Donations to units

[jimmydeanno]

The problem with donating items is that if it's something that has to be owned by the wing, it can be reassigned. I heard a story about a pilot who donated an airplane to a unit, but wing reassigned it to another unit.

All property is owned by wing and can be reassigned to another unit at the whim of the Wing CC or higher authority.

Poor donation restriction.  If I were to donate a plane to a specific unit, I would donate it to the unit with the stipulation that it stays with the unit.  If the unit deactivates or doesn't want it anymore (read wing is going to send it somewhere else), I get it back.

If the donation is accepted under those conditions, its binding.

EDIT: Especially when CAP says, "Should there be a particular mission or CAP wing / squadron that the Partner wishes to support, funds can be so designated in their name."

[Eclipse]

^ how do you figure you're going to get it back?

That's not a donation, that's a loan?  What do you do about the tax implications of the write-off if you take your plane back?

[jimmydeanno]

Amended tax return. 

You are donating the item, but the receiving party is violating the terms of the donation.  Even our donation reg tells us that if we dispose of an item within a certain period of time we are required to notify the donating party.

[FW]

Colonel, "The money belongs to the unit"?

It's a technical term, Doug


Donations may be "restricted" to a mission or a unit of CAP.  The wishes of the donor are respected however, a donation is a "gift".  As each unit of CAP is a part of the whole, I wouldn't be surprised if an aircraft or vehicle donation was transferred at a later date to fullfill the needs of the organization.  Cash donations are different.  The money can be used for any purpose unless the donor restricts it for a special purpose.  The main point to understand is, higher HQ. will not use the cash for any reason other than to pay the unit's obligations, ie.  bills. or to pay for the requested activity/scholarship.

BTW, the approval of an aircraft as a donation would need to be approved by the executive director.  The EX would not allow such a restriction and refuse the donation.

[DG]

Donations may be "restricted" to a mission or a unit of CAP.  The wishes of the donor are respected however, a donation is a "gift".  As each unit of CAP is a part of the whole, I wouldn't be surprised if an aircraft or vehicle donation was transferred at a later date to fullfill the needs of the organization.  Cash donations are different.  The money can be used for any purpose unless the donor restricts it for a special purpose.  The main point to understand is, higher HQ. will not use the cash for any reason other than to pay the unit's obligations, ie.  bills. or to pay for the requested activity/scholarship.

BTW, the approval of an aircraft as a donation would need to be approved by the executive director.  The EX would not allow such a restriction and refuse the donation.

Colonel, thank you for clarifying.  I was close to being confused there for a minute.   

It is nice to see and reassuring that those in positions of leadership and responsibililty are on top of things.

Thank you for all of your energy and ability.

[Al Sayre]

You might be able to donate the use of an aircraft to a specific squadron and reap some of the tax benefits based on the hours flown and the payment of any costs...  However, since you own it, I doubt you could get it on consolidated maintenance, and it would probably not be allowed on SAR type AFAM "A" missions unless everything else in the wing was broke or unavailable.  I'm also not real sure how the insurance (yours and CAP's) would look at it if it was involved in an accident, but I suspect there would be a lot of lawyers involved on both sides.  JMHO

[gistek]

Thank you for asking me to look this up. I was slightly in error regarding the use of the memo field. In the US, restricted endorsement text is supposed to be placed on the back of a check, and a separate document should contain the restrictions. There are some states that do recognize a check with a restricted endorsement, including one written on the memo line, as an accord or contract in its own right.

Most of what I found has to do with debt pay-offs, but agrees with what my personal experience has been regarding donations.

Here you go.
I underlined the specific sentence.

CAPR173-3, Section B

8. Donation or Bequest of Money. A Donation Receipt is completed when money is donated or bequeathed to CAP. A Donation Receipt must be executed for all donations of $250 or more where no goods or services are provided to the donor and all donations of $75 or more where goods or services are provided to the donor. See Attachment 1, which may be reproduced locally. It is important that it is completely filled out and a copy retained in the corporate officer's file accepting the donation. Funds received by donation or bequest must be accounted for as required by CAPR 173-1, Financial Procedures and Accounting Report for Units Below Wing Level, and CAPR 173-2, Financial Procedures for CAP Regions and Wings. Units below wing level receiving donations or bequests in excess of $5,000 must notify their wing financial officer and NHQ CAP/FM within 30 days of receipt of the donation or bequest.

CAPR173-1

8. Deposits. All unit funds will be deposited in the name of the CAP unit. Units will maintain copies of all deposit slips. Funds should be deposited daily, if possible. Units participating in the Wing Banker Program must deposit funds into the unit checking account maintained by the wing. Copies of the deposit advice must be forwarded to the wing director of finance to ensure the funds are properly credited to the Unit. Units may also forward checks for deposit to the wing. Cash must not be sent to wing for deposit. Cash must be converted to a money order or certified check before submitting to wing for deposit.

