Fundraising Policy and Gift Acceptance Guidelines

Fundraising Policy and Gift Acceptance Guidelines

Abstract:
All fund-raising efforts for the university must receive prior approval from the appropriate administrative unit. Employees who participate in purchasing decisions are prohibited from accepting personal gifts.
Effective Date:
6/19/2001
Contacts:
None Assigned
Administrative Category:
Applies To:
Faculty, Staff
Keyword(s):
Material Original Source:

University of Alabama at Birmingham

FUND RAISING POLICY AND GIFT ACCEPTANCE GUIDELINES

June 19, 2001

(Replaces policy entitled "Fund Raising Policy and Guidelines" dated June 1, 1990)

See also the following items:

  • UAB Acceptance of Benefits, Awards, and Prizes from External Entities policy.
  • UAB Cash Receipts Policy.
  • UAB Conflicts of Interest Policy.
  • UAB Policy Concerning Separately Invested Endowments.
  • Board of Trustees Rule 411 Minimum Standards, Acceptance, and Reporting of Gifts and Use of Gift Revenue.
  • Board of Trustees Rule 404 Investment Management Policy.

Introduction

UAB encourages its faculty and staff to seek private support as a means for enhancing the quality of UAB's educational, research, and service programs. To maximize the opportunity for success and to insure that the institution and its priorities are properly represented in all appeals for private support, institutional coordination and approval of such appeals is essential. Therefore, all efforts within UAB to raise funds from private sources including corporations, foundations, individuals, or other charitable entities must be approved, prior to their initiation, by the Vice President for Development, Alumni and External Relations.

Board of Trustees Rule 411 specifies that certain categories of gifts also must be accepted by the Board of Trustees. UAB will administer acceptance of all gifts in accordance with the provisions of that Board Rule.

Definitions

  1. Gift

The dictionary defines gift as "something that is voluntarily transferred by one person to another without compensation." As generally understood, a gift is a transfer that is motivated by detached or disinterested generosity or out of affection, respect, admiration, charity, or similar impulses. Generally, gifts are irrevocable, and, beyond a possible designation of use, the donor does not impose contractual requirements or subsequent reports as a condition of the gift.

A transfer of assets will not qualify as a charitable contribution for tax purposes, regardless of how it is styled by the parties to the transfer, if it is, in fact, a quid pro quo transaction (that is, if the donor receives or expects to receive a bargained-for benefit). Examples of transfers which do not qualify as charitable gifts are gifts with "strings attached," gifts to individuals, gifts which move with an individual faculty member, or payments to "sponsor" events or performances in which tickets and/or promotional considerations are involved. In a university setting, examples of payments which do not qualify as gifts are payments for services rendered by university employees, payments for tickets or admission to events, payments for "scholarships" where the scholarship recipient is determined solely by the donor, or payments to support research by faculty when the award is directed at satisfying specific grantor requirements.

All gifts must be reported to, and processed through, the Gift Records Office in the Office of University Development and Alumni Affairs. (See section entitled "Recording and Deposit of Gifts.")

  1. Grant

Funding agencies such as philanthropic foundations sometimes use words like "gift," "grant," "contribution," "donation," etc., interchangeably. In addition, private grants as well as gifts may be awarded on the basis of an unsolicited proposal, both may be based on line item budgets, and both may involve the responsibility for providing periodic and final reports on the uses made of the funds. The difference, however, between a gift and a grant is judged on the basis of the intention of the awarding agency, the legal obligations incurred by the institution in accepting the award, and the way the funds are handled and accounted for. Any of the following kinds of arrangements between outside organizations or agencies and UAB should be handled as grants or contracts and should be processed through the Office of Grants and Contracts Administration:

