints and subsequent investigations shall be maintained in a confidential manner and in accordance with the Society’s document retention policy.
The Society will take appropriate action in response to any Complaints, including, but not limited to, disciplinary action (up to and including termination) against any person who, in the assessment of the President, the Vice President or the Board, as the case may be, has engaged in misconduct. Such misconduct shall be reported to the relevant civil or criminal authorities as may be required by law.
The Society will not knowingly, with the intent to retaliate, take any action harmful to any person, including interference with lawful employment or livelihood, for reporting a Complaint in good faith pursuant to this policy or to law enforcement officers, governmental agencies or bodies, or persons with supervisory authority over the complainant. Likewise, there will be no punishment or other retaliation for providing information regarding a Complaint in good faith to, or otherwise assisting in any investigation regarding a Complaint conducted by, the Society, law enforcement officers, governmental agencies or bodies, or persons with supervisory authority over the complainant. An employee or other person affiliated with the Society who has made a Complaint or who provided information regarding a Complaint and who subsequently believes he or she has been subjected to retaliation should immediately report it to the President or the Vice President. An individual who deliberately or maliciously provides false information, however, may be subject to disciplinary action (up to and including termination).
Posting of this Policy
This Policy is to be posted in the Society’s office, on its website and shall be provided to all employees upon commencement of their employment with the Society. The name and contact information of the President and the Vice President shall accompany the posting or giving of this Policy.
The Board of Directors of Western Cover Society (the “Society”) adopts the following guidelines for accepting gifts from donors.
- Authorization. The President or any other person or persons designated by the Society’s Board of Directors from time to time, are authorized to accept gifts made to the Society and to approve and execute, on behalf of the Society, all agreements with donors in furtherance of the Society’s charitable purposes as set forth in the Society’s Articles of Incorporation and Bylaws. Acceptance of gifts other than cash or marketable securities shall require two signatures. The Society reserves the right to refuse any gift.
- Policies Regarding Assets Used to Make Gifts.
- Gifts of Cash and Publicly Traded Securities. The Society will accept gifts of cash and publicly traded securities in any amount.
- Other Business Interests. The Society will accept gifts of stock, options, warrants and other interests in closely held “C” corporations, “S” corporations, limited partnership interests and limited liability company (LLC) interests, as well as notes, trust deeds and similar assets. All such gifts will be evaluated on a case-by-case basis. Valuation of the gift for tax purposes is the responsibility of the donor. The Society will not provide a value for the gift in its acknowledgment letter to the donor.
- Gifts with Adverse Consequences for the Society. The Society will not accept a business interest that will subject the Society to a liability, including cash calls on limited partnerships or LLC’s or other liabilities that could have adverse consequences for the Society, unless favorable advice of legal counsel is secured.
- Sale of a Business Interest. In the case of a business interest that is to be sold, the Society generally will not join in or participate in the issuance of warranties, representations, indemnification agreements, or covenants not to compete unless favorable advice of legal counsel is secured.
- General Partnership Interests. General partnership interests generally will not be accepted by the Society because they can result in significant legal and tax liability to the Society. Structuring of the transaction to avoid such liabilities may be considered by the Society.
- Cost of Gift. If a designated fund is created by the gift, the Society will charge the resulting fund the Society’s costs associated with accepting the business interest (e.g., unrelated business income taxes, attorney fees, etc.). The Society may request that the donor contribute additional cash or other liquid assets to the fund to pay such costs.
- Life Insurance. The Society may be designated as a primary or successor beneficiary of a life insurance policy owned by the donor. Insurance policies must have a minimum face value of ten thousand dollars ($10,000) and the Society must be irrevocably named as owner and beneficiary of the policy. As a condition to accepting a gift of a life insurance policy on which premiums remain due, the Society will require the donor to enter into a legally binding pledge to contribute to the Society, at least thirty (30) days prior to each premium due date, an amount sufficient to pay the premium. Premiums may be paid from accrued dividends or accumulated cash value if sufficient and so stipulated by the donor. The Society shall have the right to surrender, exchange or sell any policy at any time. If the Society is notified that a policy is to be terminated for non-payment of premium, the Society may elect to continue to pay such premiums from its unrestricted assets or use the accrued cash value of the policy to pay the premium. The Society will not accept gifts of insurance that are related to what are commonly referred to as a “charitable reverse split dollar” or “charitable limited partnership” plan, or any other controversial charitable giving plan involving insurance, without first obtaining an opinion from legal counsel or a private letter ruling from the Internal Revenue Service as to their legality.
