Donors get charitable deductions for toxic waste dumps and land with unexploded ordinance—if they can find a charity willing to go along.
A fascinating article in the Sarasota Herald Tribune (Laura Green) peeks into the world of charitable donations that involve problem real estate. It starts out with a story that has a happy ending: a donation of a trailer park to the Boys and Girls Clubs of Sarasota County (EIN 59-6211876 Form 990) that was eventually sold for $2 million to build a new center in Venice, Florida, once they solved the problems with the sewerage system.
But the downside risk is illustrated by the case of the New College Foundation (EIN 59-0911744 Form 990), which still has a piece of land donated 30 years ago—located next to a former bombing range and lacking road access.
The charities with the veteran's scars in this area are the community foundations. The article quotes the CEO of the Community Foundation of Sarasota County (EIN 59-1956886 Form 990), who says he once refused a donation of a lot next door to a home owned by Martha Stewart, because it had once been used for dumping and he didn't want the risk of a lawsuit from Ms. Stewart.
The Gulf Coast Community Foundation (of Venice) (EIN 59-1052433 Form 990) has even set up a separate organization to manage their donated real estate holdings and other non-cash assets, like a jewelry collection.
The glib response to these situations is that charities need a donation acceptance policy. But no policy can adequately address all the complexities involved, both in donor relations and in managing and selling real estate (developed or not). Small charities will have no idea of all the possibilities that donors (and their tax advisors) can come up with and are rarely equipped to understand the implications of a complex gift.
The advice to charities given by the representative of the Association of Fundraising Professionals* sums up the situation—"they need to be careful."
*AFP is a nonprofit, but it registers its local chapters under the same name and address as the headquarters, so it has 112 organizations listed under its name in Guidestar. I'll let you know when I figure out which one is the real Association of Fundraising Professionals.
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