GIFT ACCEPTANCE POLICY. Advancement Services February 2014

Transcription

1 GIFT ACCEPTANCE POLICY Advancement Services February 2014

2 INTRODUCTION The WVU Foundation (Foundation) was incorporated in 1954 and chartered under the laws of the State of West Virginia. The Foundation has been granted 501(c)(3) tax status by the Internal Revenue Service for the purpose to solicit, accept, administer, invest and disburse contributed funds and properties in support of West Virginia University and its affiliated organizations (University). Governance The Foundation is governed by an independently elected Board of Directors (Board) which has the power, authority, and obligation to set fund-raising policies and oversee its operations. In carrying out its responsibilities, the Board employs management, forms policy and maintains fiscal accountability over funds administered by the Foundation. Responsibilities Foundation responsibilities include the management of contributions received on behalf of the University to include, but not limited to: (a) administration of bequests, estates, trust arrangements and endowments in which the University or Foundation is the intended beneficiary; (b) investment of funds; (c) gift accounting and reporting (d) gift valuation for development, federal, and financial purposes; (e) compliance with Federal and State laws and regulations; and (f) acceptance, management and sale of gifts of real and personal property. The Foundation provides various fund-raising support services including annual giving programs, major gifts planning, donor relations, planned giving, prospect research and constituent information systems support. The Foundation ensures that all gifts and earnings are used according to donor guidelines. Donor stewardship programs are managed through the Foundation. DEFINITIONS Gift - A gift is defined as a voluntary transfer of money or property of value made by a donor without expectation or receipt of an economic benefit commensurate with the money or property transferred and to which no commitment of resources or services has been made. PURPOSE The purpose of this communication is to provide clarification and guidance to: Facilitate the gift-giving process. Direct the administration of gift deposits to ensure effective accomplishment of the organizational mission from fiscal, legal and operational perspectives. Define sources of monies and the expected level of oversight for use of funds. 2

3 Outline Foundation accountability for gifts and the overarching principles for receiving such funds. Maintain effective internal control pertaining to the reliability of financial records, effectiveness and efficiency of operations including safeguarding of assets. Mitigate reputation risk or risk of loss of confidence in Foundation stewardship abilities and the related adverse impact of negative publicity on future fund raising efforts. Ensure the Foundation operates as a separate and independent entity in substance and form. POLICY STATEMENT The WVU Foundation is the gift solicitation organization and custodian of private gifts for benefit of the University. The Foundation has the authority to receive gifts, grants, conveyances, devises, and bequests, whether real or personal property, in trust or otherwise, for the designated or undesignated use or benefit of the University. The WVU Foundation staff solicits gifts from individuals, corporations, foundations and other private entities to fulfill its mission. Gift Review and Acceptance Authorized Agents It is the responsibility of the Board to accept gifts directed to the Foundation on behalf of the University. The Board delegates to the Foundation President the responsibility for implementing fiscal policies and procedures governing gift acceptance. Gift Acceptance Committee The Foundation President may convene a Gift Acceptance Committee (GAC) to include the Senior Vice President of Development, the Senior Vice President for Development, Health Sciences, and the Vice President for Finance and Chief Financial Officer, and/or designees when the circumstances surrounding a specific gift raise significant institutional issues. The Vice President for Finance and Chief Financial Officer is responsible for reviewing and making recommendations regarding gifts in which current or future financial obligations may be incurred. The GAC will convene to consider the merits of a particular gift and reach a decision on whether or not to solicit and/or recommend acceptance to the Board. The Foundation will consult with WVU Officials as needed regarding deposit acceptance where the nature of the underlying transaction is unclear. Executive management will provide quarterly gift acceptance recommendations to the Board detailing specific restrictions for acceptance. Gifts to be presented to the Board include, but are not limited to: Outright cash and public securities of $100,000 or more. All gifts of real property or an interest therein including mineral rights. 3

4 Gifts of closely-held securities, promissory notes, partnership interests, stock options, or other negotiable instruments with a value of $100,000 or above. Bargain sales or gifts subject to any encumbrance. Gifts of tangible personal property valued at $100,000 or above. Gifts that, because of their unusual nature, present questions as to whether they are within the role and scope of the Foundation. Gifts that, because of their size or nature, present questions as to the impact on West Virginia University, or a particular program or area. Gifts that might raise questions about the Foundation s integrity, independence, or potentially expose the Foundation to adverse publicity, financial risk, or litigation. Use of Legal Counsel The Foundation shall seek the advice of legal counsel in matters relating to acceptance of gifts when appropriate. Such matters may include; 1. Gifts of closely held stock that are subject to restrictions, buy-sell agreements or other arrangements that limit the marketability of the securities. 2. Gifts governed by contracts, trusts or other legal documents. 3. Gifts involving bargain sales or documents requiring the Foundation to take or refrain from taking some action or assume an obligation. 4. Gifts with potential conflicts of interest that may invoke IRS or other legal sanctions. 5. Gifts of real property or interest therein, including mineral rights. Gift Restrictions The Foundation is legally obligated to adhere to the terms and conditions of each gift. For this reason, gift terms must be considered with the utmost care to be sure they are feasible, do not unduly hamper the usefulness and desirability of the gift, and are in conformity with Foundation policy. It is the responsibility of development officers and/or University administrators to present gifts with unique restrictions to Foundation Executive Management for review. GENERAL PRINCIPLES This gift acceptance policy shall be interpreted in light of the following principles: Donor Rights and Interests - A gift will be accepted when in the mutual best interest of the donor and the Foundation. A determination of the donor s interest will include, but not be limited to, the donor s financial situation and philanthropic interests, as well as any tax or other legal matters revealed while planning for a gift. The Foundation adheres to the Donor Bill of Rights. The Foundation will not pay a finder s fee or commission for any gift in exchange for securing said gifts. Donor Responsibility - Donors are responsible for ensuring that proposed gifts further their own personal charitable, financial and estate planning goals. Each 4

