CAL POLY FOUNDATION SECTION NO. 100 POLICY MANUAL POLICYNO. 101 POLICY STATEMENT - GENERAL AND ADMINISTRATIVE

Transcription

1 CAL POLY FOUNDATION SECTION NO. 100 POLICY MANUAL POLICYNO. 101 SECTION: POLICY STATEMENT - GENERAL AND ADMINISTRATIVE SUBJECT: GIFT ADMINISTRATION POLICY PURPOSE: To provide management with the criteria and framework by which donations may be accepted, managed and conveyed. EFFECTIVE DATE: January 1, 2007 RESTATED: November 10, 2008 RESPONSIBLE EXECUTIVE: Vice President of University Development RESPONSIBLE DEPARTMENT: Gift Administration UPDATED: April 19, 2008 and November 10, 2018 FIRST EFFECTIVE DATE: January 1, 2007 LAST REVIEW: November 10, 2018 NEXT SCHEDULED REVIEW: November 2023 GIFT ADMINISTRATION POLICY I. BACKGROUND AND PURPOSE A. The Cal Poly Foundation (Foundation) is an auxiliary of Cal Poly University. The Foundation is primarily responsible for holding, investing and administering private support donated for the benefit of the University. The Foundation Board of Directors has approved this Gift Management Policy to provide Foundation management and independent contractors engaged by management to assist the Foundation carry out its responsibilities with the criteria and framework by which donations may be accepted, managed, and conveyed in appropriate circumstances. Title 5 of the California Code of Regulations (Section 42500) provides the broad authority of the Foundation to function as the recipient/donee of private support gifts under the terms of an appropriate agreement between CSU Trustees and the Foundation. Authority for the Foundation to function as the donee/recipient of gifts is set forth in University Campus Administrative policy 711 Gift Acceptance, the Memorandum of Understanding and Master Operating Agreements between these entities. The provisions of this policy shall be interpreted consistent with these policy statements and agreements. The Internal Revenue Service has determined that the Foundation is tax-exempt pursuant to IRC Section 501(c)(3) and a public charity pursuant to IRC Section Cal Poly Foundation 1

2 170(b)(1)(A)(4). The State of California Franchise Tax Board has classified the Foundation as charitable corporation under Section 23701d of the California Revenue and Taxation Code. The Foundation s financial statements will be prepared in accordance with accounting policies and standards established by the Governmental Accounting Standards Board (GASB). II. POLICY A. General Only gifts of cash, bequests, devices, endowments, trusts, and similar funds or other assets which are designated for the use of (in trust for) the University or to the Foundation for University programs or projects may be considered for acceptance. 2. Except as provided below, the Foundation s Chief Executive Officer, or his or her designee, has authority to accept gifts or related funds and instruments designated by the donor/grantor for purposes or uses approved by the Board of Directors, or for established, instructional or support programs and functions of the University authorized by the University President or his designee. 3. Donated real property may be sold or otherwise conveyed at fair market value, consistent with any gift restrictions and upon concurrence by the University President. Such sale or conveyance must be authorized by the CEO in consultation with the appropriate Foundation Board committee. 4. Donations to implement new University programs, or donations involving a substantial or unique obligation of the Foundation, shall be submitted to the University President for approval as to its acceptability and conformance with CSU regulations and then to the Board of Directors for consideration. B. Gifts of Real Estate 1. The Foundation CEO, or a designee, in consultation with the University President or a designee, and with the Chair of the Investment Committee of the Board of Directors, has authority to accept real estate gifts, either outright or in trust, and whether or not intended for prompt conversion to cash, within the following parameters: a. The title is in a form satisfactory, as evidenced in a preliminary title report. b. A qualified appraisal has been received from the donor. Cal Poly Foundation 2

3 c. The owner confirms they are not presently under any legal obligation to sell or otherwise convey the property. d. A review of the history of the property, known occupants and a site inspection conducted by Foundation or University staff, reveals no uses, conditions or circumstances that suggest the existence of environmental risks that warrant obtaining an external environmental assessment. e. A Phase I environmental impact study is conducted for any property not satisfying B.1.d. above, and the results of that study conclude that the property does not present an unacceptable level of environment risk. f. Donor has acknowledged and concurred regarding any holding or other administration costs that may be deducted from the sale of the property before the net proceeds are distributed in accordance with donor restrictions. 2. In the absence of gift restrictions from the donor, the decision whether to hold or liquidate real estate will be made by the Foundation CEO, or a designee, in consultation with the University President or a designee, and with the Chair of the Investment Committee of the Board of Directors, considering all pertinent information including the following: a. Liability exposure from the past or proposed use of the property, including environment risk, b. Management effort, or cost of acquiring management services, necessary to realize a reasonable return on the property, c. The suitability of the property as an investment within the overall investment policy and guidelines for the endowment or internal investment fund. 3. Gifts requiring President Approval and Board consideration. Donation proposals to implement new University programs, proposals that would involve a substantial or unique obligation of the Foundation or for real property that does not meet Section B. 1, regarding the parameters accepting gifts of real estate, must be submitted to the University President for approval as to the gift s acceptability and conformance with University needs and CSU regulations (particularly Cal. Code of Reg (c) regarding real property) before being considered for acceptance by the Foundation. 4. All real property held by the Foundation will be evaluated at least annually to determine whether the Foundation should liquidate or continue to hold the property based on the factors listed in B.2 above and any additional relevant factors, including the following: Cal Poly Foundation 3

