The University of Alabama, Division of Advancement

Gift Acceptance Policy

Unit:  Advancement
Contact: Robert Pierce
Title:  Vice President for Advancement
Effective Date: 10/05/2021
Revision Date: 10/05/2021


 
 

Purpose

The University of Alabama’s (“the University”) Gift Acceptance Policy governs the solicitation and acceptance of all gifts to the University and certain of its affiliated foundations. It details the types of gifts which may be accepted, who has authority to accept gifts on behalf of the University, ethical considerations of accepting gifts, conflicts of interest, and necessary approvals for special situations or exceptions to this policy. Rule 411 of The Board of Trustees of The University of Alabama (“the Board”) Manual specifies that certain categories of gifts must be accepted by the Board. The University administers acceptance of all gifts in accordance with the provisions of Rule 411.

Policy

By securing and managing gifts in accordance with its mission and fiduciary responsibilities, the Division of Advancement seeks to enrich the quality and scope of the University’s programs to ensure the University’s present and future success.

Staff members of the University solicit current and planned gifts from individuals, corporations, and foundations to fulfill the University’s mission. No faculty or staff member has the authority to solicit gifts as described herein in the name of The University of Alabama without coordination and approval by the vice president for advancement and the associate vice president for development, or their designees. Failure to adhere to policy guidelines may subject the employee to disciplinary action, up to and including dismissal, and/or personal liability.

Ethics

The University has an ethical responsibility to every donor. As a result, Advancement and related affiliated foundation personnel should exemplify the best qualities of the institution and observe the highest standards of personal and professional conduct. Employees acting on behalf of the University will conduct themselves in accordance with accepted professional standards of accuracy, truth and integrity and should familiarize themselves with such professional standards prior to undertaking fundraising activities. The Council for Advancement and Support of Education (“CASE”) Statement of Ethics and Principles of Practice for Fundraising Professionals, the Donor Bill of Rights and the Code of Ethical Principles and Standards set out by the Association of Fundraising Professionals serve as the University’s ethical guidelines when raising funds for the University.

Conflicts of Interest

All University employees engaged in fundraising activities will avoid any conflicts of interest with donors or prospective donors. Conflicts of interest may include, but are not limited to, the following:

  • Acting as a health care surrogate for a donor.
  • Acting in a fiduciary capacity for a donor, including trustee, personal representative or executor.
  • Providing legal or financial advice.
  • Witnessing a donor’s will or trust.
  • Profiting from the sale of any goods or services to the donor or the donor’s family.
  • Accepting gifts or other items of personal benefit from donors or prospective donors.

Advancement personnel who wish to provide volunteer fundraising solicitation or consulting services or to serve on the board of directors or fundraising committee of any not-for-profit entity must seek prior written approval from the vice president for advancement. There may be other instances where conflicts may be subjective or perceived based on the facts and circumstances surrounding contact with donors. In such cases, staff should consult with the associate vice president for development or the vice president for advancement.

Providing Financial or Legal Advice

University employees must not provide any financial planning services or legal advice to any donor. Prospective donors should be encouraged to seek the assistance of their own financial and legal advisors in matters relating to their gifts and the resulting tax and estate planning implications. Further, to avoid conflicts of interest or the appearance of improper influence, the University will not pay legal or other fees for the preparation of a donor’s will or living trust which names the University as a beneficiary.

Use of Legal Counsel

The University will seek the advice of legal advice of the UA Office of Counsel in matters relating to acceptance of gifts when appropriate. Such matters include, but are not limited to, the following:

  • Gifts involving bargain sales or documents requiring the University to take or refrain from taking some action or assume an obligation.
  • Closely held stock transfers that are subject to restrictions, buy-sell agreements or other arrangements that limit the marketability of the securities.
  • Arrangements and documents pertaining to such instances where the University is named as trustee.
  • Transactions with potential conflicts of interest that may invoke IRS or other legal dilemmas.