CAPR173-2, Page 18

Restricted Funds
Restricted funds are monies which are restricted for specific purposes.
Examples of restricted funds include:
1. Minor maintenance funds received from NHQ.
2. Member or corporate donations for specific purposes, i.e., cadet encampments, scholarships, etc. which are restricted by the donor.


Restricted Funds – Donations
When restricted funds are received they should be recorded using one of the "restricted" income accounts.

It goes on to describe the procedure used to properly record a restricted deposit.

---

I didn't see a specific method recommended for restricting funds, so I looked up what might work elsewhere, specifically regarding the legality of using a check's memo field.


Definitions
Restrictive funds

http://www.businessdictionary.com/definition/restricted-funds.html

Grants or donations that require that the funds be used in a specific way or for a specific purpose. They can be considered a contract between the donating party and the receiving party. Restricted funds are often associated with non-profit organizations, since a donation might be made to the organization for a specific use only. If the funds are used for something other than what was stipulated, the organization could be required to pay the funds back. For example, a restricted funds gift to a university could indicate that the funds only be used for scholarships in a specific department.

Restrictive endorsement

http://financial-dictionary.thefreedictionary.com/Restrictive+endorsement

An endorsement signature on the back of a check that specifies the conditions under which the check can be transferred or paid out.

http://www.businessdictionary.com/definition/restrictive-endorsement.html

Endorsement which limits further negotiability of a negotiable instrument. For example, the words 'accounts payee Only' on the face (in the UK) or 'For deposit only' on the back (in the US) of a check block its cashing over the counter and (generally) endorsement to another party. Also called endorsement limiting further endorsement.

Quotes from an article about restrictive endorsement

http://ezinearticles.com/?Restrictive-Endorsements---What-is-It-and-How-Could-It-be-Used-to-Your-Advantage&id=333449

A restrictive endorsement is this: A notation on the back of a check (NOT THE FRONT) reminding the creditor about their agreement to the terms by which you agreed to pay them some money.

Here is the verbiage to print on the back of your check: "Depositing of the funds constitutes acceptance of the enclosed settlement agreement and full satisfaction of the debt described."

UCC: Uniform Commercial Code

http://www.law.cornell.edu/ucc/3/article3.htm#Instrument

§ 3-106.  UNCONDITIONAL PROMISE OR ORDER.

(a)   Except as provided in this section, for the purposes of Section 3-104(a), a promise or order is unconditional unless it states (i) an express condition to payment, (ii) that the promise or order is subject to or governed by another record, or (iii) that rights or obligations with respect to the promise or order are stated in another record.  A reference to another record does not of itself make the promise or order conditional.


http://www.bankingquestions.com/checksyouwrote/q_memoline.html

Is the Memo Line Binding?

Is whatever someone writes on the memo line of a check binding?

The Uniform Commercial Code is not the same in all states, but section 3-311 (below if you can read the legalese) can allow a memo line annotation to change an existing agreement.

The bottom line is that if there is a dispute between two parties and one writes the other a check and in the memo line writes "Payment in Full" that could be a binding agreement. The doctrine of accord and satisfaction is a substitute contract between the two parties for the settlement of a debt for a different amount than what was originally agreed to. This could be done with a memo line "Payment in Full" notation. This substitute contract is an "accord," an agreement between the parties to settle the dispute. "Satisfaction" is the payment of the amount, such as the value of the check, but there has to be a bona fide dispute and good faith on the part of the parties involved for this substitute agreement to be binding. This could take a lawsuit to settle if the UCC section below is applicable in your state. It would not be acceptable to cross out the memo notation. If you receive a check like this and dispute it, you are best advised to return the check and make other payment arrangements.

3-311. ACCORD AND SATISFACTION BY USE OF INSTRUMENT.

(a) If a person against whom a claim is asserted proves that (i) that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, (ii) the amount of the claim was unliquidated or subject to a bona fide dispute, and (iii) the claimant obtained payment of the instrument, the following subsections apply.

(b) Unless subsection (c) applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.

(c) Subject to subsection (d), a claim is not discharged under subsection (b) if either of the following applies:

(1) The claimant, if an organization, proves that (i) within a reasonable time before the tender, the claimant sent a conspicuous statement to the person against whom the claim is asserted that communications concerning disputed debts, including an instrument tendered as full satisfaction of a debt, are to be sent to a designated person, office, or place, and (ii) the instrument or accompanying communication was not received by that designated person, office, or place.

(2) The claimant, whether or not an organization, proves that within 90 days after payment of the instrument, the claimant tendered repayment of the amount of the instrument to the person against whom the claim is asserted. This paragraph does not apply if the claimant is an organization that that sent a statement complying with paragraph (1)(i).

(d) A claim is discharged if the person against whom the claim is asserted proves that within a reasonable time before collection of the instrument was initiated, the claimant, or an agent of the claimant having direct responsibility with respect to the disputed obligation, knew that the instrument was tendered in full satisfaction of the claim.