OTHER CONSIDERATIONS

9.a. Quid Pro Quo Gifts/Premiums

Certain contributions to the University are not fully tax-deductible because a benefit of goods or services received by a donor in return for the gift (e.g., dinner or tickets to an event). A donor must reduce the value of the contribution for income tax purposes by the value of the goods or services received. It is the University's legal obligation to provide on the charitable receipt a report stating, "The donor received no goods or services in return for this gift" or "the donor received goods or services valued at $_______."

No disclosure statement is required if the goods or services given to a donor have insubstantial value as described in IRS Revenue Procedures 90-12 and 92-49. IRS Insubstantial Benefit Limits lists latest IRS inflation-adjusted limits on benefits the University can provide a donor in exchange for the donation, without the reporting the benefit.

9.b. Privacy

Utah State University respects the privacy of the donor who financially support its objectives and missions. Safeguarding donor privacy is good stewardship as well as a matter of professional ethics. It is the policy of the University to hold the name of the donor in confidence.

The Donor Bill of Rights (endorsed by CASE, the Association of Healthcare Philanthropy, the Association Fundraising Professionals and the American Association of Fund-Raising Counsel) states that donors are: “To be assured that information about their donations is handled with respect and with confidentiality to the extent provided by law.”

Confidentiality guidelines must be signed by anyone with access to constituent data, including staff (e.g., University employees and student employees), volunteers (e.g., chapter officers, college and department board) and USU Foundation Board. 

USU Advancement privacy policy can be found at https://www.usu.edu/advancement/privacy-policy.

9.c. Requirements to Report Gifts from Foreign Donors
Section 117 – Higher Education Act Reporting Requirements

Section 117 of the Higher Education Act of 1965 (HEA), as amended, requires institutions that participate in the Title IV student assistance program to report to the Secretary of Education each July 31 and January 31 on gifts, grants, and contracts received from foreign sources aggregating on an annual basis in excess of $250,000 (no matter if that amount is exceeded in one gift or the aggregated total of gifts from that source within the calendar year).

The term ‘‘Foreign Source’’ means—

  1. a foreign government, including an agency of a foreign government;
  2. a legal entity, governmental or otherwise, created solely under the laws of a foreign state or states;
  3. an individual who is not a citizen or a national of the United States or a trust territory or protectorate thereof; and
  4. an agent, including a subsidiary or affiliate of a foreign legal entity, acting on behalf of a foreign source.
  5. If an individual has dual citizenship that includes the United State citizenship, they are not considered a foreign source.

https://www2.ed.gov/policy/highered/leg/foreign-gifts.html

USU shall use forms designed to identify foreign sources.  For individuals, self-declaration of citizenship will be sought, and if unavailable, primary residence will be used.  For other entities the country of incorporation will be used, and if unavailable, the principal place of business will be used.

Under certain conditions confidentiality may be requested entities who are either making gifts or entering into contracts may be requested.  In such cases, the unit will apply existing procedures, or may consult with General Counsel, to determine the degree to which these identities can be withheld from disclosure.

Reporting subdivisions include Advancement, Financial Aid, Technology Transfer, Research Integrity and Compliance, and other units as may be identified that are qualified to accept contracts from foreign sources.  The Office of Advancement Services shall review their records for the preceding 12-month period and provide required information to Financial Aid, which will act as the coordinating unit to combine information from all areas and report via the designated portal provided by ED. 

R545, USHE Disclosure of Foreign Donations to Higher Education Institutions Requirements

Utah Code Section 53B-1-202, requires institutions of the Utah System of Higher Education provide the Board of Regents with an annual disclosure report submitted no later than July 31, for the recently concluded fiscal year that includes the following:

  1. The name of the person or entity, date, country of citizenship or entity origin (if known) and the amount of any gift of $50,000 or more from a foreign person, considered alone or in combination with all other gifts from the foreign person.
  2. The name of the person or entity, date, country of citizenship or entity origin (if known) and the amount of any gift of $250,000 or more if the gift, considered alone or in combination with all other gifts is from a foreign person with a principal residence or principal place of business located in the United States and with a permanent resident status under Section 245 of the Immigration and Nationality Act for 10 years or more.
  3. Every foreign gift that is conditional or has restrictions must have a description of the conditions or restrictions.