- Illiquid Assets (including Real Estate and Tangible Personal Property). The Society will accept gifts of illiquid assets such as real estate, tangible personal property and intangible personal property. Gifts to the Society that are not liquid may require additional documentation prior to acceptance by the Society. This may include appraisal, site visit, professional inspection or assessment, environmental review and other types of due diligence review associated with the proposed asset to be gifted.
- Costs. The costs of securing a valuation appraisal will be borne by the donor. Other transfer costs of the Society including attorney fees and title insurance, may be borne by the donor or charged to the fund being established at the Society.
- Real Estate. Gifts of real estate may be made outright, on a testamentary basis, on a current basis subject to a retained life estate, or to a charitable remainder trust or charitable lead trust. Such gifts require extra review.
- Due Diligence Review. Acceptance of real property may be preceded by a review that includes, but is not limited to:
- A valuation appraisal;
- Physical Inspection. In addition to a site visit by a Society representative, the Society may also commission a report by a professional property inspector;
- Environmental review (a Phase I or Phase II review). In general, the Society will request that the donor provide a Phase I environmental assessment on gifts of commercial or industrial property;
- Cash flow statement and tenant leases (for rental property); and
- Title examination and/or opinion of title by a qualified attorney or title company.
- Cost Benefit Analysis. The property must have significant value in relation to the costs of holding and selling the property and any liability or exposure in connection with ownership of the property. The Society will evaluate the cost of holding and/or improving the property against the cost of liquidating the property immediately.
- Marketability. The property must be marketable within a reasonable time period.
- Suitability. The use or image of the property must be consistent with the Society’s mission.
- Foreign Property. Proposed gifts of property located outside the United States will be reviewed on a case-by-case basis.
- Title and Title Insurance. The Society will secure title insurance and a title insurance binder on gifts of real property.
- Insurance. All gifts of real property will be reported to the Society’s insurance carrier for inclusion in its corporate insurance policies.
- Mortgage. See discussion below regarding property subject to a debt or encumbrance.
- Gifts of Real Property with Retained Life Estate. The Society will evaluate these gifts on a case-by-case basis, using the applicable policies and procedures regarding gifts of real estate described above. In addition, the donor and the Society will enter into an agreement regarding the donor’s or life tenant’s responsibilities for taxes, insurance, utilities, upkeep, maintenance, and limitations on the donor or life tenant’s rights to make changes to the property, or allow liens to be placed on the property, without approval of the Society.
- Tangible Personal Property. The Society will evaluate proposed gifts of personal property, such as works of art, on a case-by-case basis with specific consideration of the cost of administering, storing, insuring or otherwise managing such gifts.
- Intangible Personal Property and Intellectual Property. The Society may accept gifts of patents, trademarks, copyrights and royalty streams or distribution rights on published works (such as books or films) where there is clear evidence of marketability or assurance of an income stream. Gifts of oil and gas interests involve special considerations and will be evaluated on a case-by-case basis.
- Property Subject to Debt or Encumbrance. The Society may accept gifts of assets such as real estate, business interests or insurance policies that are subject to a debt or encumbrance. Given the potentially adverse tax consequences to the Society and donor of contributions of encumbered property (the Society may be taxed on unrelated business taxable income and the donor may be subject to capital gains tax), donors will be encouraged to refinance debt on the subject property to enable the gifted property to be free and clear.
- Real Estate. Real estate contributed to the Society shall generally be free and clear of any debt or lien. The Society may accept gifts of real estate that are encumbered with mortgage debt or other encumbrance up to twenty-five percent (25%) of its appraised value. Such gifts will be evaluated on a case-by-case basis.
- Business Interests. Gifts of shares in corporations, limited liability companies and limited partnerships with underlying debt (debt at the company or partnership level that will not be assumed by the Society) will be evaluated on a case-by-case basis.
- Insurance Policies. Gifts of insurance policies may have premiums financed by a third-party lender, in whole or in part, and will be evaluated on a case-by-case basis.
- Charitable Remainder Trusts. Gifts subject to a debt or encumbrance should not be accepted for a charitable remainder trust without review by legal counsel of unrelated business income tax consequences.
- Guidelines for Planned Gifts.
- Bequests. Bequests received by the Society will be applied for the charitable purposes requested by the donor, if any are specified. Donors and their advisors should be encouraged to advise the Society of their intention to make such bequests to ensure that the donor’s intent can be carried out by the Society.
- Charitable Gift Annuities. The Society may issue Charitable Gift Annuities to interested donors in states where Society has the authority to issue such annuities. If and when such program is established, the Society’s Board of Directors shall adopt appropriate guidelines and policies.
- Charitable Remainder Trusts. The Society may serve as trustee of any such trusts, subject to review on a case-by-case basis.
- Minimum Gift Allowed. The minimum amount of gift to a Charitable Remainder Trust for which the Society will serve as trustee is $100,000.
