Soliciting, Accepting and Processing Gifts and UPPS No. 03.05.01

Grants from Private Sources Issue No. 7

Effective Date: 2/13/2006

Review: June 1 E5Y

Attachments I, II, III, IV, V, VI, VII, VIII, IX, X, XI, XII, XIII, XIV, XV, XVI, XVII, XVIII, XIX

01. POLICY STATEMENTS

01.01 This UPPS sets forth University policies related to soliciting, accepting and processing gifts from private sources.

01.02 Proposals for external grants funding must be processed through the Office of Sponsored Programs. Refer to UPPS No. 02.02.01.

01.03 Solicitations (including web pages) must clearly identify the entity (the University or affiliated organization) to which gifts are to be made.

01.04 Educational and General (E & G) Funds may not be used for such solicitation expenses as printing and postage unless the gifts solicited are designated directly to the University, rather than to an affiliated organization such as the Development Foundation.

01.05 The Texas State Development Foundation and the McCoy College of Business Administration Foundation are separate 501(c)(3) organizations. Each of these foundations will establish their own policies and procedures for soliciting, accepting and processing gifts and grants from private sources.

02. DEFINITIONS AND ABBREVIATIONS

02.01 In this UPPS, the term "gift" means a voluntary non-reciprocal transfer of real or personal property for which the University is not required to make payment or provide any deliverables. Generally, gifts are received from individuals; but in some cases may be received from partnerships, associations, foundations, or corporations. A grant from a governmental entity is not included in this term.

02.02 The term "restricted gift" refers to gifts, the use of which is subject to restrictions imposed by the donor.

02.03 The abbreviations below have the meanings indicated:

a. VPUA: Vice President for University Advancement

b. Provost and VPAA: Provost and Vice President for Academic Affairs

c. VPFSS: Vice President for Finance and Support Services

d. OSP: Office of Sponsored Programs

e. Foundation: Texas State University-San Marcos Development Foundation

f. Library: Albert B. Alkek Library

g. OGP: Online Giving Program

h. GADC: Gift Acceptance and Disposition Committee

i. GIK: Gifts-in-Kind

j. University: Texas State University-San Marcos

k. UA: University Advancement

l. MOU: Memoranda of Understanding

03. GENERAL DIVISIONAL RESPONSIBILITIES

03.01 University Advancement Division:

a. The UA Division is responsible for soliciting, coordinating and reporting all gifts, including those initiated elsewhere in the University. Therefore, the UA Division must know who is giving how much and for what purposes. The UA Division will reconcile its records with University records maintained by the Finance and Support Services Division in order to prepare quarterly reports of gift income to the University.

b. The University and the UA Division will also provide support functions for the Foundation. A new agreement was approved at the Regents’ Meeting, November 4, 2003. The new agreement states that the University will provide the Foundation with support staff to receive gifts, receipt, acknowledge, account for and report gifts of the Foundation. And, as outlined in Chapter IX of the Regents’ Rules, University personnel may solicit and manage funds that are directed toward Foundation accounts.

c. No gifts to the University may be given to the Foundation unless the transfer is approved in writing by the donor and the Board of Regents.

03.02 All Divisions

a. All divisions will coordinate fundraising from private sources with the UA Division, except for grant contract requests, which will be submitted to the OSP. The Office of Grants Administration will record contracts and grants and provide that information to the UA Division each month.

b. The Finance and Support Services Division will post the income and expenses for the Foundation. Records maintained by the University are available to the state auditor and members of the general public under the Open Records Act. The Finance and Support Services Division will inform Advancement Services of gifts to the University received by the Cashier’s Office.

c. The Finance and Support Services Division is responsible for the investment of Foundation funds only as instructed by the Foundation.

d. Additionally, all divisions and affiliated organizations are responsible for forwarding cash gifts received to Advancement Services. See Section 05.04 for policies related to gifts of property other than money.

