GIFT ACCEPTANCE POLICY
OF
THE CALDWELL FAMILY FOUNDATION
A New York Not-for-Profit Corporation Organized Under the New York Not-for-Profit Corporation Law (NY N-PCL) Recognized as Tax-Exempt Under IRC § 501(c)(3) Classified as a Private Foundation Under IRC § 509(a)
EIN: 88-3021547
Principal Office: 330 Madison Avenue, Suite 2401 New York, New York 10017
Adopted by the Board of Directors March 20, 2023
This document constitutes the official Gift Acceptance Policy of The Caldwell Family Foundation, adopted at the organizational meeting of the Board of Directors held concurrently with the date of incorporation. This Policy is confidential and intended for use by the Board of Directors, officers, and professional advisors of the Foundation.
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ARTICLE I — RECITALS AND STATEMENT OF PURPOSE
Section 1.1. Incorporation and Tax-Exempt Status. The Caldwell Family Foundation (the "Foundation") was incorporated on March 20, 2023, as a New York not-for-profit corporation under the New York Not-for-Profit Corporation Law (NY N-PCL), pursuant to a Certificate of Incorporation filed with the New York Department of State (DOS Filing No. 230320-001847). The Foundation thereafter applied for recognition of tax-exempt status under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code" or "IRC"), and received a determination letter from the Internal Revenue Service granting such status on July 14, 2023. The Foundation is classified as a private foundation under IRC § 509(a).
Section 1.2. Mission. The Foundation's mission is to support the arts, education, and environmental conservation, with a particular focus on organizations serving the New York metropolitan area. All activities of the Foundation, including the solicitation, acceptance, and management of charitable contributions, shall be conducted in furtherance of this mission and consistent with the Foundation's Certificate of Incorporation and Bylaws.
Section 1.3. Purpose of This Policy. This Gift Acceptance Policy (this "Policy") is established to provide guidance to the Board of Directors, officers, and professional advisors of the Foundation regarding the solicitation, evaluation, acceptance, and acknowledgment of charitable contributions to the Foundation. The Policy is designed to:
(a) ensure that all gifts accepted by the Foundation further its exempt purposes;
(b) protect the Foundation from accepting gifts that may expose it to undue legal, financial, or reputational risk;
(c) ensure compliance with applicable federal tax law, including IRC §§ 4940 through 4946 (the private foundation excise tax provisions), and in particular § 4941 (self-dealing), § 4942 (failure to distribute income), § 4943 (excess business holdings), § 4944 (jeopardizing investments), and § 4945 (taxable expenditures);
(d) ensure compliance with applicable New York State law, including the NY N-PCL, the Estates, Powers and Trusts Law (EPTL), and the requirements of the New York Attorney General's Charities Bureau;
(e) establish clear procedures for the review and acceptance of various categories of gifts; and
(f) provide for proper acknowledgment and substantiation of gifts in accordance with the requirements of IRC § 170(f)(8) and related provisions.
Section 1.4. Related Governing Documents. This Policy should be read in conjunction with the Foundation's Certificate of Incorporation, Bylaws, Conflict of Interest Policy, Investment Policy Statement, and any resolutions of the Board of Directors adopted from time to time. In the event of any conflict between this Policy and the Foundation's Certificate of Incorporation or Bylaws, the Certificate of Incorporation and Bylaws shall control.
ARTICLE II — BOARD OF DIRECTORS AND OFFICERS
Section 2.1. Current Board of Directors and Officers. As of the date of adoption of this Policy, the Board of Directors and officers of the Foundation are as follows:
Section 2.2. Independent Director. Dr. Margaret P. Elsworth serves as the Foundation's Independent Director. Dr. Elsworth is Professor Emerita at Columbia University and an experienced philanthropic advisor. Dr. Elsworth is not a member of the Caldwell family, is not a Disqualified Person (as defined herein), and has no financial or familial relationship with any Disqualified Person. Her service as an Independent Director is intended to provide objective oversight and governance to the Foundation's operations, including gift acceptance decisions.
Section 2.3. Compensation. No compensation is paid to any family-member director or officer of the Foundation for service in such capacity. This practice is maintained in accordance with the Foundation's Conflict of Interest Policy and to ensure compliance with the self-dealing prohibitions of IRC § 4941. Dr. Elsworth may receive reasonable compensation for her services as an Independent Director to the extent authorized by the Board and consistent with IRC § 4941(d)(2)(E) (which permits compensation for personal services that are reasonable and necessary to carry out the Foundation's exempt purposes), provided that the compensation is approved by the disinterested members of the Board and is consistent with comparable arrangements.
Section 2.4. Authority. The Board of Directors has ultimate authority over all gift acceptance decisions under this Policy. The Board may delegate certain ministerial responsibilities to officers or professional advisors, but the authority to accept or decline gifts of property other than cash and publicly traded securities may not be delegated and must be exercised by the Board acting by majority vote at a duly convened meeting or by unanimous written consent, in each case in accordance with the Foundation's Bylaws.
ARTICLE III — DEFINITIONS
For purposes of this Policy, the following terms shall have the meanings set forth below:
Section 3.1. "Contribution" or "Gift." The term "Contribution" or "Gift" means any voluntary, irrevocable transfer of cash, securities, real or personal property, or other assets to the Foundation by any Donor, without consideration. A Contribution includes, without limitation, outright gifts, bequests, devises, transfers in trust naming the Foundation as a beneficiary, and beneficiary designations of life insurance policies or retirement accounts. A Contribution does not include a pledge or promise to make a future transfer, unless and until such transfer is completed and irrevocable.
Section 3.2. "Donor." The term "Donor" means any individual, trust, estate, corporation, partnership, limited liability company, or other entity making a Contribution to the Foundation. In the case of a joint gift by spouses or co-owners, each such person shall be considered a Donor for purposes of this Policy.
