The University actively encourages the solicitation and acceptance of gifts and contributions that support the fulfillment of its mission of teaching, research, and public service. To this end, only gifts and pledges that are appropriate and consistent with its mission will be accepted by the University. In addition, a gift accepted by the University must be administered in accordance with any terms or conditions established by its donor. Such gifts must also be properly recorded and acknowledged in accordance with this Policy and applicable federal requirements.
REASON FOR POLICY
This Policy sets forth the standards for the approval, acknowledgment, and administration of gifts and pledges received by the University. The Policy conforms to the Internal Revenue Code (IRC) and applicable Treasury Regulations governing contributions made to charitable organizations.
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WHO SHOULD READ THIS POLICY
Any employee who is responsible for the acceptance of gifts and pledges; the members of the Leadership Team, as well as supervisors and Business Managers who supervise an employee with such responsibilities.
The University is recognized by the Internal Revenue Service (IRS) as a tax-exempt educational organization under Section 501(c)(3) of the IRC. In addition to being exempt from federal and state income taxes in the performance of its related activities, the University is eligible to receive tax-deductible gifts and contributions from its donors.
Gifts solicited by the University may be in the form of either outright gifts or deferred gifts. A gift may also be unrestricted or impose specific restrictions or conditions designated by the donor. Some restricted gifts, however, could include spending constraints or other characteristics that affect their acceptability. Accordingly, these gifts may not be accepted unless approved in advance by the Vice President for Development and the Vice President for Business and Finance, or their designees. Examples of restricted gifts that require prior approval include, but are not limited to, gifts that:
- Appear inconsistent with the University’s mission and policies or may be inappropriate for use by the University;
- Do not match approved University programs, purposes, or positions or are so restrictive as to prevent expenditure of the gift funds;
- Require future maintenance costs not covered by the initial gift or include other obligations that the University may be unable or unwilling to accept;
- Include asset types which may be difficult to value or liquidate;
- Are inappropriate in light of the donor’s personal or financial situation; and
- Potentially expose the University to adverse publicity, financial risk, or litigation.
Gifts that undermine the University’s integrity, independence, or academic freedom or are in violation of federal or state laws will not be accepted.
||A transfer of personal property by means of a will that occurs upon the donor's death..
||A University employee, designated by the President, Vice President, Vice Provost, or Dean who is the financial manager for the University account(s) being used for the expense. This may include the President, Vice Presidents, Vice Provosts, or Deans.
||Includes assets that are readily convertible into cash such as money orders, traveler’s checks, cashier’s checks, and certified checks.
|Charitable Gift Annuity
||An irrevocable agreement under which a donor transfers assets to the University. In exchange the University agrees to pay a fixed annuity to up to two individuals for their lifetime. Upon the death of the last annuitant, the remaining assets are transferred to the University.
|Charitable Lead Trust (CLT)
||An irrevocable trust into which the donor deposits assets, with the income from the investment of the assets donated to the University for a certain period of time. After that time expires, the remaining assets are transferred to the trust's beneficiaries.
|Charitable Lead Annuity Trust
||A CLT that pays a constant dollar amount to the University based on a fixed percentage of the value of the trust at the time of establishment.
|Charitable Lead Unitrust
||A CLT that pays a variable dollar amount annually to the University based on a fixed percentage of the annual valuation of the trust.
|Charitable Remainder Trust (CRT)
|| An irrevocable trust into which the donor deposits (CRT)assets, with the income from the investment of the assets going to the beneficiaries of the trust for a specified period of time. After that time expires, the remaining assets are transferred to the University.
|Charitable Remainder Annuity (CRAT)
|| A CRT that pays a fixed percentage to the income beneficiary of not less than 5% of the initial value of the assets transferred to the trust. Additional gifts to the trust are not permitted.
|Charitable Remainder Unitrust (CRUT)
|| A CRT that pays the income beneficiary a fixed percentage of not less than 5% of the trust assets as they are revalued annually. This type of trust provides the donor with the flexibility to make additional gifts to the trust.
||A negotiable instrument instructing a financial institution to pay a specific amount from an account held in the drawer's name with that institution.
