|
|
| |
Gift Acceptance Policies
Adopted 7/21/07
1. Purpose
Provide guidelines for the acceptance and reporting of gifts for the benefit of Auburn University, the Auburn University Foundation, and where applicable ASFS and AUREF. For further clarification on any item(s) please contact the offices of Development Accounting, Planned Giving, or the Assistant Treasurer.
2. General Gift Acceptance Policy
Solicited gifts to the University from individuals, corporations, or foundations are typically made to the Auburn University Foundation (AUF); however, there may be instances where donors direct their gifts to Auburn University (AU). All gifts made to AU and AUF, whether in the form of an outright gift, planned gift, or pledge shall be accepted and reported in accordance with the gift acceptance guidelines as stated below. The source for these guidelines are the standards and definitions provided by the Council for Advancement and Support of Education in their publication – CASE Management Reporting Standards: Standards for Annual Giving and Campaigns in Educational Fund Raising. CASE standards focus primarily on the counting of gifts at face and present value. This provides consistent and comparative gift reporting across the various reporting institutions. However, CASE also recognizes the need for giving donors credit for gifts that do not meet CASE standards for counting. As the crediting of gifts is an institutional decision, gift crediting does not necessarily mirror gift counting. Therefore variances may occur from one institution to another. Though the CASE reporting standards are the source for all reporting of gifts, it is recognized that in certain instances the guidelines are non-specific. It is the intent of this acceptance policy to provide guidance and counting standards in all gift areas as they apply to AU and AUF. All efforts for seeking private gifts must be cleared and coordinated through the Auburn University Development Office located in the Alumni Center, 317 South College Street, Auburn University, AL 36849.
Back to Top
3. Gift Acceptance Guidelines
There are (3) gift categories with specific types of gifts within each category. The three gift categories are:
Back to Top
4. Outright Gifts
Outright Gifts are voluntary irrevocable transfers of items of value to AU or AUF in the form of cash, securities or other property where no goods or services are expected, implied or forthcoming for the donor. The donor may restrict the use of the gift or designate it for a particular purpose or program; however, once the gift(s) is accepted, the donor has no direct decision-making power regarding the gift.
a) Cash – Gifts in the form of currency, checks, Electronic Fund Transfer (EFT), and credit cards may be accepted in any amount. All checks must be payable to either AU or AUF and shall in no event be payable to an employee, agent, or volunteer for the credit of AU or AUF. Cash gifts received from an entity other than the donor, such as charitable organizations, private foundations, or a partnership or corporation of the donor will be receipted to the remitting entity. These gifts will be counted at face value on the date of receipt. Foreign currencies shall be valued at the exchange rate on the date of receipt.
b) Marketable Securities – Securities that are traded on an exchange or other publicly reported market may be accepted by AU or AUF and receipted and recorded in accordance with the AU and AUF policies as previously adopted (see Appendix A). Ordinarily, securities will be sold immediately upon receipt. In rare cases, securities may be held if they are deemed to be appropriate within the overall investment strategies of AU and AUF. Employees and volunteers of AU or AUF may not represent to a prospective donor that a particular security will be held for investment. Generally, marketable securities will be valued at the average of the high and low quoted selling price during the day of receipt or the most recent day when sales of the security occurred. For campaign reporting, gifted securities are recorded at the valued amount without regard to expenses associated with the transaction.
c) Closely Held Securities – Securities that are not publicly traded may be accepted by AU or AUF upon the recommendation of the Vice President for Development and the Assistant Treasurer. Development Officers shall make no commitments for the acceptance of these gifts without written acknowledgement from the Vice President for Development and the Assistant Treasurer. A detailed explanation surrounding the circumstances of the stock, the company, and the donor's reason for this gift must be documented and provided to the Vice President for Development and the Assistant Treasurer.
When accepted, securities of closely held corporations with a gift value of greater than $10,000 shall be recorded at the value placed on the gift by a qualified independent appraiser. The donor is responsible for obtaining the appraisal. AUF will provide a contribution receipt that gives the date of the gift and a description of the gift. The donor will value the gift for their tax reporting purposes. The donor will provide AUF with a copy of the IRS Form 8283. The independent CPA who maintains the books of the corporation, may value gifts of $10,000 or less, at the share price of the most recent transaction, if no transactions occur during a campaign period.
d) Personal Property – The gifts of tangible personal property, including but not limited to works of art, manuscripts, literary works, boats, motor vehicles, and computer hardware, will be considered only after a thorough review indicates that the property is either readily marketable, or in the case of Gifts-in-Kind, property needed by the University for use in a manner related to one of the purposes for which the tax-exempt status of the University was granted; that is, for education, research, outreach or a combination thereof (See Gifts-in-Kind section below).