- Use of Remainder Interest. The remainder from a Charitable Remainder Trust supporting the Society may be added to or used to create a fund of the Society. If the Society serves as trustee of such a trust, a minimum of fifty percent (50%) of the remainder of the trust must be irrevocably designated to support a fund administered by the Society. Exceptions shall be reviewed and approved by Society representatives authorized to enter into gift agreements.
- Purpose of Remainder Interest. The remainder of a Charitable Remainder Trust may be used to create any type of fund offered by the Society. In all cases, donors are encouraged to advise the Society of their intention to make the Society a beneficiary of such trusts, to ensure that the donor’s intent can be carried out by the Society.
- Non-Charitable Trusts Excluded. The Society will not serve as trustee of donors’ living trusts, special needs trusts or other non-charitable trusts.
- Gifts of Illiquid Assets. In situations in which the Society will serve as trustee, gifts of real estate or other illiquid assets will be considered only in relation to the funding of a Net Income Charitable Remainder Unitrust (NICRUT) or a Net Income with Makeup Provision Charitable Remainder Unitrust (NIMCRUT) or a FLIP Charitable Remainder Unitrust (FLIP CRUT).
- Charitable Remainder Annuity Trust. In general the Society will not serve as trustee of a Charitable Remainder Annuity Trust funded with illiquid assets. The Society may agree to serve as trustee of such a trust if the donor funds the trust with sufficient liquid assets to make the annuity payments from the trust over a prudent period of time, to be determined by the Society.
- S Corporation Stock. The Society shall not accept gifts of S corporation stock to fund a Charitable Remainder Trust. Under current law, a CRT is not an eligible shareholder of S corporation stock and a corporation’s Subchapter S status is automatically terminated if its stock is transferred to a CRT.
- Partnership Interests and Limited Liability Company Shares. Gifts of partnership interests and limited liability company interests will not be accepted by the Society to fund a Charitable Remainder Trust without review by legal counsel of unrelated business income tax consequences.
- Right to Decline Trusteeship. The Society reserves the right to decline to serve as trustee on any trust whose payouts are too high to create an appropriate charitable remainder benefit.
- Charitable Lead Trusts. The Society will evaluate gifts by donors to a Charitable Lead Annuity Trust or Unitrust on a case-by-case basis. The Society may serve as the trustee of a Charitable Lead Trust. The minimum amounts applicable to Charitable Remainder Trusts shall also apply to charitable lead trusts trusteed by the Society.
- Bargain Sales. The Society will evaluate these gifts on a case-by-case basis. “Bargain sales” are partial gifts and sales of real estate, securities, or other forms of illiquid property to the Society by the donor. A qualified appraisal is required. The price paid for the property by the Society should not, as a guideline, exceed 25% of the appraised fair market value of the property.
- Retirement Plans. The Society will accept account type retirement plans, in which a balance accumulates as principal, such as IRAs, 401(k), 403(b), and defined contribution plans. Methods for gifting retirement plan assets include:
- Outright Gift. Naming the Society as primary, successor or contingent beneficiary for all or part of the assets upon death of either the retirement asset owner or spouse; and
- Charitable Remainder Trust. Creating a testamentary Charitable Remainder Trust upon the death of the asset owner, naming the Society as remainder beneficiary and non-charitable heirs as income beneficiaries.
- Pledges. Pledges are commitments to give a specific dollar amount according to a fixed time schedule.
- Information needed. The following minimum information is needed to substantiate the pledge:
- Amount. The amount of the pledge must be clearly specified.
- Payment schedule. There should be a clearly defined payment schedule.
- No conditions. The donor may not prescribe contingencies or conditions with respect to payment.
- Financially capable. The donor must be considered to be financially capable of making the gift.
- Amendments. Changes to original pledges must be documented in writing.
- Payments Limited to Obligor. The obligor of a pledge shall be advised that payment of the pledge by other persons or entities may have adverse legal and tax consequences. Society will consult with legal counsel prior to accepting a payment of a pledge from a person or entity other than the obligor of the pledge.
- Terms and Conditions.
- Payment period. The pledge payment period must conform to the term prescribed by the Board of Directors for a particular campaign or project. Ordinarily, a pledge should not exceed five years.
- New program. Any pledge agreement that creates a new program, fellowship, or activity must stipulate that:
- Reliance. It is mutually agreed by the signing parties that any consequent Society action is taken in reliance upon said pledge.
- Bequest. The donor intends to provide through a bequest in his/her Will, or by other means, for any unpaid part of this pledge; and in event that his/her Will is admitted to probate and fails to contain a valid provision to comply with this charitable gift intention, or donor has not otherwise provided for payment of the pledge, the pledge document is to constitute a legal and binding obligation on the donor’s estate.