  • Any project or arrangement with a funding agency which involves any explicit quid pro quo other than routine stewardship reports concerning how the funds were used.
  • Any project which involves issues requiring UAB review including the use of human subjects or laboratory animals, assignment of patents or copyrights, ownership of data or equipment, allocation or re-allocation of UAB space; or any research involving recombinant DNA, radioactive materials, or hazardous materials.
  • Any project or proposal which contains language requiring UAB to pay a particular individual or to provide specific direct support to a particular individual.
  • Any project or proposal which includes a line item budget detailing expenditures by activity, function, or project period which must be adhered to as a condition of funding and which requires that some or all of the unexpended funds must be returned to the sponsor at the end of the project period.
  • Any funding awarded in response to submission of a specific research protocol which specifies the scope of work or line of inquiry, performance targets, timeframe, level of personnel, etc.
  • Any arrangement or request which eventually will be paid through any governmental (that is, federal, state, or local) agency.

Further guidance concerning these matters may be obtained by contacting the Office of Grants and Contracts Administration or the Office of University Development and Alumni Affairs.

  1. The University

In general, whenever the term "the University" is used in this policy it refers to The Board of Trustees of The University of Alabama or to matters generally handled by the Board of Trustees or by the University of Alabama System.

  1. UAB or the University of Alabama at Birmingham

In this policy, the terms "UAB" and "the University of Alabama at Birmingham" are used generally for matters over which UAB has control, but, in some instances for readability, the terms are used for UAB's relationship to gifts and matters controlled by the Board of Trustees. Use of the terms "UAB" or "the University of Alabama at Birmingham" in this policy is not intended to imply that UAB will handle any matters normally under the purview of the Board of Trustees.

Policy Statement

Because of the potential damage to UAB's overall fund-raising programs which can be caused by uncoordinated solicitation of gifts, all efforts within UAB to raise funds from private sources including corporations, foundations, individuals, or other private philanthropic entities must be approved by the Vice President for Development, Alumni and External Relations prior to their initiation and must be coordinated through the Office of University Development and Alumni Affairs.

The Office of University Development and Alumni Affairs is responsible for coordinating all fund-raising and gift solicitation activities at UAB. That office has responsibility for overseeing the entire development process, including the identification, cultivation, and solicitation of sources of private financial support for UAB and the valuation, recording, and acknowledgement of gifts received by the institution or any of its units.

Prior to the initiation of a formal request for solicitation approval, the Office of University Development and Alumni Affairs is available to consult with those who wish to approach potential funding sources. That office will assess the appropriateness and timing of such a solicitation in light of institutional priorities and any known financial commitments by those considered to be potential donors.

Once a formal solicitation request has been approved by the Vice President for Development, Alumni and External Relations, the Office of University Development and Alumni Affairs will work with the affected school, department, unit, or individual faculty or staff member to identify and evaluate prospects, to suggest solicitation approaches, and to assist, as appropriate, in the solicitation process.

It is recognized that individuals, corporations, foundations, or other entities may themselves initiate contact with UAB faculty and staff regarding funding opportunities. While individual staff and faculty members are encouraged to answer questions and to discuss gift opportunities with potential donors, those inquiries must be reported promptly to the Office of University Development and Alumni Affairs. That information is critical to the overall coordination of fund raising and development activities.

Recording and Deposit of Gifts

UAB, as a public institution and as steward of public funds, is responsible for ensuring that all monetary funds received by UAB or any of its units are deposited in a timely manner. Therefore, all gifts and pledges, whether solicited or unsolicited, which are sent directly to a unit or to an individual must be delivered promptly to the UAB Gift Records Office along with copies of any accompanying documentation such as letters, cards, notes, and agreements. The Gift Records Office will ensure that the funds are deposited in the proper UAB account, will issue an official receipt for income tax purposes, and will oversee the preparation of other appropriate acknowledgements. For further guidance, see the UAB "Cash Receipts Policy."

