Policy Handbook

Affinity:

Receiving and Recording Gift Pledges

 


JUNIATA COLLEGE

POLICIES FOR RECEIVING AND RECORDING

GIFTS AND PLEDGES

 

 

The policies outlined herein have been developed to provide guidance to those charged with conducting fund-raising for Juniata.  The policies include information on the kinds of gifts that will be accepted by the College and credited toward achievement of the mission of the College.  These policies will provide the method by which all gifts will be valued for reporting purposes.  Two of the underlying objectives of these policies are (1) to encourage donors to make the largest possible gifts to Juniata in forms that are convenient for the donors and which meet a need of the College, and (2) to assure accuracy in reporting campaign results.  Gift totals as credited do not necessarily reflect the balances shown in the accounting records or published financial statements of the College, nor does the valuation placed on a gift necessarily bear any relationship to the amount which the donor may deduct on his or her income tax returns.   

 

A.     Gifts 

1.   A gift is a voluntary, irrevocable, gratuitous transfer to, and acceptance by, the College of cash, securities, or property of value, or the execution of an instrument that legally vests an interest of value to Juniata College. 

2.   If a gift is for multiple purposes, unless the donor indicates the distribution percentage, the College would need to define clearly the basis for distribution so that the amounts can be properly recorded in the accounting records.  A multipurpose gift shall be divided by purpose and counted by purpose.  Multiple payments for a single gift purpose shall constitute a single gift in the accounting procedures.

3.   Gifts may be made by individuals during their lifetimes, or by testamentary disposition, by corporations, by foundations, and by other legal entities. 

4.   It is the responsibility of the Accounting Department and the Office of College Advancement to receive, receipt, and report on all gifts to the College.

5.   The source of a gift for reporting purposes is defined as those entities that transferred the gift to the College.  Exceptions include:

a.  Gifts from business-sponsored foundations are considered as gifts from the business themselves. 

 

b.  Gifts to institution-affiliated groups such as the alumni association are treated as gifts to the institution.  Institution affiliated groups are those sanctioned by and legally part of the College.

 

c.  Situations where the donor specifies otherwise.

 

B.  Grants

1.   A grant consists of a payment pursuant to an agreement (e.g., written proposal and written acceptance of proposal) for a specified project or purpose, usually over a period of time.  Normally a foundation makes grants while individuals make gifts, but there are times when the terms are interchangeable. 

2.   All grants from public and private sources are directed to the Accounting Department for deposit and receipting.

3.   Administration of a grant includes compliance with the grantor’s stated requirements, often including an annual accounting of expenditures and activities.  Direct responsibility for such accounting shall be the responsibility of the Grant Project Director, Principal Investigator or a person identified by the department in receipt of the grant.

4.   The Office of College Advancement shall have the responsibility to monitor and to ensure that acceptable and timely reporting takes place to the grant making body.

5.   The Accounting Department shall have the responsibility to create timely reports and to require that appropriate accounting procedures are followed.

 

C.  Pledges

A pledge is a written statement of an intention to make a gift or grant to the College, signed by the donor or authorized agent.  The pledge must consist of a defined pledge payment amount, period of time, designation for the gift (including the option that the gift be undesignated), and frequency of payment.   The term of a pledge shall not exceed five years or one year beyond the end date of a campaign except as may be extended as part of the board approved plan of a campaign.

 

D.  Fundamental Principles

The following basic principles for counting campaign gifts have been developed by the Council for the Advancement and Support of Education (CASE):

1.   Only those gifts and pledges actually received or committed during the specific period of time identified for the campaign (a period up to seven years including the silent phase) should be counted in campaign totals.

2.   The silent phase of a campaign is always a part of the designated campaign period, and commitments reported for this phase must actually have been received or pledged within the campaign time frame.

3.   Gifts and pledges may be counted in only one campaign.

4.   The value of any canceled or unfulfilled pledges must be subtracted from campaign totals when it is determined they will not be realized.

 

E.  Silent Phase

1.   The silent phase is that period of time prior to public announcement of the campaign, or the campaign’s official goal, during which pace-setting gifts are sought from individuals and organizations closest to the College. 

2.   Credit for gifts received in the silent phase of a campaign will be limited to those gifts given for stated campaign objectives, thereby strengthening the focus of campaign efforts and eventual results.

 

F.  Basic Guidelines

1.   Conduct of Solicitation

a.  Responsibility for coordination and conducting of all appeals is delegated to the Office of College Advancement. 

b.  The Office of College Advancement is authorized to conduct appeals that have been approved within the statement of needs adopted by the Board of Trustees and the President of the College.

c.  To maintain a consistent set of goals and procedures, faculty, staff, alumni, parents and students are not authorized to solicit groups of alumni, parents foundations, corporations, or members of those and other constituencies independently of activities administered by the Office of College Advancement. 

d.  When permitted by the Student Solicitation Policy, student solicitations of community businesses, individuals, or any other possible donor shall not take place without the prior approval of the Office of College Advancement.

