Gifts: Solicitation, Acceptance, Processing, Acknowledgement and Stewardship
Policy Number: 203
- Date Reviewed:
- August 2014
- Responsible Office:
- Office of Development
- Responsible Executive:
- Vice President for Development
I. POLICY AND GENERAL STATEMENT
The Office of Development ("OD") serves as the agent of The University of Texas Health Science Center at Houston ("university") for all philanthropic fundraising programs and for all solicitations, acceptance, processing and stewardship of charitable contributions. This includes the responsibility of maintaining all gift records and acknowledging each gift according to applicable law, regulation, The University of Texas System ("UT System") policy and procedures (UTS 138), and university policy and procedures.
All gifts received by the university must be processed through OD.
To achieve and maintain appropriate relationships with potential and current contributors, the university has established guidelines for soliciting, accepting, processing, acknowledging, and stewarding gifts. All faculty, staff and students who represent the university to a potential or current contributor must abide by these guidelines.
Gift: A commitment in the form of cash, pledge, securities, bequest/trust distributions, retirement assets, life insurance, real estate, personal property, in-kind and other transferable assets received by the university from an individual, corporation, foundation or other entity that is given with the intent of supporting the university's mission and programs, with no expectation of benefit other than the university expending the contribution for any mutually agreed upon purposes. The contribution is a nonreciprocal transfer in that there is no implicit or explicit statement of exchange, purchase of services, or provision of exclusive information. If the contributor receives benefits in return for the contribution, the amount of the gift recorded and reported is reduced by the fair market value of all benefits given, according to U.S. Internal Revenue Services ("IRS") regulations. Gifts may be restricted or unrestricted by the donor. A restricted gift must be used by the university only for the specified purpose designated by the donor. An unrestricted gift may be used by the university in accordance with university and UT System policies.
Receiving a Gift: The handling of the gift instrument, whether it is a check, cash, stock certificate, letter or other item.
Accepting a Gift: The approval of a gift as an appropriate donation to the university.
Processing a Gift: The moving of the gift through the administrative and financial branches of the university.
Acknowledgment: Tax receipts and thank you letters from the university president and other stewardship activities related to appreciating the contributor's gift.
Personal property: Anything other than real property that is subject to personal ownership. Personal property may be tangible or intangible.
Intangible property: Property that does not have physical substance. Examples include, but are not limited to, various intellectual properties such as patents, copyrights of cultural, artistic and literary works, and computer software under development.
Tangible property: Property that has physical substance and can be touched. Examples include, but are not limited to, personal collections of art, books, coins or movies; equipment; developed software; printed materials; and food.
A. Solicitation of Gifts
Prior to soliciting a gift from a private source, an employee or student must receive approval from the Vice President for Development or the lead development officer supporting his or her school or unit.
All proposals to be submitted to a potential contributor must be routed through OD.
B. Gift Acceptance
Acceptance of a gift imposes a legal obligation to comply with the terms established by the contributor.
OD must review and approve all gifts prior to acceptance by the university. Certain gifts as specified by the UT System must be submitted to the Board of Regents for formal acceptance (Rule 60101, Acceptance and Administration of Gifts, The University of Texas System Board of Regents' Rules and Regulations). The President and the Vice President for Development have been delegated the authority to accept gifts unless otherwise required to be approved at the UT System level.
In accordance with UT System Policy 138 - Gift Acceptance Procedures (UTS 138), gifts of personal property, life insurance, and retirement plan assets are handled as follows:
1. Gifts of Personal Property
Gifts of personal property, other than outdoor works of art, given for current purpose use are accepted by the university president or designee. Exceptions include, but are not limited to, marketable and closely-held securities and limited partnerships. These gifts must be reviewed, evaluated, and processed by the appropriate UT System office. In addition, the UT System Offices of External Relations and Development and Gift Planning Services have exclusive authority to handle matters related to estates and trusts, including those which provide for a current use gift for the university.
OD must be made aware of all personal property gifts, also known as gifts-in-kind. Personal property becomes a gift to the university when a transfer of ownership takes place. A written gift agreement signed by the donor(s) is required for gifts of personal property.