Gift Acceptance Committee

The University Gift Acceptance Committee (GAC) is made up of the vice president for advancement, associate vice president for development, associate vice president for advancement services, assistant vice president for planned giving, and executive director of advancement operations. The GAC is responsible for interpreting and enforcing this Gift Acceptance Policy. Representatives from colleges and other campus units may be consulted on gifts for their respective groups. The GAC will seek the legal advice of the UA Office of Counsel in matters relating to acceptance of gifts where appropriate. Gifts that are defined within this policy as able to be accepted routinely do not require consultation of the GAC.

Most gift acceptance questions involve gifts of personal property, real property, closely-held or non-publicly traded stock or planned gifts. Questionable gifts of this nature should be directed to the assistant vice president for planned giving who will confer with the University’s Real Estate Committee as well as the GAC as needed. Other gift acceptance questions should be directed to the associate vice president for advancement services who will engage the GAC in a review of the proposed gift as needed and render a decision within an acceptable time frame. The senior associate athletics director for development will be consulted on gifts related to Intercollegiate Athletics.

Conformity to National Reporting Standards

To ensure the highest possible reporting integrity, all charitable contributions to the University will be counted and recorded in the Division of Advancement database of record in accordance with the standards set forth by the Council for Advancement and Support of Education (CASE) unless otherwise specifically noted in this policy. For planned or deferred gifts, the National Committee on Planned Giving Valuation Standards may also be considered.

Gift Definition

To qualify as a gift to the University, the following conditions must be met:

  • The transfer of cash or other assets must be irrevocable;
  • The transfer must be in furtherance of the University’s mission; and
  • The transfer must be non-reciprocal, meaning there must be no explicit or implicit purchase of services, statement of exchange, or provision of exclusive information to the donor in exchange for his/her gift.

Gift Restrictions

The University will accept unrestricted gifts and gifts for specific programs and purposes provided that such gifts are consistent with the University’s mission. Additional noteworthy items related to gift acceptance and restriction include, but are not limited to:

  • Donors will not be permitted to choose any individual recipient(s) or beneficiary(ies) of their gift. For example, donors may not choose the holder of an academic chair or professorship or the individual recipients of a scholarship award.
  • The University may receive gifts that improve the diversity of campus to the extent allowed by law but will not accept gifts with restrictions requiring that beneficiaries or scholarship recipients be chosen solely on the basis of race, color, national origin, ancestry, religion, gender, sexual orientation, age, physical or mental disability, or any other characteristic which may from time to time be specified in the University’s Equal Opportunity, Affirmative Action, and Non-Discrimination Policy Statement. Any potential gift, which includes consideration of these factors, must be reviewed and approved by the associate vice president for advancement services in concert with the UA Office of Counsel.
  • Gifts accepted by the University must not inhibit the institution from seeking similar or different gifts from other donors. No gift will be accepted which limits, beyond a general definition of subject area, the research that a faculty member or student can perform.
  • A gift may be considered inappropriate, and therefore declined, due to restrictions imposed by the donor.
  • The University will not accept a gift if the acceptance imposes upon it overly burdensome administrative efforts, costs or exposes it to unacceptable liability.
  • All gifts accepted by the University will utilize charitable giving practices that conform to federal and state laws and regulations.
  • The University may accept gifts with specific designations to a particular school, unit or program.
  • Whenever possible, any restrictions related to the use or purpose of a gift should be written as “priority of consideration” to allow the University the greatest latitude in ensuring future use. When that is not possible, it is desirable to reserve the authority of the Board to change the use or purpose of the gift if necessary.
  • If the designation of a contribution needs to be changed, the Office of Advancement Services requires a written or email request from the donor or donor representative.

