Soliciting, Accepting and Processing Gifts and UPPS No. 03.05.01

Grants from Private Sources Issue No. 8

Effective Date: 03/30/2009

Review: June 1 E5Y

Attachments I, II, III, IV, V, VI, VII, VIII, IX, X, XI, XII, XIII, XIV, XV

01. POLICY STATEMENTS

01.01 This UPPS sets forth university policies related to soliciting, accepting and processing gifts from private sources.

01.02 Proposals for external grants funding must be processed through the Office of Sponsored Programs. Refer to UPPS No. 02.02.01.

01.03 Solicitations (including web pages) must clearly identify the entity (the university or affiliated organization) to which gifts are to be made.

01.04 Educational and General (E & G) funds may not be used for such solicitation expenses as printing and postage unless the gifts solicited are designated directly to the university, rather than to an affiliated organization.

01.05 The Texas State University-San Marcos Development Foundation and the McCoy College of Business Administration Foundation are separate 501(c)(3) organizations. In collaboration with university administration, each of these foundations will establish their own policies and procedures for soliciting, accepting and processing gifts and grants from private sources.

02. DEFINITIONS AND ABBREVIATIONS

02.01 In this UPPS, the term "gift" means a voluntary non-reciprocal transfer of real or personal property for which the university is not required to make payment or provide any deliverables. Gifts may be received from individuals or from partnerships, associations, foundations, or corporations. A grant from a governmental entity is not included in this term.

02.02 The term "restricted gift" refers to gifts, the use of which is subject to restrictions imposed by the donor.

02.03 The abbreviations below have the meanings indicated:

a. VPUA: Vice President for University Advancement

b. Provost and VPAA: Provost and Vice President for Academic Affairs

c. VPFSS: Vice President for Finance and Support Services

d. OSP: Office of Sponsored Programs

e. Foundation: Texas State University-San Marcos Development Foundation

f. Library: Albert B. Alkek Library

g. OGP: Online Giving Program

h. GIK: Gifts-in-Kind

i. University: Texas State University-San Marcos

j. UA: University Advancement

k. MOU: Memoranda of Understanding

03. GENERAL DIVISIONAL RESPONSIBILITIES

03.01 University Advancement Division:

a. The UA Division is responsible for soliciting, coordinating and reporting all gifts, including those initiated elsewhere in the university. Therefore, the UA Division must know who is giving how much and for what purposes. The UA Division will reconcile its records with university records maintained by the Finance and Support Services Division in order to prepare monthly reports of gift income to the university.

b. The university and the UA Division will also provide support functions for the Foundation. A new agreement was approved at the Regents’ Meeting, November 4, 2003. The new agreement states that the university will provide the Foundation with support staff to receive gifts, receipt, acknowledge, account for and report gifts of the Foundation. And, as outlined in Chapter IX of the Regents’ Rules, university personnel may solicit and manage funds that are directed toward Foundation accounts.

c. No gifts to the university may be given to the Foundation unless the transfer is approved in writing by the donor and the Board of Regents.

03.02 All Divisions

a. All divisions will coordinate fundraising from private sources with the UA Division, except for grant contract requests, which will be submitted to the OSP. OSP will record contracts and grants and provide that information to the UA Division each month.

b. Additionally, all divisions and affiliated organizations are responsible for forwarding cash gifts received to Donor Relations. See UA Division PPS 01.02 (Section 05.01 b) for policies related to gifts of property other than money.