The term “Gift” means “an endowment, scholarship, gift, donation, or grant of money or property of any kind.” Gift does not include payments to an institution for services that are contracted, tuition or fees paid for students.

The term “Conditional Gift” means a gift that is subject to conditions imposed, requested, or provided by a foreign government or foreign person. Conditions may include but are not limited to specific programs being supported, lectures, or subject matters to be taught.

USU shall determine status, pursuant to Utah Code Section 53B-1-201(d), and disclose based on their knowledge of an entity being foreign-owned.  USU, pursuant to Utah Code Section 53B-1-202(d), may rely on the “address of a foreign person to determine the citizenship or nationality of the foreign person if the citizenship or nationality is unknown.” USU shall make good faith efforts using the best and most reliable information that is readily available to them or their first-hand knowledge in making such determinations.

The Office of Advancement Services shall review their records for the preceding 12-month period and provide required information to Budget and Planning Office, who will prepare and submit report to the Board of Regents.  

9.d. The requirement to Report Cash Gifts over $10,000

The Internal Revenue Code (IRC) provides that any person who, in the course of its trade or business, receives more than $10,000 in cash in a single transaction (or in two or more related transactions) must report the transaction to the IRS and furnish a statement to the payer.

Charitable contributions are not considered received in the course of an exempt organization's trade or business and thus are not subject to these cash receipt reporting requirements.

9.e. Anonymity

The University requires that the donor is identified for all substantial gifts. This information may be kept confidential with the consent of the Vice President for Advancement. (No discretion may be exercised in certain instances, i.e., foreign gifts for which regulations require disclosure of specific information.)

When a donor asks that he/she remain anonymous in relation to a gift, the fundraiser must determine the appropriate level of anonymity. For some donors, it is acceptable for University officials and internal entities to know about a gift. Their primary request is that their names and their gift not be discussed in any public setting or included in any published honor roll of donors. In this case, the gift will be recorded to the donor's entity record in Millennium but will not be published in any University materials, nor recognized in any public fashion.

Other donors want complete anonymity, meaning that only the fundraiser(s) involved and a select number of University officers may know the source of this gift. In these cases, the gift will be added to the anonymous record in Millennium. The donor may also have a regular record that reveals his or her name, but no cross-reference between the anonymous record and the regular record will exist. The Office of Advancement Services will maintain a separate limited access record of all anonymous donors. Complete anonymity should be given in limited circumstances because of difficulties associated with donor giving history.

9.f. Memorial or Honor Gifts

Benefactors often choose to memorialize or honor a special person by making a gift to the University in their name. Families may ask that gifts be made to the University for a particular fund in memory of the deceased instead of flowers to a funeral. An online memorial URL with a secure giving form can be created for this purpose. Contact the Office of Advancement Services for more information.

Memorial/Honor gifts may be made at any time. The University will send an acknowledgment letter to the donor, and then a letter will be sent to the honoree or honoree's family. That letter will include the donor's name and address, but never the gift amount.

9.g. Recognition "Soft" Credit

The donor's giving record is soft credited when his/her direct actions result in a gift, but is not entitled to a charitable deduction for the gift (e.g., gifts from a charitable gift fund, community foundation, a spouse/partner, donor's business if they are the principal owner, or any employer matching funds).

9.h. Old Main Credit

Old Main Society Membership is bestowed upon donors whose lifetime giving to Utah State University in the form of cash or in-kind gifts, reaches a total of $25,000. Old Main Society is the university's instrument for recognizing and thanking these donors. Old Main Society membership cannot be transferred to another individual or entity without approval from the Gift Acceptance Committee.

In rare cases and upon approval from Vice President of Advancement, Old Main membership may be granted for a gift-of-service to the University. To request this approval, a memo outlining the circumstances shall be sent to the Vice President of Advancement.

If approved, a credit transaction in the amount of the approved service will be added to the donor database with a tender type of "old main credit" with the memo serving as documentation for the gift.

