Gift acceptance policy

Policy statement

Revised May 2025

This policy summarizes the documentation, signatories, and processes required for Lyric Opera of Chicago (hereinafter referred to as “Lyric”) to accept a gift or bequest. All gifts are to be accepted in accordance with the policy statements set forth herein.

Lyric is a non-profit corporation, exempt from federal income taxation pursuant to Internal Revenue Code Section 501(c)(3), and gifts to Lyric may be tax-deductible to the extent allowed by law. As such, the acceptance of a gift or bequest may have financial or legal consequences. To mitigate these consequences, this document outlines Lyric’s gift acceptance policy.

This Gift Acceptance Policy is subject to change by action of the Executive Committee of the Board of Directors, and this policy is intended to complement and integrate with existing policies established by the Executive Committee of the Board of Directors.

The Gift Acceptance Policy shall be interpreted within the context of the following overarching principles:

A gift shall not be accepted by Lyric unless there is a reasonable expectation that acceptance of the gift will support Lyric in its mission of cultural service and advancement of the development of the art form of opera. In addition, Lyric will not knowingly accept a gift that would be adverse to the interests of the donor.

Lyric may decline a gift due to particular restrictions imposed by the donor. By definition, a gift cannot be associated with a private benefit that would jeopardize the charitable contribution deduction under IRC Section 170 if the donor and beneficiary of the restricted gift have less than an arms-length relationship.

Procedures

1. Cash or check

All gifts by cash or check shall be accepted by Lyric regardless of amount. Checks shall be made payable to Lyric. In no event shall a check be made payable to an individual who represents Lyric.

 

2. Pledges

In general, pledges may be payable in single or multiple installments and must have a value of at least $100. A pledge may not exceed five years in duration. Pledge amount, purpose, and payment schedule must be confirmed by the donor in writing. Pledges less than $1,000 and payable on or before the end of the then-current fiscal year do not require written confirmation.

Exceptions to this rule are discussed and approved by the Chief Advancement Officer and Chief Financial Officer.

 

3. Publicly traded securities

Readily marketable securities, such as those traded on a stock exchange, can be accepted by Lyric.

  1. Gifts of securities may be made by electronic transfer to Lyric’s DTC account or may be made by stock certificate, in which case the stock certificate should be either duly endorsed or accompanied by a stock power and in each circumstance accompanied by an appropriate signature guarantee.
  2. All readily marketable securities are to be sold immediately upon receipt.
  3. For internal gift crediting and accounting purposes, the value of the securities is calculated as the average of the high and low on the effective date of the completed transfer to Lyric.
  4. Gift acknowledgement documents must include the number of shares received, the date received, and the fair market value. The value of the gift is calculated using the average trading price on the date received. The high, low, and mean trading prices of the security may be provided to the donor upon request.

 

4. Closely held securities

Non-publicly traded securities, including membership interests in limited liability companies or partnership interests, may be accepted after consultation with the corporate treasurer and/or general counsel.

  1. Prior to acceptance, Lyric shall explore methods of liquidation for the securities through redemption or sale. A representative of Lyric shall try to contact the closely held corporation to determine:
    1. An estimate of fair market value, and
    2. Any restrictions on transfer.
  2. Gift acknowledgement documents must include the number of shares received, the date received, and the fair market value.

 

5. Qualified Charitable Distributions (QCDs)

Qualified Charitable Distributions (QCDs) are direct transfers of funds from an Individual Retirement Account (IRA) to a qualified charity, such as Lyric. Donors must be age 70½ or older at the time of the gift to be eligible.

  1. QCDs must be made in adherence to IRS guidelines to ensure the QCD does not count towards the donor’s income taxes. Lyric staff will work with donors and their advisors to help ensure proper execution of the gift.
  2. In accordance with IRS regulations, QCDs may not be used to purchase gala tables, event tickets, or any benefits that would result in a return of goods or services to the donor.
  3. Unless otherwise restricted or designated by the donor, QCDs will be utilized as determined by the applicable gift resolution of the Executive Committee of the Board of Directors.

 

6. Donor Advised Fund (DAF) Grants

Donor Advised Fund (DAF) grants are charitable contributions recommended by a donor from an account held at a sponsoring organization (such as a community foundation or financial institution) for the benefit of Lyric.

  1. DAF grants must be made directly from the sponsoring organization to Lyric. Lyric staff are available to provide assistance with language or information required by the donor’s DAF sponsor to facilitate the gift.
  2. In accordance with IRS guidelines, DAF grants may not be used to purchase gala tables, event tickets, or any other benefits that would result in a return of goods or services to the donor or any other individual. DAF grants may only be used for fully tax-deductible contributions.
  3. Unless otherwise restricted or designated by the donor, DAF grants will be utilized as determined by the applicable gift resolution of the Executive Committee of the Board of Directors.
  4. A DAF grant may be booked upon receipt of the distribution and written confirmation from the sponsoring organization indicating the value and donor designation of the gift.