03.03 Role of the Texas State University-San Marcos Development Foundation

a. The role of the Foundation is as established in Chapter IX of The Texas State University System Board of Regents’ Rules and Regulations, Private Support Organizations.

b. The Foundation’s sole purpose is the support of Texas State University-San Marcos. All conditions and understandings are outlined in a new agreement dated November 4, 2003.

c. The Foundation will accept gifts that establish endowments, capital improvements and scholarships donated in the form of cash, legacies, gifts-in-kind, capital gifts, securities, gift annuities and real estate as outlined in the Foundation’s Policies of Acceptance of Gifts per the agreement with the Board of Regents.

d. Real estate donations can be accepted and held by the Foundation if the intent is to sell the property and deposit the proceeds into an endowment held by the Foundation or to generate income for an endowed account.

e. The Foundation also accepts gifts directed toward the President’s unrestricted funds and general/non-specific scholarship funds.

f. Donations given for operating, short-term purposes (i.e., wages, travel, rent, utilities) or special projects may be directed to the university or passed into the university from the Foundation.

03.04 Role of the McCoy College of Business Administration Development Foundation

a. The role of the McCoy College of Business Administration Development Foundation is as established in Chapter IX of The Texas State University System Board of Regents’ Rules and Regulations, Private Support Organizations.

b. The Foundation’s sole purpose is the support of the College of Business Administration at Texas State University-San Marcos. All conditions and understandings are outlined in an agreement dated May 7, 2004.

04. PROCEDURES FOR SOLICITATION OF GIFTS

04.01 University faculty and staff members will coordinate solicitation of gifts with the VPUA and the appropriate chair, dean, or director. The VPUA or a designee will work with the faculty or staff member on the project.

04.02 A faculty or staff member who receives unsolicited gift inquiries from a prospective donor will notify their appropriate chair, dean, the Provost and the VPUA, as soon as possible after the contact.

04.03 University employees may be involved in fundraising for certain programs, such as the Alumni Association, Bobcat Athletic Foundation and Parents Association.

University personnel can raise funds and support the Foundation as specified in an agreement between the Foundation and the Board of Regents.

04.04 University Advancement Online Giving Program

a. Purpose. The purpose of the UA Online Giving Program (OGP) is to increase giving to the university by providing constituents with the ability to make quick, secure, and convenient contributions via the internet. The OGP is an electronic payment method for accepting donations to the university and is subject to all applicable university policies and procedures including, but not limited to, those for accepting cash donations and electronic security concerns.

b. Electronic Payments. The OGP allows donations via credit card and electronic check transactions. Only those credit cards accepted by the university will be utilized on the OGP.

c. Security. OGP transactions will be protected via a secured SSL (secure sockets layer) webpage which captures information required to process the donation transaction. Donors’ payment information will be passed to and from on-line processing gateways via a secure SSL connection. Credit card or electronic information will not reside on university-maintained software or hardware.

d. Recipient Accounts. All gifts made through the OGP will be credited only to university endowments, designated-fund scholarships, or approved operating accounts.

e. Convenience Fee. Donors will not be charged an e-payment convenience fee for the use of their credit card in making donations via the OGP.

f. Credit Card Processing Fees. The cost of credit card processing fees will be charged to the university account that is receiving the donation via the OGP.

g. Card Returns and Refunds. Charges disputed by the donor or rejected by the credit card processing vendor will be deducted from the university account that was the recipient of the original donation. The General Accounting Office has the responsibility to enter correcting transactions into the university’s financial system for returns or refunds.

h. Donor Data Base. The UA Division has responsibility for data entry and reconciliation of gifts made via the OGP into the donor data base.

i. Financial System Entry and Reconciliations. The Cashiers’ Office has responsibility for data entry into the financial system and reconciliation of gifts made via the OGP with the financial system.

j. Affiliated Support Organizations. Donors wishing to give to university- affiliated support organizations (such as the Alumni Association, Development Foundation, and others) should contact those organizations directly or visit their respective websites. Refer to UPPS No. 03.06.01.

05. PROCEDURES FOR ACCEPTANCE OF GIFTS

05.01 Definitions

a. Cash: Cash gifts may be accepted in the form of US dollars, personal or corporate checks, credit card transactions, payroll deduction transmittals through the University Fund Drive, and cashier’s checks.

b. Outright Gifts: Outright gifts fall into five broad categories – gifts of personal property (tangible and intangible), gifts of real property (real estate), gifts-in-kind (including non-monetary corporate sponsorships), gifts of securities, and gifts of life insurance. Refer to UA Division PPS 01.02 for the specifics of reporting and for forms associated with these gifts.

