Policies and Procedures Manual: Receiving and Recording Gifts and Pledges

Policy Statement

The policies outlined herein have been developed to provide guidance to those charged with conducting fund raising for Marywood.  The policies include information on the kinds of gifts that will be accepted by the University and credited toward achievement of the mission of the University and for the purposes of the campaign(s) for Marywood.  These policies will provide the method by which all gifts will be valued for reporting purposes.  Two of the underlying objectives of these policies are (1) to encourage donors to make the largest possible gifts to Marywood in forms that are convenient for the donors and (2) to assure accuracy in reporting campaign(s) results as established by the Council for Advancement and Support of Education (CASE).  Gift totals as credited do not necessarily reflect the balances shown in the accounting records or published financial statement of the University, nor does the valuation placed on a gift necessarily bear any relationship to the amount which the donor may deduct on his or her Income Tax Return.

A.     Sources of Gifts

The source of a gift for reporting purposes is defined as those entities that transferred the gift to the University.  Exceptions:

• Gifts from business sponsored foundations are considered gifts from the business themselves.
• Situations where the donor specified otherwise.

B.     Lifetime Gifts

A gift is made when a donor irrevocably relinquishes control of an asset in favor of the University.  Gifts will be valued as of the date the gift is made.  Gifts and pledges which are unrestricted or which are designated for a purpose included among campaign objectives will be credited towards campaign totals.

Values, for purposes of crediting the gift, should be established without regard to the donor’s personal estimation of the gift’s value, the value as reported to the Internal Revenue Service or the value placed on the gift by the Internal Revenue Service in reference to income tax liability.

Lifetime gifts shall be credited as follows:

1. Outright gifts of cash will be credited in the amount of the gift.
2. Securities will be valued as of the date of delivery.  The delivery, to be effective, must be unconditional and the stock certificate properly endorsed.  If the stock certificate is not endorsed, the donor should have given the University a properly endorsed stock power in addition to the stock certificate.  The delivery date is conditioned on the type of delivery made by the donor.

When there is a market for securities on the stock exchange, in over-the-counter trading and otherwise, the fair market value is the mean between the highest and lowest quoted selling price on the date of delivery of the gift.  The value of the stock in a closely-held corporation must be determined by appraisal.

Neither losses nor gains realized upon the sale of the securities after receipt nor brokerage fees, appraisal fees or other expenses associated with the transfer should affect the value reported.

3.       Pledges made to the University during the term of a campaign will be credited in their full principal balance toward the campaign goal provided that the pledge is either unrestricted or is designated for a purpose included among campaign objective.  All oral pledges must be reduced to writing before they are credited.  Donors will be encouraged, insofar as possible, to state their philanthropic intentions in a letter of memorandum, even if such statement is informal and does not contain sufficient consideration to be binding.  With the approval of the Vice President if the solicitor of the donation is unable to obtain the donor’s written statement, the solicitor will record his or her own understanding of the terms of the oral commitment and submit this, via letter, to the donor for confirmation or modification.

NOTE:  No pledge for a building campaign or pledge for amounts of  $25,000 or more to be used to establish named funds, for which facilities will be named, and/or for which special recognition is to be given to the donor, shall be credited unless the donor has executed a legally-binding Pledge Agreement.

To be enforceable, a pledge must be supported by legal consideration, which may consist of the similar promises of others, promises by the University, or acts performed by the University in reliance on the pledge.  To ensure enforceability, pledge documents should contain as many of the following forms of consideration as possible.

• the words “in consideration of”
• the words “with the intent to be legally bound hereby”
• the words “in witness whereby”
• the word “seal” after the donor’s signature
• the signature of an authorized representative of the University acknowledging acceptance of the pledge.

All pledges shall be paid in full within five (5) years, unless a schedule of payments extending beyond five (5) years has been arranged under special circumstances.

4.       Gifts of real estate must be approved by a Gifts Policy Committee and will be credited at their appraised fair market value as of the date a properly-executed deed is received by the University.

5.       Tangible personal property (i.e., antiques, works of art, collections, etc.) accepted by the University will be credited at the items’ fair market value.

6.       Ordinary income property which is accepted by the University will be credited to the campaign at fair market value.

7.       Life insurance policies for which the University is named owner and beneficiary will be credited at present cash surrender value (if any).

8.       Gifts to class funds will be credited at fair market value.

9.       Charitable remainder gifts (including unitrusts, annuity trusts, and remainder interests in homes or farms and gift annuities) will be credited according to CASE and NACUBO Management Reporting Standards.

10.    Charitable lead (income) trusts gifts will be credited according to CASE and NACUBO Management Reporting Standards.

11.    The value of assets of gifts in trust that the University or donor has chosen to have administered by others should be included in the University’s gift totals for the year, provided the University has an irrevocable right to all or a predetermined portion of the income or remainder interest.