5 donor is urged to seek the advice of independent legal, tax, or financial counsel in the gift planning process. It is not within the province of the Foundation or its staff to give legal, accounting, tax or other advice to prospective donors. Integrity and Independence - The Foundation values and will protect its integrity and its independence. Gifts should not compromise the University or the Foundation with restrictions or conditions that may expose either party to adverse publicity, provide the appearance of impropriety, or result in real or perceived conflicts of interest or commitment. University Benefit - A gift will be accepted by the Foundation if there is reasonable expectation that acceptance of the gift ultimately will benefit the University. Factors that may be considered include: the capacity of the University to utilize the gift; is the gift too restrictive in purpose; whether the gift has unexpected responsibilities because of their sources, conditions, or purposes; and are there costs or obligations that the University or the Foundation may incur by accepting the gift. Compliance The Foundation will adhere to federal, state, and/or local laws and regulations. Specifically, the Foundation will comply with the Internal Revenue Service Code and its regulations, State of West Virginia law relating to charitable organizations and not-for-profit corporations, particularly the Uniform Prudent Management of Institutional Funds Act. The Foundation cannot accept gifts which may contravene the Foundation status as a charitable 501(c)(3) not-for-profit organization; which violate the Foundation charter, mission, or planning; or result in the misapplication of State funds. Industry Standards - The Foundation s policies are consistent with guidelines established by industry organizations such as the Financial Accounting Standards Board, the Council for the Advancement and Support of Education, the National Committee on Planned Giving, and the Association of Fundraising Professionals. Confidential Information - All information obtained from or about donors or prospects shall be held in strictest confidence by the Foundation in accordance with the WVU Foundation Code of Ethics adopted by the Board of Directors. The Foundation will respect donor wishes in regard to publication of information or other forms of recognition. TYPES OF GIFTS TO BE ACCEPTED The WVU Foundation, in keeping with the regulations of the Internal Revenue Service and charter and laws of the State of West Virginia in which it is situated, may solicit and accept gifts made through various vehicles, from the following categories to include, but not limited to: Cash and Cash Equivalents Cash, checks, 5

6 Credit Card, Debit Card, Wire, ACH or other means of electronic transfer Securities Marketable Public Equities Corporate Bonds Government Bonds Real Property and Related Revenue Personal Residence Land Life Estate Agreements Undivided Remainder Interests in Property Oil, gas and mineral interests and related royalties. Tangible Property Collections of art, books, coins or movies Cars, boats and aircraft Food or other items used for hosting dinners, etc. Hardware, Software, Software licenses Long-Lived Assets Equipment Materials Printed materials Intangible Property and Related Revenue Intellectual property patents Copyrights of cultural, artistic and literary works and related royalties Computer software under development Planned Gifts Irrevocables Life Income Agreements Charitable Gift Annuities Charitable Remainder Unitrusts Charitable Remainder Annuity Trusts Charitable Lead Trusts Life Insurance Retirement Account Distributions Planned Gifts - Revocables Bequest or devise by will Life Insurance Beneficiary Retirement Plan Beneficiary Business Interests Closely held stock Partnership interest 6

7 Third Party Distributions Donor Advised Funds Corporate Matching Gifts Promises to Gift and Intentions to Give (Pledges) Unconditional Pledges Challenge/Conditional Pledges Third-Party Intentions (Donor Advised Funds, Matching Gifts) Other gifts Bargain Purchases See Appendix A Contributed Services Compensatory Services Rendered Philanthropic Grants Quid Pro Quo Contributions Sponsorship Income Tribute Gifts Volunteer Out-of-Pocket Expenses WVU Affiliate Gifts GIFT RECEIPTING AND ACKNOWLEDGEMENT All gifts to the University should be directed through WVUF Advancement Services for recording to the appropriate fund(s). All deposits submitted to the Foundation for processing must be supported by accurate representations and original (source) documentation to clearly identify the true business nature. An IRS-acceptable gift receipt is sent to the donor upon gift acceptance. WVUF Development establishes specific parameters for acknowledging gifts according to benefiting unit and gift level. Valuation Gift recognition will differ according to the principles against which it is measured. Development professionals, the Internal Revenue Service, and the authorities that promulgate financial standards have differing precepts that require capturing contributions from different vantages. Development Development personnel have a basic interest in donor giving capacity and the gross or face value of the transfer of money, property, or services. The gift amount will not reflect the value of assets, future expectations, economic benefits or commitment of resources or services to be made to the donor in return for the transfer. Tax Deductible Donors are interested in the tax deductible amount allowed according to the Internal Revenue Code. The gift amount will reflect the value of any benefits received by the donor in return for the contribution. 7