Memoranda of Agreement

Gift agreements are key instruments in ensuring that the agreement between donor(s) and the University is mutually acceptable and understood, and that the gift will be used according to the donor(s) intentions. Formal gift agreements are required when establishing a new endowed fund or current use fund. To ensure that the University adheres to donor preferences when establishing and designating funds and making expenditures, and to guard against the creation of idle funds resulting from overly restrictive clauses, the following terms should be discussed with a prospective donor:

  • Gift/fund terms and restrictions should accurately reflect donor intention and allow for maximum use and spending flexibility by the University;
  • Use of the gift/fund may not be administered by a donor, group of donors or designees outside of the University;
  • Questions regarding the appropriateness of terms stipulated by a donor should be referred to the associate vice president for advancement services or the director of donor relations.

Not Allowable as Charitable Contributions

Contributed services may not be counted as a gift and do not qualify for a charitable tax deduction to the donor. However, a donor of services may be able to deduct certain expenses incurred while performing said services. In such cases, the donor should be advised to consult with a tax professional. The University, at the direction of the vice president for advancement, may elect to provide recognition credit to a donor who provides a valuable service to the institution. This credit is soft and will not result in a charitable gift or receipt.

In most cases, partial interest or use of property cannot be claimed or reported as a donation. Use of a donor’s property for a fundraising event or free use of office space are examples where the donor maintains at least partial interest. If the donor relinquishes interest or ownership in a building or piece of property and donates it in full to the University, it may qualify as a donation.

Appraisal fees related to establishing the value of a gift-in-kind donation are not allowable as a donation. The cost of an appraisal is customarily the responsibility of the donor per IRS regulations.

Contributions from Faculty and Staff

The University welcomes and encourages gifts from faculty and staff members. Under IRS regulations, a charitable deduction must not fall under the control of the donor, and the donor must not benefit personally from the use of the funds. Therefore, all gifts from faculty and staff members must be credited to either departmental or college accounts that are controlled by an individual other than the donor. University faculty and staff members cannot designate their gift to funds that support his/her salary, pay for consumer goods to be used by him or her, or pay for travel by him or her. Faculty and staff members may designate their gifts to a departmental fund that is fully controlled by the chair of the department and/or dean and can be used to support the research or teaching of any faculty member, including the donor.

Gift Receipts

All donors will be sent a charitable gift receipt pursuant to current IRS regulations and guidelines within a reasonable timeframe. If a donor receives benefits in return for his/her gift to the University, the amount of the benefit he or she received will be reflected on the gift receipt and deducted from the charitable amount of the contribution. It is the responsibility of the college or unit to provide benefit-related information associated with a particular gift or series of gifts to the Office of Advancement Services so that the contribution may be receipted properly. In accordance with IRS guidelines, receipts for in-kind contributions will include only a description of the item(s) donated without assigning a value to the in-kind contribution.

Naming Opportunities for Major Gifts

By making a significant gift to the University, donors may be offered the opportunity to select the name of a program, facility, professorship, academic unit, scholarship or other purpose. Naming gifts may be offered in honor or memory of the donor or another individual or entity of the donor’s choosing. In accordance with Board Rule 411, the Board retains authority for final approval of all naming opportunities. Any offer to name buildings, spaces and academic units or programs must follow the Division of Advancement Naming Guidelines, as approved by The University of Alabama Executive Staff. These guidelines govern the naming of facilities and academic programs and specify the University’s minimum levels for endowed funds as well as define the procedures for acceptance of gifts to this end and should be consulted in concert with The Board of Trustees of The University of Alabama Board Manual. It is the responsibility of the fundraiser, once he or she becomes aware of a potential naming opportunity gift that has not been pre-approved, to bring it to the attention of the associate vice president for development as soon as is possible to facilitate meaningful and timely discussion regarding the potential naming. Internal approval for naming opportunities that have not been pre-approved by the Board should be requested via the Naming Authorization Form on the Denny Portal.