Gift Acceptance Policies and Guidelines

UAB actively solicits gifts from individuals, corporations, foundations, and other entities to help fulfill its mission of instruction, research, patient care, and service. Whenever it appears that a gift--because of its source, its conditions, or its intended purpose--could expose UAB to adverse publicity, could extend UAB's resources beyond reasonable limits, or could involve UAB in new and unplanned activities, the matter must be referred to the Vice President for Development, Alumni and External Relations who will confer with appropriate UAB officials prior to final acceptance of the gift.

While UAB appreciates the financial support and goodwill of donors, special care is required to insure that the acceptance of a gift will not involve a continuing financial commitment or other obligation on the part of UAB that is disproportionate to the usefulness of the gift. While donors often wish to specify the general purpose for which a gift is given, UAB will not accept gifts which are too restrictive in nature or which do not support its overall mission. Neither will UAB accept a gift which bears with it any discrimination prohibited by UAB's Equal Opportunity Policy or by prevailing law.

"UAB employees (including faculty) who participate in purchase decisions or who purchase goods or services for UAB are prohibited from accepting personal gifts, services, gratuities, or other things of more than nominal value for themselves or for members of their immediate families from commercial enterprises with which UAB does business or with which it is likely to do business." (UAB "Acceptance of Benefits, Awards, and Prizes from External Entities" policy)

UAB will not accept gifts which are restricted to social activities for UAB faculty and staff because UAB expenditures for employee social activities generally are regarded by the State of Alabama Department of Examiners of Public Accounts as unallowable costs. UAB should not accept gifts for student social activity costs which the State of Alabama Department of Examiners of Public Accounts would consider to be unallowable costs. Under no circumstances will UAB accept a monetary gift for the purchase of alcoholic beverages.

The purpose of these policies and guidelines is to provide general guidance to prospective donors and their advisors as well as to UAB officials in determining what kinds of gifts are acceptable to UAB.

  1. Conflict of Interest

    All prospective donors--particularly those making large gifts or planned gifts--are strongly urged to seek the assistance of personal legal and financial advisors in matters relating to their gifts and the resulting tax and estate planning consequences. UAB will, in turn, seek the advice of the Office of Counsel in matters relating to the acceptance of gifts involving formal gift agreements and in other cases in which such involvement is warranted.

  2. Internal Revenue Service Rules and Regulations

    UAB will comply with the prevailing rules and regulations of the Internal Revenue Service when accepting and structuring the various types of gifts covered by this policy.

  3. Named Gifts

    See the section of this policy entitled “Endowment Standards” and Board of Trustees Rule 411 for information concerning endowment gifts, naming of a building or part of a building for a donor or a donor's designee, and naming of an academic program for a donor or a donor's designee.

  4. Acceptance of Gifts

    The following criteria govern the acceptance of each indicated type of gift. Any gifts offered to UAB which are in categories requiring acceptance by the Board of Trustees will be forwarded by the UAB President to the Chancellor for Board consideration. In most cases, gifts requiring Board approval also require a formal gift agreement between the donor and the University. (Contact the Office of University Development and Alumni Affairs for information concerning which of the following categories require Board acceptance of the gift.)

    1. Cash or Check

      Cash is acceptable in any form. Checks should be made payable to the University of Alabama at Birmingham (UAB) and should be delivered immediately to the UAB Gift Records Office with instructions regarding their use or application (see the section entitled "Recording and Deposit of Gifts").

    2. Securities

      UAB accepts both publicly traded and closely held securities. However, UAB does not accept stock options as gifts. Contact the UAB Gift Records Office for further guidance concerning procedures for accepting gifts of securities.

      1. Publicly Traded Securities

        Gifts of readily marketable securities will be credited at the mean of their market value on the date of delivery. Marketable securities may be transferred to an account maintained by UAB at one or more brokerage firms or may be delivered physically with the transferor's signature or stock power attached. All marketable securities will be sold upon receipt. Neither gains nor losses realized by UAB's sale of the securities after their receipt will affect the credited value. Any brokerage fees or changes in value after receipt of, but prior to liquidation of, the assets are considered UAB operating income or expenses.