8 Financial External parties are interested in financial disclosure that is consistent and comparable with other institutions in accordance with non-profit accounting pronouncements. The gift amount will include transfers of cash, non-monetary assets, services and unconditional promises to give those items in the future. OTHER DEPOSITS The University is a large, complex organization which interacts with, and must be responsive to, many diverse constituencies. Although the Foundation s revenue is obtained mainly through gifts and the investment of those gifts, certain other non-gift deposits are accepted by the Foundation as a service to the University Acceptable Deposits The WVU Foundation will accept deposits from the following types of activities: Alumni dues or membership fees Fees for attending University cultivation dinners and banquets Rents from real estate Royalties from real property (e.g. mineral and timber rights) Miscellaneous reimbursements Sale of donated merchandise Travel advance reimbursements Unacceptable Deposits Foundation management will consult with University Officials as needed when evaluating deposit acceptability. In general, the Foundation will not accept deposits from the following types of activities. Advertising Revenue Contractual Revenues/Awards Gaming (Special events will be considered on a case by case basis) Government/Public funds (unless stipulated by legislative statute) Rents/Royalties from property not owned by the Foundation. Regulatory restricted funding (e.g. invasive testing of human subjects or animals) University student association and club deposits Taxable compensation Taxable personal property rental which would create a sales tax liability Taxable sales Unrelated Business Income 8

9 GIFT ACCEPTANCE GUIDELINES The following discussion provides gift acceptance guidance for various types of gifts. Cash and Cash Equivalents Cash and Cash Equivalent gifts are accepted by the Foundation in the form of currency, money orders, checks, wire transfer, ACH, credit/debit card charges. Checks should be made payable to WVU Foundation. The Foundation currently accepts American Express, Diner s Club, Discover, MasterCard and Visa payment cards information online, by voice/telephone, or through the US Postal Service. The Foundation also receives cash contributions through payroll deduction. Credit Card Fees: Credit card fees are recorded either to: the depository fund if the gift is to a demand fund; or to the overall investment pool if the gift is to an endowment fund. Foreign Currency and Foreign Securities: The Foundation may accept foreign currency and securities on a case-by-case basis. In cases where the Foundation accepts a gift of foreign currency, the gift will be recorded in United States currency based on the closing exchange rate on the day the gift is received. In cases where the Foundation accepts foreign securities, the policies and procedures applicable to gifts of marketable domestic securities will apply. If the Foundation does not accept the foreign currency or securities from the donor, the securities will be returned to the donor. The Foundation is not required to send an official tax receipt for gifts coming from outside the United States, however, the benefitting college or school typically sends a donor acknowledgement. Securities Publicly Traded Securities: Publicly traded securities (stocks, bonds and mutual funds) are securities regularly traded on the New York, NASDAQ and American Stock Exchanges. Public traded securities which have appreciated in value are common charitable gifts as they allow the donor to make a significant tax favored gift. Stocks may be donated outright or used to create an income-producing gift to benefit WVU and the donors/beneficiaries. Donors can avoid capital gain taxes on the appreciation in stock value through outright gifts and substantially minimize capital gain taxes on income-producing gifts. In either case, the donor selects the purpose of the gift to help WVU, its students, faculty, staff, facilities and programs. Gifts of donated securities are coordinated through WVU Foundation Advancement Services. Instructions for handling donated securities differ according to whether the donor has physical possession of the stock certificate or the donor s broker holds the stock in street name. 9