Types of Gifts

The following criteria govern the acceptance of each type of gift and are addressed in more detail within the Division of Advancement’s Gift Administration Guidelines. Any gifts offered to the University which are in categories requiring approval of the Board of Trustees will be considered by the Office of Advancement Services in conjunction with the vice president for advancement and, assuming consideration by the GAC is not necessary, will be prepared for the UA president to forward to the chancellor for Board consideration. In most cases, gifts requiring Board approval also require a formal gift agreement between the donor and the University. Gifts not requiring Board approval or GAC involvement as defined below may be accepted without further involvement of the GAC.

1. Cash

Gifts of cash include currency, bank drafts, credit cards, checks, payroll deductions, wire transfers and matching gifts. Cash gifts will be processed as part of normal business operations provided that any donor restrictions imposed on the gift are otherwise in compliance with this policy. Rare coins and rare currency are handled as gifts-in-kind and will be valued as such. Faculty and staff may elect to support the University via payroll deduction by filling out the appropriate forms available from the Office of Advancement Services.

2. Securities

Marketable securities, including stocks, bonds, and mutual funds deemed to be readily transferable, will be accepted and processed in the normal course of business operations provided that any donor restrictions imposed on the gift are otherwise in compliance with this policy. Proposed gifts of stock options and restricted shares must be reviewed on a case-by-case basis prior to acceptance to ensure that there are no limitations on subsequent sale by the University. Marketable securities received as gifts will be sold as soon as reasonably possible after they have been received and the proceeds directed to the donor’s designation of choice.

In accordance with IRS guidelines, securities will be valued at the mean of their market value on the date the donor relinquished control of the assets in favor of the University. The mean is determined by averaging the high and low trading price for the day the securities were received by the University. For securities held in a brokerage account, Advancement personnel may provide donors with transmittal instructions, or have their brokers contact Gift Accounting directly for details regarding the transmittal. Review the Gifts of Securities information on the Advancement website for instructions on how to make a gift of securities.

The GAC may accept closely held or non-publicly traded securities only after prior review and approval. The University will consider gifts of closely held securities deemed to be marketable if the acceptance or sale will not generate any undesirable tax consequence for the University. Valuation of closely held securities may be challenging because of infrequent trading, which makes it difficult to establish fair market value. Donors must submit IRS form 8283 when making a gift of closely held securities. The following documentation must be provided before a gift of closely held securities will be considered for acceptance:

  • A qualified independent appraisal as defined in the Internal Revenue Code and IRS Publication 561.
  • Copies of any shareholder buy/sell agreements.
  • Copies of any restrictions on the transfer or sale.
  • Evidence of marketability.

Gifts of publicly traded securities will be valued for gift recording purposes as the mean of the highest and lowest selling prices quoted for the stock (as reported by recognized public securities exchanges) on the date of the gift to the University. The date of gift will be determined based on one of the following criteria:

  • The date an electronic transfer of securities from a donor’s account is received into the University’s brokerage account;
  • The date of hand delivery of certificates that are signed over to the University; or
  • The date of U.S. postal cancellation on envelopes containing a certificate(s) accompanied by a qualified stock power (Both the stock power and the certificates must be received by the University before valuation can be determined).

3. Gifts-In-Kind/Personal Property

The University may accept in-kind contributions to be used to advance UA’s mission. Gifts-in-kind are generally defined as non-cash donations of materials or long-lived assets, other than real or personal property. Gifts-in-kind usually come from companies, corporations or vendors, in contrast to individuals, who typically give personal property. Furniture, equipment, medical supplies, and computer hardware are examples of gifts-in-kind that may be considered for acceptance by the University. Depending on the nature of the gift, there may be associated maintenance, storage, shipping, and insurance costs. Generally, the University will use the following criteria to determine whether a gift-in-kind will be accepted:

  • Whether the property furthers the mission of the University.
  • Whether the donor has requested any restrictions on the use or display of the property.
  • Whether the donor is willing and able to finance the packing, shipping, and in-transit security, insurance, and other costs associated with transferring the gift to the University.
  • Whether the gift imposes upon the University overly burdensome administrative or other efforts or costs or exposes it to unacceptable liability.

