Gift Acceptance IA 300.3:

Transcription

1 Gift Acceptance IA 300.3: Purpose To describe the policies and procedures which govern the College s solicitation and acceptance of gifts (i.e., real estate, tangible and intangible personal property, publicly traded stocks and securities, and life insurance). Applicability All officers, faculty, staff, alumni and volunteers who engage in raising funds or accepting gifts on behalf of the College. Source The Gift Policy Manual (found in the Office of Institutional Advancement). Policy The College accepts gifts for the purpose of furthering its mission of teaching, research and service. Relatively few gifts will be subjected to scrutiny under the Gift Acceptance Policy. However, gifts of real estate, tangible and intangible personal property, publicly traded stocks and securities, and life insurance that are not immediately useful to the College in its ongoing programs may be reviewed. Procedure The gift acceptance procedures define the considerations and process through which the College assesses the desirability of receiving gifts from potential donors and determines whether to accept a gift as offered. Real Estate Gifts of real estate require special handling. The vice president for campus operations shall consider all forms of real estate including, but not limited to, improved and unimproved land, single-family dwellings, apartment buildings, condominiums, office buildings, farms, leasehold interests and gifts subject to a retained life estate. 1

2 Gifts of real estate can be costly to maintain and illiquid. Prior to their acceptance, such gifts will be reviewed thoroughly by the vice president for campus operations according to the criteria stated in the above paragraph. Criteria for Acceptance Market Value/Marketability A donor must provide a current appraisal of the property and the value of the interest in the property the College will receive if the gift is accepted. Environmental Report A Phase I environmental audit must be performed on all gifts of real property. The College may waive this requirement for certain residential properties used exclusively for residential purposes for a period of thirty years. Encumbrances/Restrictions All mortgages, deeds of trust, restrictions, reservations, easements, mechanic liens and other limitations must be disclosed. Carrying Costs All carrying costs including, but not limited to, taxes, insurance, association dues, membership fees and transfer charges must be disclosed. Title Information The donor must provide the College with a title insurance policy. Approval/Acceptance The development officer shall submit a written summary of the proposed gift to the vice president for campus operations. The summary must include the following information: 2

3 Description of property Purpose of gift Appraisal of property and the percentage interest of the College Income/expenses, encumbrances, and carrying costs Environmental risks or problems Special arrangements for disposition requested by the donor The vice president for campus operations will review the information provided by the College and will determine whether to accept the gift. The development officer shall notify the donor, in writing, of the decision by the College and shall advise the donor that the IRS will require a qualified formal appraisal. Treasury Form 8283 shall be forwarded to the donor, upon request. Tangible Personal Property Tangible personal property is property other than real property. It is often defined as property that can be "touched." Examples of tangible personal property include automobiles, boats, clothing, personal papers, antiques, china, stamp collections, rare coins, works of art, books, jewelry, gemstones and home furnishings and appliances. (Cash is generally regarded as intangible personal property for the purposes of the charitable deduction rules.) The vice president for institutional advancement will consider all gifts of tangible personal property after determining the asset's marketability and its intended use by the College. Approval/Acceptance The development officer shall submit a written summary of the proposed gift to the vice president for campus operations. The summary shall include the following information: 3

4 Description of asset Purpose of gift Estimate/appraisal of fair market value of gift Potential use by the College Special arrangements concerning disposition The vice president for campus operations will review the information provided by the development officer and will determine whether to accept the gift. The development officer shall notify the donor, in writing, of the decision by the College and shall advise the donor that the IRS will require a qualified formal appraisal for gifts valued in excess of $5,000. Treasury Form 8283 shall be forwarded to the donor, upon request. Gifts of Publicly-Traded Stocks and Securities The minimum value of securities that will be accepted as a gift is $500 on the date of delivery. Donors wishing to donate securities that are valued at less than $500 should be encouraged to sell them and to donate the proceeds. Securities shall be valued for the purposes of calculating the donation at the mean value between the highest and lowest quoted sales price on the date of the gift. Marketable bonds or other securities are acceptable as gifts, regardless of maturity date. The acceptance of non-liquid securities shall be decided by the vice president for institutional advancement, the vice president for business and finance and the vice president for administrative services and general counsel according to the criteria stated in the above paragraph. Intangible Personal Property Intangible personal property is property (other than real estate) whose value stems from intangible elements, rather than from physical or 4