- Pledge Reminders. The Society will maintain systems for reminding donors in a timely manner when their pledge payments are due.
- Restructuring Pledge Payments. If a pledge has lapsed more than 90 days, the Society will contact the donor to see when payment can be expected. If a donor wishes to restructure his or her pledge payment schedule, every effort will be made to accommodate this request. The Society recognizes that periodically donors may have an unexpected adverse financial situation and will be unable to complete their pledges based upon the original payment plan.
- Pledge Cancellations. The Society is responsible for tracking pledge cancellations, including the reason for the cancellation, and for notifying the Board in a timely manner. The Board will review any pledge cancellation and determine if it is in the best interest of the Society to pursue any kind of legal action against the donor. Cancellation or reduction of an enforceable pledge may have adverse legal and tax consequences for the Society and the donor. Legal counsel shall be consulted when an enforceable pledge is proposed to be reduced or cancelled.
- Letters of Intent. Many donors are reluctant to sign enforceable pledge agreements even if the donor fully intends to and likely will make a gift that is to be paid over time. In addition, tax and legal complications can arise if an enforceable pledge is cancelled or reduced. For the Society and the donor, it often may be preferable that an agreement to make a gift be an expression of intent that the donor retains the right to revoke.
- Amount and timing. A letter of intent will clearly list the intended amount and timing of each payment of the gift.
- Designated purpose. A letter of intent can provide for a designated purpose for the gift, that it be endowed, or both.
- Binding on estate. A letter of intent may provide that the commitment is a binding obligation of the donor’s estate if it is not satisfied before the donor’s death and not revoked by the donor.
- Recognition. The Society may reserve the right to modify or remove the recognition of an intended gift if the donor does not make all the intended payments.
- Information needed. The following minimum information is needed to substantiate the pledge:
- Applicability of Guidelines. This set of guidelines is intended to cover the more common types of gifts that may be made to the Society. It is understood that special gifts or circumstances may require a case-by-case review and provisions not covered by this document. The Society reserves the right to refuse any gift that it believes is not in the best interests of the Society.
- Exceptions. Unless otherwise noted above, gifts to the Society that entail exceptions to these guidelines shall be reviewed and approved by Society representatives authorized to enter into gift agreements on behalf of the Society.
- Amendments. The Society’s Board of Directors or such Committee of the Board of Directors that is designated to review and approve such activities of the Society may amend these guidelines from time to time.
Maintenance of organization-related records for compliance with applicable laws and regulations.
Applicable to all organization staff, officers, directors, consultants, contract workers and temporary staff members.
Records, data and information are organization assets and are to be valued and managed accordingly and in compliance with all applicable laws and regulations. All reports, records, documents or other information complied in the performance of your duties must be completed fully and accurately. The President shall establish a Records Retention Schedule with the time periods for which certain categories of records must be maintained by the organization in accordance with law and industry best practices. Records and documents outlined in this Policy includes paper, electronic files (including e-mail) and voicemail records regardless of where the document is stored, including network servers, desktops or laptop computers and handheld computers and other wireless devices with text messaging capabilities.
- All individuals subject to this Policy are responsible for the proper creation, management and storage of the records and information of the organization and for remaining in compliance with this Policy.
- The President of the organization has the primary responsibility for administering and managing this Policy in the organization’s day-to-day operations. The President shall establish an annual schedule to review retained records for determination of retention and disposal requirements. The President, staff, members, officers, directors, consultants, contract workers and temporary staff members shall conduct this review of records in their possession in accordance with the President’s schedule. Records subject to destruction shall be turned over to the President or his/her designee for destruction in accordance with best available practices, or disposed of as instructed by the President.
- 3. Under the guidance of the President of the organization, outside vendors and consultants may be retained to assist in the collection, management, retention and destruction of organization records.
- Records and information are confidential and proprietary property or assets of the organization and may be made available outside the organization only with the appropriate authorization and after consideration of the interests of the organization as a whole.
- All organization records shall be retained in accordance with the Records Retention Schedule subject to all laws and regulations. If an individual subject to this Policy determines that a category of organization records is not included on the Records Retention Schedule, the individual should contact the President, who may determine whether the Records Retention Schedule should be supplemented to include the identified records.
- All individuals subject to this Policy shall comply with the retention periods set forth in the Records Retention Schedule.
- All records shall be destroyed upon the conclusion of their retention period in compliance with written procedures, subject to Provision (5) below.
- Records identified as subject to litigation, an audit or a government investigation shall be suspended from destruction and held. All records suspended shall not be destroyed until they are released by written notification of the President.
Records that have not passed their retention period may be stored offsite as long as the facility that is used to store the records meets the minimum standards established by this Program.
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