THE LIBRARY FOUNDATION GIFT POLICY

Policy Statement

The TOPEKA & SHAWNEE COUNTY PUBLIC LIBRARY ("Library") strongly encourages the solicitation and acceptance of gifts by THE LIBRARY FOUNDATION, INC., ("Foundation") which enable it to fulfill its mission. Gifts are essential. The Library cannot survive without them.

LIBRARY VISION STATEMENT

"The Topeka and Shawnee County Public Library, a vital community resource, will become one of the finest public library facilities in the nation. The Library will serve an increasingly diverse population, and it is committed to becoming the community gateway for information access in the 21st century."

The Topeka and Shawnee County Public Library promotes lifelong reading and learning through excellence in library services and quality collections. The Library serves as a center of cultural activity which enriches the lives of the citizens of the diverse community by assuring access to collections and print and electronic resources, by providing programs and services that enlighten, inspire and entertain, and by actively supporting the development of community partnerships.
Gifts may be sought from individuals, corporations, foundations, and federal, state and local governments. However, they may be sought only for funds and programs which are appropriate to fulfill the Library's mission and the Foundation's purposes.

GIFT POLCIES

Gifts the Foundation receives must not inhibit it from seeking gifts from other donors, be they similar or different, foreign or domestic.

Gifts that may expose the Library or Foundation to adverse publicity, require expenditures beyond the Library or Foundation's resources, or involve the Library or Foundation in unexpected responsibilities because of their source, conditions, or purposes will be referred to the Executive Committees of the Library and the Foundation. The combined executive committees may withhold approval of acceptance, pending a review by administrative personnel appointed for that purpose. Under other circumstances, the Library delegates the authority to receive gifts, and in appropriate cases, receives gifts personally to the Foundation.

The most useful gifts are those with the fewest possible restrictions. Unrestricted funds allow the Library to address its most pressing needs. Gifts for unrestricted endowment are the most welcome.
This policy is designed to provide guidance to the Foundation and the general public so as to facilitate the gift-giving process. Neither the Library nor the Foundation intends to stifle philanthropic creativity. Therefore, this policy is to be interpreted liberally so that prospective donors may enjoy the greatest freedom possible in formulating their gifts.

Methods of Giving, Outright Gifts

Many types of assets may be used to provide gifts. A variety of methods of giving to the Foundation allows donors to choose the most appropriate for their circumstances and interests.

Outright Gifts

Outright gifts are those placed at the immediate disposal of the Foundation and in which the donor retains no interest. They may be either restricted or unrestricted in purpose. Gifts which are donated to the Foundation without any express limitation placed upon them will be credited to the unrestricted fund accounts.

Special Purpose and Unrestricted Endowment Funds

The Foundation may approve the establishment of special purpose and unrestricted endowment funds upon receipt of gifts or commitments which meet its approved financial and other criteria. Endowments bearing individuals' names or otherwise rendered discrete from unrestricted funds must be approved by the Director of Development.
In all cases, the establishment of a special purpose endowment fund requires the prior approval of the executive committee, and in some circumstances, the Library.
Because conditions change over time, all endowment instruments should contain the following contingency clause:
If, in the opinion of the Foundation, all or part of the funds cannot be applied in strict conformance with the purposes previously stated, they may use these funds for other appropriate purposes as nearly aligned to the original intent of the donor as good conscience and need dictate within the authorized powers of the Foundation.

Cash Gifts, Gifts of Securities

Cash Gifts

The most frequent method used to make a gift is with a personal check. Checks should be made payable to the Foundation and mailed or delivered to:
Mr. James McHenry
The Library Foundation
1515 S.W. Tenth Street
Topeka, Kansas 66604

The postmark date is the gift date for gifts of cash mailed to the Foundation.

Gifts of Securities

Publicly-traded securities, shares of stock in closely-held companies, bonds, and government issues may be given. Gifts of securities may be made by sending the certificate and an executed stock power for each separate issue of stock or bond to:
Mr. James McHenry
The Library Foundation
1515 S.W. Tenth Street
Topeka, Kansas 66604

Publicly-Traded Securities.

These are securities regularly traded on a public stock exchange. The value of the gift will be the mean of the highest and lowest selling prices quoted for the stock on the day of the gift, as defined on the next page.