03.03 Role of the Texas State University-San Marcos Development Foundation

a. The role of the Foundation is as established in Chapter IX of the Texas State University Board of Regents’ Rules and Regulations, private support organizations.

b. The Foundation’s sole purpose is the support of Texas State University-San Marcos. All conditions and understandings are outlined in a new agreement dated November 4, 2003.

c. The Foundation will accept gifts that establish endowments, capital improvements and scholarships donated in the form of cash, legacies, gifts-in-kind, capital gifts, securities, gift annuities and real estate as outlined in the Foundation’s Policies of Acceptance of Gifts as per the agreement with the Board of Regents.

d. Real estate donations can be accepted and held by the Foundation if the intent is to sell the property and deposit the proceeds into an endowment held by the Foundation.

e. The Foundation also accepts gifts directed toward the President’s unrestricted funds and general/non-specific scholarship funds.

f. Donations given for operating, short-term purposes (i.e., wages, travel, rent, utilities) or special projects may be directed to the University or passed into the University from the Foundation.

04. PROCEDURES FOR SOLICITATION OF GIFTS

04.01 University faculty and staff members will coordinate solicitation of gifts with the VPUA and the appropriate chair, dean, or director. The VPUA or a designee will work with the faculty or staff member on the project.

04.02 A faculty or staff member who receives unsolicited gift inquiries from a prospective donor will notify their appropriate chair, dean, the Provost and the VPUA, as soon as possible after the contact.

04.03 University employees may be involved in fundraising for certain programs, such as the Alumni Association, Bobcat Athletic Foundation and Parents Association.

University personnel can raise funds and support the Foundation as specified in an agreement between the Foundation and the Board of Regents.

04.04 University Advancement Online Giving Program

a. Purpose. The purpose of the UA Online Giving Program (OGP) is to increase giving to the University by providing constituents with the ability to make quick, secure, and convenient contributions via the internet. The OGP provides an opportunity to give to a single discretionary account at the college, school, department, institute, or center level. The OGP is an electronic payment method for accepting donations to the University and is subject to all applicable University policies and procedures including, but not limited to, those for accepting cash donations and electronic security concerns.

b. Credit Cards. The OGP allows donations via credit card transactions only. Only those credit cards accepted by the University will be utilized on the OGP.

c. Security. OGP transactions will be protected via a secured SSL (secure sockets layer) webpage which captures information required to process the donation transaction. Donors’ credit card information will be passed to and from on-line processing gateways via a secure SSL connection. Credit card information will not reside on University maintained software or hardware.

d. Donation Amount. The OGP will accept on-line donations in a minimum amount of $25 per transaction and only in whole dollars (no cents).

e. Recipient Accounts. All gifts made through the OGP will be credited only to University restricted-fund scholarship, gift, or approved operating accounts. Each division, college, and University-recognized institute may designate one such account to be listed on the OGP. The accounts must be approved jointly by the VPUA or a designee and Associate Vice President for Financial Services/Treasurer or respective designee prior to listing on the OGP. Changes to accounts on the OGP will be made only once per fiscal year. Requests to change the account listing must be made in writing to the VPUA or a designee not later than June 1 of each fiscal year to be effective as of the following September 1.

f. Convenience Fee. Donors will not be charged an e-payment convenience fee for the use of their credit card in making donations via the OGP.

g. Credit Card Processing Fees. The cost of credit card processing fees in an amount equal to the e-pay Convenience Fee charged for other electronic payments to the University will be charged to the University account that is receiving the donation via the OGP.

h. Card Returns and Refunds. Charges disputed by the donor or rejected by the credit card processing vendor will be deducted from the University account that was the recipient of the original donation. The General Accounting Office has the responsibility to enter correcting transactions into the University’s financial system for returns or refunds.

i. Donor Data Base. The UA division has responsibility for data entry and reconciliation of gifts made via the OGP into the donor data base.

j. Financial System Entry and Reconciliations. The Cashiers’ Office has responsibility for data entry into the financial system and reconciliation of gifts made via the OGP with the financial system.

k. Affiliated Support Organizations. Donors wishing to give to University affiliated support organizations (such as the Alumni Association, Development Foundation, and others) should contact those organizations directly or visit their respective websites.

05. PROCEDURES FOR ACCEPTANCE OF GIFTS

05.01 Definitions

a. Cash: Cash gifts may be accepted in the form of US dollars, personal or corporate checks, credit card transactions, payroll deduction transmittals through the University Fund Drive, and cashier’s checks.

b. Outright Gifts: Outright gifts fall into five broad categories – gifts of personal property (tangible and intangible), gifts of real property (real estate), gifts-in-kind (including non-monetary corporate sponsorships), gifts of securities, and gifts of life insurance.