10 Stock gifts are valued at the mean of the high and low price of the security on the date of transfer of ownership to the Foundation multiplied by the appropriate number of shares (NAV is used for mutual fund valuation). Upon receipt of a gift of donated securities, the Foundation will generally place the securities with a recognized broker for sale. If the security sales occur both before and after the gift date, the value is calculated as the weighted average of the means between the highest and lowest sales on the nearest date before and the nearest date after the valuation date. Upon receipt of the proceeds of such sale, the funds shall be placed in the Foundation s accounts. Closely-Held Securities (Restricted and Control Securities): Closely-held securities include debt and equity positions in non-publicly traded companies, interests in limited partnerships and limited liability companies, or other ownership funds. Restricted securities are acquired in unregistered, private sales from the issuer or from an affiliate of the issuer. Control securities are those held by an affiliate of the issuing company. An affiliate is a person, such as a director or large shareholder, in a relationship of control with the issuer. Control means the power to direct the management and policies of the company in question, whether through the ownership of voting securities, by contract, or otherwise. Rule 144 allows public resale of restricted and control securities if a number of conditions are met. Per IRS regulations, the donor is responsible for having gifts of non-publicly traded securities exceeding $10,000 valued by a qualified independent appraiser. Gifts of nonpublicly traded securities of $10,000 or less may be valued at the per-share cash purchase price of the most recent transaction. Normally, this transaction is the redemption of the stock by the corporation. While it is permissible for the donor s company to redeem the stock, there can be no redemption agreement, either stated or implied, prior to the gift. For a gift of $10,000 or less, when no redemption has occurred during the reporting period, an independent certified public accountant who maintains the books for a closely held corporation is deemed to be qualified to value the stock of that corporation. Government Bonds: The Foundation will accept U.S. Treasury securities issued by the U.S. Department of the Treasury and the Bureau of the Public Debt. Savings bonds may be gifted to the Foundation; however; special consideration must be given to gifts of Series E, EE, H, and HH savings bonds (such Bonds must be redeemed and the proceeds donated to WVUF). Lifetime transfers of these types of savings bonds may not be recommended due to the associated tax consequences. Bequests of these savings bonds have tax advantages. Gifts-In-Kind The Foundation may accept in-kind gifts as charitable contributions. In-kind gifts are donations of property other than cash and marketable securities such as real estate, art 10

11 works, collections, literary works, boats, vehicles, software, intellectual property, books, equipment and furnishings. An in-kind gift requires a formal transfer of ownership of property from the donor to the Foundation. Title to the gift property should be clear and unencumbered, and properly documented. University business units must communicate and coordinate with the Foundation prior to the acceptance of an in-kind gift and are required to submit a completed Deed of Gift or similar agreement detailing the contributed property. Foundation management in coordination with university administration should review restrictions sought by the donor on the sale, maintenance, transfer, administration, loan, or display of items. If the in-kind gift has unusual restrictions or requirements the proposed plan for fulfilling the agreed-upon obligations should be noted. University officials must approve the acceptance of in-kind items that involve unique handling provisions such a donor indemnification or require a commensurate use of University resources such as personnel costs, technical or service obligations, insurance, fees, storage facilities, and set-up costs. Gift Recording and Receipting: Donors are responsible for determining the fair market value of the in-kind gift for their individual tax reporting purposes. The Foundation will issue an in-kind gift receipt consisting of a simple description of the donated property and the date title to the property was formally transferred. A dollar value is not assigned to the property contribution for receipting purposes. However, an estimate of property fair market value at the gift date is recorded in internal records for Foundation financial and development purposes. Ownership Transfer: In most instances, the Foundation will transfer ownership of inkind gift assets to the University unless directed otherwise. The Foundation will report in-kind gift asset ownership transfers to the University Department of Asset Management for inventory purposes on a monthly basis. Real Property The Foundation will accept gifts of real property; improved and unimproved, including detached single-family residences, condominiums, cooperative units, apartment buildings, rental property, commercial property, farms, and acreage. These gifts may include real property that is subject to a retained life estate or other planned gift vehicle. The Foundation will not accept gifts of time-share properties. The donor of real property should consult with his or her professional advisors before making the decision to donate the property. The Foundation s policy is to review all gifts of real estate as expeditiously as possible regarding disposition. This policy will be communicated to the donor when the Foundation receives notification of the donor s desire to make the gift. It is the donor s responsibility to establish a value for the property and to provide, at his or her expense, 11

12 a qualified appraisal as required by the Internal Revenue Service. Although the Foundation may obtain a separate appraisal for its own purposes, it will not assign value to the gift property on the donor s behalf. Any costs associated with the conveyance and delivery of the gift, recording fees, a current survey, title insurance, and/or an attorney s title opinion will be paid by the donor unless an exception is made in which case it will be charged to the department that benefits from the gift. Title to the property should be clear, unencumbered and properly documented. Phase I environmental reviews must be obtained for any gift of real property except residential property that is determined to pose minimal potential for environmental risk. The Foundation may require inspection by a licensed or certified professional for gifts of real estate, including interests in mining or oil and gas properties, as may be required to demonstrate due diligence and care in accepting the property as free from contamination. Any such inspection shall be documented properly for legal reasons. Limitations and encumbrances will be carefully reviewed by legal counsel and management before a gift can be accepted, including any and all mortgages, deeds of trust, restrictions, reservations, easements, liens and other limitations or records. In general, no gift of real estate will be accepted until all mortgages, deeds of trust, liens, and other encumbrances have been discharged. Exceptions may be made when the fair market value of the Foundation s interest in the property is deemed to be substantial, or when a separate agreement to pay any encumbrances that might be charged to the Foundation has been executed by a financially responsible party. The existence and amount of any carrying costs-including real estate taxes, insurance, utility services, transfer fees, and property owners association or membership dues-will likewise be considered before the gift is approved by the Resource Development Committee (RDC). Minimum Gift Level: The Foundation will accept gifts of real property for which it can reasonably expect to net a minimum of $50,000 if sold. The Foundation President/CEO may waive the minimum gift requirement if warranted, ex. The gift in question is part of a larger gift, is expected to lead the other gifts, or is from an especially generous donor. Authorization for Acceptance: The Resource Development Committee is responsible for reviewing all gifts of real property. Acceptance Procedure: 1. Development officers or other appropriate departmental officials will prepare written summaries of proposed gifts of real property for review by the Resource Development Committee. Each summary will include: Description of the real property and its location. 12