The University often receives gifts of tangible personal property that it plans to keep and use in furtherance of its mission. Tangible personal property is an asset that can be touched, handled, or moved by an individual (as opposed to intangible assets such as ownership in a company or intellectual property rights). The most common types of tangible personal property assets gifted to the University include art, book collections, jewelry, coin or stamp collections, furniture, or any similarly unique asset or collectible owned by a donor. Personal property becomes a gift to the University when the items of property or clear title to the property has been delivered to the institution. Gifts-in-kind and personal property donations may be liquidated by the University unless otherwise specified by the donor and agreed to in writing by the University via a signed gift agreement.

In considering such gifts, donors should be encouraged to consult with a professional financial adviser regarding the related use rules that apply to such gifts. Unless it can be determined that the item being donated will be used by the University to further its mission (related use donation), a donor’s deduction will be limited to the lesser of his/her cost basis and the fair market value of the property (unrelated use). Documentation must substantiate the current fair market value of the gift at the time it is made. If substantiation is not available, the University will credit the gift as $1. In-kind gifts with values greater than $5,000 must be reported at the value determined by a qualified independent appraiser, and a copy of the appraisal must be provided to the University. It is the donor's responsibility to obtain the qualified appraisal from an independent qualified appraiser and the donor is responsible for all costs associated with an appraisal. The appraisal must be made within 60 days of the date of the transfer and before the filing of the tax return on which the deduction is first claimed. The costs associated with the appraisal are not considered charitable per IRS regulations.

The University may not provide appraisals, but in some cases will have a list of independent qualified appraisers from which the prospective donor may choose. If there is an extenuating circumstance with a particular in-kind gift and its accompanying appraisal, the matter should be presented to the associate vice president for advancement services for consideration and consultation with the vice president for advancement. Should an exception be made, any payment of appraisal expenses by the University represents a quid pro quo benefit to the donor and will be reflected as such on the donor’s charitable gift receipt. In order to receive tax credit by the IRS for gift-in-kind contributions greater than $5,000, the donor must submit IRS Form 8283 to the University with an appraiser’s signature. The IRS has additional specific regulations regarding gifts-in-kind and gifts of personal property and staff should refer to the UA Gift-in-Kind Guidelines for detailed information.

The Office of Planned Giving should be consulted for gifts of personal property valued at $5,000 or more to ensure proper procedures are adhered to in reviewing and accepting these gifts. Gifts of property are covered under the University’s insurance policy. However, the Office of Risk Management requests that a list of all personal property gifts exceeding $50,000 be provided to their office as a courtesy to the underwriter.

4. Real Property

The University is appreciative of and generally accepts gifts of real property. Those gifts are detailed in the Overview of Process for Donating Real Estate to The University of Alabama.

5. Deferred or Planned Gifts

Deferred or Planned Gifts are a broad description for charitable gifts that provide a deferred benefit to the University. Final designation for such gifts should be clearly stated and approved by the University if possible when the instrument is established. Common types of planned or deferred gifts include:

  • Charitable gift annuities, charitable remainder trusts, charitable lead trusts, deferred charitable gift annuities, bequests or estate gifts, life insurance policies, bargain sales, retained life estates, oil, gas and mineral rights and IRA rollovers.

6. Pledges

A pledge is an unconditional promise to give cash or other assets at a future date. The pledge must be evidenced in writing from the donor to the University via the UA Gift Form and may also be captured in email as long as the donor’s commitment and payment schedule are clearly articulated. Additionally, the donor may not prescribe any contingencies or conditions regarding payment of the pledge and must be considered financially capable of making the gift. Under certain circumstances, the GAC may accept a conditional pledge. A donor may amend his/her pledge payment schedule if his/her personal circumstances change substantially and affect his/her ability to fulfill the pledge as originally recorded. Schedule change requests must be in writing and provide the amended schedule.