05.02 Gifts of Cash. Gifts of cash of any value may be accepted by the Director of Advancement Services without Presidential or Board of Regents approval.

a. Cash gifts are reported as of the date the University receives or processes them.

b. Credit card donations are not a gift until the University has received authorization for the charge from the credit card agency.

c. In rare instances, cash gifts may be declined by the President and Board of Regents, if the donor or the origin of the gift does not reflect the moral and ethical standards of the University.

05.03 Gift Acceptance and Disposition Committee

Because of the complexities surrounding certain gifts, a Gift Acceptance and Disposition Committee (GADC) will be appointed by the President. Membership will include the VPUA or a VPUA designee, the Director of Development, a VPFSS senior representative, the Planned Giving Development Officer, the University Attorney, and the Director of Advancement Services. The VPUA or designee will serve as chair and will convene the meetings.

Routine gifts can be approved electronically by the VPUA or VPUA designee. For more complex gifts, the GADC will meet, as needed. For an item to be included on an agenda, the development officers or departmental or other University officers must present relevant paperwork (as outlined in this document), prior to the meeting.

Unrestricted gifts of books, collections, and other library-related material (not including equipment), valued at less than $100,000, will not require the usual approval and acceptance process as set forth in this UPPS. The Library and the Department of Special Collections will, however, report gifts of personal property to the UA Division as provided for under Section 05.04.

05.04 Gifts of Tangible and Intangible Personal Property

a. Tangible personal property is defined as property that can be held physically. Many different items are considered tangible personal property that may be used to make a gift. For example:

1) Furniture

2) Artwork

3) Antiques

4) Jewelry

5) Coin collections

6) Equipment

7) Automobiles

8) Aircraft

9) Books

10) Clothing

11) Livestock

b. Intangible personal property is property that has no intrinsic value; its value results from intangible qualities rather than from specific tangible (physical) factors. Intangible personal property can take the form of:

1) Copyrighted literary, musical, or artistic composition

2) Patent, invention, formula, process, design, pattern, or know-how

3) Trademark, trade name or brand name

4) Franchise, license, or contract

5) Method, program, system, procedure, campaign, survey, study, forecast, estimate, customer list, or technical data

6) Any similar item that has substantial value independent of the services of any individual; i.e., personal papers

c. Criteria for Acceptance of Tangible and Intangible Personal Property

The GADC will consider gifts of tangible and intangible personal property only after a thorough review indicates that the property is

1) Readily marketable; or

2) Needed by the University for use in a manner which is related to the mission of the University; i.e., education, research or a combination thereof.

d. Approval/Acceptance Process

1) Board of Regent’s approval is required for gifts of personal property which exceed $10,000.

2) When necessary to comply with donor desires, and when recommended by the President and approved by the Chairman of the Local Committee of the Board of Regents, gifts which exceed $10,000 in value may be accepted prior to the next Board meeting, but must be reported to the Board at its next regular meeting.

3) If the gift of personal property exceeds $10,000 in value, the VPUA will submit the GADC’s recommendation to the President. With Presidential approval, the VPUA then will prepare a Board Order to obtain approval from the Board of Regents.

4) For all gifts of personal property, regardless of value, the development officer or other appropriate departmental representative will prepare correspondence summarizing the gift and submit it to the GADC through the VPUA. At a minimum, the summary shall include the following:

a) Description of asset

b) The purpose of the gift

c) An estimate or appraisal of the gift’s fair market value and marketability

d) The gift’s intended use by the University and its benefit to the department receiving the asset.

e) Any special arrangements requested by the donor concerning disposition, i.e., price considerations, time duration prior to disposition, potential buyer, recognition, maintenance, storage and security, etc.

5) The GADC will review the material presented by the development officer or other appropriate departmental official and make a recommendation as to accept or reject the proposed gift, or if necessary, postpone a decision pending the receipt of additional information. The final determination of the GADC shall be communicated to the development officer or other appropriate departmental official by the VPUA representative, and this individual shall communicate the University’s decision to the donor in writing.

6) When a gift of tangible or intangible personal property is approved by the GADC for gifts less than $10,000 or Board of Regents approval is granted for gifts that exceed $10,000 in value, the Director of Advancement Services will acknowledge receipt of the gift on behalf of the University, the President, and the Board of Regents, as appropriate. The University will not appraise or assign a value to the gift property.