Section 3.3. "Disqualified Person." The term "Disqualified Person" has the meaning set forth in IRC § 4946 and the Treasury Regulations promulgated thereunder. For purposes of this Policy, Disqualified Persons include, but are not limited to, the following:
(a) Substantial Contributors. Any person who has contributed or bequeathed an aggregate amount of more than $5,000 to the Foundation, if such amount is more than 2% of the total contributions and bequests received by the Foundation from its inception through the close of the tax year in which the contribution or bequest is received. As of the date of this Policy, Jonathan R. Caldwell and Eleanor V. Caldwell are the initial substantial contributors, having contributed an aggregate of $10,000,000 in cash pursuant to the Initial Contribution Agreement dated April 1, 2023.
(b) Foundation Managers. All directors and officers of the Foundation, including Jonathan R. Caldwell, Eleanor V. Caldwell, Thomas R. Caldwell, Katherine C. Hartfield, Olivia G. Caldwell, and Dr. Margaret P. Elsworth.
(c) Family Members. Members of the families (as defined in IRC § 4946(d)) of substantial contributors and foundation managers, including but not limited to the following individuals: Thomas R. Caldwell, Katherine C. Hartfield (née Caldwell), Olivia G. Caldwell, Dr. Sarah P. Caldwell, Dr. Andrew W. Hartfield, James W. Hartfield, Charlotte M. Hartfield, Lucas T. Caldwell, Nora E. Caldwell, and the spouses and lineal descendants of all such individuals.
(d) Controlled Entities. Any corporation, partnership, limited liability company, trust, or estate in which Disqualified Persons hold, individually or in the aggregate, more than a 35% interest (whether measured by voting power, profits interest, or beneficial interest), including but not limited to: Caldwell Ridgeline Capital LLC (and its managed investment funds, including Fund IV, Fund V, and Fund VI), Stonecrest Realty Holdings LLC, Meridian Crest Partners LLC, and any other entities controlled by Caldwell family members as identified from time to time by the Treasurer.
(e) Government Officials. Certain government officials as described in IRC § 4946(c), to the extent applicable.
The Treasurer shall maintain an updated list of all known Disqualified Persons, as further described in Section 7.3 of this Policy.
Section 3.4. "Qualified Appraisal" and "Qualified Appraiser." The terms "Qualified Appraisal" and "Qualified Appraiser" have the meanings set forth in IRC § 170(f)(11) and Treasury Regulation § 1.170A-17. A Qualified Appraisal is an appraisal of property that:
(a) is conducted by a Qualified Appraiser in accordance with generally accepted appraisal standards as defined by the Uniform Standards of Professional Appraisal Practice (USPAP);
(b) is prepared no earlier than sixty (60) days before the date of the Contribution and no later than the due date (including extensions) of the Donor's federal income tax return for the taxable year in which the Contribution is made;
(c) does not involve a prohibited appraisal fee (i.e., a fee based on a percentage of the appraised value); and
(d) includes the information required by Treasury Regulation § 1.170A-17(a)(3), including but not limited to a description of the property, the physical condition of the property, the date of the Contribution, the terms of any agreement or understanding relating to the use or disposition of the property, the qualifications of the appraiser, and the appraised fair market value.
A Qualified Appraiser is an individual who has earned an appraisal designation from a recognized professional appraiser organization or has otherwise met minimum education and experience requirements as set forth in Treasury Regulation § 1.170A-17(b), and who regularly performs appraisals for which the individual receives compensation, and who is not a Disqualified Person or a party to the transaction in which the contributed property is transferred.
Section 3.5. "Excess Business Holdings." The term "Excess Business Holdings" has the meaning set forth in IRC § 4943 and the Treasury Regulations promulgated thereunder. In general, the combined holdings of the Foundation and all Disqualified Persons in any business enterprise may not exceed the "permitted holdings," which are generally twenty percent (20%) of the voting stock of an incorporated business enterprise, or twenty percent (20%) of the profits interest or capital interest in an unincorporated business enterprise, reduced by the percentage of such voting stock or interest held by all Disqualified Persons. The permitted holdings limit is increased to thirty-five percent (35%) if effective control of the business enterprise is held by persons who are not Disqualified Persons.
Section 3.6. "Foundation." The term "Foundation" means The Caldwell Family Foundation, a New York not-for-profit corporation, EIN 88-3021547.
Section 3.7. "Board." The term "Board" means the Board of Directors of the Foundation.
Section 3.8. "Policy." The term "Policy" means this Gift Acceptance Policy, as amended from time to time.
ARTICLE IV — CATEGORIES OF ACCEPTABLE GIFTS
Section 4.1. Cash and Cash Equivalents
4.1.1. General. The Foundation accepts gifts of cash and cash equivalents, including checks, wire transfers, Automated Clearing House (ACH) transfers, and money orders, without prior Board approval. There is no minimum gift amount for cash contributions.
4.1.2. Currency. Cash gifts shall be accepted in United States dollars. Gifts denominated in foreign currencies require advance coordination with the Treasurer to ensure proper conversion, recording, and compliance with applicable regulations, including the Bank Secrecy Act and anti-money laundering requirements. The Treasurer shall coordinate foreign currency conversions through the Foundation's banking relationship and shall record the gift at the U.S. dollar equivalent on the date of receipt, using the applicable exchange rate.
4.1.3. Initial Contribution. For the avoidance of doubt, the Foundation's initial corpus consists of a contribution of $10,000,000 in cash by Jonathan R. Caldwell and Eleanor V. Caldwell ($5,000,000 attributable to each spouse), made pursuant to the Initial Contribution Agreement executed on April 1, 2023. This contribution has been recorded in the Foundation's gift log and acknowledged in accordance with this Policy.
4.1.4. Recording and Acknowledgment. All cash gifts shall be recorded in the Foundation's gift log within five (5) business days of receipt, and an acknowledgment letter shall be sent to the Donor within thirty (30) days of receipt, as further described in Article X of this Policy.