05.02 Gifts of Cash.

a. Cash gifts are reported as of the date the university receives or processes them.

b. Credit card or electronic check donations are not a gift until the university has received authorization for the charge from the credit card agency.

c. In rare instances, cash gifts may be declined by the President and Board of Regents, if the donor or the origin of the gift does not reflect the moral and ethical standards of the university.

06. PROCEDURE FOR ACCEPTING ENDOWMENT GIFTS

06.01 The following section provides information on regulations, policies and procedures regarding endowments and describes the files and records on endowments. In addition to standard processing for deposit, record keeping and acknowledgement, many gifts to the university require specific approval of the President, VPUA and VPFSS. The recognition of an endowment donor may include the naming of a campus facility. Regulatory and procedural information on this process is included in UPPS No. 08.03.01, Criteria for Namings.

With guidance and oversight by an Endowment Compliance Committee appointed by the Provost, the Donor Relations Office and the University Advancement Compliance Specialist will work with administrative officers and appropriate staff in the colleges and schools to:

a. assess Texas State’s risks regarding endowment compliance,

b. provide the required reports, and

c. create procedures to bring Texas State into a desirable position with regard to proper expenditure and accountability of endowed funds.

06.02 Endowment Funding Levels

Periodically the VPUA, the Provost and the President will review the current lists of endowment types and minimum funding levels for each category. This review will include minimum endowment funding levels for chairs, professorships, faculty fellowships, graduate fellowships, presidential scholarships, program support and scholarships, and any other categories deemed appropriate. A current list of endowment funding levels may be found in Attachment XV.

06.03 Endowment Types

Endowments may be established by gifts (there is a minimum amount for the creation of each endowment, reference Attachment XV) from private individuals, corporations, foundations, associations and other organizations. Endowments may be established by a one-time gift, a series of gifts, a pledge paid over a period of years, wills, trusts, gifts of appreciated assets, or by a combination of these. The principal of endowment funds remains intact (nonexpendable) in perpetuity. The gift is invested, and distributed funds are used to support the purpose designated by the donor.

Endowments may be designated to benefit specific academic or non-academic departments, or the donor may request that the President of the university designate an area of need at the institution. Endowments are usually named after their donors or a person the donor wishes to honor.

Certain terms are used with endowments and it is important for personnel to understand them. The following definitions come from NACUBO, the National Association of College and University Business Officers:

a. Permanent or True Endowment: Endowment funds are funds received from a donor with the restriction that the principal not be expendable. These endowments are only subject to modification as may be allowed by law and Board of Regents regulations.

b. Quasi-Endowments: A quasi-endowment fund is a fund established by a governing board to function like an endowment fund but which may be totally expended at any time at the discretion of a governing board. This may be gift funds that the donor did not specifically direct for use as an endowment, or funds available to the university from other sources that are permitted to be designated for an endowment. This means that the donor of the gift funds did not specifically direct the creation of an endowment. The funds are invested in the same manner as a true endowment and have the same payout provisions. When creating a quasi-endowment a governing board should have the intention of retaining the fund in perpetuity or at a minimum of five years prior to the endowment principal being claimed. Should a department wish to combine permanent and quasi-endowment funds for a single purpose, the VPUA and VPFSS should be consulted.

Essentially:

1) If an endowment is being created with a combination of gifts, the type of endowment (permanent or quasi) will be dictated by the source of the majority of funds. If at least $10,000 of each is being dedicated, then the funds should be divided by their source (endowed/non-endowed) and both a permanent endowment and a quasi-endowment will be created.

2) A transfer of unrestricted gifts or other funds may be made into an existing permanent endowment if the gift instrument originally creating the permanent endowment indicated that future additions from any party would be subject to its provisions. In that instance the transferred funds could not be reclaimed.