7) According to IRS regulations, it is the donor’s responsibility to establish a value for the gift. For gifts valued in excess of $5,000, the donor bears the responsibility to acquire a qualified appraisal accompanied with the completion of IRS Form 8283. This form must be signed by the donor and the VPFSS. In the event that the University pays for the appraisal, the University will generate IRS Form 1099 and provide it to the donor. The University cannot pay for the appraisal from educational or general funds.

8) The Office of Advancement Services is responsible for filing IRS Form 8282 for gifts of tangible property valued at more than $5,000 that are sold by the University within two years of the date of the gift.

9) The execution and delivery of the Deed of Gift or other appropriate conveyance acceptable to the University, and the delivery of the property, as applicable, will complete the gift. The donor will pay the costs associated with the conveyance and delivery of the gift.

10) Upon approval of a processed gift, the Office of Materials Management may be asked to inventory the gift. The VPUA or designee will identify a corresponding University account for charging expenses associated with the gift.

11) Upon sale of the property, the University office responsible for disposing of the gift will prepare a final report on the property, including a financial summary of net proceeds to the extent known, and distribute it to the VPUA and the Office of Advancement Services and the representative to benefit from the gift.

05.05 Gifts of Real Property (Real Estate)

a. Gifts of real property (also called real estate or realty) are defined as land, its natural resources such as timber, coal, oil, gas and other minerals, and any permanent buildings on it. Examples of real property include:

1) Residential property

2) Investment property, such as apartments, office buildings, and shopping centers

3) Commercial property, such as industrial parks, hotels, and recreational parks

4) Agricultural land used for the production of livestock or crops

b. Criteria for the Acceptance of Real Property

1) The GADC will consider gifts of real property, both improved and unimproved, including gifts subject to a retained life estate, only after a thorough review of the criteria for acceptance set forth below under the direction and supervision of the VPUA and Planned Giving Development Officer. Acceptance is based upon:

a) Fair Market Value and Marketability. The GADC must receive, within 60 days of the gift, a current appraisal of the fair market value of the property and interest in the property the University would receive if the proposed gift were approved.

b) Potential Environmental Risks. All proposed gifts of real property, including gifts from estates, must be accompanied by a Phase I environmental audit performed at the donor’s expense. The only permitted exception to this requirement is for residential property that has been solely used for residential purposes for a significant (at least twenty years) period of time. In cases where this exception applies and no environmental audit is undertaken, the donor or executor must have outside parties complete an environmental checklist prepared by the University and may be required to execute an environmental indemnity agreement. Even in cases where a Phase I audit is submitted, the University may require that the donor sign an environmental indemnity agreement.

c) Limitations and Encumbrances. The existence of any and all mortgages, deeds of trust, restrictions, reservations, easements, mechanic liens and other limitations of record must be disclosed. No gift of real estate will be accepted until all mortgages, deeds of trust, liens and other encumbrances have been discharged, except in very unusual cases where the fair market value or the University’s interest in the property net all encumbrances is substantial.

d) Carrying Costs. The existence and amount of any carrying costs, including property owners’ association dues, country club membership dues and transfer charges, taxes and insurance, must be disclosed.

e) Title Information. A copy of any title information in the possession of the donor, such as the most recent survey of the property, a title insurance policy, or an attorney’s title opinion must be furnished.

2) Development officers or the appropriate University representative will inform the donor that, if the gift is completed, the IRS will require an appraisal within sixty days of the date of the gift. In the event that the University pays for the appraisal, the University will generate IRS Form 1099 to the donor. The University cannot pay for the appraisal from educational or general funds.

3) Development officers or the appropriate University representative must understand and communicate to the donor that it is the University’s policy to dispose of all gifts of real estate (other than property that fulfills the mission of the University) as expeditiously as possible. Thus, regardless of the value placed upon the property by the donor’s appraisal, the University will attempt to sell at a reasonable price in light of current market conditions, and the donor must realize that any such sale occurring within two years of the date of the gift will be reported to the IRS on Form 8282.

c. Approval Acceptance Process of Real Property

1) Board of Regents approval is required for all gifts of real property, regardless of value.