2.   Pledge Documentation and Accounting

a.  A standard pledge recording procedure will be used by the College throughout the campaign.  Pledge documentation will be forwarded to the Office of College Advancement for entry into the campaign accounting system.

b.  Pledges made to the College during the term of a campaign will be credited at their full principal balance toward the campaign goal, provided that the pledge is either unrestricted or is designated for a purpose included among campaign objectives.  All oral pledges must be reduced to writing before they are credited.  The pledge must be signed by the donor or donors in order to be entered as a pledge.  Typed names will not suffice.  The pledge amount attributed to the individual shall not include any anticipated matching gift funds.

c.  Pledges for a building campaign in the amount of $50,000 or more shall include the following language that stresses the importance of the pledge in the ultimate decision of the Board of Trustees to go forward with construction: “I  understand that the Board of Trustees will rely on my pledge in making its determination as to the feasibility of funding construction of ______”.

d.  Pledges of cash should be written and should commit to a specific dollar amount that will be paid according to a fixed time schedule.  A pledge received even on the last day of the campaign is counted in campaign.

e.  Pledges made before the campaign accounting period will be credited where they pertain to campaign objectives.  Payments made during the campaign accounting period in fulfillment of such pledges will be credited to the campaign.  Payments made after the campaign accounting period on pledges made during the campaign accounting period will be credited to the campaign.

f.  A pledge may be made to establish a named endowment for the purposes accepted by the College.  See Attachment “A” for the types of restricted funds and Attachment “B” for the restrictions governing a pledge to establish a named endowment.

 

G.  Acceptance of Gifts

1.   The preservation of the tax exempt status of the College requires the acceptance and administration of only those gifts which will not jeopardize that legislative privilege.  Where such an issue arises, it will be resolved by the Gift Acceptance Committee and, as required, by legal counsel.

2.   The purpose and use of a gift as specified by the donor must be appropriate to the functions and character of the College, as determined by statutes, by-laws, and other governing instruments.

3.   A restricted use imposed by a donor must not require the College to act contrary to law or public policy.

4.   When gifts of tangible personal property, including works of art, are accepted, the donor should be advised of the intended use or disposition thereof.  The utility of other gifts may be in their value when sold and converted to endowment or when exchanged for items more appropriate to College interests.  See Attachment “E” for guidelines governing the disposal of donated assets.

5.   Gift valuations shall conform to the provisions of the Internal Revenue Code and related regulations. 

6.   Gifts-in-kind, non-marketable securities, works of art and other gifts of tangible personal property shall be acknowledged with a description of the property and a statement of value for gift credit (not accounting) that represents the dollar value of the gift recorded by the Office of College Advancement.  Donors of certain properties that exceed $5,000 must obtain an independent third-party appraisal by a qualified appraiser at the donor’s personal expense.  Donors of assets whose value falls below $5,000 may provide a dollar value in writing along with the gift. 

7.   A gift for endowment purposes should include a contingency clause in the event that the stated gift purpose becomes obsolete or contrary to law or public policy (e.g., “In the event the stated purpose of this gift is rendered obsolete or contrary to law or public policy, as shall be determined by the then President of the College, the principal and proceeds herefrom shall be paid and applied to further the intent of the donor insofar as possible.”)

8.   Authority for the acceptance of gifts of any kind shall be only as prescribed by the written guidelines (as the same may be amended in writing and approved by the Advancement and Marketing Committee of the Board of Trustees).  Prior to the acceptance of any gift outside the guidelines, the approval of the Gift Acceptance Committee will be needed.

9.   A gift should be sufficient to carry out the specified use; provided, however, that exception may be made with the approval of the Gift Acceptance Committee.

10.   A gift requiring a commitment on the part of the College to spend College funds, either upon receipt or in the future, in addition to the amount donated or pledged, must receive prior approval from the Gift Acceptance Committee based on a memorandum of understanding.  Examples of such gifts are gifts that require:

a.  matching funds from the College;

b.  a commitment to continue a project after the termination or the exhaustion of gift;

c.  the financing of construction projects;

d.  the establishment of permanent interest-bearing funds where the amount pledged is insufficient to carry out the specified purpose;

e.  a commitment to finance and/or administer an undertaking outside the routine functioning and operation of the College or any part thereof (e.g., accruing income to apply to the gift objective).

11.   Gifts-in-kind, as well as any other gifts to be used for restricted purposes, other than those purposes designated as part of a campaign, should receive advance approval by:

a.  the department or division of the College most directly concerned in fulfilling the donor’s expectation; and

b.  the President of the College.

12.   With respect to gifts to the Beeghly Library, please refer to the procedures in “Attachment D”. 

13.   Gifts of non-marketable securities for any purpose must receive the advance approval of the Vice President for Finance and Operations.

14.   Gifts of IRA accounts and other qualified plans may be made.  The College must be notified when named as the beneficiary of such accounts or when named the remainderman in a charitable remainder unitrust to be funded by the proceeds of a qualified plan. 

15.   Gifts to establish charitable remainder unitrusts or charitable remainder annuity trusts must meet the requirements listed below and in Attachment “C”. 

