71.50 - Processing Charitable Gifts
Last updated: July 21, 2009
A. General. The Regents of the University of Idaho designated the University of Idaho Foundation, Inc., (UIF) as the agency through which all charitable gifts to the UI are to be solicited and received. By agreement between UI and UIF, UI performs certain services for the UIF to assist UIF in the discharge of its agency responsibilities. Those services include asset acquisition support (gift solicitation, gift acceptance, and donor stewardship) performed in the Division of University Advancement, and asset management support (accounting, custody of assets, investment and management of trust accounts) performed in the Division of Finance and Administration. Charitable gifts may be in the form of cash, checks, bankcard charges, marketable securities, personal property, or real property; gifts may be received from individuals, organizations, corporations, or foundations; gifts may be designated for the outright use of or for endowments that benefit any UI department or activity, or approved affiliated organization [See 71.50 (E-8)]. [For further information, see the Division of University Advancement web site.] [ed. 7-09]
A-1. Gift Administration Office. The Gift Administration Office (GAO), in the Division of Finance and Administration and the Trust and Investment Office, is responsible for services to UIF related to receiving, depositing, acknowledging, and keeping a record of all gifts. All gifts received directly through the UIF are processed through the GAO; all gifts received through departments or otherwise must be delivered or reported to the GAO as agent for the UIF, outlined in the following sections. [ed. 7-06]
B. Types of Gifts. The following types of gifts are frequently received directly by departments and should be forwarded to the GAO and processed as provided below: [ed. 7-06]
B-1. Cash Gifts. Departments that receive gifts in the form of cash, checks, or bankcard charges must transmit them to the GAO on the day of receipt or as soon thereafter as possible. Copies of any correspondence from the donor must accompany the gift. If donor information is incomplete, the department must provide it (e.g., name and address of the company representative to be acknowledged in the case of a corporate contribution). Cash, checks, and bankcard contributions are batched at the GAO and deposited in the UIF bank account. [ed. 7-06]
B-2. Bankcards. Bankcards accepted for charitable gifts are VISA, MasterCard, Discover and American Express. [rev. 7-06]
B-3. Checks Split Between Gift and Non-Gift Accounts. A department that receives a check that is both a gift and a payment must complete the Cash Transmittal/General Receipt for the entire check amount to Accounts Receivable in the Business and Accounting Services Office. The portion that is a gift should be deposited to UI Fund U60201 and Account 0451—Change Check Clearing. Detailed information should accompany the deposit which will be sent to GAO along with a copy of the completed Cash Transmittal/General Receipt. The check is cut automatically and sent to GAO. When the check arrives, GAO processes the gift portion in accordance with procedure. [rev. 7-06]
B-4. Canadian Currency. Checks drawn on Canadian banks that do not indicate US funds are discounted at the currency exchange rate obtained from the UIF’s bank on the date of deposit. The donor's receipt is issued for the discounted rate.
B-5. Other Foreign Currency. Donors may use other foreign currency for making contributions. Gifts are discounted at the current currency exchange rate obtained from a local bank on the deposit date; the donor's receipt is issued for the discounted rate. A processing fee, assessed by the UIF’s bank, is charged to the receiving department's gift account.
B-6. Wired Funds. Donors may make contributions via electronic transfer of funds. A wire fee is assessed by the UIF’s bank; the fee does not reduce the donor's charitable contribution, but the fee is charged to the receiving department's gift account.
B-7. Web Site Access. The gift transmittal form for processing of gifts received can be accessed online. Donors may also use the website to make a gift and/or pledge. [rev. 7-06]
B-8. Gifts of Marketable Securities. Departments that receive gifts of negotiable marketable securities must transmit certificates and/or documentation to the Trust and Investment Office (TIO) on the same day they are received. The TIO establishes the fair market value of the gift and provides that information to the GAO. Gift receipts for marketable securities are issued for the fair market value of the securities as of the gift date; the gift date is established by IRS rules. The fair market value is the average of the high and low selling prices, (or bid and ask prices, if an over-the-counter stock). Specific instructions regarding the transfer of marketable securities may be obtained by calling TIO. [ed. 7-06]
B-9. Gifts-in-Kind. Gift receipts are issued for in-kind contributions of personal or real property as follows: (1) at no declared value, if none is provide by the donor; (2) at donor's declared value, if a value is provided by the donor but not substantiated by an appraisal; or (3) at the appraised value, if a qualified independent appraisal is provided by the donor.