Section 4.2. Publicly Traded Securities
4.2.1. General. The Foundation accepts gifts of publicly traded securities, including common and preferred stocks, corporate and government bonds, and mutual fund shares, that are listed on a recognized securities exchange (including, without limitation, the New York Stock Exchange (NYSE), Nasdaq Stock Market (Nasdaq), NYSE American, and similar domestic and international exchanges), without prior Board approval, subject to the conditions set forth in this Section 4.2.
4.2.2. Valuation. Publicly traded securities shall be valued at the mean of the high and low trading prices on the date of the Contribution, in accordance with Treasury Regulation § 20.2031-2. If the date of the Contribution falls on a day when the relevant exchange is not open for trading (e.g., a weekend or holiday), the value shall be determined by taking the weighted average of the means of the high and low trading prices on the nearest trading dates before and after the date of the Contribution, with the respective means weighted inversely by the number of trading days between the selling date and the nearest trading date before and the nearest trading date after the date of Contribution.
4.2.3. Transfer Instructions. Donors wishing to contribute publicly traded securities shall direct the transfer of such securities to the Foundation's brokerage account, which is maintained by Havensbrook Wealth Advisors LLC (Diana R. Linden, CFP®, Managing Director, 900 Third Avenue, 18th Floor, New York, New York 10022). The Treasurer shall provide the Donor with the Foundation's account number, DTC number, and any other information necessary to facilitate the transfer. Donors should be advised that the date of the Contribution for tax purposes is the date on which the securities are delivered to the Foundation's brokerage account (or, in the case of certificated securities, the date on which the endorsed certificates are mailed or delivered to the Foundation).
4.2.4. Liquidation. The Foundation generally liquidates publicly traded securities promptly upon receipt, unless the Investment Policy Statement or a specific resolution of the Board directs otherwise. Prompt liquidation is the Foundation's default practice in order to avoid potential jeopardizing investment concerns under IRC § 4944 and to maintain the Foundation's desired asset allocation as set forth in the Investment Policy Statement. The Treasurer and the Foundation's financial advisor, Havensbrook Wealth Advisors LLC, shall coordinate the timing and execution of any liquidation.
4.2.5. Excess Business Holdings Screening. Prior to acceptance of any gift of publicly traded securities, the Treasurer shall verify that the acceptance of such securities will not cause the Foundation, together with all Disqualified Persons, to hold Excess Business Holdings in any business enterprise under IRC § 4943. If the contributed securities represent an ownership interest in a publicly traded corporation in which Disqualified Persons hold a significant position, the Treasurer shall consult with legal counsel before accepting the gift.
Section 4.3. Closely Held Business Interests
4.3.1. General. Gifts of closely held business interests, including limited liability company membership interests, limited partnership interests, S corporation stock, C corporation stock, carried interests, profits interests, and similar interests in entities that are not publicly traded, require advance Board approval before acceptance.
4.3.2. Self-Dealing Risk. If the closely held entity in which an interest is being contributed is owned or controlled by a Disqualified Person, or if the Donor is a Disqualified Person, the proposed gift must be analyzed for compliance with the self-dealing prohibitions of IRC § 4941. The transfer of a closely held interest by a Disqualified Person to the Foundation may constitute an act of self-dealing if, for example, the Foundation assumes a liability in connection with the transfer, the transfer is structured as a sale or exchange, or the transfer otherwise confers an economic benefit on the Disqualified Person (such as relief from management obligations, assumption of indemnification obligations, or provision of liquidity). Legal counsel must review all gifts of closely held interests from Disqualified Persons before such gifts are presented to the Board for approval.
4.3.3. Excess Business Holdings. Before accepting any gift of a closely held business interest, the Foundation must confirm that acceptance will not cause the Foundation to exceed the permitted holdings limits under IRC § 4943. This analysis requires identification of all Disqualified Persons holding interests in the same business enterprise, aggregation of those interests with the Foundation's proposed holding, and comparison against the applicable permitted holdings threshold. Particular attention must be paid to proposed gifts of interests in Caldwell Ridgeline Capital LLC (and its managed Funds IV, V, and VI), Stonecrest Realty Holdings LLC, and any entity in which Caldwell family members hold substantial ownership or management interests.
4.3.4. Qualified Appraisal Required. For all gifts of closely held business interests with a claimed value exceeding $5,000, the Donor must obtain and provide the Foundation with a Qualified Appraisal from a Qualified Appraiser in accordance with IRC § 170(f)(11) and Treasury Regulation § 1.170A-17. The Foundation may, at its discretion and at its own expense, engage its independent appraiser, Ashford Valuation Group LLC (Dr. Leonard K. Whitfield, ASA, Managing Partner, 1120 Avenue of the Americas, Suite 3500, New York, New York 10036), to conduct a separate valuation of the contributed interest to inform the Board's acceptance decision.
4.3.5. Valuation discounts. Appropriate discounts for lack of marketability and lack of control shall be applied to the valuation of closely held business interests, consistent with IRS standards and relevant United States Tax Court precedent (including, without limitation, Estate of Mandelbaum v. Commissioner, T.C. Memo. 1995-255, and related authorities). The Foundation will not accept gifts of closely held interests where the Donor's claimed value appears to be materially overstated relative to the Foundation's own assessment or independent appraisal.
4.3.6. Transfer Restrictions and Agreements. Before the Board considers acceptance of a closely held interest, legal counsel (Calderwood & Harkness LLP, 375 Park Avenue, 42nd Floor, New York, New York 10152) must review all operative documents governing the interest, including operating agreements, partnership agreements, shareholder agreements, buy-sell agreements, rights of first refusal, call options, put options, tag-along and drag-along provisions, restrictions on transfer, and any other agreements that may affect the Foundation's ability to hold, manage, or dispose of the interest. The Foundation shall not accept a closely held interest if the operative documents effectively prevent the Foundation from liquidating the interest within a reasonable period or subject the Foundation to obligations inconsistent with its exempt purposes.