16.   Memorial and tribute gifts must meet the appropriate guidelines and requirements outlined herein.  A memorial or tribute is considered to be a named annual fund to be applied and recognized as other named annual funds. If family and friends wish to create a named endowed fund and the initial gift is less than the minimum required for a named endowment, then the gift and all gifts received for this memorial or tribute will be subject to the same policies as pledges for named endowment funds.  See Attachment “B” for policies that pertain to establishing endowed funds through irrevocable pledges. 

17.   In the event that a charitable remainder trust lists more than one charitable remainderman, the College will serve as the trustee of such trusts only when the trust exceeds $100,000 and when the College is identified as the recipient of at least sixty (60%) of the remainder.  The acceptance of the trust is subject to the approval of the Gift Acceptance Committee.

18.   In the event of a conflict, the statutes and by-laws of the College shall supersede any guidelines set down herein.

 

H.  Gift Valuation and Dating

Values, for purposes of crediting the gift, should be established without regard to the donor’s personal estimation of the gift’s value, the value as reported to the Internal Revenue Service, or the value placed on the gift by the Internal Revenue Service in reference to income tax liability. 

 

Lifetime gifts shall be credited as follows:

 

1.   Outright gifts of cash will be credited in the amount of the gift.  Cash gifts are usually made in the form of a check made payable to Juniata College.  Certain credit card gifts may be accepted by the College with prior approval. The minimum credit card gift is $5.00.   In the case of time sensitive contributions (e.g., at the end of the calendar or fiscal year) the gift date recorded by the College for outright gifts of cash shall be as follows:

 

a.  The postmark date on the envelope used to mail the contribution.

 

b.  The date hand delivered to an Office of College Advancement or solicitor or the date on the check, whichever is later.

 

c.  The date the credit card account number, expiration date, and donor’s name and address are recorded by a telephone solicitor employed by the College or entered electronically via College web site employed for gift solicitation.

 

d.  The gift date recorded by the College may or may not be the date recognized by the Internal Revenue Code. 

 

2.   Securities will be valued as of the date of delivery.  The delivery, to be effective, must be unconditional and the stock certificate properly endorsed.  If the stock certificate is not endorsed, the donor should give the College a properly endorsed stock power in addition to the stock certificate.  The College encourages donors to use a properly endorsed stock power rather than delivering a signed stock certificate.  The delivery date is conditioned on the type of delivery made by the donor.  Note the following table for details:

 

 

Type of Delivery                                                   Delivery Date

 

Personally delivered to the College.                       Date received by a College staff member.

 

Mailed to the College.                                            Date securities are mailed (providing

                                                                              securities are received by the College

                                                                              in the ordinary course of the mail).

 

Delivered to donor’s broker                                               Date securities are mailed to the agent and he mails to the College.                                              (providing securities are received in

                                                                              ordinary course of the mail).

 

Delivered by donor to his bank or                         Date stock is transferred to the

broker (as donor’s agent) or to                               College’s name on corporation’s issuing corporation (or its agent)                                        books (this is the date on the new

instructing corporation to reissue                           certificate having the College’s

in the College’s name.                                           name).

 

Electronic transfer                                                 Date funds arrive in College owned account.

 

3.   When there is a market for securities on the stock exchange, in over-the-counter trading or otherwise, the fair market value is the mean between the highest and lowest quoted selling price on the date of delivery of the gift.

 

4.   The value of stock in a closely-held corporation must be determined by an appraisal meeting IRS standards.

 

5.   Neither losses nor gains realized upon the sale of the securities after receipt nor brokerage fees, appraisal fees or other expenses associated with the transfer should affect the value reported.

 

6.   A gift of real estate must be approved by the Gifts Acceptance Committee and will be credited at the property’s qualified appraisal value.  The following special guidelines apply:

 

a.  The donor must pay the qualified appraiser’s fee.

 

b.  If the gift is deemed to be subject to transfer tax, the donor must pay the “seller’s” portion of the tax.

 

c.  Real estate taxes assessed by local governing authorities shall be prorated as of the date the deed is executed.

 

d.  The donor shall prepare the deed and will be responsible for his or her attorney fees. 

 

e.  The College will bear the costs associated with recording the deed.

 

f.  The property must be inspected by the College or its agent for present or past hazardous waste and/or other environmental liabilities.

 

g.  The date a deed is recorded defines the gift date.

 

7.   Tangible personal property (i.e., antiques, books, works of art, stamp or coin collections, furniture, etc.) accepted by the College will be credited at the item’s fair market value.

 

8.   Ordinary income property (i.e., short-term capital assets, property held for sale in the course of the donor’s trade or business such as inventory, copyrights, or artistic property created by the donor, depreciable property which was depreciated via the use of accelerated depreciation) will be credited at the allowable charitable income tax deduction.  The deduction is usually limited to the donor’s cost or tax basis in the property.

 

9.      Life insurance policies for which the College is named owner and irrevocable beneficiary will be credited as follows:

 

a.  Paid-up life insurance policies will be counted at the policy’s accumulated cash surrender value and counted as a current outright gift.

 

b.  An existing life insurance policy that is not fully paid up on the date of its contribution to the College will be credited at the policy’s cash surrender value. 

 

c.  A donor of life insurance may make gifts to the College for the payment of life insurance premiums. 

 

d.

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