University Gift Acceptance

Category: Governance
Number: GOV-030-005
Audience: All University employees
Issued: January 27, 2004
Revised: July 14, 2014
Owner(s): AVP (External Relations), AVP (Finance)
Approved by: Board of Governors
Contact: Associate Vice-President (External Relations) - 306-337-3264

Introduction

The University gratefully accepts support from the community in the form of charitable donations.

This policy governs the acceptance of all gifts made to the University, whether such gifts are inter vivos (during the donor’s lifetime) or testamentary (trusts and estates).

This policy has been established to ensure:

  • informed decisions are made on the acceptance of gifts
  • gifts are handled in accordance with federal and provincial laws and regulations
  • efficient administrative, legal and accounting practices are followed
  • accurate reporting of all gifts and sponsorships to the University
  • consistent, ethical and equitable relations with all donors and sponsors

Clinical trials funded by a business are based on contractual agreements and are not considered charitable gifts or sponsorships. The coordination and administration of these agreements is the responsibility of the University and the recipients of the funding and is outside the scope of this policy.

Policy

The University may accept or decline any gift. The negotiation and development of terms and conditions relating to any gift is coordinated through the External Relations department, with appropriate input from academic and administrative units.

The University will accept as a donation only those items that may be used to meet the University’s strategic objectives or mission of teaching, research and public service.

For an official receipt to be issued, no right, privilege, material benefit or advantage may accrue to the donor or to a person designated by him/her (CRA Interpretation Bulletin 110R3). For example, an individual may not obtain a donation receipt for money donated to the University to:

  • purchase equipment which the donor then gets to use;
  • receive a donation receipt for money placed in an account over which the donor has authority to spend; nor
  • receive a donation receipt for money given for the tuition or scholarship of a student specified by the donor.

Gift Eligibility

The following types of gifts are eligible for consideration by the University:

  • Cash (currency, cheques, credit cards, electronic funds transfers, payroll deductions)
  • Gifts-in-kind (artwork, cultural property, and other assets)
  • Value-in-kind
  • Real Estate
  • Personal Property
  • Life Insurance
  • Charitable Remainder Trusts
  • Residual Interest in an Asset
  • Reinsured Gift Annuities
  • Securities (including privately or publicly held shares, bonds, mutual funds and flow-through shares)

Ethics

The University has an ethical responsibility to every donor. Employees, volunteers and professional representatives acting on behalf of the University will conduct themselves in accordance with accepted professional standards of accuracy, truth and integrity.  The Code of Ethical Principles and Standards set out by the Association of Fundraising Professionals (AFP) and the Code of Ethics set out by the Canadian Association of Gift Planners (CAGP) will serve as the ethical guidelines when raising funds for the University. 

Conflict of Interest

Donor interest and wellbeing must take priority in any gift negotiation.

If…

Then…

an individual presents him/herself as a representative of the University and attempts to sell financial or other products related to a donation to a donor

they must declare a potential or actual conflict of interest to both the donor and the University. See GOV-022-010 Conflict of Interest and Conflict of Commitment.

an individual presents him/herself as a representative of an outside interest and his professional counsel results in assisting in a donation to the University

no conflict would exist.

Role of Legal and Professional Counsel

Before any major or planned gift is accepted, a donor must be aware of the benefits of discussing the proposed gift and any possible appraisal costs with an independent legal counsel or financial advisor.

It is the responsibility of External Relations to recommend to the donor that he/she seek such independent counsel. This will serve to eliminate any perception of undue influence by representatives of the University and will help to ensure the donor receives an independent explanation of the proposed gift.

Normally, the donor is responsible for any expenditure incurred when seeking independent counsel. In rare cases, the University may accept responsibility for some or all of the fees for a donor’s independent counsel. These exceptions must be approved in advance by the Associate Vice-President (External Relations) or a designate.

Role of the University’s Legal Counsel

The Associate Vice-President (External Relations) has the authority to engage legal counsel for the purposes of this policy, as delegated by the Vice-President (Administration). The University’s legal counsel performs the following tasks:

  • reviews materials related to a donation on behalf of the University
  • assists the donor’s advisors as necessary
  • reviews documents related to a donation that are drafted by the donor’s advisors

Sponsorships

University community members must make External Relations aware of any event or project sponsorships or partnerships. This includes sponsorship of athletic teams and other University units. These sponsorships often cross many boundaries and must be coordinated in a professional manner for the benefit of the University.

