Fund Raising Policy The Methodist Hospital Foundation

Contents Foundation Home Page Board of Directors Fund Raising Policy Mission Statement Naming Policy Policy Governing Gifts of Real Estate Hospitality House The purposes of this Policy Statement is to give guidance and counsel to individuals employed by and volunteers associated with the Methodist Hospital Foundation (Foundation). The Board of Directors of the Foundation (Board), in the discharge of their legal and fiduciary obligation, shall periodically evaluate the operations of the Foundation according to this Policy Statement. All efforts to develop charitable financial support for Methodist Medical Center of Oak Ridge or any of its subsidiaries or affiliates, will be the responsibility of the Methodist Hospital Foundation with the exception of the Methodist Medical Center Volunteer Organization and the Pink Placebo Gift Shop. General Policy Statements Charitable Intent All gifts to the Foundation must be evidence of philanthropic intent. Conditions Regarding Acceptance of Gifts The Foundation will accept only those gifts which are consonant with the mission, goals, purpose, and sustain the Foundation's mission; are deemed consistent with public laws, regulations, and public policy of the State of Tennessee and the federal government. The Foundation will properly and timely acknowledge all contributions. Gift Appraisal The Foundation will not appraise or in any way establish value of any asset. The Foundation is not a "qualified appraiser" as defined by the Internal Revenue Service. Ethical Fund Raising All promotions and solicitations conducted by the Foundation will be conducted in a manner that is both ethical and professional. Gift Confidentiality All information concerning a gift shall be kept in strict confidence. All confidential, financial, and historical records of all contributions shall be kept in the Foundation office. Under no circumstances will the amount of any gift be disclosed unless authorized to do so, in writing, by the donor. Use of Gifts and Associated Income All gifts received will be used for the stated purpose for which they were given and accepted. All unrestricted or non-designated (see definition below) gifts will be available for use by the Foundation as determined by the Board of Directors. Income generated by a restricted or legally binding gift (see definition below) will be considered as unrestricted or non-designated. The only exception to the definition of income as previously defined is the definition of income generated from an endowment. The income from an endowment is restricted and will be used for the purposes as stated in the endowment agreement. Acceptance of Gifts The Director of Development of the Foundation or the designee of the Director of Development shall approve and accept all philanthropy to the Foundation subject to the policies and procedures contained herein or adopted by the Board. At the next regularly scheduled meeting of the Foundation Board of Directors, the Director will make a report listing each gift by type of gift, i.e., cash, stocks, and bonds; real estate; gifts-in-kind; deferred gifts. It is the intent of the Foundation that no donor makes a major gift, revocable or irrevocable, which could impair the economic sovereignty of the donor. Independent Tax and Legal Counsel Donors, before making a capital gift (defined as any gift not normally regarded as being made from the donor's cash flow) will be advised to seek independent tax and legal counsel. Legal Documents All written agreements, contracts, trusts, or other legal documents dealing with gifts to the Foundation will be submitted to legal counsel for review as determined by the President. Trustee of Split Interest Trust Each gift of a split interest requires the donor to select a Trustee to administer the trust and to invest the trust assets. It is the duty of the Trustee to represent all classes of beneficiaries. The financial compensation of the Trustee should be paid by the trust. The Foundation will function as Trustee of split interest trusts only when the Foundation or Methodist Medical Center has no less than 51% interest in either the trust income or trust principle. Quid Pro Quo Statutes Disclosure of benefits and/or services associated with a fundraising solicitation will be furnished, on a timely basis, to the donor as required by federal and state law. Finder's Fee The Foundation will not pay a commission or "finder's fee" for any gift. Rejecting Gifts The Foundation reserves the right to decline any gift. Reasons a gift may be declined include, but are not limited to the following: Restrictions associated with the gift may be such as to make compliance with the restrictive covenants impossible for the Foundation or Methodist Medical Center to satisfy. Restrictions associated with the gift may be against public policy or in contradiction to the mission of the Foundation or Methodist Medical Center. Gifts of real estate are subject to specific policy guidelines, and if the property fails to meet those guidelines the gift will be declined. Endowments Endowments are identified as restricted or legally binding gifts. Restricted or legally binding accounts must have an initial deposit or pledge of $25,000. Endowment principal will not be invaded. From the annual realized appreciation and income of each endowment a percentage, to be determined by the Finance Committee, will be added back to the endowment principal. The balance of the endowment income, as just defined, will be eligible for distribution. Self-Dealing Foundation personnel will be circumspect in all dealings with Donors in order to avoid even the appearance of any act of self-dealing. A conflict exists between a Foundation employee and a donor when the employee has a "material interest." In reviewing self-dealing transactions, the Board shall consider financial interests "material" if it is sufficient to create the appearance of a conflict of interest. This is a question of fact in each case. Acceptable Gift Types The following are approved by the Board as acceptable agents for making gifts to the Foundation: Gifts Of Cash Or Checks Certificates Of Deposit Listed And Unlisted Securities Restricted Securities Closely Held Securities Mutual Fund Securities Personal Property Life Insurance Policies Real Estate Mortgaged Property Gifts-in-kind Inventory Services such as advertising space, time or legal services, while not tax deductible are acceptable gift types. Deferred Or Split Interest Gifts (a.k.a. Planned Gifts). Tangible personal property Restricted or designated gifts of tangible personal property should be accompanied by an endowment sufficient to pay for insurance, storage, maintenance, handling, and other costs associated with the gift. Tangible personal property gifts must also be accompanied by a notarized statement authorizing the Board to convert, sell, or