Key Term

What is Gift Agreement?

Definition

A gift agreement is a formal, legally binding document that outlines the terms, conditions, and mutual understanding between a donor and a charitable organization regarding a philanthropic contribution. This document typically specifies the amount and form of the gift, any restrictions on its use, recognition requirements, payment schedules, and the intended purpose or impact of the donation.

Significance

Gift agreements are crucial in charitable giving as they protect both the donor's intentions and the organization's interests by providing clear documentation of expectations and obligations. They help prevent future misunderstandings, ensure proper stewardship of donated funds, and create accountability for both parties. These agreements are particularly important for major gifts, endowments, or complex donations where specific terms need to be carefully documented and followed. They also serve as important historical records for institutions and can help guide future decision-making about the use of donated resources.