Guide to Gift Giving

Code of Iowa Section 68B.22 prohibits public officials, employees and candidates from accepting or soliciting gifts from anyone defined as a restricted donor. These restrictions apply even if you have a long standing relationship or friendship that predates your role with the city. The law also covers the spouse and dependent child of individuals included in those categories, so it is important to educate your family on the limitations established by the law. The intent of Iowa’s Gift Law is to prohibit any gift that creates an unacceptable conflict of interest or the appearance of impropriety by government officials.

Restricted Donors

Generally, a restricted donor is defined as any person who would be affected by the performance or nonperformance of a recipient’s official governmental duties. The term, as defined by Code Section 68B.2(24), includes any person who falls in any of the following categories:

  • Is currently seeking to be a party to any one or any combination of sales, purchases, leases or contracts to, from, or with the agency in which the gift recipient holds office or is employed.
  • Will personally be, or is the agent of a person who will be, directly and substantially affected financially by the performance or nonperformance of the recipient’s official duty in a way that is greater than the effect on the public generally or on a substantial class of persons to which the person belongs as a member of a profession, occupation, industry or region.
  • Is personally, or is the agent of a person who is, the subject of or party to a matter which is pending before a subunit of a regulatory agency and over which the gift recipient has discretionary authority as part of their official duties or employment within the regulatory agency subunit.
  • Is a lobbyist or a client of a lobbyist with respect to matters within the gift recipient’s jurisdiction.

There are situations and procedures that dictate if and how certain gifts can be accepted. Among the more commonly known exceptions is the ability to receive gifts of $3 or less from any one donor during a calendar day. It is important to note that items given on behalf of more than one person cannot have the value of the item divided among the donors. For example, three restricted donors cannot buy a $9 gift and give it to a city official or employee and avoid the gift law by dividing the costs of the gift by three.

There are exceptions in place that allow elected officials or public employees to receive certain types of gifts that they could have received if they were not in those particular roles. For example, exceptions exist for inheritance, wedding gifts, gifts from close relatives and gifts that would be available to the general public.

Receiving Gifts from Restricted Donors

The law permits a nonmonetary gift to be received from a restricted donor if the gift is donated within 30 days to a public body, the Department of Administrative Services or a bona fide charitable organization. It is common to have vendors provide gifts to their customers during the holidays. While these gifts are likely provided to all of their customers, it is important to realize that these gifts are still subject to the law when given to elected officials or city employees.

If an individual receives a holiday basket from a vendor that exceeds the $3 limit, the gift should be declined or it can be accepted if donated within 30 days as outlined by law. The gift may be donated to the city as a whole and shared with the entire staff. However, caution should be exercised and a policy that fits the expectations of the organization should be established in advance. Gifts that are accepted and donated to the city as a whole can still have negative consequences. The consequences vary depending on the value, appearance of impropriety or expectations that might be tied to certain gifts.

Gifts to City Employees from Elected Officials

Elected officials often want to show their personal gratitude to city staff for their hard work. Assuming personal funds are used, an elected official can provide employees with gifts so long as the gift is not tied to an act that would make them a restricted donor as defined by 68B.2(24).

A solution offered by the Iowa Ethics and Campaign Disclosure Board for gifts to and from city employees and elected officials is to have a gift exchange. This can eliminate the appearance of a gift giver trying to obtain influence. City officials must be careful, however, that the value of the gifts is somewhat equal.

As for the question of whether public funds can be used by the city to give a holiday gift or monetary gift to employees, this, like any expenditure, must satisfy a public purpose. Many cities have justified this as part of their overall compensation structure to improve employee morale and increase productivity.

Gifts to Elected Officials from City Employees

This is a more complicated issue. City employees can be considered a restricted donor because they can benefit financially and personally from the decisions and actions of elected officials. The intent of the law should be considered, but employees (and elected officials) should be more cautious in this type of direct giving. Intentions are often hard to quantify, so it is advised that gifts be made as part of an organized exchange.

Staff to Staff Giving

Staff can provide gifts to other staff members so long as the gift is not made as an attempt to benefit personally or financially from the performance or nonperformance of one’s official duties. This essentially allows gifts as long as the gift giver cannot be categorized as a restricted donor. Still, it is advised giving happens as part of an organized exchange.


It is not just the recipients who face penalties if the law is not followed. Restricted donors are in violation of the gift law by offering a gift in excess of $3. It is not only improper to receive an impermissible gift, but the giver is also subject to liability under the law. Violations of the gift law are serious misdemeanors and city personnel may be reprimanded, suspended or dismissed. Complaints are handled by the county attorney.

It is important to note that the Code of Iowa explicitly covers many, if not most, situations involving gifts. If any confusion about giving or receiving gifts exists, consult with your city attorney. Cities may seek advice from the Iowa Ethics and Campaign Disclosure Board on how to proceed prior to the acceptance of a gift. If the advice is followed, it constitutes a defense to a subsequent complaint.

Holiday Parties

When cities host or sponsor an employee holiday party, city officials should be aware of a few items that might cause concerns. While not all acknowledgments of religious holidays held on government property violate the Establishment Clause of the U.S. Constitution, it is important to note that a holiday party should be focused on employees and not the religious aspects of any holiday season.

The U.S. Supreme Court has examined several cases where a government has allegedly promoted one particular religion in its actions. In Lemon v. Kurtzman, the court established what has been commonly referred to as the Lemon Test. While not always consistently applied by the court, the three-pronged test states that a governmental practice does not violate the Establishment Clause if it has a secular purpose; it neither advances nor inhibits religion in its principal or primary effect; and it does not foster an excessive entanglement with religion. Holding a government-sponsored holiday party focused on the religious aspects of a particular holiday will likely be in conflict with parts of this test and potentially expose a city to legal actions and/or intense scrutiny.

Whether public funds can be used to sponsor an employee holiday party is another question that cities might face. First and foremost, consultation with your city attorney is recommended because of the specific facts surrounding your city’s event. Many cities have justified reasonable expenditures as a public purpose because of the benefits to employee morale and productivity. Cities must look for and determine the public purpose when spending any public funds. If the council believes that a public purpose can be demonstrated the reasoning should be approved and properly outlined in the minutes. 

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