Gifts of Cash or Property
Gifts of Cash or Property
A gift is the receipt of something of value, such as money or other economic asset, by the University from a donor who provides support for University programs. There is no economic benefit provided by the University in return. An individual, a corporation, or a nonprofit entity may be the donor of a gift. A gift may be given to the University directly, or it may be given to the U of O Foundation to be used by the University.
Gift vs. Grant
A gift may be designated for general operations or restricted to a particular purpose, such as research in a defined area or support of a professorship or a program. The donor may earmark the gift for specific purposes, but may not have control over expenditures or over the work performed. Generally, a gift is not based on performance, and has no specified time frame, no financial reports provided, and no product or items of value given in return. A thank you or a tax statement may be provided to the donor.
A grant, in contrast, returns something of value to the donor. There is generally a formal agreement and restrictions on how the money can be spent. There may be effective dates for results, or requirements that financial or technical reports be provided to the donor, or rights to intellectual property be retained by the donor, or access to University resources or services be given to the donor.
When the University receives an award, the University determines whether it is a gift based on the conditions placed on the award, regardless of the characterization by the donor or sponsor. If in doubt, contact the Business Affairs Office (BAO) or Sponsored Project Services (SPS).
University of Oregon employees may make tax-deductible contributions to the University or to the UO Foundation. If made directly to the University, the gift may not be under the control of the donor.
No gifts shall be subject to any undue constraints nor earmarked for the donor. The funds in the unrestricted gift fund should be allocated following the usual allocation process for the department and should be overseen, at a minimum, by the department head. The departmental allocation process should address potential conflicts of interest. Any gift so received should follow the usual University protocols once it has been awarded to a specific purpose or budget.
Deposits from UO Foundation
Amounts given to the UO Foundation by donors are gifts and must maintain that identity when transferred to the University of Oregon. When checks are requested from the Foundation for deposit to the University they must be deposited into an appropriate gift fund as described below.
Foundation gifts with no limitations on use imposed by the donor are considered 'unrestricted'. Checks from an unrestricted Foundation account are deposited into a University Unrestricted Gift fund (060XXX).
Foundation gifts with limitations on use imposed by the donor are considered 'restricted'. Checks from a restricted Foundation account are deposit into a University Affiliated Foundations Gifts (435XXX ) or Foundation Interest-State Match Endowment Eligible (438XXX).
Foundation gifts given with the intention of supporting Capital Projects are deposited into a University Affiliated Foundations Gifts Grant Contract Plant Fund (8095XX).
All checks from the Foundation are deposited into the above funds as revenue and posted to account code 03651.
If an area requests or receives a check from the Foundation and does not have the proper fund at their disposal, they should contact their budget analyst in the Office of Budget and Resource Planning for assistance is establishing an appropriate fund.
A specific department or area may be the recipient of a gift, or it may be deemed available for general use. If not specified by the donor, authority to spend the gift will generally be given to the President's office.
A gift may be restricted or unrestricted. A gift is considered restricted if it is available for operations but limited by the donor to specific purposes, programs, or departments. It is considered unrestricted if the donor does not specify how it is to be used.
A gift may be structured such that only the income may be spent, while the principal is held indefinitely (endowment). Endowments may be either restricted or unrestricted, depending on whether there are purpose restrictions on the use of the income from the endowment.
A gift in excess of $100,000 is generally classified as a quasi-endowment, in accordance with OUS Internal Management Directive (IMD) 6.140(5). Such gifts may be spent according to donor specifications, and may be unrestricted, but require Board approval for the principal to be released for spending. Exceptions to this provision may be authorized, and gifts of less than $100,000 may be classified as quasi-endowments.
A related gift income fund may be set up for the earnings on endowment principal.
Earnings and Assessments on Gifts
Money in gift funds earn interest. This rate can change daily. Interest income is based on the average ending cash balance of the fund for the previous three months and is posted to the funds quarterly by the Controller's office. Funds in deficit are charged interest on the same basis.