Methods of Delivery, Real Estate

Methods of Delivery

If securities are hand-delivered to the Foundation, the value of the gift will be the mean of its fair market value on the date of delivery. Donors should endorse stock certificates only upon delivery to the Foundation. For securities which are hand-delivered, the gift date is the day the securities are delivered to the Foundation.
If the securities are mailed to the Foundation, the value of the gift will be its fair market value on the date the securities were mailed. Donors should obtain a stock power from their banker or broker, signing their name exactly as it appears on the certificates, and have their signature guaranteed by their banker or broker. The stock power and a letter of instruction should be mailed to the Foundation under separate cover from the stock certificate(s). The Foundation or Library should be designated on the stock certificate(s), stock power, or related instruments of transfer as The Library Foundation or The Topeka and Shawnee County Public Library, as appropriate. The stock certificate(s) should be sent by registered mail, return receipt requested, to Mr. James McHenry. Unendorsed stock certificates are non-negotiable. The postmark date on the stock power will be used as the gift date when the certificate and stock power are mailed under separate covers.

Real Estate

The Foundation may accept gifts of real estate, including houses, condominiums, commercial properties, farm land, rental property, and undeveloped land, after a thorough review of the following factors:

1. the usefulness of the property for Library purposes;
2. the marketability of the property;
3. the existence of restrictions, reservations, easements, and/or limitations;
4. the existence of encumbrances such as mortgages and mechanics liens;
5. carrying costs, such as property owner's association dues, taxes, insurance, and other maintenance expenses; and
6. fair market value in relation to the costs and limits listed above as determined by a qualified appraisal conducted in accordance with Internal Revenue Service ("IRS") standards.

Prior to the acceptance of any parcel of real property, an assessment of the potential environmental risks will be conducted. This assessment shall include the following:

1. an inquiry of the present owner regarding his, her, or its knowledge of the history of the property;
2. a title search to determine who the prior owners might have been;
3. a consultation with federal, state, and local environmental agencies to find out whether the property has any history of hazardous waste contamination; and
4. a visual inspection of the property for any evidence of environmental hazards.
5. A Phase I environmental audit conducted by a professional service also may be required. For all gifts of real estate, the development officer will first consult with the Library executive director and treasurer and Foundation chair and legal counsel concerning the implications of accepting the gift. The decision to accept gifts of real estate resides with the Foundation executive committee.

Tangible Personal Property

The Foundation may accept gifts of tangible personal property, including works of art, jewelry, antiques, coin, stamp and other collections, automobiles, manuscripts, and books. Such gifts may be accepted only after a thorough review indicates the property is readily marketable or may be used by the Library in a manner consistent with one of its purposes. An essential issue for donors to consider before contributing a gift of tangible personal property is whether they would like the Library to use or display the property. Prospective donors should be advised that the Foundation reserves the right to sell or otherwise dispose of the personal property in question, if such action is financially advisable or necessary.
If the Foundation intends to sell any gift immediately, rather than use it, the donor must be informed that IRS rules will probably limit the amount of the charitable deduction to the donor's cost basis. Whenever donors estimate their gifts of tangible personal property at $5,000 or more, they must obtain a written appraisal by a qualified independent appraiser. The Foundation cannot appraise or assign valuation to gifts of tangible property.

In-Kind Gifts, Planned Giving, Bequest in Will

Methods of Delivery

If securities are hand-delivered to the Foundation, the value of the gift will be the mean of its fair market value on the date of delivery. Donors should endorse stock certificates only upon delivery to the Foundation. For securities which are hand-delivered, the gift date is the day the securities are delivered to the Foundation.
If the securities are mailed to the Foundation, the value of the gift will be its fair market value on the date the securities were mailed. Donors should obtain a stock power from their banker or broker, signing their name exactly as it appears on the certificates, and have their signature guaranteed by their banker or broker. The stock power and a letter of instruction should be mailed to the Foundation under separate cover from the stock certificate(s). The Foundation or Library should be designated on the stock certificate(s), stock power, or related instruments of transfer as The Library Foundation or The Topeka and Shawnee County Public Library, as appropriate. The stock certificate(s) should be sent by registered mail, return receipt requested, to Mr. James McHenry. Unendorsed stock certificates are non-negotiable. The postmark date on the stock power will be used as the gift date when the certificate and stock power are mailed under separate covers.

Real Estate

The Foundation may accept gifts of real estate, including houses, condominiums, commercial properties, farm land, rental property, and undeveloped land, after a thorough review of the following factors:

1. the usefulness of the property for Library purposes;
2. the marketability of the property;
3. the existence of restrictions, reservations, easements, and/or limitations;
4. the existence of encumbrances such as mortgages and mechanics liens;
5. carrying costs, such as property owner's association dues, taxes, insurance, and other maintenance expenses; and
6. fair market value in relation to the costs and limits listed above as determined by a qualified appraisal conducted in accordance with Internal Revenue Service ("IRS") standards.