4.3.7. Unrelated Business Taxable Income (UBTI). Before accepting any closely held business interest, the Foundation must evaluate whether the contributed interest will generate unrelated business taxable income under IRC § 512. Interests in partnerships and LLCs taxed as partnerships that engage in active trade or business activities may generate UBTI to the Foundation. Interests in S corporations will generate UBTI to the Foundation under IRC § 512(e). The Foundation should assess the magnitude and character of any expected UBTI, including debt-financed income under IRC § 514, and determine whether such UBTI is acceptable in light of the Foundation's financial and operational objectives.
Section 4.4. Real Property
4.4.1. General. Gifts of real property, whether developed or undeveloped, commercial or residential, including interests in real property such as remainder interests, undivided fractional interests, and conservation easements, require advance Board approval before acceptance.
4.4.2. Self-Dealing. If the real property is owned by, has been occupied by, or is otherwise associated with a Disqualified Person, additional analysis under IRC § 4941 is required. Legal counsel must review the proposed gift and provide a written opinion as to whether the transfer would constitute an act of self-dealing before the gift is presented to the Board.
4.4.3. Environmental Review. A Phase I Environmental Site Assessment, prepared in accordance with ASTM Standard E1527-21, is required at the Foundation's expense before the Board may accept any gift of real property. If the Phase I assessment reveals recognized environmental conditions or potential contamination, a Phase II Environmental Site Assessment (including sampling and laboratory analysis) shall be conducted before the Board may accept the gift. The Foundation shall not accept real property where environmental contamination has been identified unless the Board, after consultation with legal counsel and environmental consultants, determines that the environmental risks are manageable and that acceptance is in the Foundation's best interest.
4.4.4. Title Review. A title search and commitment for title insurance must be obtained at the Foundation's expense before the Board may accept any gift of real property. Clear and marketable title must be demonstrated to the satisfaction of legal counsel. The Foundation shall not accept real property where defects in title cannot be cured prior to transfer.
4.4.5. Encumbrances. All mortgages, liens, easements, restrictive covenants, and other encumbrances affecting the property must be disclosed by the Donor and reviewed by legal counsel. The Foundation generally will not accept real property that is subject to outstanding indebtedness, including mortgage debt, because:
(a) the acquisition of debt-financed property may generate unrelated debt-financed income under IRC § 514, which is subject to the unrelated business income tax under IRC § 511;
(b) the assumption of debt from a Disqualified Person may constitute an act of self-dealing under IRC § 4941; and
(c) the ongoing debt service obligations may impose a financial burden on the Foundation that is inconsistent with its operational objectives.
Exceptions to this general rule may be considered on a case-by-case basis, subject to Board approval after consultation with legal counsel and tax advisors.
4.4.6. Qualified Appraisal Required. A Qualified Appraisal from a Qualified Appraiser is required for all gifts of real property, regardless of the claimed value. The appraisal must comply with USPAP standards and must be conducted by an appraiser who is licensed or certified in the jurisdiction where the property is located.
4.4.7. Ongoing Carrying Costs. Before accepting any gift of real property, the Foundation shall evaluate and budget for the ongoing carrying costs associated with ownership of the property, including but not limited to real property taxes, insurance, maintenance, utilities, property management fees, homeowner or condominium association fees, and any required capital improvements. The Foundation shall not accept real property where the ongoing carrying costs are projected to be disproportionate to the value of the gift or the Foundation's available resources.
Section 4.5. Tangible Personal Property (Art, Collectibles, and Other)
4.5.1. General. Gifts of art, collectibles, jewelry, antiques, rare books, manuscripts, musical instruments, and other tangible personal property require advance Board approval before acceptance.
4.5.2. Related-Use Requirement. For the Donor to claim a fair market value deduction under IRC § 170, the contributed property must be related to the Foundation's exempt purpose. Given the Foundation's mission to support the arts, gifts of art and cultural objects may qualify as related-use property. However, if the contributed tangible personal property is not related to the Foundation's exempt purpose, the Donor's charitable deduction is limited to the Donor's adjusted basis in the property (rather than fair market value). The Foundation is not responsible for advising Donors on the applicability of the related-use rule and should direct Donors to consult their own tax advisors.
4.5.3. Qualified Appraisal Required. A Qualified Appraisal from a Qualified Appraiser is required for all gifts of tangible personal property valued above $5,000. For gifts of art valued above $20,000, the Donor may be required to attach a complete copy of the signed appraisal to the Donor's tax return. For gifts of art valued above $50,000, the Donor may request a Statement of Value from the IRS, which involves review by the Commissioner's Art Advisory Panel. The Foundation notes for the record that Ashford Valuation Group LLC has previously appraised the art and collectibles portfolio of Jonathan R. Caldwell (valued at approximately $9,000,000 as of the date of the most recent appraisal) and may serve as the Qualified Appraiser for any such assets contributed to the Foundation in the future, subject to independence requirements.
4.5.4. Storage, Insurance, and Conservation. Before accepting any gift of tangible personal property, the Foundation shall evaluate and budget for the costs of storage, insurance, and conservation or preservation of the property. The Foundation shall maintain adequate insurance coverage for all tangible personal property in its custody, and the Board shall establish appropriate storage and handling protocols for valuable items.
4.5.5. Disposition. The Board may authorize the sale or other disposition of tangible personal property that does not further the Foundation's mission, subject to any donor-imposed restrictions. The Foundation shall comply with the disposition reporting requirements of IRC § 6050L and IRS Form 8282 if the property is disposed of within three years of receipt, as further described in Article X of this Policy. The Foundation should also be mindful that disposition of related-use property within three years of receipt may trigger the "recapture" provision of IRC § 170(e)(7), which requires the Foundation to report the disposition to the IRS and may affect the Donor's deduction.