Endowments and quasi-endowments earn income as part of the pooled endowment fund. These earnings are distributed to the funds monthly based on the unit value of the fund. Earnings are based on a rolling 5-year average interest rate. Endowments with special investment provisions are not part of the pooled endowment fund and earn income based on the investment.
As of 7/1/2010, interest earnings on University Unrestricted Gift funds (060XXX), that post to account code 05141, will be redirected to a central fund on a quarterly basis.
Gift funds are classified in the Chart of Accounts by the presence or absence of restrictions.
Unrestricted gifts (060xxx) are grouped in accordance with the U of O organization chart.
Unrestricted gift funds have been set up for most departments on campus. Generally, all gifts without donor restrictions on spending should be deposited into the department's pooled unrestricted fund, unless the amount is sufficient to justify a separate fund. Contact the Business Affairs Office at 6-1115 for more information.
Restricted gift funds are grouped as follows:
- Individual gifts - 405xxx to 406xxx
- Commercial gifts - 415xxx
- Other nonprofits gifts - 425xxx to 427xxx
- Affiliated foundations gifts - 435xxx
- Other foundations gifts - 445xxx
In the past, some endowments were eligible for a state match on interest earnings. These income funds are classified as 008xxx (unrestricted) and 438xxx (restricted) funds.
Procedure for Cash Gifts
Unless there are extraordinary circumstances, cash gifts should be directed to and deposited with the UO Foundation. Please work directly with your unit's Development Officer, or contact Marcella Sharp in University Development (541-346-5146 or firstname.lastname@example.org for additional information.
Donors can also be directed to the UO Foundation's webpage for online gifts.
- Cashier receives gift check with appropriate documentation and notifies BAO - Accounting. See the Cashiers page for procedures.
- Accounting confers with Contract Officer, legal counsel, or Research Services if there are questions or concerns about the gift.
- Accounting contacts department if necessary and determines the type of fund and appropriate organization and program codes. Accounting sets up fund and index as needed and notifies Cashier. Gifts with no purpose restrictions will generally be deposited into the Department's Unrestricted Gift Fund (060xxx).
- Cashier deposits gift as directed. If there will be a delay in depositing the gift, the check is posted to a safekeeping fund.
- Business Affairs keeps documentation of the gift in a central file, and notes details/restrictions and the fund manager in the text field of the fund table.
- Accounting sends list of gift receipts to the Foundation once a month for acknowledgment to donors.
Procedures for Gifts in Kind (Property)
Non-cash gifts of tangible or intangible property are generally known as gifts-in-kind. Tangible property can fall into two distinct categories, and its value is derived from its physical existence: (1) objects, such as equipment, software, automobiles, printed materials, etc.; (2) services, such as providing photography services. Intangible personal property is property whose value stems from intangible elements. Examples include patents and copyrights.
To ensure that donors receive proper gift credit, acknowledgement, and stewardship, and to ensure that the gifted property is entered into the university's fixed asset inventory when appropriate. All gifts-in-kind need to be reported to the UO Foundation and to the Business Affairs Office.
It is the responsibility of the university representative accepting a gift-in-kind to discuss the university's policies related to gifts-in-kind prior to accepting a gift. It is, therefore, important that the representative, department, program, or office consider the value of the gift to the university. Please carefully consider the following before accepting a gift-in-kind:
- Is it relevant to the work of the university? As a general rule, accept only gifts that further the work of departments and programs at the university.
- Will accepting the gift jeopardize the reputation of the donor or the university? Does the donor's intent match the interests of the university?
- Will the gift cost the university money in the future, such as maintenance, repair, or preservation costs?
- Are there any risks associated with accepting the gift?
- Will the gift require a special facility in which to house it?
- Are there any special conditions the donor may impose?
- If the property cannot to be used in university programs, will the donor allow it to be sold? If the donor places a condition on the gift that it is not to be sold, the university should not accept the gift.
- Will the gift require a loan agreement with the UO Foundation? That is, will the foundation own the property and then loan it to the university for specific use? If so, contact the Real Property Division of the UO Foundation before accepting the gift.
If additional cost may be necessary and not normally part of the department's operating budget, the person receiving the gift should consult with his or her supervisor, department head, academic dean, or vice president in advance of accepting the gift.