Gift Categories Requiring Prior Approval

The following gifts must be reviewed and approved in advance by the Associate Vice-President (External Relations) or a designate. All relevant information about the gift must be documented, including a copy of the appraisal, if applicable:

  • Gifts-in-kind
  • Value-in-kind
  • Personal Property
  • Real Estate
  • Intellectual Property
  • Cultural and Ecological Property
  • Shares of Privately-Owned Companies
  • Partnership Interest and any other property interests not readily negotiable or valued
  • Charitable Remainder Trusts
  • Reinsured Gift Annuities
  • Residual Interest in an Asset
  • Significant donations designated to a specific facility, project, program or service
  • Flow Through Shares
  • Gifts from residents of the USA with the intended recipient being a federated college of the University of Regina (i.e. Campion College, Luther College or First Nations University of Canada)

Gift Categories Not Requiring Prior Approval

The following types of gifts do not require prior approval, provided they are unrestricted or designated to a broadband category:

  • Cash
  • Publicly Traded Securities
  • Life Insurance

Gift Refusal

When an offer of a charitable gift is judged to be contrary to the University’s best interest, the Associate Vice-President (External Relations) or a designate may request that the terms be revised or decline the offer.  The final decision to accept or decline any offer rests with the University’s Board of Governors.

Some reasons for the refusal of a gift would be that it:

  • has benefits that are directed to a specific individual or individuals
  • is too narrowly restricted to be used within a reasonable time
  • has an attached liability that could create an undesired financial burden
  • jeopardizes the tax-exempt status of the University
  • is from an individual or organization whose philosophy and values are inconsistent with the overall philosophy and values of the University
  • is determined to be something other than a charitable gift
  • in any way violates federal and provincial laws or regulations

Undue Persuasion or Pressure

It is unacceptable for an employee, volunteer, allied professional or other person representing the University to use undue persuasion or pressure in securing any gift.

Independent Appraisals

Independent appraisals of the value of the gift may be required for the following types of gifts:

  • Personal property
  • Real Estate
  • Gifts-in-kind
  • Art objects, intellectual property and cultural property
  • Any unusual gift

Independent appraisals are required for all gifts-in-kind over $1,000. Gifts under $1,000 require either an independent appraisal or an internal valuation set by a qualified employee of the University as per CRA regulations.

Assistance in performing an appraisal or in identifying qualified appraisers is available without cost through Supply Management Services.

Appraisal costs are the responsibility of the donor.  

Negotiation of Unusual Gifts

When negotiating a gift on behalf of the University that is unusual in nature, the Associate Vice-President (External Relations) or a designate must be consulted. 

Such consultations must occur when gifts:

  • might expose the University to an uncertain liability
  • are precedent-setting or involve sensitive issues
  • are perceived to come from illegal or unethical activities
  • involve a proposal to name a program or facility area
  • present questions as to whether they are within the role and scope of the University
  • are from an individual or organization whose philosophy and values could be considered inconsistent with the overall philosophy and values of University

It is the responsibility of the Associate Vice-President (External Relations) to inform the President and Board of Governors about any donor relationships or gifts that may be controversial in nature.

Anonymous Donors

When a donor wishes to remain anonymous, the University will ensure that such wishes are respected.

Gift Restrictions

For accounting and administrative purposes, gifts are classified into two main categories: Unrestricted and Restricted.

Unrestricted Gifts

Generally accepted accounting principles require that unrestricted gifts be accounted for as unrestricted revenue. Such funds may be budgeted, appropriated, and expended for any appropriate purpose through the University's normal budget procedures.

Restricted Gifts

Restricted gifts are available for use in accordance with the law, with respect to the policies of the University, and under conditions designated by the donor.

Permission to Alter

Donors who designate a gift to a specific purpose must be advised of the right of the University of the permission to alter in certain circumstances.  A Permission to Alter clause must be included in all gift agreements.

Grants

Most research grants to University projects from government agencies or other groups are not considered charitable gifts or sponsorships. The coordination and administration of these grants is the responsibility of the Office for Research, Innovation and Partnership and the grant recipients.

Spending Balances

Separately designated funds that are not endowed will be used for the designated purposes until expended.

Endowment Funds

Restrictions on Expenditure

An Endowment fund can be unrestricted or restricted as to its area of expenditure.

