Real estate is the largest asset class in the United States, yet it only represents about 3% of total charitable giving.

The truth is that most nonprofits lack the infrastructure or expertise to accept these gifts, which deters their growth and impact.

In a recent webinar, experts from San Diego Foundation (SDF) and Charitable Real Estate Foundation (CREF), a supporting organization of SDF, discussed the transformative potential of accepting real estate gifts for nonprofit organizations.

The event aimed to educate and empower organizations to leverage real estate donations to support their missions in partnership with SDF.

Importance of Real Estate Gifts

Real estate gifts can be transformative for nonprofits, providing significant financial benefits and helping donors achieve their philanthropic goals without the burden of capital gains taxes.

Webinar panelists emphasized that real estate gifts, although more complex than gifts of cash or securities, are worth the effort due to their substantial impact.

Panelists included:

  • Bruce Bandemer, CPA, Bandemer Accountancy Corporation
  • Joseph A. Delaney, Principal, Delaney Real Estate Law, CREF Boardmember
  • Leslie S. Klein, CFP, AFP, San Diego Foundation
  • Candace Wo, MPA, San Diego Foundation

Download: 10 Steps to Accept Real Estate Gifts

Finding & Accepting Real Estate Gifts

Finding real estate gifts involves talking with donors about their assets and identifying those who might be interested in donating property. Property could include homes, rental properties, commercial properties, or even unique assets like mobile home parks or mineral rights.

Nonprofits should educate their boards about the potential of real estate gifts and set realistic expectations about the timeline and complexities involved in accepting these assets.

Once a potential real estate gift is identified, nonprofits can connect with SDF to help manage the gift intake and acceptance process. Initial steps include:

  1. Initial Contact and Information Gathering: Collect basic information about the donor and the property.
  2. Due Diligence: Conduct a thorough review of the property, including title and environmental assessments, to ensure there are no unforeseen liabilities.
  3. Board Approval: Present the findings to the CREF board, which consists of experienced real estate professionals who provide oversight and guidance.
  4. Legal Documentation: Prepare and sign a gift letter, which serves as the binding contract for the donation.

It is crucial to recognize and appreciate donors for their real estate gifts. This can be done through various means, such as social media, PR, events and personalized acknowledgments.

For instance, a donor who gave a significant gift might have a building or hall named in their honor, creating a lasting legacy.

Overcoming Challenges

During the webinar, panelists shared examples of challenges they have faced and overcome, such as environmental issues, lease complications, and unexpected market conditions.

They stressed the importance of having a disciplined approach and the ability to adapt to unique situations.

Partnering for Impact

CREF provides invaluable expertise and support to nonprofits, especially those without the resources or experience to manage real estate gifts on their own.

By partnering with SDF and CREF, nonprofits benefit from a streamlined process and avoid potential pitfalls, ensuring that a real estate gift is managed efficiently and effectively.

Accepting gifts of real estate can unlock significant financial resources for nonprofits, allowing them to expand their impact and support their missions in new and powerful ways.

Nonprofits interested in exploring real estate gifts should start by educating their boards and staff, building relationships with potential donors, and reaching out to organizations like SDF and CREF for guidance and support.

Download the 10 Steps to Accept Real Estate Gifts Checklist

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