C.      Estate Gifts

1.  Bequests which are distributed (realized) within the campaign period will be credited to campaign total regardless of whether the bequest was a response to a campaign solicitation.  Gifts made by bequest during the lifetime of the donor will generally not be counted for a campaign, unless the donor executes a legally-binding deferred pledge agreement as set forth below.
2. Deferred Pledge Agreement (also called an Estate Note), which irrevocably places an obligation on the estate of the issuer, requiring the executor to satisfy such pledge after the issuer’s death, will be counted at full value as pledges toward campaign goals.  The agreement will require the issuer to be at least 60 years of age.  Deferred Pledge Agreements will be credited according to the CASE and NACUBO Management Reporting Standards.
3. Contracts to make a will which provide for the inclusion of a specific or residuary bequest in the will of the testator will be counted at full value as pledges toward campaign totals  if the University is in receipt of  that portion of  the will which pertains to the bequest, provided such contract has been determined to be enforceable.  In the event a specific dollar amount is not set forth in the agreement (for example, a bequest of an item of property or a percent of a residuary estate) an estimated value will be determined based on the testator’s report of the current value of the estate.  When possible, the estimate shall be supported by an appraisal, if specific property is to be given, or a financial statement.

D.  Reporting - All reports of gifts receiving campaign credit will clearly differentiate outright gifts and pledges payable during the life of a campaign from deferred pledges and commitments that are expected to mature at an unknown future date.  A combined total may be reported so long as the separate components of that total are identified.

E.  Gift Policy Committee – The policies set forth herein have been designed to address the majority of anticipated commitments.  However, in the event situations should arise during the course of a campaign for which these policies are inadequate, there will be a Gift Policy Committee which will be empowered to investigate and resolve any questions regarding the acceptance, valuation and crediting of gifts.  Membership on the Gift Policy Committee shall consist of the Vice President for Advancement, the Vice President for Business Affairs, and the Chairs of the Advancement and Financial Affairs Committees of the Board of Trustees.  The Gift Policy Committee may rely on members of the development staff, University counsel, or other individuals for counsel and assistance.  Consideration will be given to the Policies established by the Council for Advancement and Support of Education as set forth in the Management Reporting Standards for Educational Institutions: Fund Raising and Related Activities.

ATTACHMENT A

ATTACHMENT B

Recommended Policy for the Distribution of Bequests

 ATTACHMENT C

  I.  Life Income Gifts

                                  *  if for a term of years, maximum number of years is 20

                                **  persons who as of January 1, 1990, had PIF contracts for less than the above stated minimum

                                      may continue to participate in new contracts for lesser amounts.

II.                  Additional Deferred Gifts

Wills:  Marywood will accept, if beneficial to the institution, bequests of sums of money, bequests of tangible personal property such as works of art, coin collections, antiques, etc., where such gifts will further the work of the institution, devise of real estate, gift of residuary estates, deferred gifts by Will, charitable income trust by Will, contingent bequest.

Other deferred gifts:  Other types of deferred gifts which may come up for consideration from time to time are as follows:

• gift of personal residence or farm with retained life estate;
• charitable income (lead) trust;
• revocable charitable remainder trusts;
• bank account “in trust for” the University generally called a Totten trust.

III.               Life Insurance Gifts

A.      Amount to record as gift

When donor names Marywood University as owner and beneficiary on the original insurance application,

• record amount of initial premium payment;
• record amounts of subsequent premium payments as they are made.

       When donor names Marywood University as owner and beneficiary of an already existing policy,

• record cash surrender value of policy;
• receive statement from insurance company of cash surrender value as of date of gift;
• record amounts of subsequent premium payments as made.

B.      Amount to record as pledge

Initial Pledge:  Record pledged amount of future premium payments yet to be made during the time of the campaign.

As premium payments are made, record payments as gifts and reduce pledge amount accordingly.

ATTACHMENT D

Leadership Gift Naming/Recognition Opportunities

Endowment Gifts Recognition Greater Than $250,000

ATTACHMENT D

Leadership Gift Naming/Recognition Opportunities

Facility Gifts Greater than $250,000

Naming opportunities for proposed new facilities is set at a minimum of 25 per cent of the projected costs of construction

History

04/25/92  Adopted by the Board of Trustees

10/19/96  Minimum endowment increased to $15,000;  named academic medal to $15,000

04/18/98  Major gift naming opportunities for Impact 2000 added

10/23/99  Minimum gift for naming opportunities added

10/19/02  Naming opportunity for colleges added

10/19/02  Minimum raised from $15,000 to $25,000 for named faculty support, named scholarship, named maintenance of a facility, a named program, an academic medal, and an unrestricted bequest

11/11/05  Attachment D updated

04/29/06  Unrestricted bequests changed to place $25,000 in the Annual Fund and balance in Quasi-Endowmen

09/11/06  Attachment D updated

05/14/07  Attachment D updated

04/26/08  Revision approved by the Board of Trustees

07/13/09  Attachment D updated

04/16/11  Revision approved by the Board of Trustees