      2. Closely Held Securities

        Securities which are not readily marketable may be accepted; however, such gifts must be reviewed prior to their acceptance to determine that there are no restrictions on the securities that would prevent UAB from eventually converting those assets to cash. The Vice President for Financial Affairs and Administration and the Office of Counsel or their designees must approve acceptance of closely held securities, when necessary. Donors will provide the book value of those assets as determined by the most recent financial statement, adjusted to the date of the gift. Every effort will be made to convert nonmarketable securities to cash as soon as possible.

    3. Personal Property or Other Non-cash Charitable Contributions

      Gifts of personal property or non-cash items such as books, scientific or medical equipment, portraits, or similar items generally are accepted by UAB when UAB has some related use for the donated items. Contributions of personal property or non-cash items with a value of $5,000 or more must be accompanied by IRS Form 8283 which must be certified by a qualified appraiser and by an appropriate UAB representative. Under no circumstances will UAB provide appraisal services or pay appraisal fees for gifts of property or non-cash items.

      Acceptance of all gifts of personal property or non-cash items must be approved by the Vice President for Development, Alumni and External Relations who will confer with the affected department/unit head, director, or dean in light of the following criteria:

      1. Can UAB use the property/item?
      2. Is the property/item marketable?
      3. Are there any undue restrictions on the use, display, or sale of the property/item?
      4. Are there any maintenance, storage, or other additional costs associated with acceptance of the property/item?

    4. Donation of Services

      Donations of time or services by local corporations, entities, or individuals for which a dollar value cannot be readily established and which are not recognized by the Internal Revenue Service as contributions for income tax purposes are appreciated by UAB but are not recorded and maintained centrally. Departments or units which receive such donated services should acknowledge those donations, when appropriate; should maintain records of the donations; and should report that information to the Office of Grants and Contracts Accounting when used as part of matching funds for grants or other funding mechanisms.

    5. Real Estate

      Gifts of real estate may include developed property, undeveloped property, or gifts subject to a prior life interest. Because real estate is a highly specialized field and numerous rules and regulations govern the transfer and disposition of donated properties, all potential gifts of real estate are reviewed, and must be approved, by UAB's Real Estate Committee prior to recommending their acceptance. All gifts of real property are accepted by the Board of Trustees upon recommendation of the Chancellor and the campus President and upon receipt of an appropriate environmental review and assurance of a clear title.

      1. Transfer of Deed: Ordinarily, a transfer of property becomes effective for tax purposes at the time a properly executed deed is delivered to the University by the donor.
      2. Appraisals: Contributions of real estate or other property with a value of $5,000 or more must be accompanied by a qualified appraisal and IRS Form 8283 which must be certified by an appropriate University representative. Under no circumstances will UAB provide appraisal services or pay appraisal fees for gifts of real estate.
      3. For properties not included in UAB’s campus master plan, it is UAB’s usual practice to recommend to the Board of Trustees the sale of gifts of real estate as soon as is practical after legal transfer of title, except when the donor legally limits the University's right to dispose of the property or limits its use of the property. In any case, gifts of real estate do not necessarily result in cash being available to UAB, and departments/units should not assume that sales proceeds would be available at any specific time, if ever. In the meantime, the department/unit receiving the gift is responsible for paying for all associated operating costs (including, but not limited to, repairs, utilities, environmental cleanup costs, debt service, and rental management fees).
    6. Gift of Remainder Interest (Retained Life Estate)

      The University will accept a gift with a retained life estate in a personal residence, farm, or vacation home subject to the real property guidelines contained in the "Real Estate" section of this policy. The donor or other occupants may continue to occupy or use the real property for the duration of the stated life. After death of the donor or other designated individuals, the University may use the property or may sell it to obtain the cash proceeds. In cases in which the University receives a gift of a retained life estate, expenses for maintenance, real estate taxes, insurance, and any property indebtedness are to be paid by the donor or primary beneficiary.