9.i. Foreign Currency

Gifts made in foreign currencies will be valued at the USD equivalent on the date the gift is received. This value is determined by the daily currency conversion rates listed in the Wall Street Journal.

The Treasury Services Office is responsible for currency conversion transactions, and for informing the Office of Advancement Services of the U.S. dollar amount of the gift.

The transaction fee resulting from converting foreign currency to U.S. dollars will be charged to the receiving unit's chargeback account identified in Millennium.

9.j. When Gifts Are to be Raised From Multiple Donors

A group of donors may decide to coordinate efforts to raise gifts for a specific purpose that requires a minimum funding amount, such as an endowed or expendable scholarship fund to be named after a professor, advisory board, deceased classmate, etc. The Unit’s Development Officer should be the point of contact to facilitate the process.  It is recommended that prior to establishing a fund for a memorial or to honor an individual that permission from the family or honoree has been granted.

To facilitate a Multi Donor Fund:

  1. Draft the Solicitation

    The solicitation must be in writing, using a letter/form letter, email, a website, or other method.  This will be used to document both the donors’ intent and requirements for establishing the named fund without a gift agreement.

    A Solicitation must include the following:

    • If the fund is to be endowed, language that clearly communicates to the donors that their gifts will be used to create an endowed fund.  The word “endowed” must be included in either the name or description of the fund. 
    • A brief explanation of the purpose of the fund, what it will be used for, and how it will be used.  If endowment, keep in mind that the use of the fund should be flexible enough to be sustainable in perpetuity.
    •   An explanation of how the funds should be received.  (A secure giving widget may be requested from Advancement Services for the online collection of funds.  E.g. gifts may be mailed to Utah State University at _____ or given online at www._______.usu.edu).
    • The below clauses must be included, but may be displayed on the solicitation as fine print or “additional details”.


    For Endowments:

    • Your gift will be used only for the above-stated purpose if the required minimum endowment level of $25,000 is met by       <>.  If not met, the gift will be considered expendable towards the stated purpose. 
    • The Endowment will exist in perpetuity.  If circumstances arise that render the stated purpose of the Endowment (as set forth herein) illegal, impractical, impossible, or wasteful (e.g., a change in law, the elimination of a USU program, position, or course of study, the persistent unavailability of scholarship recipients that meet the criteria, etc.); then, as set forth in this Solicitation, under such circumstances and in keeping with Utah Code 51-8-501(1), USU may designate a new purpose [and/or scholarship selection criteria] <> for the Endowment.  Any such new purpose shall be defined by USU’s President and       <>.
    • The Endowment shall be deposited and invested by the Board of Trustees of USU, through the USU Investment Advisory Committee in accordance with USU’s investment policy.  The USU Foundation is the legal entity designated by USU to receive charitable gifts in support of its academic mission.
    • Distributions from the Endowment shall be governed by USU’s Endowment Spending Policy. The spending policy calls for an annual distribution up to 5% (currently set at 4%) of the value of the endowment account to be expended per the gift agreement. An additional 1.5% of the endowment value shall be used to fund the administration of the endowment and USU advancement efforts.  All additional gains shall be retained as appreciation and invested along with the corpus to grow the value of the Endowment over time.
    • By letter dated May 21, 2008, the Internal Revenue Service has declared the USU Foundation (federal tax identification number 87-0627128), to be a duly qualified charitable organization under section 501(c)(3) and also an organization described in sections 509(a)(1) and 170(b)(1)(A)(iv) of the Internal Revenue Code.  The Foundation is a duly chartered active Utah nonprofit corporation, under the provision of Utah Code, Title 16, Chapter 6a.