The university must have a mission-related use for the donated personal property. Gifts such as animals, including livestock, and used vehicles are not accepted except in rare circumstances.
The IRS requires that donors seeking to claim a charitable tax deduction for a personal property gift with a fair market value in excess of $5,000 obtain a qualified appraisal. To avoid any conflict of interest, the university can neither pay for nor reimburse a donor for his or her appraisal costs. Appraisals are not required for gifts of $5,000 and less, but the donor may obtain a qualified appraisal if he or she chooses.
2. Gifts of Life Insurance
The university may accept gifts of life insurance proceeds as well as ownership of life insurance policies. In accordance with UTS 138, life insurance proceeds may be processed by the OD or the UT System Office of Development and Gift Planning Services in compliance with the beneficiary designation form. All life insurance beneficiary designations should be made as follows: “Board of Regents of The University of Texas System for benefit of The University of Texas Health Science Center at Houston. This gift shall be used for the further benefit of the school/department and shall be used to ___________________________.” When a donor names the university as beneficiary of a life insurance policy, but does not transfer ownership of the policy, he or she has made a revocable gift.
An existing or new life insurance policy may be accepted if the donor names the Board of Regents of The University of Texas System or the university as both irrevocable owner and beneficiary. University group life insurance policies may not be assigned to UT System or the university nor may UT System or the university be named a beneficiary of such policies. A donor may name The University of Texas Foundation, Inc. for benefit of the university as the beneficiary of a UT group life insurance policy.
If the donor of a life insurance policy is unable, for any reason, to make the gifts to cover premium payments and there are no dividends to cover payments, the university will decide the future of the policy. This decision will be based upon several factors, which may include the age of the donor, death benefit, amount of paid-up insurance, amount of premium, and number of premiums remaining. The university may decide to cease premium payments and consider the policy paid at the current level of insurance, surrender the policy for the cash value and use the funds as designated by the donor, or use university resources to pay the insurance premium(s).
3. Retirement Plan Assets
Gifts of retirement plan assets, such as IRAs and qualified pension or profit sharing plans may be processed by the OD or the UT System Office of Development and Gift Planning Services, including executing all necessary documents. All retirement plan beneficiary designations should be made as follows: “Board of Regents of The University of Texas System for benefit of The University of Texas Health Science Center at Houston. This gift shall be used for the further benefit of the school/department and shall be used to ____________________.” The university may be primary or secondary beneficiary. If the latter, the designation is contingent.
A copy of the beneficiary designation form or the portion of the beneficiary designation that pertains to the university or other documentation showing the university’s interest should be requested. Such gifts are revocable.
OD may further define gift acceptance policy with respect to a particular fundraising campaign to include specific reporting standards and guidelines for particular types of complex gifts.
C. Gift Processing
Within one working day of receiving a gift, the school/department must forward the gift and related correspondence to OD for deposit via the bursar's office using the required gift deposit forms and tamper-proof bags (see https://inside.uth.edu/finance/bursars/cash-handling-manual-logs-and-guidelines.htm). OD will record the gift in the contributor's record, deposit the gift in the appropriate departmental account, and receipt the contributor per IRS regulations.
The minimum gift amount to establish an individually budgeted account is $1,000. To establish such an account, the appropriate chair and dean should forward a request to OD that indicates the proposed account title and the name of the designated account manager (see https://inside.uth.edu/development/internal-forms.htm). Gifts of less than $1,000 must be deposited into an existing account.
D. Acknowledgement and Stewardship of Gifts
Contributors play a critical role in the growth of the university. To communicate effectively the university's appreciation, OD administers a stewardship program to inform contributors in a timely manner of the receipt and use of their gifts.
When appropriate, thank you letters may be sent by the President, the Vice President for Development, and development officers involved in soliciting the gift. OD coordinates the thank you letters sent by the President or Vice President. Program directors, department chairs and deans are also encouraged to express appreciation to contributors.
OD conducts additional stewardship activities such as site visits and contributor recognition events as appropriate. Individual schools may also wish to recognize contributors or groups of contributors in other ways at the school's expense and in coordination with OD. All contributor recognition activities are subject to the availability of funds within each school or unit that receives benefits from the donation.
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