 

7. Real estate and tangible personal property

Lyric may accept gifts of real estate and tangible personal property when such gifts align with the organization’s mission and can be readily sold or used to support its operations. All gifts of this nature require advance review and approval. Lyric generally partners with third-party vendors — such as Realty Gift Fund or Charitable Solutions LLC — to help Lyric evaluate and facilitate real estate gifts, though simple gifts may occasionally be handled independently of third-party vendors. Tangible personal property gifts, whether intended for organizational use or fundraising events, are also subject to review to ensure their acceptance is in Lyric’s best interest.

a. Gifts of real estate

    1. Gifts of real estate may include residential, commercial, agricultural, or undeveloped land
    2. Lyric generally does not retain gifted real estate for any length of time, and will liquidate it as quickly as possible and realize the sale proceeds from the gift.
    3. All real estate gifts must be approved by the Chief Advancement Officer of Lyric.
    4. Prior to acceptance, a review will be conducted to assess:
      1. Marketability and estimated net value after sale
      2. Environmental condition (initial screening required; audit if warranted at donor’s expense)
      3. Title status and ownership (clear and unencumbered)
      4. Potential carrying costs (taxes, insurance, maintenance, etc.)
      5. Any restrictions, easements, or limitations on use or resale
    5. The estimated value of the property at the time of the gift — net of expenses — shall be recorded by Lyric as a pledged donation. The donor shall receive a Gift Receipt at the time of the gift showing the description of the property received, but the Gift Receipt will not contain a valuation of the property. (Under IRS rules and regulations, the donor is responsible for valuing the gifted property with a supporting appraisal, not the donee.) After the sale of the property, the final financial entry shall be made by Lyric recording the net sales proceeds of the sale. 

b. Gifts of tangible personal property — for use by Lyric

    1. Gifts of tangible personal property (e.g., artwork, wine, books, collectibles, furnishings) may be accepted at Lyric’s discretion.
    2. Prior to acceptance of such property, the gift shall be approved by the Chief Advancement Officer.
    3. Criteria for acceptance of any gift of personal property shall include, but not be limited to, the following factors:
      1. Usefulness of Lyric’s mission
      2. Ability to display, store, or otherwise utilize the item(s)
      3. Any restrictions placed by the donor
      4. Ongoing costs associated with display, storage, insurance, or maintenance of the item(s)
    4. A description and the donor’s estimated value of the property at the time of the gift shall be recorded as an in-kind donation by Lyric. The donor shall receive a Gift Receipt at the time of the gift showing the description of the property received. The receipt does not contain a valuation of the property. 
    5. Under IRS rules and regulations, if the value of a donated gift is $5,000 or more, the donor is advised to complete an IRS Form 8283 and provide supporting appraisal. Lyric acknowledges on the IRS Form 8283 that it has received the gift, without representing agreement with the donor’s claimed fair market value. A copy of the 8283 form will be maintained in the donor’s file for future reference.

c. Gifts of tangible personal property for resale by Lyric at auctions, raffles and other Lyric events

    1. For specific events at Lyric, such as the Wine Auction and other fundraising activities, Lyric solicits gifts of personal property for use or resale from individuals and companies. The same procedures as specified in Section 7, Part C, above, shall be followed.
    2. Lyric records these gifts on its financial records using the donor’s estimated value. Acknowledgment receipts are sent to the donor where no estimated values are included.
    3. As mentioned above, if the value of a donated gift is $5,000 or more, the donor is advised to file an IRS Form 8283 and provide supporting appraisal. Lyric acknowledges on IRS Form 8283 that it has received the gift, without representing agreement with the donor’s claimed fair market value. A copy of the filed and signed Form 8283 must be forwarded to the Finance Department with the date the organization received the donated property; date the property was sold, exchanged or otherwise disposed of; and amount received upon disposition. If Lyric sells a donated item (valued at $5,000 or more) within three years of the date of receipt (as we normally do at our events), Lyric is required to file IRS Form 8282 within 125 days of the date of sale. A copy of the Form 8282 is also sent to the donor.

 

8. Charitable Lead Trusts (CLTs)

Charitable Lead Trusts are irrevocable trusts that provide an income stream to Lyric for a term of years or the life of one or more individuals, after which the remaining trust assets pass to non-charitable beneficiaries, typically the donor’s heirs. These trusts can be a valuable tool for donors seeking to support Lyric’s mission while potentially reducing gift and estate taxes for future generations.