    For Expendable Funds:

    • Your gift will be used only for the above-stated purpose if the required minimum expendable level of $10,000 is met by       <>.  If not met, the gift will be moved to a general fund with a similar purpose. 
    • If circumstances arise that render the stated purpose of the gifts (as set forth herein) illegal, impractical, impossible, or wasteful (e.g., a change in law, the elimination of a USU program, position, or course of study, the persistent unavailability of scholarship recipients that meet the criteria, etc.); then, as set forth in this Solicitation, under such circumstances and in keeping with Utah Code 51-8-501(1), USU may designate a new purpose [and/or scholarship selection criteria] <> for the gifts.  Any such new purpose shall be defined by USU’s President and       <>.
    • By letter dated April 8, 1959, the Internal Revenue Service has declared USU (federal tax identification number 87-6000528), to be a duly qualified charitable organization under section 501(c)(3) and also an organization described in sections 509(a)(1) and 170(b)(1)(A)(iv) of the Internal Revenue Code.
  2. Submit a draft of the solicitation to the Senior Director of Advancement Services for approval. 

  3. Distribute the approved solicitation to the potential donor pool. 
    A secure giving widget may be requested from Advancement Services for the online collection of funds.  The University will hold contributions for the fund in the University Advancement holding account until a Memorandum is created and a Banner Index is assigned.

  4. Create a Memorandum requesting a named fund be established using the Multiple Donor Expendable Memorandum template or Multiple Donor Endowment Memorandum template within the first year. 

  5. Once the Memorandum has been fully signed, the business manager of the supported area will be notified to establish the new index.

  6. Advancement Services will move the funds to the new named expendable/endowment fund. 

If the above procedures are not followed, then, prior to the fund being set up, the University Unit will be required to obtain permission after the fact from each donor confirming that they understand how their respective gifts will be used. 

True Endowments must be established at the direction of an external party or parties.  They may not be established as a result of a decision made within the University.  Donors must know that their gifts are intended to create an endowment.  By “answering” the solicitation with a gift, the donor is directing the University to establish the endowment or expendable fund.

Donors must know the University’s intention if the endowment or expendable minimum is not reached.

One donor cannot necessarily speak for other donors; therefore, a gift agreement is not appropriate in situations where multiple donors have contributed.

9.k. Gifts From Unknown Donors

If a gift is received without donor information, the Office of Advancement Services shall make every reasonable effort to trace the donor. The gift will be recorded on the unidentified donor record until the donor can be identified.

9.l. Record Retention

Development and Alumni Relations maintains scanned images of all gift transactions. This includes copies of gift transmittals, correspondence, checks, gift receipts, deposit slips, journals, and all gift agreements.

9.m. Return of Gifts to Donors at Their Request

Per IRS Publication 526 a gift is not a gift unless it is irrevocably given. Once given, donors are given a charitable gift receipt, and the money then belongs to the University.

However, in rare cases, there may be times it is best to pay a donor back for a previously donated gift. Also, nonprofit organizations are required to return a donor's gift if the funds cannot be used according to the donor's intent or if any significant provisions of the gift agreement are violated.

  1. To refund gifts donated in previous calendar year

    • The receiving unit reaches out to Office of Advancement Services. 
    • Office of Advancement Services will obtain approval from the Vice President of Advancement for anything over $500.
    • Office of Advancement Services will coordinate with the Advancement Financial Officer to issue the refund via check.
    • Advancement Financial Officer will coordinate with the Controller's office to issue a 1099 Misc. for refunds greater than $600.
    • Office of Advancement Services will void the gift and attach journal documentation.

  2. Refunds given for gifts donated in same calendar year

    • The receiving unit reaches out to Office of Advancement Services. 
    • Office of Advancement Services will obtain approval from the Vice President of Advancement for anything over $500.
    • Office of Advancement Services will process refund for credit card donations by putting the gift back on their credit card that are no more than two weeks old.
    • Office of Advancement Services will coordinate with the Advancement Financial Officer to issue the refund via check for all other donations. The check will be accompanied by a letter stating "by accepting this check you agree that the charitable receipt issued on (gift date) in the amount of (amount) is now null and void."
    • Office of Advancement Services will void the gift and attach journal documentation.

9.n. Gifts from Faculty to Support Their Research

The University receives donations or funds from university employees to support their research or other programs in their own units/departments. The University also receives donations of funds from members of the University employee's families or by corporations in which an employee holds a significant or controlling interest.

Donations of this nature are important to the University's intellectual and operational life. However, specific guidelines must be followed for these donations to be handled appropriately in a manner that does not create awkwardness for either the employee/donor or for the University.