exchange the property, at its discretion, after a period not to exceed ten years. All gifts-in-kind, going to or for the benefit of Methodist Medical Center, must have the medical center's prior approval before the gift can be accepted by the Foundation. Planned Gifts This very special type of media for charitable giving results from a planning process that considers the effects of each gift upon the donor, the donor's estate, and family. The donor's tax and legal counsel should be part of the "team" that considers every gift of this type, in as much as planned gifts historically are very large and are gifts of capital assets. The Legacy Society is the donor club created to recognize individuals who have named Methodist Hospital Foundation in a planned gift vehicle. Types of planned gifts will include: Bequests: Every bequest is a testamentary gift. The gift may be a gift of a specific item, a percentage of the donor's estate, the residuary of the donor's estate, or a specific dollar amount. Life Insurance: Life insurance is an ideal way to memorialize your interests in Methodist Medical Center. Many individuals reach the point in life where their life insurance no longer has the financial significance that it once had. It may be time to seek new significance for those old life insurance policies -- as a thoughtful gift to Methodist Hospital Foundation. Purchase of a new policy as a gift to Methodist Hospital Foundation can provide a meaningful gift. Premiums can be paid over the donor's lifetime, as a single lump sum, or be paid up after several years (seven, for example). You can designate the Foundation as beneficiary of an existing insurance policy. The donor retains the right to change the beneficiary or surrender the policy for it's cash value at any time, thus retaining financial security from the policy. A donor can name the Foundation as co-beneficiary or contingent beneficiary. As contingent beneficiary the Foundation is the policy beneficiary only if the primary beneficiary is not living at the time the policy matures. Charitable Remainder Trusts: Charitable Remainder Trusts -- Split Interest Trusts are a special type of trust created by the US. Congress to promote charitable giving. Charitable Gift Annuity: Charitable gift annuity is not an annuity trust. The gift is made in exchange for an annuity that is payable to the donor or someone the donor designates. The charitable gift annuity can be for the life of the beneficiary and/or for a specific period of time. Charitable gift annuity payments are paid by the Foundation and are a direct liability of the Foundation. The annuity is a fixed sum agreed upon at the time of the annuity contract is signed by both the donor and the Foundation. The charitable gift annuity can be either a deferred annuity, in which case the annuity payments do not start until a specific date, or an immediate annuity, in which case the payments commence during the year the annuity contract is signed. Gift With A Retained Life Estate: Gift of residence or farm with a retained life estate is a way the donor can make a current gift, retain the benefits of living on the property for life, receive a charitable deduction, and eliminate the property from the donor's taxable estate. Bargain Sale: A bargain sale is a combination gift and sale. The property owner agrees to sell the property to the Foundation for a value less than the current fair market value, usually the donor's cost basis. Gift Credit Business firms, foundations, individuals and other organizations will receive gift credit for their philanthropy as set forth below: Matching Gift Credit. The Foundation will recognize and give credit to all donors that make matching gifts. Recognition and credit will be given for gifts up to the dollar amount of the philanthropy. Soft credit (defined as recognition only) will be given to those individuals for whom a matching gift was made. Gifts-In-Kind. The Foundation will give gift credit for gifts-in-kind for the greater of either the current market value or the discounted present value. Gift credit will be postponed for gifts of hard to value assets until the asset is converted into cash or some other form of marketable security. Gifts of Services. Gifts of services will be recognized at the level the gift reduces the actual expenses that would have been incurred by the Foundation. Deferred Gifts. Donors utilizing one or more deferred giving techniques will receive gift credit for the present value of the gift (the value used for determination of the charitable deduction). Every five (5) years the gift will be re-valued (soft credit) for purposes of upgrading the donor to a higher donor club. Donor Recognition The Foundation will recognize all donors. This recognition will include listing the donors in certain Foundation publications. Donors may be recognized on the Donor Wall of Honor, Legacy Society Certificates or other donor club recognition. An individual donor recognition piece will not exceed 3% of the value of the gift. Donor Clubs There are three donor club levels. MMC Friend Bronze $100 Silver $250 Gold $500 MMC Benefactor Bronze $1,000 Silver $5,000 Gold $10,000 Platinum $25,000 Diamond $50,000 MMC Philanthropist Bronze $100,000 Silver $250,000 Gold $500,000 Platinum $750,000 Diamond $1,000,000 All gifts are cumulative . . . a donor passes through all club levels as the total giving increases. Recognition will be provided (according to giving level achieved) on the Donor Wall of Honor for club levels above MMC Friend. Club members will be listed according to club membership. Club membership above MMC Friend, will receive special information mailings, will be invited to participate in the President's Concern Luncheons, and will be listed on the Donor Wall of Honor. A portrait plaque will be permanently placed on the Donor Wall of Honor for all MMC Philanthropist. Members of the MMC Philanthropist will each receive a pin or plaque for their personal display. Donors who have made testamentary or have named the Foundation as a beneficiary of a trust are eligible for membership in the Legacy Society. Each member of the Legacy Society will be given a framed certificate. Those corporate and business donors who commit to a $1,000 annual gift will be listed as members of the Business and Industry Partnership. Business and Industry Partnership members will be listed on the Donor Wall of Honor. When a gift is received by the Foundation, every attempt should be made to obtain the Donor's tax basis in the gifted property. The Donor's basis becomes the Foundation's basis and will be carried on the books and records of the Foundation at that value. The current value of the property is important to the Foundation for purposes of gift acknowledgment, substantiation, gift credit, and when applicable for insurance purposes.

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