While Lyric does not create or manage Charitable Lead Trusts, it can be named as the income beneficiary of a CLT and welcomes opportunities to be included in a donor’s philanthropic planning in this way. Donors should consult with their own legal and financial advisors to determine whether a CLT aligns with their goals.

To ensure appropriate recognition and documentation, Lyric requests that donors notify the Development Office when naming Lyric as a beneficiary of a Charitable Lead Trust. In such cases, Lyric may request a copy of the relevant trust documentation or sections thereof, to better understand the terms of the gift and coordinate stewardship and recognition.

 

9. Cryptocurrency

Lyric does not accept cryptocurrency donations directly. However, if a donor wishes to make a gift of cryptocurrency, Lyric will work with a qualified third-party vendor — such as The Giving Block or Endaoment — to facilitate the transfer and conversion of the gift into U.S. dollars. Donors are encouraged to consult with their financial and tax advisors regarding the implications of making a charitable gift of cryptocurrency. For internal gift crediting and acknowledgement purposes, the value of the gift will be determined based on the U.S. dollar amount received by Lyric upon liquidation by the third-party vendor.

 

10. Appraisals

Qualified appraisals are required of donors to support the allowance of specific income tax charitable deductions under certain circumstances. Individuals and corporations who donate property, other than money or publicly traded securities, with a claimed value exceeding $5,000 must obtain at their own expense a qualified appraisal prepared by an independent appraiser.

 

11. Planned gifts

a. Bequests

Assets transferred through bequests or distributions by will or trust (“bequests”) that have immediate value to Lyric or can be readily liquidated shall be encouraged by the Development Office of Gift Planning. Bequests that appear to require more cost than benefit shall be discouraged or rejected.

    1. Donor restrictions and designations on the use of bequests will be followed under all reasonable circumstances. Where no restrictions or designations exist, the proceeds of bequests will be utilized as stated in the bequest resolution of the Executive Committee of the Board of Directors.
    2. A bequest gift can be booked after the creditor period has passed for the estate and when/if Lyric receives written confirmation, either electronically or hardcopy, from the executor, attorney, trustee, or trust officer which includes the value of the bequest to Lyric.
    3. Any restrictions or designations on the use of a bequest must be documented in writing by the estate representative (such as the executor, attorney, trustee, or trust officer). Lyric cannot honor verbal or informal restrictions that are not provided in formal written communication from the estate or trust.

b. Retirement account remainders

Gifts made through beneficiary designations of retirement assets — such as IRAs, 401(k)s, or other qualified retirement plans — shall be encouraged by the Development Office of Gift Planning. These gifts may be designated in whole or in part to Lyric upon the donor’s passing.

    1. Donor restrictions or designations on the use of retirement account remainder gifts will be honored under all reasonable circumstances.
    2. Where no restrictions or designations exist, the proceeds will be utilized as stated in the applicable gift resolution of the Executive Committee of the Board of Directors.
    3. A gift from a retirement account remainder can be booked after Lyric receives written confirmation — either electronically or in hard copy — from the plan administrator, executor, or attorney, which includes the value of the distribution to Lyric and when any applicable waiting periods (such as a creditor claim period) have passed.

 c. Donor Advised Fund (DAF) remainders

Donor Advised Fund (DAF) remainders refer to assets that remain in a donor’s DAF account and are distributed to Lyric Opera of Chicago upon the donor’s death or at the termination of the fund, as outlined in the donor’s agreement with the sponsoring organization.

    1. DAF remainders may be accepted by Lyric if they are expected to provide immediate value or can be readily liquidated. Distributions that appear to require more cost than benefit shall be discouraged or rejected.
    2. Donor designations or restrictions related to DAF remainders will be followed under all reasonable circumstances. If no restrictions are provided, the gift will be used as determined by the applicable bequest resolution of the Executive Committee of the Board of Directors.
    3. DAF remainder gifts may be booked when Lyric receives written confirmation from the sponsoring organization detailing the amount and designation of the distribution.

d. Charitable Remainder Trusts (CRTs)

Charitable Remainder Trusts (CRTs) are irrevocable trusts that provide income to one or more non-charitable beneficiaries for a period of time, after which the remainder of the trust is distributed to a charitable organization such as Lyric.

    1. Lyric does not draft, establish, serve as trustee for, or manage Charitable Remainder Trusts.
    2. Lyric may be named as a remainder beneficiary of a CRT and encourages donors to consider including Lyric in their CRT planning.