Minimum for Endowments

An Endowment fund requires a minimum balance in order for it to generate sufficient annual income for the support of programs and services. This level will be determined periodically by the Associate Vice-President (External Relations) or a designate, in consultation with Financial Services.

Maximum Fulfillment Time

In some cases an endowment will be pledged. The pledged amount for an endowment needs to be fulfilled within a specific period, usually not exceeding five years.

Gift Agreement

Every Endowment fund must be based on a Gift Agreement, which includes:

  • Fund name
  • Designation provision
  • Administrative expense provision
  • Permission to Alter Clause
  • Pledge schedule (if applicable)
  • Donor recognition provision

Unfulfilled Pledges

In the case of a new endowment that has not reached the minimum endowed amount, if a pledge is not fulfilled as outlined in the Gift Agreement, the University will have the authority to close the fund and immediately direct the principal toward one or more of the areas designated in the Gift Agreement.

Endowment Expenditure

Endowment income will be expended on an annual basis unless there are specific provisions in the Gift Agreement to provide for a modified schedule.

Installment Endowment Expenditure

Endowment income earned will be directed towards the principal until it reaches the predetermined minimum balance. It can then be used as indicated in the Gift Agreement.

Exceptions

Any exceptions to the above policy on Endowment Funds, however minor, must have the explicit written approval of the Associate Vice-President (External Relations) or a designate attached to the Gift Agreement. 

Bequests

University Representation

The Associate Vice-President (External Relations) or a designate, in consultation with the University’s legal counsel, will represent the University in all dealings with the professional counsel, executor of the estate and the trustee of the trust.

Cases Involving Residual Interest or Insufficient Assets

The University’s legal counsel should be involved in review of the terms of the will and the administration of the estate (including expenses charged to the estate) in the following instances:

  • gifts of residual interest
  • insufficient assets to pay the full bequest

Sample Bequest Clauses

Every request for bequest wording should be immediately referred to the Associate Vice-President (External Relations) or a designate.  No information on the University’s legal name or bequest clauses should be given over the phone as this can lead to errors. 

The table below outlines sample clauses.

Category

Unrestricted Use

Restricted Use

Capital Bequest

To pay to the University of Regina the sum of $ ____ (or __% share of the residue of my estate) for the unrestricted use of the University.

To pay to the University of Regina the sum of $ ____ (or __% share of the residue of my estate) to be used for ________ (specify area).

Income

 

To pay to the University of Regina the sum of $ ____ (or __% share of the residue of my estate) to be held in trust and invested by the Trustee; the income from such trust to be used for _________ (specify area).

Research Endowment

 

To pay to the University of Regina the sum of $ ____ (or __% share of the residue of my estate) to be used for __________ (specify research).

Reversionary

If any gift or residual gift contained in this Will cannot be fulfilled due to legal prohibition or the inability of the designate for any reason whatsoever, I direct my Trustee to transfer the whole of the gift or the portion thereof affected, to the University.

 

Bequest of Specific Property

To transfer and deliver to the University of Regina my ___________ (specify legal description of property).

To transfer and deliver to the University of Regina my ___________ (specify legal description of property) to be used for ________ (specify area).

Life Insurance

Methods

A donor may make a gift of life insurance to the University by:

  • irrevocably assigning ownership and beneficiary rights of a paid-up life insurance policy to the University
  • irrevocably assigning ownership and beneficiary rights of a life insurance policy to the University on which premiums remain to be paid
  • naming the University as a beneficiary of a life insurance policy.

Tax Receipts

When ownership and beneficiary rights are irrevocably assigned to the University, the donor is entitled to:

  • a charitable tax receipt for the net cash surrender value of the life insurance policy (if any), plus any accumulated dividends
  • a charitable tax receipt for any premiums subsequently paid on the life insurance policy by the donor

The University is not able to issue a charitable tax receipt for any premiums paid on a life insurance policy where it is a beneficiary but does not irrevocably own the policy.

Life Insurance Policies Requiring Premium Payments

If the original donor is no longer willing or able to make the required premium payments, the University may continue the premium payments or take other action, such as redeem the life insurance policy for its cash surrender value, as deemed prudent in each particular case. 

The Associate Vice-President (Finance) will determine the action to be taken after ascertaining the type of the policy and the surrender value, if any.