Valuation and Reporting
Valuation refers to the value placed on the property gift for university gift crediting and property control purposes. It should be noted that the university's valuation might differ from what the donor claims as a tax deduction. It is the responsibility of the donor to be able to substantiate to the IRS the gift value noted on his/her income tax form.
Gifts of personal property that qualify as a charitable deduction for a donor will be valued and recorded at fair market value. Fair market value may be determined by:
- A written appraisal, or
- Documentation obtained from a qualified expert on the faculty or staff if he or she is considered to hold special knowledge or expertise related to the property being donated, or
- Documentation obtained from a qualified outside source such as "blue book" or a knowledgeable dealer, or
- Documentation obtained identifying what it would cost the university if it were to purchase the gift outright from a vendor or an original bill of sale for new equipment.
Contact Risk Managment for information regarding valuation and insurance for "exceptional items" such as rare or historical items or works of art. See Risk Management for more information.
When donors pay for event expenses, the value placed on the gift must be substantiated with both the event receipts (such as a hotel invoice) and payment documentation (such as a credit card receipt) to prove that the donor actually paid for the expenses.
Documentation that supports the donor's valuation should be submitted at the time the gift is to be booked by the receiving organization. Note that the UO Foundation will not absorb appraisal costs, nor is there a "central" university fund to absorb such costs. University departments are encouraged to pay for appraisals if they deem it necessary and appropriate for proper insurance and inventory. Please note that the university should never pay for an appraisal for a donor.
It is the responsibility of the department accepting the gift to ensure that tangible property is entered into the university's fixed asset inventory and tagged appropriately. This is true for property accepted by the UO Foundation and by departments and programs within the University of Oregon. It is the policy of the university to enter items into inventory if their value is greater than $5,000.
Receiving an In-Kind Gift:
All donors of in-kind contributions will receive a receipt from the Foundation that does not specify a dollar value of the gift received. Instead, the receipt will contain a description of the gift (e.g. make, model number, year, etc.). The UO Foundation will generate the receipt when the Accounting Department has received all materials that describe and substantiate the value of the gift.
The value provided by the University for the in-kind gift will be recorded on the donor's giving history and used by the Office of Stewardship for recognition purposes only.
All in-kind gifts should be acknowledged by the University of Oregon. Department heads, faculty members, and academic deans are encouraged to thank donors as soon as the gift is entered into the university's books and recorded on a donor's record.
A university acknowledgement will be sent to donors whose in-kind gifts are valued at $500 and above.
$2,500-$24,999 System-generated thank-you letter signed by Director of Stewardship
$25,000-$249,999 Personal thank-you letter signed by Vice President for Development
$250,000++ Personal thank-you letter signed by the President
The following procedures should be followed when a department, college, or program representative intends to accept a gift-in-kind:
- Determine the purpose of gift.
- Determine the value of the gift.
- If the value of the gift is likely to be greater than $500, donors wishing to claim a charitable deduction need to complete IRS form 8283 Noncash Charitable Contributions. A qualified written appraisal is required for non-cash gifts over $5,000. If an appraisal is conducted, please submit a copy of the document with the UO Report of Gift form.
- Complete the UO Report of Gift form located on the Business Affairs website or obtain a copy from any of the following offices: UO Foundation Office of Gift and Records Management,UO Development Office, or UO Office of Donor Relations.
- If the gift to be donated will be liquidated, contact the Real Property division of the UO Foundation, phone number 302-0317.
- Gather the university signatures required on the gift-in-kind form, and forward the completed document to Accounting in the Business Affairs Office.
- The Business Affairs Office will report to the UO Foundation each month all gifts-in-kind reported to Accounting. The UO Foundation will process the gifts, generate receipts, and enter the fair market value of the gift on the donor's official gift record. Departments will be notified of in-kind gifts through the foundation's weekly Gift Journal.
- If the value of the gift is determined to be $5,000 or greater, the entity receiving the Report of Gift-in-Kind form (i.e. UO Foundation or UO business office) will forward the relevant documents to Property Control for inventory and asset management.