2) Prior to seeking Board approval, the development officer or other appropriate departmental representative will prepare a summary form and submit it to the GADC through the VPUA. At a minimum, the summary will include the following:

a) Description of real property

b) The purpose of the gift

c) An appraisal of the property, and, if different, the University’s interest in the property’s fair market value and marketability

d) Any potential for income and expenses, encumbrances, and carrying costs prior to disposition

e) Any environmental risks or problems revealed by audit or survey

f) The gift’s intended use by the University and its benefit to the department receiving the asset.

g) Any special arrangements requested by the donor concerning disposition, i.e., price considerations, time duration prior to disposition, potential buyer, recognition, etc.

3) The GADC will review the material presented by the development officer or other appropriate departmental official and make a recommendation to accept or reject the gift or real property, or if necessary, postpone the committee’s decision pending the receipt of additional information.

4) If accepted by the GADC, the VPUA is responsible for creating and submitting a Board Order that includes the GADC recommendation with supporting documentation.

5) The final determination shall be communicated to the development officer or other appropriate departmental official by the VPUA representative, and this individual shall communicate the University’s decision to the donor in writing, along with any conditions imposed by the Board of Regents, President, or GADC prior to acceptance.

6) When the gift of real property is approved, the Planned Giving Development Officer will notify the Director of Advancement Services that the property has been properly recorded in the local registry of deeds.

7) The execution and delivery of a Deed of Gift or other appropriate conveyance will complete the gift. The costs associated with the conveyance and delivery of the gift, including recording fees, and, if deemed necessary by the Planned Giving Development Officer, a current survey, title insurance or an attorney’s title opinion, will be either paid by the donor or in some cases, the University.

8) IRS Form 8283 must be signed by the donor and the University. In the event that the University pays for the appraisal, the University will generate IRS Form 1099 to the donor. The University cannot pay for the appraisal from educational or general funds.

9) The sale of real property gifts is the responsibility of the GADC.

10) Until the property is sold or otherwise disposed of, the GADC will prepare quarterly status reports and distribute them to the VPUA and to the designated representative of the department that will benefit from the gift.

11) Upon sale of the property, the GADC will prepare a final report on the property, including a financial summary of net proceeds, for the review of the VPUA, the Director of Advancement Services and the designated representative of the department benefiting from the gift.

12) The Office of Advancement Services is responsible for filing IRS Form 8282 for gifts of real property sold by the University within two years of the date of the gift.

05.06 Gifts-in-Kind

a. Gifts-in-Kind (GIK) are generally defined as non-cash donations, other than real and personal property, of materials and long-lived assets. Gifts of materials and long-lived assets that are directly related to the mission of the institution should be reported at the fair market value. The value of the GIK must be established by the donor.

The following are policies and procedures for accepting GIK. If there are any concerns or questions about receiving GIK or if additional forms are needed, please call the University Advancement Division at 245-2396.

1) When a prospective donor indicates he or she wishes to donate a GIK to the University, a “GIK Donor Information Packet” should be provided to the donor from the department that is to receive the gift. This includes:

a) A letter to the prospective donor (Attachment I)

b) A donor “GIK form” to be completed by the donor (Attachment II)

2) The donor will be asked to return the completed form to the department receiving the donation.

3) If the department that is to receive the gift has an interest or a need for the gift, they will then complete the GIK report form (Attachment III).

4) The department will then mail the GIK form to the Advancement Services Office for review. The University’s chief development officer will sign the form and return it to the department receiving the gift.

5) The gift can be formally accepted by the University only after steps 1) - 4) are completed.

6) After receiving the gift, all completed forms should be sent to the Advancement Services Office for processing, along with a memo from the department stating the date on which the gift was received.

7) A “thank you” letter will be sent to the donor from the VPUA or VPUA designee.

8) If a donor contributes a GIK and does not assign a value to the gift, and the respective University department deems that the gift is of value, the donor should be appropriately acknowledged for the gift by the VPUA or VPUA designee.

9) If items are solicited for resale or auctioning for fundraising purposes, the Gift-In-Kind Auction Donation form (Attachment IV) is to be completed by the donor and forwarded to Advancement Services.

b. The Office of Advancement Services has the authority to accept gifts-in-kind valued at less than $1,000, including:

1) Airline tickets

2) Tickets to athletic events

3) Postage

4) Computers

5) Computer software

6) Medical equipment

7) Auction items

8)