i) Personal Property. In-kind gifts of personal property (e.g., equipment, books, journals, livestock, costumes, etc.) must be reported to the GAO by memorandum from the receiving department. The memorandum must include donor name and address, description of item(s), including serial number if available; intended use for item(s); location of item(s); and value. Gifts of personal property exceeding $300 are reported to the UI Property Management Office [See 10.40] by the GAO for insurance purpose and inventory records. Gifts of personal property with a value exceeding $25,000 are reviewed by the Gift Acceptance Committee (GAC). [ed. 7-06]
ii) Real Property. A donor (or his/her agent) wishing to donate real property should be referred to the Development Office. Gifts of real property must be evaluated and approved by the GAC before acceptance.
iii) Form 8283. If an in-kind donation exceeds $5,000, the IRS requires that the donor file with his/her income tax return a Form 8283 that has been signed by a qualified appraiser and UI. Any Form 8283 submitted by a donor to UI for signature must be transmitted to the TIO for verification and signature.
iv) Form 8282. If an in-kind donation valued at $5,000 or more has been reported on Form 8283 and is subsequently sold by the UIF within two years of the date of gift, TIO will submit Form 8282 to the Internal Revenue Service.
B-10. Matching Gifts. Donors who are employed by, retired from, or directors of companies that match charitable contributions may submit a company matching gift form with their gift. Any UI department that receives a matching gift form must send the form to the GAO to be recorded, completed and signed by a senior University officer in Gift Administration, and submitted to the matching company. If the GAO processes a gift from a donor who works for a matching gift company, but who did not submit a matching gift form, GAO sends a letter to the donor asking him/her to participate in the matching gift program. When the matching gift is received by GAO from the matching gift company, it is credited to the same account as the donor's original contribution, and is attributed to the original donor for gift recognition purposes. If a matching gift company indicates that it will not match the program to which the donor designated his or her gift, the GAO will honor the company's rules and return the gift form to the original donor with an explanatory note. [ed. 7-06]
C. Exceptions. Donations Not Allowed for Gift Record Purposes. Gift receipts are not issued for donations that do not qualify as charitable gifts for IRS purposes. Specifically, these include:
C-1. Personal Services. Donations of personal services are not allowed as tax deductions; therefore, gift receipts are not issued for the value of such services. In certain instances, with prior approval, a gift receipt may be issued for actual unreimbursed out-of-pocket costs associated with a donor's services to the UI or UIF (e.g., postage, telephone, travel, etc.).
C-2. Use of Property. Donations of the right to use property are not tax deductible to the donor and gift receipts are not issued for the value of using the property.
C-3. Agency Scholarships. Moneys received to offset the educational costs of students where selection is determined by the donor (e.g., relatives, friends, neighbors, etc.) are not charitable contributions to UI and are not allowed as charitable tax deductions; therefore, gift receipts are not issued. Moneys so received may, however, be deposited with Accounts Receivable in Business and Accounting Services Office for credit to an agency account.
C-4. Premiums and Token Benefits. The IRS has issued rules regarding the use of premiums and token benefits in fundraising, and their deductibility. To ensure required disclosure language is used, departments engaging in fundraising activities must contact GAO prior to offering a premium or other benefit in exchange for a charitable contribution. [ed. 7-06]
C-5. Raffle Tickets. The cost of raffle tickets is not deductible to the donor; therefore, gift receipts are not issued when UI departments or the UIF sponsor a raffle.
C-6. Auctions. The purchase of an item at a UI-sponsored fundraising auction is tax deductible only for the amount of the donation that is above the fair market value of the item purchased. A gift receipt is issued to the donor for the difference. The fair market value of the items at a fundraising auction must be determined before the auction is held and the Department must make the fair market value known to the donors at the auction. Departments sponsoring auctions must provide GAO with the donor’s name, donated item, fair market value of the item purchased, and total amount donated. [rev. 7-06]
D. Process. Gift Receipts. The GAO issues a UIF charitable contribution gift receipt indicating the donor’s name and address, the dollar amount of the gift, the date the gift was processed, the donor's identification number, the fund name of the account for which the gift was designated by the donor, the receipt number; and designation codes. The gift receipt is a one-page letter with a thank you from the UIF President for their donation. [rev. 7-06]
D-1. Donor Recognition and Reporting. The UI Development Office is responsible to the UI and UIF for appropriate gift recognition. A report is prepared annually by the Office of Development that provides recognition and appreciation to donors in gift categories exceeding $100 annually. Gifts in higher amount ranges receive additional recognition and expression of appreciation. All UIF gifts are reported annually to the Regents via the UIF Annual (Fiscal Year) Report.