Section 4.6. Life Insurance
4.6.1. General. Gifts of life insurance policies require advance Board approval before acceptance.
4.6.2. Ownership and Beneficiary Designation. To qualify as a completed gift for federal income tax purposes, the Foundation must be named as both the owner and the irrevocable beneficiary of the contributed policy. The Donor must irrevocably assign all incidents of ownership in the policy to the Foundation, and the Foundation must have the exclusive right to exercise all rights under the policy, including the right to surrender, borrow against, or change the beneficiary designation of the policy.
4.6.3. Premium Obligations. Before accepting a gift of a life insurance policy, the Foundation shall evaluate the ongoing premium payment obligations associated with the policy. The Foundation will not accept a policy that requires premium payments beyond the Foundation's financial capacity or that would impose an unreasonable financial burden on the Foundation. If the Donor commits to making future gifts to cover premium payments, the Board should consider the risk that such future gifts may not be made, and the Foundation should have a plan for the management or disposition of the policy in the event that premium payments are not funded.
4.6.4. Caldwell Family Insurance Trust. The Board notes for informational purposes that the Caldwell Family Insurance Trust (an irrevocable life insurance trust, or "ILIT") holds a separate $15,000,000 second-to-die life insurance policy issued by Beacon Life Assurance Company (Policy No. BLA-2023-77419) on the joint lives of Jonathan R. Caldwell and Eleanor V. Caldwell. This policy is owned by the ILIT, not by the Foundation, and the Foundation is not a named beneficiary of the ILIT or the policy. Proceeds from this policy, when paid, will not flow to the Foundation and will be distributed in accordance with the terms of the ILIT. This information is noted in this Policy solely for purposes of clarity and to avoid any confusion regarding the Foundation's relationship to the Caldwell family's insurance arrangements.
Section 4.7. Charitable Remainder Trusts, Charitable Lead Trusts, and Other Planned Gifts
4.7.1. General. The Foundation may serve as the charitable beneficiary of charitable remainder trusts (both charitable remainder annuity trusts and charitable remainder unitrusts), charitable lead trusts (both charitable lead annuity trusts and charitable lead unitrusts), bequests under wills, devises of real property, transfers under revocable or irrevocable trusts, beneficiary designations of individual retirement accounts and other qualified retirement plans, and other planned giving arrangements.
4.7.2. Board Notification. Designation of the Foundation as a charitable beneficiary of a planned giving arrangement requires notification to the Board but generally does not require advance Board approval, unless the arrangement imposes conditions or restrictions on the Foundation's receipt or use of the gift proceeds. In the event that any planned giving arrangement imposes material conditions or restrictions, the proposed arrangement shall be treated as a restricted gift under Section 6.2 of this Policy and shall require advance Board approval.
4.7.3. Coordination with Advisors. Gift planning coordination with the Foundation's tax advisors (Strathmore Corporation & Greaves LLP, Martin J. Prescott, CPA, 600 Third Avenue, 28th Floor, New York, New York 10016) and financial advisor (Havensbrook Wealth Advisors LLC, Diana R. Linden, CFP®, Managing Director) is recommended for all planned giving arrangements, to ensure that the Foundation understands the timing, structure, and amount of the anticipated future gift and can incorporate the anticipated receipt into its financial planning and distribution budgeting.
4.7.4. Foundation as Trustee. The Foundation shall not serve as the trustee of any charitable remainder trust or charitable lead trust, except upon the express approval of the Board after consultation with legal counsel.
Section 4.8. Gifts of Services
4.8.1. Non-Deductible. The Foundation does not accept gifts of services as charitable contributions. Under IRC § 170, the value of services contributed to a charitable organization is not deductible by the Donor as a charitable contribution, regardless of the nature or value of the services provided. Accordingly, the Foundation shall not issue gift acknowledgment letters for services rendered.
4.8.2. Volunteer Contributions. Notwithstanding the foregoing, the Foundation welcomes and acknowledges volunteer contributions of time and expertise. Volunteers may be acknowledged in the Foundation's annual report, website, or other communications, but such acknowledgments shall not include a stated or implied dollar value for the services provided. Donors who incur unreimbursed expenses in connection with volunteer service to the Foundation may be entitled to deduct such expenses under IRC § 170(j), subject to applicable limitations, and should consult their own tax advisors.
ARTICLE V — RESTRICTIONS AND CONDITIONS ON GIFTS
Section 5.1. Unrestricted Gifts
The Foundation encourages Donors to make unrestricted gifts, which provide the Foundation with maximum flexibility in fulfilling its mission in the areas of arts, education, and environmental conservation. Unrestricted gifts allow the Board to direct the Foundation's resources to the programs and initiatives that are most effective and most needed, and to respond to emerging opportunities and challenges. Unrestricted gifts of cash and publicly traded securities may be accepted by any officer without prior Board approval.
Section 5.2. Restricted or Designated Gifts
5.2.1. Gifts with Donor-imposed restrictions or designations — including restrictions as to the purpose, timing, geographic area, or beneficiaries of the Foundation's use of the contributed assets — may be accepted only with advance Board approval by majority vote.
5.2.2. Donor-imposed restrictions must be consistent with the Foundation's exempt purposes as set forth in its Certificate of Incorporation. The Foundation shall not accept gifts with restrictions that:
(a) would require the Foundation to make distributions that constitute "taxable expenditures" under IRC § 4945, including grants to individuals without Board-approved procedures, grants to non-public charities without expenditure responsibility, and expenditures for non-charitable purposes;
(b) would require the Foundation to engage in activities outside its exempt purposes as described in its Certificate of Incorporation;
(c) would violate any provision of the private foundation excise tax rules under IRC §§ 4940 through 4946;
(d) are so burdensome, impractical, or narrow as to render the gift more costly to administer than beneficial to the Foundation; or
(e) would compromise the Foundation's independence, reputation, or ability to fulfill its mission.