    7. Life Insurance Policies

      Before a life insurance policy can be recorded as a gift, UAB must be named as both owner and irrevocable beneficiary of the policy. The gift will be valued at its interpolated terminal reserve value, or cash surrender value, at the time it is received. If the donor contributes future premium payments, those payments will be credited as gifts in the year they are received by UAB.

      If the donor does not elect to continue to make gifts to cover premium payments on the policy, UAB may choose one of the following options:

      1. Continue to pay the premiums.
      2. Convert the policy to paid-up insurance.
      3. Surrender the policy for its current cash value.

    8. Charitable Remainder Trusts

      The University may accept designation as remainder beneficiary of a charitable remainder trust. These gifts will be valued using the present value of the remainder interest as calculated using Internal Revenue Service tables.

      The University will not accept appointment as Trustee of a charitable remainder trust unless the University is the sole charitable beneficiary of the trust. In cases in which the University serves as Trustee, the minimum initial funding for a charitable remainder trust shall be $100,000 and the minimum age for life income beneficiaries shall be 60 years of age. No more than two life income beneficiaries for any charitable remainder trust will be allowed.

    9. Charitable Lead Trusts

      The University may be named as an income beneficiary of a charitable lead trust. The University will not accept appointment as Trustee of a charitable lead trust unless the University is the sole irrevocable beneficiary of the trust. In cases in which the University serves as Trustee, the minimum amount for funding a charitable lead trust shall be $100,000.

    10. Charitable Gift Annuities

      The University does not offer charitable gift annuities directly. However, the UAB Educational Foundation does offer charitable gift annuities and permits donors to designate the proceeds of a gift annuity to UAB. Charitable gift annuities are available to residents of Alabama and certain other states. The annuity rate is calculated solely on the age of the beneficiary. The minimum amount required to establish a charitable gift annuity is $10,000.

    11. Pooled Income Fund

      The University offers another life income gift arrangement through the UAB Pooled Income Fund. Each quarter when the income from the fund is distributed, the beneficiary(ies) is paid a proportionate share of earnings. The minimum contribution required to participate in the Pooled Income Fund is $10,000.

    12. Bequests

      Donors and supporters of the University of Alabama at Birmingham are encouraged to make bequests to the University through their wills. Donors who make these bequest intentions known and who provide the required documentation are recognized through UAB's planned gift recognition program. Potential donors should be referred to the Office of University Development and Alumni Affairs for guidance including the proper wording of a bequest to the University or one of its units in their wills.

  5. Adherence to Standards

    UAB will comply with the Model Standards of Practice for the Charitable Gift Planner which are promulgated by the National Committee on Planned Giving as well as the Code of Ethical Principles and Standards of Professional Practice promulgated by the National Society of Fund Raising Executives. Copies of those documents are available from the Office of University Development and Alumni Affairs.

Endowment Standards

Standards and guidelines for creating named endowments at any of the three campuses of the University of Alabama System have been issued by the University's Board of Trustees. (See Board of Trustees Rule 411.) Part of the purposes of those rules and guidelines is to ensure equity among the campuses and to ensure that the amount used to create an endowment will generate sufficient income to accomplish the intended purpose. The amounts established by the Board of Trustees for named gifts to the University are minimum amounts, and individual campuses may adopt higher minimums for each category of named gift.

All gifts given for the purpose of establishing an endowment must be formally accepted by the Board of Trustees. Establishment and management of endowment funds present a significant legal and financial commitment on the part of the University. Recognizing that such sums must often be accumulated over a period of years, the University generally is cooperative in working with a donor who wishes to spread the payments toward an endowment over a period of up to five years. However, an endowment fund is not activated until the minimum level has been reached.