7. Sponsorships

Corporations and organizations may support University activities, events or projects in return for some type of recognition at the event or in publication materials related to the event. Most corporate sponsorship dollars are fully charitable; the determining factor is whether the recognition the corporation receives constitutes advertising under IRS regulations in effect at the time of the sponsorship. If the recognition fits the relevant IRS definition of advertising, the sponsorship is an exchange transaction and not charitable. Simple name or logo placement for the sponsor is not considered advertising and allows the contribution to be fully charitable.

8. Matching Gifts

Many companies match current gifts of cash, stocks or bonds made to higher education institutions by their employees, retirees and/or employees’ spouses. Matching gifts are generally allocated to the same purpose as the donor’s gift unless restricted to another purpose by the company. The University encourages donors to apply for any available matching gifts; however, because the donor has no control over matching gifts, matching gifts may not be included in a donor’s pledge commitment.

Donors are entitled to income-tax deductions for their individual gifts only and not the matching portion. Donors receive recognition credit for corporate matching gifts as those gifts are received.

Each matching gift company maintains its own set of rules or guidelines that govern the type of employee gifts it will match. The University, in all cases, will respect and adhere to each company’s guidelines. Donors who question a matching gift decision are encouraged to consult with their company’s matching gift administrator.

9. Donor-Directed and Donor-Advised Funds

A donor-directed fund is established when the donor sends an asset to a financial institution or foundation for investment and safekeeping. The assets remain in the name of and under the control of the donor. At some future point, the donor will contact the financial institution or foundation and direct it to make a gift to a qualified charity. When that gift is made, the original donor who directs the gift is the legal donor and would get hard credit.

With a donor-advised fund, the donor gives an asset to a 501(c)(3) tax-exempt organization (such as a community foundation or charitable arm of a financial services company) as a gift to that entity. The asset is then in the name of and controlled by that entity. At some future time, the donor may contact the organization holding the fund and request it to make a gift to a qualified charity. When that gift is made, the third-party organization controlling the fund is the legal donor and will receive hard credit. Soft credit will be applied to the original donor (the individual) who recommended the grant from the donor-advised fund. Grants made from a donor advised fund may not confer a benefit of any kind on the donor recommending the grant.

Donor-advised fund gifts from 501(c)(3) entities cannot be applied to a personal pledge, because of potential tax penalties to the original donor and the institution. Only an entity exercising legal control over his/her assets can make a pledge. Therefore, an individual cannot commit funds that might come from a donor-advised fund, community foundation, or corporate matching gift program. A pledge includes only those funds that will be given by that legal entity. Therefore, if a donor-advised fund enters into its own gift agreement with the University, a pledge can be recorded with the donor-advised fund as the donor. All gifts from donor-advised funds should be directed to the Office of Planned Giving for proper administration and acknowledgment.

Commitments made where future payments will be received from a Donor Advised Fund will be codified with the DAF Intention Form stipulating that the donor and University are not entering into a formal pledge agreement. These conditional commitments will be counted in fundraising totals but excluded from any pledge receivable total provided to Financial Affairs, who will recognize the revenue once the DAF grant is received.

Refunding of Gifts

In very rare instances, the University may deem it necessary to refund a gift. Requests for refunds may come either from the donor or from the recipient department and must include a statement of reason addressed to the associate vice president for advancement services. Any refunds must be approved by the vice president for advancement.

Definitions

University: For purposes of this document, references to the University include UA as well as the Capstone Foundation, 1831 Foundation, Crimson Tide Foundation, Law School Foundation and National Alumni Association.

Scope

This policy applies to all University personnel and personnel of charitable-contribution-accepting affiliated foundations noted above involved in soliciting and accepting gifts.

References

 
 

Division of Advancement

Approved by Allison Drake, Executive Director of Advancement Operations, 10/05/2021