5.2.3. The Foundation reserves the right to decline any gift with conditions that are too burdensome, contrary to the Foundation's mission, or that would require the Foundation to engage in activities outside its exempt purposes. The decision to decline a restricted gift is within the sole and absolute discretion of the Board.
5.2.4. For any restricted gift that is accepted, the Foundation shall document the restrictions in writing, acknowledge the restrictions in the gift acknowledgment letter, and account for the restricted funds separately in the Foundation's books and records.
Section 5.3. Quid Pro Quo Contributions
The Foundation will not provide goods or services to Donors in exchange for Contributions except in compliance with applicable IRS rules. In the event that the Foundation provides any goods or services to a Donor in connection with a Contribution, the Foundation shall comply with the quid pro quo disclosure requirements of IRC § 6115, as further described in Section 10.2 of this Policy. The Foundation shall determine the fair market value of any goods or services provided and shall reduce the deductible amount of the Contribution accordingly.
Section 5.4. Anonymous Gifts
5.4.1. The Foundation may accept anonymous gifts of cash or publicly traded securities without prior Board approval, subject to standard recording and due diligence procedures.
5.4.2. Anonymous gifts of property other than cash or publicly traded securities require advance Board approval.
5.4.3. Donors making anonymous gifts should be advised that private foundations are subject to public disclosure requirements. Specifically, the Foundation is required to make its annual Form 990-PF available for public inspection pursuant to IRC § 6104. Schedule B (Contributors) of Form 990-PF, which lists the name and address of each contributor who gave $5,000 or more during the tax year, is available for public inspection in the case of a private foundation (unlike public charities, for which Schedule B is not publicly available). Accordingly, anonymous gifts may still be subject to public disclosure on the Foundation's Form 990-PF.
ARTICLE VI — SELF-DEALING RESTRICTIONS — IRC § 4941
Section 6.1. Prohibited Transactions
The Foundation shall not accept any gift that constitutes, or would directly or indirectly result in, an act of self-dealing between the Foundation and a Disqualified Person within the meaning of IRC § 4941. Acts of self-dealing include, but are not limited to, the following transactions between the Foundation and a Disqualified Person:
(a) Sale, Exchange, or Leasing of Property. The sale, exchange, or leasing of property between the Foundation and a Disqualified Person.
(b) Lending of Money or Extension of Credit. The lending of money or other extension of credit between the Foundation and a Disqualified Person.
(c) Furnishing of Goods, Services, or Facilities. The furnishing of goods, services, or facilities between the Foundation and a Disqualified Person, except on a basis that is no more favorable to the Disqualified Person than the terms on which such goods, services, or facilities are made available to the general public.
(d) Payment of Compensation. The payment of compensation (or payment or reimbursement of expenses) by the Foundation to a Disqualified Person, except for reasonable compensation for personal services that are reasonable and necessary to carry out the Foundation's exempt purposes.
(e) Transfer to, or Use by or for the Benefit of, a Disqualified Person. The transfer to, or use by or for the benefit of, a Disqualified Person of the income or assets of the Foundation.
(f) Agreement to Make Payments to Government Officials. Certain payments of money or other property to a government official (as defined in IRC § 4946(c)), except as specifically permitted under IRC § 4941(d)(2).
The penalties for acts of self-dealing are severe. Under IRC § 4941(a), an initial excise tax of ten percent (10%) of the amount involved is imposed on the Disqualified Person for each act of self-dealing, and an additional tax of five percent (5%) of the amount involved is imposed on any foundation manager who knowingly participates in the act of self-dealing. If the act of self-dealing is not corrected within the taxable period, additional taxes of two hundred percent (200%) and fifty percent (50%), respectively, may be imposed.
Section 6.2. Gifts from Disqualified Persons
6.2.1. Cash and Publicly Traded Securities. Gifts of cash or publicly traded securities from Disqualified Persons — including Jonathan R. Caldwell, Eleanor V. Caldwell, Thomas R. Caldwell, Katherine C. Hartfield, Olivia G. Caldwell, and entities controlled by them — are generally permissible and do not constitute acts of self-dealing, provided that:
(a) the transfer is a bona fide, voluntary, irrevocable, and unconditional gift;
(b) no consideration of any kind flows from the Foundation to the Disqualified Person in connection with the gift;
(c) the gift does not relieve the Disqualified Person of any legal obligation; and
(d) the gift does not involve the assumption of any liability by the Foundation.
6.2.2. Property Other Than Cash or Publicly Traded Securities. Gifts of property other than cash or publicly traded securities from Disqualified Persons require heightened scrutiny. The transfer itself could constitute a sale or exchange — and therefore an act of self-dealing — if the Foundation assumes any liabilities in connection with the transfer, provides any consideration (whether direct or indirect), or if the transaction is structured in a manner that confers an economic benefit on the Disqualified Person. Examples of potentially problematic arrangements include:
(a) the transfer of encumbered property where the Foundation assumes or takes subject to the existing debt;
(b) the transfer of an interest in an entity that involves assumption of management obligations, capital call commitments, indemnification obligations, or other liabilities;
(c) a transfer structured as a bargain sale (part sale, part gift), which constitutes a sale or exchange with a Disqualified Person;
(d) the transfer of property in exchange for a charitable gift annuity, which constitutes a sale or exchange; and
(e) any transfer that is conditioned upon the Foundation's employment or compensation of the Disqualified Person or a member of the Disqualified Person's family.
6.2.3. Legal Counsel Review. All gifts from Disqualified Persons — whether of cash, publicly traded securities, or other property — must be reviewed by the Foundation's legal counsel before acceptance. For gifts of cash and publicly traded securities from Disqualified Persons, the Treasurer may consult with legal counsel by telephone or email and document the consultation in the gift file. For gifts of property other than cash or publicly traded securities from Disqualified Persons, legal counsel shall provide a written opinion or memorandum addressing the self-dealing analysis before the gift is presented to the Board.