13 Purpose of the gift, including identification of the department(s), program(s), or endowment(s) that will benefit from the use or sale of the property. Appraisal of the property and disclosure of the Foundation s interest in the property s fair market value and marketability. Disclosure/discussion of any potential for income and expenses and of carrying costs prior to disposition. Disclosure of any encumbrances, e.g., easements or other limitations on use of the property. Disclosure/protection against liens. Disclosure/discussion of any environmental risks or problems revealed by audit or survey. Description of any potential uses of the property by the University. Description of any special arrangements preferred by the donor concerning disposition of the real property. Title information. Contact information for the attorney representing the donor. 2. After summary is completed and before the RDC reviews the gift, a representative of the Foundation or its property management affiliates must perform a site visit of the property. A report of the visit will be appended to the gift summary and submitted to the RDC. 3. Once the RDC has completed its review, the development officer or other official will inform the donor of the decision to accept or decline the gift. 4. If the gift is to be accepted, the official will inform the donor, in writing, that: The donor should seek guidance from his or her tax advisor regarding the potential need to file IRS form If form 8283 is required, it should be sent to the Foundation Chief Financial Officer for execution by the Foundation after it has been signed by the appraiser. Note: An appraisal for gift purposes should be prepared no earlier than 60 days prior to date of the gift and must be completed before filing the tax return. The Foundation will report a disposition price to the IRS on Form 8282 and send a copy to the donor if the gift was reported on Form 8283 and is sold within three years of the date of gift. Note: Such disposition at an amount below the original appraised gift value could affect the donor s tax situation. 5. The gift will be completed upon the execution and delivery of a fee simple/quit claim deed of gift or other appropriate conveyance. 13

14 Campaign Counting: Approved gifts of real property will be valued for campaign purposes at the fair market value as substantiated by a qualified appraisal. At the discretion of the RDC; the appraisal used to establish the property s value may be the one provided by the donor or a separate one obtained by the Foundation. Disposition of Property The sale or disposition of donated property will be carried out by Foundation management in consultation with Resource Development and/or Finance/Administration Committees. Criteria to Use for Disposing of Donated Property A. Cash Generally, all properties should be sold for cash. B. Carrying Paper The Foundation may consider taking a promissory note, secured by a mortgage, if it is advantageous to do so. The Foundation shall consider the following criteria in making this determination: 1. The credit worthiness of the buyer 2. The amount of the note 3. The security 4. The time period 5. The interest rate 6. The amount of other income (if property income producing) 7. The effect carrying paper may have on the selling price received by the Foundation 8. The effect carrying such paper may have on the value of the property, the length of time required to sell the property, or other related issues Method of Disposing of Donated Property A. Broker Consideration The Foundation shall undertake an inquiry to determine the manner most advantageous to the Foundation for the disposition of donated property. The Foundation may, but shall not be required to, engage a broker in connection with the sale of any donated property. B. Marketing Program If the Foundation determines that listing the property with a broker is in its best interest, then all potential listing brokers selected by the Foundation shall be required to provide it with a comprehensive marketing program. The Foundation shall consider such factors as it deems appropriate in selecting a broker, which 14

15 may include the marketing program, the commission rate and the reputation of the broker. C. Transfer Documents Whenever possible, the conveyance should be made as is and by quit claim or special warranty deed. The Foundation should receive an express written release from liability for environmental matters. Collections Collection items are defined as works of art, historical treasures, or similar assets that are (a) held for public exhibition, education, or research in furtherance of public service rather than financial gain, (b) protected, kept unencumbered, cared for, and preserved, and (c) subject to an organization policy that requires the proceeds of items that are sold to be used to acquire other items for collections. Acquisition and Accession: The Foundation will acquire, through gift, or bequest art objects and artifacts for accession into the University s permanent collection. Upon acceptance into the University s collections, the objects will be properly catalogued, conserved, stored and possibly exhibited in accordance with University accession procedures. A collection item may be submitted for consideration as a gift in consultation with the individual unit Dean, Collection Director, Curator and/or Development officer. Before any object is accepted by the Foundation, the acquisition committee as defined by University procedures must recommend it. The Foundation will only acquire objects that the University has the facilities and resources to care for properly. Consideration will be made regarding any special requirements associated with the object, including, but not limited to, conservation, preservation, exhibition, and insurance. The Foundation will not acquire an object without attempting to obtain valid title and a verifiable record of authenticity and provenance. Normally, title to any object acquired should be obtained free and clear without restrictions to use or future disposition including but not limited to any right, title and interest in the use thereof and to copyrights, trademarks or rights of reproduction. The donor will also need to warrant and represent that the gift property has not been exported from its country of origin in violation of the laws in effect in that country at the time of export, nor imported into the United States in violation of laws and treaties. Valuation: The responsibility for determining the dollar value of the collection for federal income tax purposes rests solely with the donor. Appraisals must be secured independently by the donor at the donor s expense. The Foundation may accept the gift valuation for insurance purposes, but may not determine nor confirm value for any purpose. The Foundation will record and receipt collection items upon submittal of a completed Deed of Gift or similar ownership transfer agreement. 15