A gift that may obligate AU or AUF to perpetual ownership shall not be accepted without the written approval from the Vice President for Development. A proposal for accepting the ownership of this property will be submitted in writing by the Development Officer to the Vice President for Development, and upon receiving a signed and dated acceptance, the Development Officer may communicate to the donor the acceptance of the gift. Gifts of art to the Jule Collins Smith Museum of fine Art's permanent collection will only be accepted by the VP for Development upon the recommendation of the Museum Director and Advisory Board. Any recommendation of the Director will not unreasonably be denied. Gifts with values greater than $5,000 shall be reported at the value determined by a qualified independent appraiser. In accordance with IRS guidelines, the donor is responsible for obtaining an independent appraisal. The donor must submit a copy of IRS Form 8283 and a copy of the appraisal to the Vice President for Development for review and approval. Gifts with a value of $5,000 or less shall be reported at the value placed on them by the donor.
e) Gifts-in-Kind – These non-cash donations of materials or long-lived assets that serve to further the mission and purposes of Auburn University shall be reported on the gift recording system at $1 unless independent verification of the fair market value or the donor provides a true accounting of the cost basis of the gift.
Gifts with values greater than $5,000 shall be reported at the value determined by a qualified independent appraiser. In accordance with IRS guidelines, the donor is responsible for obtaining an independent appraisal. The donor must submit a copy of IRS Form 8283 and a copy of the appraisal to the Vice President for Development for review and approval. Gifts with a value of $5,000 or less shall be reported at the value placed on them by the donor, supported by an informal independent source such as eBay, classified ads in a trade publication, etc.
No written or verbal acceptance of any Gift-in-Kind shall be provided to the donor by the Development Officer without a written acceptance of the gift by the Vice President for Development. Submission for acceptance of any Gift-in-Kind must be in writing with adequate documentation of the purpose, nature, and approximate value of the gift.
f) Real Property – The Boards of both Auburn University and Auburn University Foundation have policies that outline the need for care in accepting real estate because of environmental issues. The Auburn University Real Estate Foundation (AUREF) has therefore been created to facilitate real property donations.
If a donor wishes to donate real property, the property must be accepted through the AUREF policies as indicated in Appendix B. If real property is transferred to AU, the documents related to the property should be forwarded to AU's General Counsel and AU President for review. Additionally, the donor needs to be notified by the Development Officer of the following real property policies:
Additionally, the donor needs to be notified by the Development Officer of the following real property policies:
- The IRS will require an appraisal made within sixty (60) days of the date of the gift.
- It is the policy of AUREF to sell all gifts of real estate, (other than property which the University wished to retain) as expeditiously as possible.
- AUREF will attempt to sell the donated real property at a reasonable price in light of the then current market conditions. This sales price will become known as the fair market value of the appraised property. If this fair market value is lower than the original appraisal presented by the donor, the donor's tax professional will need to file an amended tax return reflecting this lower value.
- AUREF is required to report to the IRS, on Form 8282, any such sale of real property occurring within three (3) years of the date of the gift.
g) Realized Bequest – All bequests realized during a period of time defined as a "campaign period" shall be counted at full value as long as the gift is not counted in a previous campaign.
h) Charitable Lead Trust – Lead trusts are immediate gifts in trust that pay defined amounts of income to AU or AUF over a period of time. The payout is based on the value of the property held in trust for a term of years or the life of the donor with the remainder passing back to the individual or other non-charitable organization. There are two types of Charitable Lead Trust: Charitable Lead Unitrust (CLUT) and Charitable Lead Annuity (CLAT). The CLUT payout is based on a percentage of the market value of the assets as valued annually. The CLAT payout is based on a fixed annuity amount. Payments received during a campaign period (current) and payments to be received after the end of the period (remaining) will be reported to the public at face value.
i) Life Insurance – Life insurance policies fall within both the Outright Gifts section and the Planned Gifts section. The premiums paid for the insurance policy count as outright gifts and because there is the potential of additional value being derived from the gift it also can be considered a planned gift. During a campaign, the face value only will be counted.