Therefore, for gifts from the faculty and staff of the University to qualify for tax deductions, they must align with the following four criteria:

  1. Primary Charitable Intent: The primary motivation for contributing should be a charitable intent.
  2. Fund Crediting: The contribution must be attributed to a fund that is not solely controlled by, or does not personally financially benefit, the donating faculty or staff member.
  3. Non-Earmarked Usage: Donations should not be earmarked for the use of a specific individual but rather directed towards supporting research conducted by anyone within the department.
  4. No Future Remuneration: The faculty or staff donor should neither receive nor anticipate future remuneration from the fund to which their gift was credited.

Examples include faculty signing an honorarium check over to the department (this is taxable income to the faculty member as well), creating a life income gift (e.g., CRUT, CGA) to ultimately benefit a university-wide scholarship endowment, or donating equipment or materials for use by the department.

9.o. Separately Invested Endowment Funds

If the donor wants to direct the investment of his/her own endowment, the Gift Acceptance Committee will review and provide recommendations to the University President for final approval.

9.p. Use of Earnings from Restricted Endowment Funds

The Unit responsible for the endowment shall review scholarship awards each year for compliance with the intended purposes outlined in the donor gift agreement.

The Office of Advancement Services shall monitor endowment spending returns and notify the development officer if substantial underspending has occurred. If the purpose for which the endowment was established is removed or the Unit is unable to use the earnings for the intended purpose, the development officer shall work with the Donor (if surviving) to amend the existing agreement.  In cases where the signatory of the agreement is no longer living, the development officer shall contact the Senior Director of Advancement Services for instructions on the process.

9.q. Conflict of Interest when Advancement Staff Serving as Executor or Successor Trustee of Living Trusts

Any University Advancement staff serving as Executor or Successor Trustee of Living Trusts, for the benefit of the University, must disclose their potential conflict of interest to the Vice President of Advancement.

9.r. Undesignated Bequests

When the University receives a bequest without any pre-existing gift agreement or accompanying instructions from the donor's estate or representative, the University President may allocate the proceeds to any University purpose. The Vice President of Advancement and/or the Gift Acceptance Committee will make a recommendation on how the funds should be allocated based on the deceased persons giving history to the University. If a donor priority can't be determined, the Vice President of Advancement will make a recommendation to the University President that may include designating the purpose of the gift or that it be used as a matching initiative.

9.s. Membership Programs

According to IRS Publication 526, a donor can deduct membership fees or dues paid to the University in excess of the value of the benefits they receive. The University can disregard the following membership benefits if received in return for an annual payment of $75 or less:

  1. Any rights or privileges that you can frequently use while you are a member, such as:

    • Free or discounted admission to the organization's facilities or events,
    • Free or discounted parking,
    • Preferred access to goods or services, or
    • Discounts on the purchase of goods and services.
  2. Admission, while you are a member, to events open only to members of the organization if the organization reasonably projects that the cost per person (excluding any allocated overhead) isn't more than $10.70.

According to CASE standards, while the IRS may suggest that certain amounts paid as alumni membership dues/fees could constitute a legal gift, they are always excluded from official fundraising totals. However, if an amount is paid over and above the assessed alumni dues amount in conjunction with that dues payment, and that additional amount is applied to philanthropic endeavors, those additional funds can be counted.

9.t. Holding Account

Utah Code Title 51, Chapter 4, requires that money "should be deposited daily, if practicable, but no later than once every three banking days." Therefore funds that are received in the Office of Advancement Services that cannot be deposited into a University banner account at the time received will be deposited in the University Advancement holding account.

When the Office of Advancement Services receives a banner index that is qualified to hold a charitable donation, the funds will be moved by the Office of Advancement Services from the holding account to the new banner index as a journal transfer. The unit and department will be notified when this transfer has been initiated.

Units should make every effort to not have funds in the University Advancement holding account for more than one year. This will ensure that the donor's intentions are being met.

9.u. Charity Registration for Solicitations and Gift Annuity

University Advancement will review the charity registration for solicitation and gift annuity requirements for each state and will work with Office of General Counsel as needed to comply with registration.