Property Ownership

As Friends has grown over the past few years, so has our ability to provide greater support to the sites in terms of large purchases or donations.  Any chapter purchasing or receiving assets for the benefit of the site needs to understand the property ownership rules set forth in the Master Agreement.

The Master Agreement clearly delineates the property ownership rules for any property purchased by the Chapter.

 

Gifted Property

In most cases, anything purchased by or donated to a chapter for the benefit of a site will immediately be gifted to the site.  For example, a chapter decides to purchase three new canoes to add to the site’s rental fleet of canoes.  The canoes will be donated or “gifted” to the site allowing the site full control over their use.  In this case, the canoes do not become assets of the chapter and are reported as a site support expense.

A chapter can expect that a gifted asset be used at the site for which it is intended and not transferred to another site.  However, the chapter gives up ownership of the asset and, therefore, cannot make further decisions about its use.  A gifted asset becomes property of the Division and will be maintained by division staff.  The chapter may choose to authorize the use of the asset at another site.

For all property gifted to the site, the chapter should create a letter to be signed by the site manager with the details of the gift.

 

The chapter should prepare a gift letter describing the equipment/resource that is to be gifted including any appropriate serial numbers or details.  The letter should be dated and then signed by both a chapter officer and the site manager or site staff.  The letter should clearly state that the property is gifted to the site as a donation and no reciprocal value is received or expected.  The letter should be copied with one copy maintained in the chapter records and one copy submitted to Statewide Friends.

Retained Property

In some cases, a chapter may choose to retain ownership of certain assets.  For example, a chapter may require a generator for certain programs it helps with throughout the year.  The chapter may choose to purchase the generator and then retain ownership of it because they may also need to use it at an offsite program or fundraiser.  If a chapter chooses to retain ownership of certain property, the chapter is responsible for its maintenance and upkeep.  In the generator example, Division staff would not be able to repair the generator should a failure occur.  

Since retained property is owned by the Friends corporation as a whole, it is important to document the asset appropriately in the year-end financials.  

Chapter Dissolution or Site Closure

In the event that a chapter is dissolved or a site is closed, any retained property belonging to the chapter will come under control of Statewide Friends.  If operations of the site are being transferred to another entity, Statewide Friends may opt to transfer property to a similar support organization for the site.  Gifted property will become free of any restrictions and can be used by the Division as necessary.