    3. The Development Office of Gift Planning is available to consult with donors and their advisors regarding naming Lyric as a CRT remainder beneficiary, but donors must work with their own legal and financial counsel to establish and administer the trust. 

e. Life insurance

There are two kinds of life insurance planned gifts: those in which the donor only names Lyric as a beneficiary (which can be changed), and those in which the donor gifts the life insurance policy to Lyric to own (which beneficiary designation cannot be changed).

    1. Any person may name Lyric as a beneficiary of a life insurance policy in any percentage amount without transferring ownership of the policy to Lyric.
    2. Lyric will accept the ownership of life insurance policies as gifts only when Lyric is named as the owner and beneficiary of 100% of the policy and the donor agrees to reimburse Lyric for the annual premium payments.  The reimbursement of the annual premium payment qualifies as a tax-deductible donation for the donor.
    3. If the policy owned by Lyric is a paid-up policy, the value of the gift for Lyric gift-crediting and accounting purposes is the policy’s replacement cost.
    4. If the policy owned by Lyric is partially paid-up, the value of the gift for Lyric gift-crediting and accounting purposes is the policy’s cash surrender value. (Note: For IRS purposes, the donor’s charitable income tax deduction is equal to the interpolated terminal reserve.)
    5. Any person naming Lyric as a beneficiary of any life insurance policy must agree to pay all life insurance premiums when due unless there is enough value built up in the policy to automatically pay the premiums when due. In the event payment of premiums cease, Lyric shall surrender the policy and take the cash surrender value available.

 

12. Perpetual Endowment funds

Lyric accepts lifetime gifts and bequests perpetually restricted to endowment.

    1. Lyric’s Endowment Spending Policy allows for an annual draw as outlined in the Investment Spending Policy. 
    2. The minimum gift to establish a separately identified named perpetual endowment fund is $1,000,000; exceptions must be approved by the Chief Advancement Officer.
    3. To establish a perpetual endowment fund, the donor shall sign documentation making the perpetual restriction explicit. The document shall be reviewed by a member of the Finance Team and a member of the Development Team prior to being signed by the donor.
    4. Estate documents may specifically state that a gift is to be used for  perpetual endowment support and the perpetual endowment would be established when the gift is transferred to Lyric from the estate.
    5. All perpetually restricted endowment funds will be governed by Lyric’s Endowment Spending Policy.

 

13. Gift agreements

Gift agreements are required for all commitments with a value of $250,000 or more, whether current or deferred. These agreements serve to confirm the donor’s intent, clarify any restrictions or designations, and ensure mutual understanding of Lyric’s obligations in connection with the gift.

    1. Gift agreements must include details regarding the purpose of the gift, recognition preferences, payment schedule (if applicable), and any donor-imposed restrictions or conditions.
    2. While gift agreements are not required for commitments under $250,000, they may still be used at the discretion of the Development Office to ensure clarity and to document the donor’s intent.
    3. All gift agreements should be reviewed by the Development Office.

 

 

Administrative issues

Lyric shall not act as an executor for a donor’s estate nor shall it act as a trustee for any donor’s trust. 

 

 

Gifts of significant risk

  1. Lyric shall closely review all gifts of significant risk prior to acceptance of the gift.
  2. All such gifts shall be acknowledged when received, with written notice to the donor that due to the nature of the gift and its inherent risks, review is necessary prior to final acceptance.
  3. Such gifts include, but are not necessarily limited to, the following:
    1. Non-publicly traded securities;
    2. All gifts of real property;
    3. Gifts of personal property if not to be used by Lyric;
    4. Gifts of real or personal property with donor restrictions pertaining to disposal;
    5. All bargain sales of property;
    6. Cash gifts with significant donor restrictions; and
    7. All gifts of unusual items or gifts of questionable value.

 

 

Special situations

Lyric has developed the following policies with respect to atypical gifts and situations outside of the normal course of donor/donee relations.

  1. Conditional gifts: Conditional gifts are those gifts that, because of some qualifier or restriction, are considered non-routine. Conditional gifts may commit Lyric to act within a specified time or use a gift for a specific purpose. If, in any instance, a gift offered by a donor would put Lyric in an embarrassing or untenable position with the general public, Lyric will decline acceptance. Gift acceptance agreements should specify a time period for meeting any condition for the gift and should also indicate what will happen to the gift if the conditions are not met. 
  2. Refunding of gifts: Under rare circumstances, Lyric may deem it necessary to return or refund a gift. For example, when it is in the best interest of Lyric or because conditions agreed to in accepting a gift cannot or will not be met. Requests for refunds may come either from the donor or from the Board of Directors of Lyric.