16 Transfer: The Foundation will give, transfer, assign, and convey, without condition restriction, all right, legal and equitable title and interest to the collection to WVU. Deaccession and Disposal: In the absence of specific agreements with the donor, the Foundation may dispose of items that are not appropriate for permanent preservation. The decision to deaccession any object will be subject to Foundation policies and procedures in coordination with the University. Vehicles All charitable donations of cars, trucks, or other modes of transportation require coordination with the West Virginia University Motor Pool and approval by the Foundation prior to acceptance. Noncash Charitable Contributions, IRS Form 8283 The donor should seek guidance from his or her tax advisor regarding the potential need to file IRS form 8283, Noncash Charitable Contributions. When required, an inkind tax deductible gift of donated property with a market value over $5,000 ($10,000 for closely held stock) requires a summary property appraisal from the donor by a qualified appraiser and Foundation verification of receipt of the stated property. The cost of the appraisal will be the responsibility of the donor. The form 8283 should be sent to Advancement Services for execution after it has been signed by the appraiser. Special rule for public traded securities: A donor doesn t need an appraisal for gifts of publicly traded securities, even if their total value exceeds $5,000. Sale, Exchange, or Disposition of Donated Property: In-kind gifts that are given with the intent of being sold may have tax implications for the donor. The WVU Foundation will file an information return (IRS Form 8282) upon the sale; exchange or disposition of property sold or otherwise disposed of within three years of its receipt. The Foundation must file the form to report the disposition price within 125 days of the date of sale or disposition of the asset and send a copy to the donor. Intellectual Property The Foundation can accept intellectual property (an intangible asset) that has been produced through creativity and innovation. Examples of intellectual property include patents, copyrights of cultural, artistic and literary works and computer software under development. In many instances, the donor is the developer of such property and is giving the University the right to use such property, not the copyright to the intellectual property itself. Patents/Copyright: Individuals are encouraged to make commensurate gifts of royaltygenerating intellectual property (e.g. literary works) to the WVU Foundation, Inc. benefiting the University. There will be no tax burden to individual(s) who make an 16

17 irrevocable gift to the Foundation of all right, title, and interest in the intellectual property. Property rights must be assigned to the WVU Foundation, Inc. by formal written agreement. All foundation-owned copyrights should be protected by notice of copyright in the name West Virginia University Foundation, Inc. The WVU Copyright Policy governs the equities of ownership for persons who have developed intellectual property through the significant use of University space, funds, or facilities. The policy requires transfer of copyright ownership to the University as a condition of use. Royalties from a work under University copyright should be deposited to University accounts. Individuals who desire to donate intellectual property should complete an Assignment of Intellectual Property form. The form requires the creator(s) to represent and warrant that he/she/they are the sole creator(s) and owner(s) of the work product and hold the complete and undivided copyright interest in the work product. The creator(s) also confirm Foundation s ownership of the entire and exclusive right, title and interest in the work product including, but not limited to, the right to make, use, reproduce and transfer the work product, and any improvement in the work product subsequently made or acquired by the creator(s). Software/Hardware Corporate software and hardware gifts critical to University academic and research initiatives are evaluated by the Foundation from tax, financial, development, and stewardship perspectives for recording and reporting purposes. To ensure proper recording and reporting, the Foundation must ascertain whether a technology transfer of software/hardware represents an irrevocable gift or a partial interest transaction. Irrevocable Transfer of Software/Hardware: In general, to recognize a technology transfer for IRS purposes: The donor must provide an irrevocable gift of software or hardware. The donor must irrevocably transfer ownership of the property to the University. There must be no implicit or explicit statement of exchange, purchase of services, or provision of exclusive information. The donor must transfer full rather than a partial interest in the property representing a permanent, non-expiring Software license. An irrevocable gift of software or hardware with an established retail value is recorded at the educational discount value (if one exists) or the fair market value, as long as the agreement qualifies as a charitable donation under tax laws. The donor gift receipt provides a general description of the software received and/or reference to the transfer agreement where applicable. Partial Interest Transfer In Software/Hardware: A partial interest technology transfer that is critical to University academic and research initiatives such as a University 17