4 a. Compliance with donor objectives, b. Current University needs, c. Changes in the potential for short or long term appreciation, d. Current estimates of revenue, expenses and return. C. Gifts of Personal Property 1. Expendable supplies/materials which involve on-campus floor space necessary to house the gift in excess of 100 square feet shall require a certification from a designated University official that: the gift is acceptable; space is available; acceptance of the property will require reasonable storage costs, in relation to value and use; and the funds for such costs are available. 2. Vehicles and equipment involving on-campus space necessary to house the gift in excess of 100 square feet shall require a certification from a designated University official that: the gift is acceptable; authorized space of equipment has been obtained; acceptance will require reasonable operation, repair, and maintenance costs in relation to value and use; and the funds for such costs are available. The Foundation will consider transfer title/ownership of such gifts to the University when circumstances unique to the gift or conditions of its donation and acceptance or operational considerations make such transfer feasible. 3. Gifts of stocks, bonds and similar instruments shall be processed in accordance with established University and Foundation investment policies and guidelines regarding retention in portfolio or sale. 4. Gifts of software, gifts involving intellectual property rights, and gifts-inkind shall be processed in accordance with established under University Campus Administrative Policy Types of Gifts and Foundation policies and guidelines affecting these classes of assets. 5. Special rules apply to contributions of services and works of art, historical treasures, and similar assets. Contributions of services are recognized only if the services received (a) create or enhance nonfinancial assets or (b) require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation. Cal Poly University Campus Administrative Policy 180 University Art Acquisition and Oversight Policy serves as the guide for receiving contributions of works of art, historical treasures, and similar assets need not be recognized as revenues and capitalized if the donated items are added to collections Cal Poly Foundation 4

5 held for public exhibition, education, or research in furtherance of public service rather than financial gain. D. Accounting Standards Compliance GASB 33 requires the Foundation to distinguish between contributions received (non-exchange transactions) versus exchange transactions, and provides guidance on the timing of recognition of non-exchange transactions (contributions). Assets are recognized when all eligibility requirements are met or funds are received, whichever is first. Eligibility requirements are established by the provider and may stipulate the qualifying characteristics of recipients, time requirements, allowable costs, and other contingencies. Revenue is recognized when all eligibility requirements have been met. If a gift is received prior to meeting eligibility requirements, it is recorded as deferred revenue. More specifically, for transactions in which the provider requires the recipient to use (sell, disburse, or consume) the resources in or beginning in the following period, resources provided before that period should be recognized as deferred revenues (for the recipients). For transactions, such as permanent or term endowments, in which the provider stipulates that resources should be maintained intact in perpetuity, for a specified number of years, or until a specific event has occurred, resources should be recognized as revenues when received and as expenses/expenditures when paid. Purpose restrictions are not eligibility requirements and do not affect revenue recognition. Gifts received with purpose restrictions will be reported as restricted until used for designated purpose or until restriction expires. Some gifts are received with the stipulation that the resources cannot be sold, disbursed, or consumed until a specified number of years have passed or a specific event has occurred, or must be held in perpetuity. For these gifts, revenues are recognized when the resources are received, provided that all eligibility requirements are met. Resulting net assets/fund balance should be reported as restricted for as long as the restrictions or time requirements remain in effect. If a gift is received in installments spread over more than one year, and there are no unmet eligibility requirements or time restrictions, the present value of all future cash flows should be recognized as revenue in the first year of the gift. III. REPORTS TO THE BOARD Summary information about all gift activity and special reports about major or unique gifts and their disposition shall be reported periodically to the Board. IV. IMPLEMENTING GUIDELINES Cal Poly Foundation 5

6 The CEO is authorized to establish management guidelines consistent with this policy statement to effect its implementation. V. REVIEW The Audit Committee of the Foundation Board of Directors, in consultation with the managers, will review this policy in its entirety every five years from the most recent updated date to determine its effectiveness and appropriateness. The policy may be evaluated before that time as necessary to reflect substantial organizational, financial, or physical change(s) at the Foundation or any change required by law or by other governing policy. VI. REFERENCES AND RELATED POLICY A. Title 5 of the California Code of Regulations (Section 42500) B. IRC Section 170(b)(1)(A)(4) The term public charity means an organization described in clause (i) to (vi) of section 170(b)(1)(A). If an organization is described in clause (i) to (vi) of section 170(b)(1)(A) and is also described in clause (viii) of such section, it shall be treated as a public charity. C. Cal Poly Campus Administrative Policy 711 a. Related University Policies, Procedures, Manuals and/or Documents: i. ICSUAM 9019: Real Property Acquisition i. Partnership for Philanthropic Planning Model Standards of Practice for the Charitable Gift Planner ii. CSU Executive Order 676: Delegation of Gift Evaluation and Acceptance to Campuses iii. Gift-in-Kind Acceptance Procedureshttp:// b. Laws, Regulations and/or Codes of practice referred to herein or related to this policy: i. California Education Code Section 89720, D. Master Operating Agreement effective July 1, 2016 to June 30, 2026 Cal Poly Foundation 6

7 Document Chronology: November 10, 2018, updates for formatting and added review schedule, revised for improved clarity of socially responsible investing. Cal Poly Foundation 7