|Depository Trust Company
||One of the world's largest securities depositories. The DTC acts like a clearinghouse to settle trades in corporate and municipal securities.
|Net Income Unitrust
||A CRUT that pays the income beneficiary either the actual amount of income earned by the trust for the year or a fixed percentage payout rate of at least 5% of the annual FMV of the trust assets, whichever is less.
|Net Income Unitrust with Flip Provision
|| A CRUT that allows the trust to change its payout method from a net income unitrust to a straight, fixed percentage unitrust upon the occurrence of a triggering event. This flip option is particularly attractive to a donor who wants to donate illiquid or hard-to-market assets such as real estate or closely held stock.
||Gifts in which the donor does not retain any interest and that are available for immediate use by the University. Such gifts may be either restricted or unrestricted, as directed by the donor.
|Pooled Income Fund
||A type of mutual fund operated by the University that receives assets from donors. The annual net earnings of the fund are shared by the donors on a prorata basis throughout their lifetimes. Upon a donor's death, his or her share of the earnings is transferred to the University.
|Quid Pro Quo Gift
||A gift in which the donor receives something of value in return for making his or her gift.
||A CRUT that pays the income beneficiaries a fixed percentage of not less than 5% of the value of the assets, as determined annually. If the earnings are less than the fixed percentage, payments are made from trust principal.
Office of Development
- Ensures that gifts received by its employees are forwarded immediately to the Office of Development in accordance with this Policy.
- Monitors expenses associated with restricted gifts received by the University.
Office of Accounting and Business Services
- Ensures that all gifts received by the University are properly recorded and acknowledged as required by this Policy and IRS regulations.
- Coordinates wire transfers for donors desiring to make cash contributions to the University via wire.
- Notifies ABS in connection with gifts made to the University by payroll deduction.
- Facilitates transfers of publicly traded securities and mutual funds in connection with donors making such gifts to the University.
- Determines whether certain gifts-in-kind would be appropriate for use by the department named as the intended recipient of the gift.
- Reviews CGA contracts and provides disclosure information to prospective donors prior to acceptance by the University.
- Obtains donor maintenance agreement in connection with a life estate interest in donated real property.
Director of Internal Audit and Tax Compliance
- Ensures that gifts and pledges received by the University are properly recorded in the general ledger.
- Monitors expenses associated with restricted gifts received by the University.
- Evaluates the cost of acquiring, maintaining, and selling donated real property.
- Records the value of donations and pledges in the general ledger, as appropriate.
- Reviews CGA contracts prior to acceptance by the University.
- Requests that a third-party trustee provide the University with an annual accounting of the trust’s activities.
- Sells securities and other marketable assets donated to the University.
Vice President for Development and Vice President for Business and Finance
- Advises on the tax requirements governing the preparation of gift acknowledgements.
- Reviews and signs required filings of the IRS Forms 8283 and 8282.
President, Vice Presidents, Vice Provosts, and Deans
- Reviews and approves certain restricted gifts such as gifts of real estate and privately held stock before they may be accepted by the University.
- Reviews certain gifts of life insurance that are not fully paid before the policy may be accepted by the University.
- Reviews gifts of certain asset types before they may be accepted by the University.
- Reviews requests to waive an environmental audit in connection with a proposed gift of real property (Vice President for Business and Finance only).
- Reviews requests to waive the liquidation requirement for real property and other noncash gifts (Vice President for Business and Finance only).
- Reviews proposed CGA agreements prior to acceptance by the University.
- Reviews proposed CRT and CLT agreements naming the University as a trustee or co-trustee prior to acceptance by the University.
- Reviews requests to accept pass through donations on behalf of another non-profit organization.
- Reviews requests for an exception to the requirements set forth in this Policy that would require his or her approval.
- Approves redirection of an unrestricted gift to a specific use by the University (President only)
- Ensures that employees in his or her division are in compliance with this Policy.
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FREQUENTLY ASKED QUESTIONS
- 06/01/2014 - Revised to provide additional guidance on the acceptance of gifts by the University.
- 02/27/2007 - First publication of Policy.