18 license, recurring grant/lease are recognized in internal records for Foundation development attainment reporting purposes. A renewable license or grant does not represent an irrevocable transfer of assets. A partial interest transfer in property (a gift of less than the donor s entire interest in the property) is not eligible for a charitable deduction. However, such gifts are acknowledged by the Foundation to: properly steward the donor; report on all private support to the University; and to capture development fundraising efforts. The Foundation will acknowledge receipt of the transfer but place no valuation on the donor acknowledgement. Valuation Considerations: Technology transfer agreements are evaluated for valuation purposes on a case by case basis. Pertinent questions include: What is the replacement value to the University? What would a commercial customer or a similar positioned university have to pay for the technology? Has an educational institution ever purchased the software? Important valuation considerations include: Technology transfers should be recorded at the educational discount value. The educational discount value represents the cost to the University if the institution purchased the technology outright. Regardless of the estimated value a vendor may place on a gift-in-kind, the Foundation should only count as a gift the amount it would have paid for the item or items were they not donated. If no educational discount price is available, it should be so stated in writing by the donor. A gift of software should be counted only in the year received. A perpetual license is recorded in subsequent years for development attainment purposes at the incremental value (if any) of the software upgrades or higher established value. Recurring software grants are recorded for development attainment purposes at the incremental educational discount value with consideration for the valuation of previously recognized grants/licenses. Revocable grants/licenses are acknowledged when the probability of revocation is remote. If the company offers a purchase price that covers numerous installations (a site license), that amount should be used as the value if sufficient seats are donated. A maintenance agreement can be considered services unless the agreements include free upgrades that have a higher established retail value. The incremental value of the maintenance agreement providing free upgrades is recorded for development attainment purposes. Financial Recognition: Technology transfers are typically received directly by the University and are not included in Foundation contribution revenue totals within the statements of activity. 18

19 Pro Bono Services The WVU Foundation will provide recognition credit to individuals and organizations who provide Pro bono services of times and energies to the University/Foundation valued at $250 or more. Pro bono services include a volunteer s time to the University/Foundation or the value of a person s or organization s specialized skills, time, or professional services (accounting, legal work, consulting, architectural work, printing, etc.). The value of a volunteer s time is priceless (meaning difficult to value). Accordingly, per IRS regulations, the value of a person s or organization s time or professional skills are generally not considered tax deductible gifts. WVU Foundation recognition is provided upon the completion of the WVUF Gift-In-Kind Pro Bono Services form. Volunteer Expenses Out-of-Pocket Costs A Volunteer is entitled to deduct certain unreimbursed expenses (out-of-pocket costs) incurred while contributing their time and energies to the University and/or the Foundation. According to IRS regulations, a volunteer may deduct unreimbursed costs they incur in rendering services to the Foundation/University. Examples of deductible costs donors can incur while volunteering include meals, lodging, and travel incidentals. The volunteer is required to substantiate all charitable deductions to the IRS and be prepared to: 1) prove costs with cancelled checks, receipted bills, diary entries, etc.; 2) show the connection between the unreimbursed costs and the volunteer work; and 3) substantiate the deduction with a written receipt from the Foundation. A WVU Foundation gift receipt is provided upon completion of the WVUF Volunteer Gift-In-Kind Expense form for out-of-pocket costs of $250 or more. Planned Gifts Planned gifts include immediate and deferred giving that result from a careful consideration of how the gift will affect a donor s current financial planning and longrange goals. Planned gifts include outright contributions of cash, securities, real estate, tangible personal property, life insurance, bequests, and income producing gifts. The Office of Planned Giving coordinates Foundation efforts in providing donors with the necessary counsel, strategic direction, data and other services to establish planned gifts. The Foundation produces materials which educate and inform prospective donors/advisors about various forms of giving. The Foundation pays no fees or commissions as consideration for directing a gift to the Foundation, nor does the Foundation endorse professional or fiduciary services. 19

20 Planned gifts can take multiple forms. An online tool to educate donors on the type of gifts that will address their personal financial goals is located at The discussion that follows provides a synopsis of the various donor gift plans. The Foundation offers four types of income producing gifts that are eligible for a partial federal income tax deduction. The gifts are split interest in that the donor provides an irrevocable transfer to the Foundation of some property (cash, securities, etc.) and the Foundation agrees in contract to pay the donor or other beneficiaries a sum based upon the type of gift instrument. A federal income tax deduction is allowed for the difference between the gift value and the amount required to fund the gift instrument. Because the transferred property has a value larger than the value of the income obligation, the transaction is in part the purchase of a stream of income from the Foundation and in part a gift. Charitable Remainder Unitrusts (CRUT): The gift instrument provides a variable income based on a percentage of the annual value of the trust s principal and can be a hedge against inflation. The minimum payout is 5% and can be paid for life or for a specific number of years (up to 20) to one or more persons. A minimum contribution of $50,000 is required and the income recipient(s) must be 50 or older when the income begins. Charitable Remainder Annuity Trusts (CRAT): The gift instrument provides a fixed income based on a percentage of the gift amount. The minimum payout is 5% and can be paid for life or for a specific number of years (up to 20) to one or more persons. A minimum contribution of $50,000 is required and the income recipient(s) must be 50 or older when the income begins. Immediate Gift Annuity: The gift instrument provides a fixed income payout for life based on a rate tied to the age of one or two income recipients. A minimum contribution of $25,000 is required, and the income recipient(s) must be 50 or older, the income begins immediately. Deferred Gift Annuity: The gift instrument provides a fixed income for life based on a rate tied to (1) the amount of time between the date of the gift and the beginning of the income payout and (2) the age of one or two income recipient(s) at the time of the gift. A minimum contribution of $25,000 is required, and the income recipient(s) must be 50 or older when the income begins. Other Gift Plans Charitable Lead Trusts: The Foundation may accept designation as the income beneficiary of a charitable lead trust. A charitable lead trust is a form of split-interest gift. This trust is designed to make periodic payments to the Foundation for a period of several years, after which the trust terminates and the assets pass to the 20