An endowment fund may be designated for a specific purpose, program, or campus unit depending on the wishes of the donor and is subject to approval of the University's Board of Trustees. Generally, only the income produced by investing the principal (corpus) of the endowment may be spent for the intended purpose. In the case of a pure endowment--that is, one created when the donor specifies that a contribution is to be used for an endowment--the principal may not be expended under circumstances not expressly set out in gift documents. In the case of a quasi endowment--that is, one created by the University itself using funds that were not specifically designated for an endowment--the principal may be invaded only after review and approval of the Board of Trustees. (See also UAB "Policy Concerning Separately Invested Endowments.")

The University has an investment policy (see Board of Trustees Rule 404) which is designed to preserve the real value, and to enhance the purchasing power, of earnings so as to keep pace with inflation and with evolving University needs. In order to accomplish this, the Board of Trustees has established a spending rate which it reviews annually. Earnings realized beyond those necessary to fund the annual spending rate and costs of portfolio management are added to the principal of the endowment.

The allowed types of endowments (also known as "named gifts") are described below along with the minimum amount required by UAB to officially establish and activate each type of endowment.

TYPE OF ENDOWMENT MINIMUM LEVEL
Endowed Chair $1,500,000
An endowed chair is among the most prestigious and meaningful gifts that can be made to an academic institution. Funds provided by an endowed chair are used to attract and retain nationally or internationally recognized scholars or researchers. An endowed chair may provide full salary or a salary supplement and fringe benefits for the recipient of the chair, for support staff, or for other expenses as the endowment agreement permits.
Endowed Professorship $500,000
Funds generated by an endowed professorship are used to support the salary or work of the holder, who may also use the honorary title associated with the professorship. An endowed professorship is structured like an endowed chair; however, it provides a lower level of support to the holder.
Endowed Visiting Professorship $250,000
Distinguished faculty from other institutions often bring new experiences and perspectives to share with students and faculty colleagues. Visiting professors add richness to an academic program and are a valuable addition to campus life.
Endowed Graduate Fellowship $250,000
Funds provided by an endowed fellowship are used to attract the next generation of outstanding scholars and researchers into academic programs for advanced training in specific disciplines, interdisciplinary fields, or broad areas of study, which may be of interest to the donor. In other cases, donors may wish to give the University greater flexibility in supporting young scholars across a wide range of disciplines.
Endowed Research Fund $100,000
Income provided by an endowed research fund is used to support research in a discipline, disease, or area of interest as stipulated in an agreement with the donor. The research fund may be named according to the wishes of the donor.
Endowed Lectureship $75,000
The income from an endowed lectureship often is used to bring a distinguished scholar to UAB each year to lecture on a particular subject or in a specific discipline. The lectureship series may be named according to the wishes of the donor.
Endowed Student Loan Fund $50,000
Income provided by an endowed loan fund is used to offer loans to students with demonstrated financial need. Students are required to repay over time the amount loaned to them according to guidelines established by the donor. The UAB Office of Student Financial Aid is responsible for administering these loan funds.
Endowed Scholarship $25,000
Funds generated by an endowed scholarship are used to provide financial assistance to students who meet certain criteria. For example, the donor may wish to benefit students enrolled in a particular school or program or students with a particular grade point average. In other cases, the donor may wish to give the University more flexibility to adapt the criteria based on changes in student recruitment needs.
Endowed Program Support Fund $25,000
Income provided by an endowed program support fund is used to advance the on-going operations of a specific program designated by the donor. The program support fund may be named according to the wishes of the donor.
Endowed Library Book Fund $10,000
An endowed library book fund will provide books or periodicals for any of UAB's three libraries in perpetuity. In addition, bookplates affixed to the purchased books acknowledging the source of funds provide an enduring tribute to the donor or designee.
Endowed Award Fund $10,000
An endowed award fund may be established to provide funding for academic awards, one-time scholarship grants, or similar activities which recognize outstanding performance or achievement.

Implementation

The Vice President for Development, Alumni and External Relations is responsible for procedures to implement this policy.