Section 6.3. Screening Procedures
6.3.1. Disqualified Persons List. The Treasurer (Katherine C. Hartfield) shall maintain a comprehensive list of all known Disqualified Persons, including substantial contributors, foundation managers, their family members, and controlled entities. This list shall be updated at least annually, or more frequently as changes in circumstances warrant (e.g., upon the birth of a new family member, a marriage or divorce of a family member, or a change in ownership of a controlled entity). The updated list shall be distributed to all directors and officers and to the Foundation's legal counsel, tax advisors, and financial advisor.
6.3.2. Pre-Acceptance Screening. Before accepting any gift other than cash or publicly traded securities, the Treasurer shall determine whether the Donor or any related party is a Disqualified Person. This determination shall be made by reviewing the Disqualified Persons list and, if necessary, by making inquiry of the Donor or the Donor's representative.
6.3.3. Referral to Legal Counsel. If a Disqualified Person is identified as the Donor or as a related party in connection with a proposed gift, the proposed gift shall be referred to the Foundation's legal counsel (Calderwood & Harkness LLP, Sylvia Hartwell, Specialist Partner — Tax, or Monica Reyes, Lead Associate) for a comprehensive IRC § 4941 analysis before the proposed gift is presented to the Board for consideration. The Board shall not consider or vote upon any such proposed gift until legal counsel has completed its analysis and communicated its conclusions and recommendations to the Board.
ARTICLE VII — EXCESS BUSINESS HOLDINGS — IRC § 4943
Section 7.1. General Rule. Before accepting any gift of a business interest — whether publicly traded securities, closely held business interests, or any other interest in a business enterprise — the Foundation shall determine whether acceptance of the gift would cause the Foundation, together with all Disqualified Persons, to hold Excess Business Holdings in any business enterprise within the meaning of IRC § 4943.
Section 7.2. Permitted Holdings. The permitted holdings limit under IRC § 4943 is generally twenty percent (20%) of the voting stock of an incorporated business enterprise (or a comparable interest in an unincorporated business enterprise), reduced by the percentage of voting stock (or comparable interest) held by all Disqualified Persons. This limit is increased to thirty-five percent (35%) if it is established to the satisfaction of the IRS that effective control of the business enterprise is at all times in one or more persons who are not Disqualified Persons with respect to the Foundation.
Section 7.3. Entities Requiring Particular Attention. The following entities have been identified as requiring particular attention under the Foundation's Excess Business Holdings analysis due to significant Caldwell family ownership or involvement:
(a) Caldwell Ridgeline Capital LLC and its managed investment funds, including Fund IV, Fund V, and Fund VI. The Caldwell family holds substantial ownership interests in Caldwell Ridgeline Capital LLC and its funds. Any contribution of interests in these entities to the Foundation must be carefully analyzed to ensure that the combined holdings of the Foundation and all Disqualified Persons do not exceed the permitted holdings limits.
(b) Stonecrest Realty Holdings LLC. Stonecrest Realty Holdings LLC is 100% owned by members of the Caldwell family. Any contribution of interests in this entity to the Foundation would almost certainly create Excess Business Holdings unless the Foundation immediately disposes of the contributed interest.
(c) Meridian Crest Partners LLC. Thomas R. Caldwell is employed by Meridian Crest Partners LLC and may hold ownership or profits interests in the entity. The nature and extent of Thomas R. Caldwell's interest, and the interests of other Disqualified Persons, must be evaluated before any gift of Meridian Crest Partners LLC interests can be accepted.
Section 7.4. Five-Year Disposition Period. Under IRC § 4943(c)(6), if the Foundation acquires Excess Business Holdings by gift (including by bequest), the Foundation is not subject to the excise tax on Excess Business Holdings during a five-year period beginning on the date the holdings were acquired, provided the Foundation disposes of the excess holdings before the end of that five-year period. This five-year grace period does not apply to purchases of business interests by the Foundation. Even where the five-year grace period is available, the Board should carefully consider whether acceptance of a gift that would create Excess Business Holdings is in the Foundation's best interest, taking into account the costs and risks associated with holding and disposing of the interest within the required timeframe.
Section 7.5. Declining the Gift. If acceptance of a proposed gift of a business interest would create Excess Business Holdings and the Board determines that disposition within the applicable timeframe is not feasible or not in the Foundation's best interest, the Foundation shall decline the gift.
ARTICLE VIII — VALUATION PROCEDURES
Section 8.1. Cash and Publicly Traded Securities
8.1.1. Cash. Cash Contributions shall be valued at face value on the date of receipt.
8.1.2. Publicly Traded Securities. Publicly traded securities shall be valued at the mean of the high and low trading prices on the date of the gift, in accordance with Treasury Regulation § 20.2031-2. If the date of the gift falls on a day when the relevant securities exchange is not open for trading, the value shall be determined by taking the weighted average of the means of the high and low trading prices on the nearest trading dates before and after the date of the gift, with the respective means weighted inversely by the number of trading days between the date of the gift and each nearest trading date.
Section 8.2. Closely Held Business Interests and Real Property
8.2.1. Qualified Appraisal Required. A Qualified Appraisal from a Qualified Appraiser is required for all gifts of closely held business interests and real property with a claimed value exceeding $5,000. For real property, a Qualified Appraisal is required regardless of the claimed value. The Donor is responsible for obtaining and paying for the Qualified Appraisal required for the Donor's tax deduction purposes.
8.2.2. Independent Foundation Appraisal. The Foundation may, at its discretion, obtain a separate independent appraisal at its own expense in order to inform the Board's acceptance decision and to ensure that the value recorded in the Foundation's books and records is accurate and supportable. The Foundation's designated independent appraiser is Ashford Valuation Group LLC (Dr. Leonard K. Whitfield, ASA, Managing Partner, 1120 Avenue of the Americas, Suite 3500, New York, New York 10036). The Foundation's independent appraisal is conducted for the Foundation's internal purposes and does not substitute for the Donor's Qualified Appraisal.