In order for the commitment of a life insurance policy to be included in campaign totals, AU or AUF must be both the owner and irrevocable beneficiary of the policy.
- Life Insurance (Existing Fully Paid Up) – These policies will be counted as a current gift and valued at the extrapolated value (cash value + permanent value ).
- Life Insurance (Existing Self Paying) – These policies will be counted as a current gift and valued at the existing cash value. If the donor decides to pay additional premiums towards this policy over a campaign period, the value of the premium(s) paid will be added to this value.
- New Policies – These policies are counted as planned gifts and valued at the face value.
- Realized Death Benefits – The value credited towards a campaign is the insurance company's settlement amount for an insurance policy. If a donor dies during a campaign but their policy was counted towards a previous campaign the credited value will be the realized death benefit received during the current campaign minus the credit previously given.
Back to Top
5. Planned Gifts
Planned gifts by definition are gifts whose values are deferred until either the death of all named beneficiaries or for a period of years. During a campaign the donor will receive campaign credit for the face value of irrevocable planned gifts. All planned gifts of which neither AUF nor AU are the irrevocable Remainderman will be counted as $1.00 in campaign totals. Though these gifts will not be credited towards campaign totals the donor will receive normal recognition credit towards the various Recognition Societies currently sponsored by AUF.
a. Charitable Remainder Trust – Charitable remainder trusts (CRT) are irrevocable planned gifts that provide income to the donor or beneficiaries for life or a number of years not to exceed 20 years. At the end of the trust, the remaining gift assets are left to the benefit of the University. There are two basic types of CRTs: a Charitable Remainder Unitrust (CRUT) that provides a variable income based on a fixed percentage of the annual value of the trust and a Charitable Remainder Annuity Trust (CRAT) that pays a fixed income based on the initial value of the trust. CRUTs and CRATs are reported to CASE at both the face value and the discounted presented value of the remainder interest allowable as a deduction by the Internal Revenue Code. All public reports will be at face value.
b. Charitable Gift Annuities – With a charitable gift annuity (CGA), the donor makes an irrevocable gift to AUF, and AUF contractually agrees to pay a fixed annuity payment to a maximum of two beneficiaries for life. The annuity may begin immediately or be deferred. The gift portion of the CGAs will be received at the death of the final beneficiary. Consequently, a CGA is a planned gift and should be reported to CASE at both the gift's face value and face value less the present value of the annuity. All public reports will be at face value.
c. Retained Life Estate – This is an irrevocable interest in a personal residence or farm and should be reported to CASE at face value and at the value of the deduction allowed by the Internal Revenue Code. All public reports will be at face value.
d. Bequests – Wills and living trusts are instruments by which a person may make a disposition of property to take effect after death and which may be altered or revoked at any time during life, thus these gifts are categorized as revocable. Generally, the counting of revocable gifts is left up to the decision of the charitable organization as stated in the CASE Management Reporting Standards. Bequests can be included in campaign totals if the following CASE guidelines are followed:
- The commitment must have a specific amount or percentage of the estate with a credible estimate of the future value of the estate;
- The commitment must be verified by a letter from the donor or his attorney stating the commitment and that the University will be notified of changes; and
and
- The amount of the commitment will be reported at both the present and face value with a $1 value included in public reports.
e. Life Insurance – See comments under Outright Gifts section.
Back to Top
6. Gift Pledges
A gift pledge should be a written commitment for a specific dollar amount that will be paid according to a fixed time schedule not to exceed the time frame of the campaign or five years. In only unusual circumstance will a pledge payment schedule exceed five (5) years. In the case of oral pledges, they will only be counted if documented in the form of a memorandum providing the commitment amount and time schedule and signed by the University President or Vice President for Development. A copy of the memorandum should also be provided to the donor.
Back to Top
7. Special Circumstances
While the above guidelines will prevail in practically all instances, the Vice President for Development has the authority to consider and make decisions for the recognition and reporting of gifts in special circumstances.
Back to Top
|
Last Updated: June 25, 2012
|