5 tangible elements. Examples of intangible personal property include securities, patents, copyrights, subscription lists, goodwill, trade names and trademarks, player contracts and installment obligations. Intangible personal property also includes partnership interests and certain rights to tangible property, whether personal or real (e.g., mineral production payments). The distinction between intangible and tangible personal property is important for the purposes of computing the charitable income tax deduction. Gifts of intangible personal property are not subject to the future interest rule or to the related use rule, both of which apply to tangible personal property. A donor can retain a right to use intangible personal property and still receive a charitable income tax deduction, provided the partial interest rule is observed. Also, a donor is not required to reduce the value of the contribution by the amount that the property has appreciated, if the College does not plan to use the property for its tax-exempt purposes. Assets in this class include, but are not limited to, promissory notes, assignment of promissory notes, patents, royalties, trademarks and copyrights, professional practices (medical or legal), partnership interests and stock in closely held or private corporations. The vice president for institutional advancement, vice president for business and finance, and the vice president for administrative services and general counsel will consider all gifts of intangible personal property after a review of the applicable criteria. Criteria for Acceptance If the proposed gift is estimated to be worth less than $50,000, the donor should be encouraged to dispose of it and donate the proceeds to the College. Exceptions, especially for stock and notes, may be granted. Market Value/Marketability A donor must provide the College with a current appraisal of the property and the interest in the property the College will receive if the gift is approved. The appraisal must indicate that there is 5

6 a market for the asset and that it can be sold in a timely fashion. Disposition of the Asset A donor must provide the College with a request for any special arrangements concerning the disposition of the asset, such as how long it should be held prior to sale, potential buys, and price considerations. The donor should also include a statement outlining how the asset should be sold to realize its full value. Encumbrances/Restrictions All mortgages, deeds of trust, restrictions, reservations, easements, mechanic liens and other limitations must be disclosed. Carrying Costs Approval/Acceptance All existing and potential carrying costs including, but not limited to, taxes, insurance and transfer charges must be disclosed. After careful consideration, the College will decide whether to accept the proposed gift and any of the donor s restrictions on it. Life Insurance The Vice President for Institutional Advancement, Vice President for Business and Finance, and the Vice President for Administrative Services and General Counsel will consider jointly all gifts of life insurance. A donor will receive a charitable income, gift and estate tax deduction for the gift of a life insurance policy to the College. A gift of a paid whole life insurance policy will be accepted automatically, provided that the College is named as the owner and 6

7 beneficiary and that the donor intends for the policy s proceeds to be used for endowment purposes. The vice president for institutional advancement, vice president for business and finance, and vice president for administrative services and general counsel will use the applicable criteria in the acceptance of a potential gift of insurance. Approval/Acceptance The planned giving officer shall submit a written summary to the vice president for institutional advancement. The summary shall include the following information: Description of policy Face value Premium payment schedule Interest rate Age of insured Other relevant policy information Purpose of gift The vice president for institutional advancement, vice president for business and finance, and vice president for administrative services and general counsel will review the information provided by the planned giving officer and will determine whether to accept the gift. The planned giving officer shall notify the donor, in writing, of the College s decision and shall advise the donor that the IRS will require a qualified formal appraisal if the face value of the policy exceeds $5,000. Treasury Form 8283 shall be forwarded to the donor. Closure of Gifts 7

8 Upon closure of a gift, the vice president for administrative services and general counsel assigned to handle the matter shall prepare and record all closing documents necessary to process and finalize the gift. The president and the vice president for institutional advancement shall be notified in writing within thirty days of the completion of all final closing documentation. Revision History Last revision completed on