Gifts of Residual Interest

Receipting of a Residual Interest Gift

The donor is entitled to a gift receipt for the fair market value of the residual interest.

Gift of Residual Interest in Real Estate

In the event of a residual interest in real estate, refer to Gifts of Real Estate (see below). In addition, after transferring title to the property to the University, the donor shall continue to be responsible for:

  • real estate taxes
  • insurance
  • utilities
  • maintenance

The University may in some cases agree to assume the responsibility for any portion of the above items.

Charitable Remainder Trusts

A Charitable Remainder Trust is a form of a Residual Interest Gift. The donor (settlor) transfers property to a trustee who holds and manages the asset.

If . . .

Then . . .

the property is income-producing

the net income will be paid to the donor and/or other named beneficiaries until the trust terminates (either on the death of the named beneficiary or after a term of years), the trust remainder is distributed to the University.

the trust is irrevocable

the donor is entitled to a gift receipt for the present value of the residual interest.

The University will not serve as a trustee of charitable remainder trusts but may refer the donor to a trust institution that has agreed to provide this service.

Funding of a Charitable Remainder Trust

A Charitable Remainder Trust may be funded with:

  • cash
  • securities
  • real estate
  • any property of value acceptable to the trustee

Appraisals

Appraisals of any property shall be obtained from reputable valuators that are at arms’ length to both the University and the donor. The costs for the appraisals are normally the responsibility of the donor.

Assistance in performing an appraisal or in identifying qualified appraisers is available without cost through Supply Management Services.

Gift Agreement

The donor and the University shall specify the terms of the gift and responsibilities for expenses in a Gift Agreement.

Inspection of Property

The University reserves the right to inspect any property from time-to-time to ensure its interest is properly safeguarded.

Gifts of Real Estate

Gifts of real estate may be made in various ways:

  • outright gifts
  • residual interest in the property*
  • to fund a charitable remainder trust*

* See — Gifts of Residual Interest (above)

Acceptance of Gifts of Real Estate

The following are general guidelines for gifts of real estate.

Step

Procedure

1

The donor shall secure a qualified appraisal of the property from a reputable valuator.

2

The University will determine that the donor has clear title to the property.

3

The University will review other factors including

  • zoning restrictions
  • environmental liability
  • marketability
  • current use
  • cash flow
  • liabilities related to the property (e.g. unpaid property taxes, unpaid tax on accrued capital gain, other corporate interests in the property)

to ascertain that acceptance of the gift is in the best interest of the University.

 

The University may also require an environmental assessment, and will accept a gift of property only if remedies are taken which assure the University assumes no liability whatsoever.

Receipting of Gifts

A gift receipt will be issued for the appraised value (or the present value of the residual interest which is usually computed from the appraised value and actuarial tables.)

Assistance in performing an appraisal or in identifying qualified appraisers is available without cost through Supply Management Services.

The University reserves the right to secure an appraisal and issue a gift receipt based on it.

Reinsured Gift Annuity

The University does not issue gift annuities but may accept assets from a donor pursuant to terms outlined below.

Remainder Assets

Assets in excess of the amount required for purchase of the commercial annuity are retained by the University and used for mutually acceptable purposes as outlined in a Gift Agreement.

Gift Receipt

Determination of the gift receipt and taxation of annuity payments will be made in accordance with the regulations of CRA.

Guidelines for Annuities

The following outlines the guidelines surrounding gift annuities:

  • The Associate Vice-President (External Relations) or a designate must approve all annuity agreements.
  • The minimum the University can accept for a reinsured gift annuity is $50,000.
  • The cost of the commercial annuity should not exceed 75 percent of the assets transferred, so that there is a reasonable gift to the University.
  • The donor may designate the purpose of the gift as outlined in a Gift Agreement
  • Financial Services will negotiate the terms of the annuity contract.

Gifts of Publicly Traded Securities or Mutual Funds

Gifts of publicly traded securities such as stocks, bonds and mutual funds may be donated to the University.

Market Value of Securities or Mutual Funds

For publicly traded securities, the fair market value will be determined by reference to the closing market price on that day of the legal transfer of ownership to the University. Recognition will be based on the receipted value of the gift.

Assistance in performing an appraisal or in identifying qualified appraisers is available without cost through Supply Management Services.

Transferring Securities

Financial Services will act as a conduit for the clearing of securities. The tax receipt will be issued for the value on the day the ownership of securities was received by the University or the net proceeds of disposition if greater.