Prior to the acceptance of any parcel of real property, an assessment of the potential environmental risks will be conducted. This assessment shall include the following:

1. an inquiry of the present owner regarding his, her, or its knowledge of the history of the property;
2. a title search to determine who the prior owners might have been;
3. a consultation with federal, state, and local environmental agencies to find out whether the property has any history of hazardous waste contamination; and
4. a visual inspection of the property for any evidence of environmental hazards.
5. A Phase I environmental audit conducted by a professional service also may be required. For all gifts of real estate, the development officer will first consult with the Library executive director and treasurer and Foundation chair and legal counsel concerning the implications of accepting the gift. The decision to accept gifts of real estate resides with the Foundation executive committee.

Tangible Personal Property

The Foundation may accept gifts of tangible personal property, including works of art, jewelry, antiques, coin, stamp and other collections, automobiles, manuscripts, and books. Such gifts may be accepted only after a thorough review indicates the property is readily marketable or may be used by the Library in a manner consistent with one of its purposes. An essential issue for donors to consider before contributing a gift of tangible personal property is whether they would like the Library to use or display the property. Prospective donors should be advised that the Foundation reserves the right to sell or otherwise dispose of the personal property in question, if such action is financially advisable or necessary.
If the Foundation intends to sell any gift immediately, rather than use it, the donor must be informed that IRS rules will probably limit the amount of the charitable deduction to the donor's cost basis. Whenever donors estimate their gifts of tangible personal property at $5,000 or more, they must obtain a written appraisal by a qualified independent appraiser. The Foundation cannot appraise or assign valuation to gifts of tangible property.

In-Kind Gifts, Planned Giving, Bequest in Will, Charitable Remainder Unitrust

The primary feature of a charitable remainder unitrust is that it provides for periodic payment of income to the donor, or another person specified by the donor, for life or a specified term of years, after which the trust assets pass to the Foundation.

During the lifetime of the donor, he or she creates a formal trust agreement under which assets such as cash, appreciated securities, or both are irrevocably transferred to a trustee who then pays the donor, or a person specified by the donor, an income for life.

During the donor's lifetime, the trust assets are managed and invested by the trustee as a single fund. The donor cannot borrow or otherwise deal with the trust assets. The Foundation receives payments based on a fixed percentage of the net fair market value of the trust as valued annually. The donor determines the fixed percentage which may not be less than five percent, upon creation of the unitrust. Donors may make subsequent additions to the unitrust during their lifetime or by bequest upon their death.

Charitable Remainder Annuity Trust

The annuity trust shares many common features with the unitrust, the principal difference being the manner used to calculate the payment to the income beneficiary. Whereas the unitrust provides for a payout that varies with each annual valuation, the annuity trust provides for fixed payments based upon the fair market value on the date the trust is established. Another difference is that additional contributions cannot be made to an annuity trust.
The donor during his or her lifetime irrevocably transfers assets to a trustee, who pays the Foundation a fixed dollar amount annually for life. The trust can also provide income for the donor's survivors for life; however, the trust assets become the sole property of the Foundation.

Charitable Gift Annuity

The Library Foundation's Gift Policy permits the Foundation to accept Charitable Gift Annuities. The policy states, "A charitable gift annuity is a contract between the donor and the Library Foundation, whereby in exchange for donor's cash or property, the Library Foundation agrees to make fixed payments to one or more annuitants (beneficiaries) for life.
Unlike the charitable remainder trust that looks only to the trust corpus for its payments, the charitable gift annuity payments are backed by the entire assets of the Library Foundation.

The charitable gift annuity is designed to assist a donor who would like to benefit the Library Foundation, but who does not desire to give up the income those available assets would produce."

Discussion of Benefits

A charitable gift annuity offers a number of benefits to the donor(s):
• The personal satisfaction derived from knowing your gift will strengthen the Library's ability to carry out its mission.
• A Fixed Income for Life-the annuity provides payments on a quarterly, semiannual or annual basis for one or two beneficiaries. A portion of the payments you receive is tax-free;
• An Income Tax Charitable Deduction if you itemize your deductions. Your deduction is based on your age, the annuity payment rate, and the discount rate (set by the Internal Revenue Service each month) at the time your charitable gift annuity is established.
• Capital Gains Tax Savings-a portion of the capital gains on gifts of appreciated securities is avoided when you transfer them for a charitable gift annuity. A portion of each payment will be reportable as capital gain over the life expectancy of the annuitant(s) - the recipient(s) of the payments. Capital gains income is taxed at a lower rate than ordinary income.
• A Charitable Gift Annuity established for a donor and his/her spouse will generally avoid federal gift and estate taxes.