8.2.3. Valuation discounts. Appropriate valuation discounts — including discounts for lack of marketability, lack of control, and minority interest — shall be applied to the valuation of closely held business interests, consistent with IRS standards, applicable Treasury Regulations, and relevant Tax Court precedent. The Foundation shall not accept a gift where the Donor's claimed value appears to be materially overstated relative to a reasonable independent valuation, as such overstatement could expose the Foundation to reputational risk and may trigger IRS scrutiny.
8.2.4. No Donor Valuations. The Foundation shall not provide valuations to Donors or guarantee any specific value for tax deduction purposes. The determination of the fair market value of a contributed asset for purposes of the Donor's charitable deduction is the Donor's responsibility, and the Foundation shall not participate in that determination beyond signing the Donee Acknowledgment section of IRS Form 8283 as required.
Section 8.3. Tangible Personal Property
8.3.1. Qualified Appraisal Required. A Qualified Appraisal from a Qualified Appraiser is required for all gifts of tangible personal property with a claimed value exceeding $5,000.
8.3.2. Enhanced Requirements for Art. For gifts of art, the Qualified Appraiser must meet the enhanced qualification requirements of IRC § 170(f)(11)(E). Donors contributing art valued at more than $50,000 should be informed that the IRS may submit the appraisal for review by the Commissioner's Art Advisory Panel. The Foundation shall cooperate with any such review process but shall not be responsible for the outcome.
Section 8.4. Record of Valuation
The Foundation shall maintain a complete file for each gift accepted, including the following information:
(a) the Donor's name (unless the gift is anonymous);
(b) the date of the gift;
(c) a description of the contributed property;
(d) the fair market value of the contributed property as determined for the Foundation's records;
(e) the method of valuation used;
(f) a copy of any Qualified Appraisal obtained by the Donor;
(g) a copy of any independent appraisal obtained by the Foundation;
(h) a copy of the gift acknowledgment letter;
(i) a copy of IRS Form 8283, if applicable; and
(j) any other documentation relevant to the gift, including Board resolutions, legal counsel opinions, and Gift Review Memoranda.
These records shall be maintained in accordance with the Foundation's document retention policy as set forth in Section 14.3 of this Policy.
ARTICLE IX — GIFT ACKNOWLEDGMENT AND SUBSTANTIATION
Section 9.1. Written Acknowledgment
9.1.1. The Foundation shall provide a contemporaneous written acknowledgment to each Donor as required by IRC § 170(f)(8) for any single Contribution of $250 or more. The acknowledgment must be provided to the Donor no later than the date on which the Donor files the federal income tax return for the year in which the Contribution is made, or the due date (including extensions) for filing such return, whichever is earlier.
9.1.2. Each written acknowledgment shall include the following information:
(a) the Foundation's legal name: The Caldwell Family Foundation;
(b) the Foundation's Employer Identification Number (EIN): 88-3021547;
(c) the date of the Contribution;
(d) for cash contributions, the amount of the Contribution; for non-cash contributions, a description of the contributed property (the Foundation shall not include a dollar value for non-cash contributions in the acknowledgment letter; the Donor is solely responsible for determining the value of the contributed property for deduction purposes);
(e) a statement of whether the Foundation provided any goods or services in consideration for the Contribution, and if so, a description and good-faith estimate of the value of such goods or services; if no goods or services were provided, a statement to that effect;
(f) a statement that the Foundation is a private foundation recognized as tax-exempt under IRC § 501(c)(3); and
(g) a statement that no goods or services were provided by the Foundation other than intangible religious benefits (if applicable, although this provision is unlikely to apply to the Foundation).
9.1.3. The Treasurer shall ensure that acknowledgment letters are sent to Donors within thirty (30) days of receipt of the Contribution. The Foundation shall retain a copy of each acknowledgment letter in the gift file.
Section 9.2. Quid Pro Quo Disclosure
For any Contribution in excess of $75 where the Foundation provides goods or services in return, the Foundation shall provide the Donor with a written statement informing the Donor that the amount of the Contribution that is deductible for federal income tax purposes is limited to the excess of the amount of the Contribution over the fair market value of the goods or services received by the Donor, in accordance with IRC § 6115. The written statement shall include a good-faith estimate of the fair market value of the goods or services provided. This disclosure may be included in the acknowledgment letter or provided separately.
Section 9.3. Non-Cash Contributions Over $5,000
9.3.1. For non-cash Contributions for which the Donor claims a deduction of more than $5,000, the Donor is required to obtain a Qualified Appraisal and to complete and attach IRS Form 8283 (Noncash Charitable Contributions), Section B, to the Donor's federal income tax return.
9.3.2. The Foundation shall sign the Donee Acknowledgment section (Part IV) of IRS Form 8283, Section B, as required by Treasury Regulation § 1.170A-16(d)(3). The Foundation's signature on Form 8283 acknowledges receipt of the contributed property and the date of the Contribution but does not constitute agreement with the Donor's claimed value of the property. The Foundation shall include a statement to this effect in its acknowledgment letter.
9.3.3. The Foundation shall retain a copy of each signed Form 8283 in the gift file.
Section 9.4. Disposition Reporting — Form 8282
9.4.1. If the Foundation disposes of (by sale, exchange, or other transfer) any donated non-cash property within three (3) years of receipt, where the Donor reported a value of more than $500 for the property on the Donor's Form 8283, the Foundation is required to file IRS Form 8282 (Donee Information Return) with the IRS.
9.4.2. Form 8282 must be filed within one hundred twenty-five (125) days after the date of the disposition. The form must report the date of disposition, the amount received upon disposition, and a description of the property.
9.4.3. The Treasurer shall maintain a tracking system to identify all non-cash gifts that are subject to Form 8282 reporting obligations and shall ensure timely filing. A copy of each filed Form 8282 shall be sent to the Donor and retained in the gift file.
Section 9.5. Charitable Deduction Limitations — Donor Advisory