The donor will provide direction to his broker to transfer the securities directly to the University. Upon notification of the receipt of the securities, the Associate Vice-President (Finance) will:

  • document the nature of securities donated
  • determine the fair market value of the securities at the time of ownership transfer
  • give direction for the issuance of an official tax receipt
  • assign any fees incurred in the transfer to the donation

The University prepares a tax receipt and initiates gift recognition activities.

Gifts of Stock Options

The Associate Vice-President (External Relations) or a designate must provide written approval for the acceptance of any gift of Stock Options.

Investments

The University does not hold equities, mortgages, etc. for extended periods.  These investments must be liquidated as soon as is practical and prudent.

Gifts of Shares in Privately Owned Companies and Other Business Interests

Gifts of privately owned shares and business partnership interests may be accepted by the University if the net benefit of accepting the gift is deemed worthwhile.

Privately Owned Company Shares

The following table outlines guidelines for acceptance of privately owned shares:

If . . .

Then . . .

shares can be sold and transferred in the near future to the corporation or other shareholders or to others interested in acquiring an interest in the business

privately owned shares may be accepted by the University.

an arrangement is made to redeem the shares upon the death of the shareholder

privately owned shares may be accepted by the University.

the shares cannot be redeemed within the near future

the Associate Vice-President (Finance) may indicate that the shares are acceptable if certain conditions specific to that transaction are met.

Partnership Interests

To be considered for acceptance by the University, partnership interests must not subject the University to cash calls or any other liability.

The gifting of any business interest to the University should be viewed in light of issues relative to potential liability and liquidity.

Determination of Fair Market Value

For privately held securities, market value is determined by obtaining an independent appraisal on the date of acceptance. The cost of this appraisal is usually the responsibility of the donor.

Assistance in performing an appraisal or in identifying qualified appraisers is available without cost through Supply Management Services.

Consequences for Noncompliance

Employees who are in noncompliance with this policy may be subject to disciplinary action up to and including termination of employment. If gift acceptance is not managed in accordance with this policy, the University could assume unacceptable liabilities and could potentially not be able to meet donor promises.

Processes

Monetary Donations

All monetary donations are to be immediately forwarded to External Relations. All donations are recorded in the Alumni-Development System on Banner, which generates official receipts for income tax purposes.

Processing of donations will be done by External Relations.

Means of making monetary donations:

  • Cheque/Cash
  • Credit Card
  • Electronic Funds Transfers
  • Payroll Deduction (receipted on T4)
  • APEA transfers (not eligible for charitable tax receipt)
  • Third-party payments (not eligible for charitable tax receipt)

Receipts for Income Tax Purposes

The University of Regina follows CRA regulations governing the eligibility of donors to receive a receipt for income tax purposes. For information on Canadian Federal Law concerning tax receipting, visit: www.cra-arc.gc.ca/chrts-gvng/menu-eng.html.

All eligible donations will receive a receipt produced in External Relations.

Receipts are issued for all gifts of at least $20.00 or by request for other amounts.

Acknowledgement of Donations

Donors are thanked for each donation made through the year. External Relations coordinates the issuance of thank you letters or cards.

Non-Monetary Donations

The CRA does not permit donation receipts to be issued for services. In instances where donors want a tax receipt, a cheque exchange must be facilitated. The University provides a cheque to the individual for the value of the service. This is taxable income and therefore subject to federal and provincial deductions. If the individual then chooses to donate the funds to the University, a tax receipt will be issued for the donation.

Where the value of the donation must be determined, appraisal requests are to be forwarded to, and managed by, Supply Management Services who will coordinate appropriate methods of determining the fair market value of the donation in collaboration with External Relations, Financial Services, and the donor. A letter requesting the issuance of a donation receipt will be submitted by Supply Management Services to Financial Services listing:

  • each item donated,
  • the current fair market value of the item(s),
  • the source of the evaluation,
  • name and address of donor,
  • the department receiving the donation and how the donation will provide value to their program(s).

According to the CRA, "property of little or only nominal value to the donor" will not qualify as a donation for income tax purposes. The donation value for a donation receipt should exceed the administrative cost to process the donation and receipt. This nominal value for the issuance of a donation receipt for non-monetary donations by the University will be for donation values that are greater than $100.00.

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