POLICIES GOVERNING CHARITABLE GIFT ANNUITIES ADOPTED BY THE LIBRARY FOUNDATION BOARD OF TRUSTEES, September 15, 1999.

1. The minimum gift for a single-life charitable gift annuity shall be $7,500. The minimum initial gift for a two-life annuity shall be $15,000. Additional amounts shall be for no less than $2,000.
2. No gift annuity agreement shall be issued for more than two lives.
3. The minimum age for the beneficiary of an immediate annuity shall be 50.
4. The Library Foundation shall consider the guidelines established by the American Council on Gift Annuities* when quoting the rate of return to be paid to anuitants. The quoted rate shall be determined by the Finance Committee.
5. Only cash or marketable securities shall be accepted in exchange for a gift annuity.
6. Annuity funds shall be maintained in a discrete investment fund with the objective of earning a minimum 6.75% annual return at a cost not to exceed 75 basis points.
7. The current value of each annuity shall be calculated and reported at least annually. Current value is defined as donated principal plus allocated earnings less allocated expenses and annuity payments.
8. The current value of an annuity shall be calculated upon the final annuity payment following the death of an annuitant and withdrawn from the annuity investment fund.
9. The Finance Committee shall deal with any and all exceptions to these policies.
*The American Council on Gift Annuities (ACGA) is a national group of representative charitable organizations who generally meet every three years to publish a uniform schedule of recommended maximum rates payable that are actuarially sound and provide gift to the charity.

Charitable Lead Trust, Gifts of Life Insurance

Charitable Lead Trust

The primary feature of a charitable lead trust is that it provides for the immediate support of the Foundation through income generated by the assets in trust for a set period of time, after which the assets pass to a non-charitable beneficiary such as the donor, the donor's children, or other persons the donor specifies. Thus, a charitable lead trust is conceptually the opposite of a charitable remainder trust. In a lead trust, the donor gives the Foundation the current economic benefit of the transferred assets and retains the right to reacquire possession and control of the assets at a future date.
The donor during his or her lifetime creates an irrevocable trust agreement for a period of ten years or more. The agreement may take effect during the donor's lifetime or be part of the donor's will. Assets are transferred to a trustee, with the stipulation that the income from the assets be paid to the Foundation for the life of the trustee, after which the principal or corpus of the trust reverts back to the donor or others of his or her choosing.
A lead trust may be advantageous for donors who have a larger income than they currently need and who desire to transfer assets to heirs.

Gifts of Life Insurance

Life insurance can be the medium for giving funds to the Foundation. With it, the donor can make a substantial gift for a relatively modest annual outlay. For instance, a donor may irrevocably assign to the Foundation an existing life insurance policy that is no longer needed for family protection, making the Foundation both the policy owner and the beneficiary. If the donor does not choose to continue paying the premiums, the Foundation may elect to:
• Continue paying the premiums and receive the full face value of the policy at the donor's death;
• Convert the policy to paid-up insurance in a reduced amount with no further payments; or
• Surrender the policy for its present cash value

Remainder Interest, Tax Aspects, Donor Confidentiality
Gift of a Remainder Interest in a Personal Residence or Farm

A donor can give a remainder interest in a personal residence, such as a home or condominium, or a farm to the Foundation. The donor or other occupants may continue to occupy the residence or operate the farm without disruption for the duration of the donor's life. Thereafter, the residence or farm will either be sold or used by the Foundation for purposes specified by the donor, if any. The procedures for evaluating proposed gifts or real property, as outlined above, also apply to gifts of a remainder interest in property.

If a life estate is retained in the property, expenses for maintenance, real estate taxes, and any indebtedness relating to the property are to be borne by the donor.

Tax Aspects of Giving

The tax benefits of gifts made to the Library Foundation during the donor's lifetime may reduce income taxes, inheritance taxes and/or estate taxes. Tax valuation and reporting requirements are complex subjects, and donors are encouraged to seek the advice of competent tax experts to obtain the maximum tax benefit from their giving.

Donor Confidentiality

Information regarding all individual, foundation, corporate and association gifts is considered confidential, unless authorized for release by the donor and the Library Foundation.

Final Approval, Acceptance, and Execution by the Foundation
Documents effectuating the acceptance of all gifts, the creation of endowment programs, and the transfer of real or tangible personal property to the Foundation must be approved by Foundation legal counsel and executed by the authorized Foundation official. Documents shall be executed in duplicate, and the donor and the Foundation shall each retain an original of the documents.