21 designated individuals either outright or in trust. Generally, the Foundation will not serve as trustee of a charitable lead trust. Retirement plan beneficiary designations: Donors and supporters of the Foundation will be encouraged to name the WVU Foundation, Inc. as beneficiary of their retirement plans, including Individual Retirement Accounts (IRAs) and qualified pension and profit-sharing plans. Donors may wish to make their spouse the primary beneficiary, in which case the Foundation may be designated as secondary or contingent beneficiary. Such designations will be recorded as gifts to the Foundation at such time that they become irrevocable. Gifts from retirement plans may be established by sending a new beneficiary designation to the donor s plan administrator. Individual Retirement Account (IRA) Charitable Rollover: Under current tax law IRA owners starting at age 70 ½ are allowed to roll over up to $100,000 from an IRA directly to a qualifying charity without recognizing the assets transferred to the qualifying charity as income. An IRA distribution can be qualifying or non-qualifying. A qualified charitable distribution from an IRA is not included in taxable income to the donor and consequently there is no income tax deduction. If a donor is under age 70½, the IRA distribution is non-qualifying. A non-qualifying distribution from an IRA is taxable income to the donor. However, the donor will qualify for a federal charitable deduction under Sec Charitable Bequests Bequests are provisions in a will, trust, or other testamentary legal document providing a gift to the Foundation pursuant to applicable state law. The gift may be designated as a percentage of the donor s estate, a specific dollar amount, specific property (such as securities, real estate or other assets), or as residual (whatever remains after specific bequests have been fulfilled). Typically, bequests may be revoked before the donor s death unless accompanied by a legally enforceable contract. Donors and supporters of the Foundation will be encouraged to make bequests to the Foundation in their wills and trusts. The donors and supporters will be advised to name the legal entity of the WVU Foundation, Inc. specifically in their wills and trusts rather than WVU or West Virginia University in order to clearly indicate the intent of their bequest for the Foundation. Bequests may be given as unrestricted gifts or gifts restricted to a purpose or program designated by the donor. Donors may also establish, by bequest, a testamentary charitable remainder annuity trust or unitrust. The bequest can be arranged so as to provide a life income for a designated beneficiary or beneficiaries. If such a gift is made by will, the principal will pass to the Foundation only after the death of the life income beneficiary or beneficiaries. 21

22 Life Insurance The Foundation can receive two types of life insurance gifts; as beneficiary (revocable), or as owner and beneficiary (irrevocable). The donor, on the advice of his or her advisers, must decide which arrangement is in his/her best interests. Irrevocable: The Foundation will count/report gifts of insurance provided the WVU Foundation is named both owner and irrevocable beneficiary of the policy. Life insurance gifts require special valuation calculations depending upon whether the policy was recently issued, or is an existing life policy in premium paying mode, or a paid-up life insurance policy. The gift shall be valued at its interpolated terminal reserve value (cash surrender value) on the date of receipt. If a policy is not paid up, donors must make a contribution equal to the cost of the annual insurance premium to keep the policy in force. In turn, the Foundation will facilitate premium payment to the insurance company. The Foundation will issue a gift receipt to the donor for the amount of the premium in the year the payment is made. If the donor elects not to make gifts to cover premium payments on the life insurance policy, management shall decide whether to continue to pay the premiums, convert the policy to paid-up insurance, or surrender the policy for its current cash value. Revocable: The Foundation will encourage interested donors to simply name the WVU Foundation as the beneficiary (or one of the beneficiaries) of an existing life insurance policy. One advantage of this form of giving is that it can be accomplished with a simple change of beneficiary form available from the insurance company. In instances where the Foundation is named beneficiary, but not owner of an insurance policy, the full amount of the insurance company s settlement at the death of the donor shall be reported as a gift on the date the University receives the proceeds. The Foundation may be named the beneficiary of a life insurance policy with or without its knowledge. Additional guidance on gifts of life insurance is as follows: 1. For the Foundation to accept a gift of life insurance, the minimum death benefit value shall be $10, The donor, working with a qualified Foundation representative, shall specify in writing the school/college, program, project or area to benefit when the death benefit is realized. 3. In instances when the ultimate purpose of the death benefit is to establish an endowment, the face value of the policy shall meet the minimum funding requirements for that type of endowment (exceptions will be made to grandfather in gifts that do not meet new minimum funding requirements that have increased) 22