E. Procedures. The following procedures apply to various transactions with the GAO. [ed. 7-06]
E-1. Receipt Distribution. The original gift receipt copy is mailed by the GAO to the donor, at the address on the records system. The gift receipt information is provided to the colleges and divisions using the Dean’s Report, which is produced each week. It includes the donor information, including gift date, gift number, amount; the donor identification number, name, spouse information, company contact info, address (city, state, county and zip code); the college, department, gift designation, fund, and any other messages associated with the gift, including pledge memos and gift comments. The colleges and divisions then distribute to each department their portion of the Dean’s Report. For any questions about the Dean’s Report and the distribution, please contact GAO. [rev. 7-06]
E-2. Departmental Gift Accounts. Unless otherwise instructed, gifts designated for departmental use are deposited into the department's "unrestricted" gift account. [rev. 7-06]
i) New Gift Accounts. Departmental administrators who wish to create a new UI gift account must send a memorandum to the TIO requesting that a new gift account be created.
ii) Transfers. Gifts that are designated by the donors for the outright use of university departments are transferred from UIF to UI on a semi-annual basis (November and May).
iii) Transfer Fee. Gifts that are designated by the donors for the outright use of university departments and programs are subject to a five percent (5%) transfer fee when transferred from UIF to UI
iv) Fee Assessment. The full amount of each gift will be transferred into the appropriate UI account. During the same month that the gifts are transferred (November and May) a fee equal to 5% of the gift value is assessed at the time of transfer to the recipient department.
v) Exceptions. Gifts not subject to the transfer fee include gifts for affiliated organizations listed in Section E-8; and gifts-in-kind such as equipment, artwork, books, etc., that will be used by the UI in their gifted state, rather than being converted to cash. Other exemptions may be allowed per approval by the Vice President for University Advancement.
E-3. Scholarships (Annual). Gifts that are designated by the donor to be awarded as outright scholarships to UI-selected students are transferred from UIF to UI named annual-contribution scholarship accounts on a semi-annual basis (February and August). [ren. 7-06]
E-4. Gifts for Endowments. Gifts that are designated by the donor for endowments are, to the extent possible, invested in the Consolidated Investment Trust (C.I.T.) unless otherwise restricted by the terms of the gift. [See 71.51] for procedures regarding establishing an endowment. Such gifts are held for one year prior to transfer to the C.I.T. [rev. & ren. 7-06]
E-5. Gifts for Research or Grant Accounts. Gifts from private foundations, corporations, organizations, or individuals for specific research projects that are accounted for through the UI Office of Sponsored Programs (OSP) must be transmitted to OSP for budgeting, with instructions to deliver the checks to the GAO. Checks are receipted in accordance with procedures outlined in Section E-1 and are subject to the five percent (5%) transfer fee outlined in Section E-2. [rev. & ren. 7-06]
E-6. Gifts via Payroll Deduction. Board-appointed UI employees may give donations to UI via payroll deduction. Payroll deduction contribution forms are available at the GAO. Completed forms must include the employee's name and signature, social security number, department, designation for gift, amount of each payroll deduction, number of pay periods, and total deduction. Payroll deduction forms are available online. The GAO records the gift information and transmits the original form to Payroll Services. Receipts for payroll deduction contributions are mailed quarterly. [rev. & ren. 7-06]
E-7. Affiliated Organizations. Gifts designated for certain UI-affiliated organizations may be received by the UIF; call TIO at (208) 885-4000 for questions regarding qualifying organizations. [ren. 7-06]
E-8. Cut-Off Dates. Calendar year: Gifts that are postmarked by December 31 are processed with a December 31 donation date for the donor's calendar year tax purposes. Fiscal year: Gifts must be received at the GAO by 2:00pm on June 30, or the last business day of the fiscal year, to be included in gift totals for that fiscal year. [ren. 7-06]
E-9. Tax Deductibility of Charitable Gifts. Donors should be advised to contact their personal tax advisors or accountants regarding the tax deductible amount of specific contributions. [ren. 7-06]
E-10. Memorial Gifts. Using an appropriate card of acknowledgment, the GAO reports to surviving family members the names and addresses of donors who have made contributions in memory of a deceased individual. The GAO reports gifts received in honor of a living individual to that individual, if requested by the donor. [ren. & ed. 7-06]
F. Information. Please direct questions concerning handling of charitable gifts to Gift Administration Office at (208) 885-6796 or Mail Stop [MS 3147]. [ed. 7-06]