3) If a department wishes to dedicate $10,000 or more of unrestricted funds to the same purpose as a permanent endowment, yet retain the privilege of reclaiming those funds, they may be used to create a quasi-endowment. Language describing the purpose of the quasi-endowment and the permanent endowment must be the same if they are intended to serve the same purpose. The payout from the two endowments may be directed to the same expenditure account. A request to create the quasi-endowment should be submitted following the procedures outlined under Endowment Approval Process in this section.

c. Term Endowment: Term endowment funds initially function exactly like [true] endowment funds. However, after a specific period or event, as defined by the donor, the nature of the principal of the term endowment changes. For example, the donor states that the gift funds be used as an endowment benefiting a particular program for 20 years, and, after that, the funds be used to purchase general library materials for the campus. The contributed funds would be invested as with a standard endowment and the annual distributions would be used by the benefiting program. At the end of 20 years, the endowment would be dissolved and the endowment principal transferred to an expenditure account for the purchase of library materials.

d. Following are brief descriptions of endowment categories and minimum amounts required for the creation of each.

1) Faculty Support Endowments

a) Chair

(1) For outstanding, distinguished, tenured faculty members and visiting scholars.

(2) Supplements state-funded base salary.

(3) Rewards and enhances research and scholarly efforts.

(4) Minimum funding: $1,500,000 to $2,000,000 pending President’s approval.

b) Professorship

(1) For outstanding, tenured faculty members.

(2) Supplements state-funded base salary.

(3) Rewards and enhances research and scholarly efforts.

(4) Minimum funding: $600,000.

c) Faculty Fellowship

(1) For any rank of faculty member.

(2) Supplements state-funded base salary.

(3) For research and teaching efforts, and for visiting scholars while in residence at the university.

(4) Minimum funding: $200,000

2) Student Support Endowments

a) Graduate Fellowship

(1) Supports graduate student awards.

(2) Academic merit may be a consideration.

(3) Financial need may be a consideration.

(4) Other allowable criteria may be suggested by the donor.

(5) Minimum funding: $100,000

b) Endowed Presidential Scholarships

(1) Renewable support to undergraduate students beginning in the sophomore year for the following 2 years.

(2) Maintain a GPA of 3.25 or higher.

(3) Financial need may be a consideration.

(4) Other allowable criteria may be suggested by the donor.

(5) Minimum funding: $50,000

c) Undergraduate Scholarships

(1) To support undergraduate student awards.

(2) Academic merit may be a consideration.

(3) Financial need may be a consideration.

(4) Other allowable criteria may be suggested by the donor.

(5) Minimum funding: $25,000

3) Other Endowment Types

a) Lectureships

(1) A select position to be filled by a top scholar who is in residence temporarily, but who typically does not accept a permanent faculty position.

(2) A series that will bring Texas State a variety of outstanding individuals with broad experience and expertise whose presentations will have university-wide and interdisciplinary appeal or special interests relevant to a particular school or college.

(3) Often designated for use at the discretion of a college or school dean, department chair, or unit director.

(4) Minimum funding: $100,000

b) Libraries, Teaching, Staff

(1) Recognize outstanding performance in the classroom, in service to the university and in research by faculty.

(2) Minimum funding: $25,000

c) Book

(1) Provide funds to be used to purchase publications in support of students and faculty.

(2) Minimum funding: $10,000

06.04 Public Announcement of New Endowment

Public announcement of a new endowment is not to occur until after official approval has been obtained from the donor and the President of Texas State.

06.05 Endowment Approval Procedures

Following is an explanation of the documents that are required and the procedures used to obtain official acceptance of any item listed.

Approval Items

Memorandum of Understanding (forms and sample letters attached)

a. Full, Outright Gift (Attachment I)

b. Pledge (Attachment II)

c. Pledge with Corporate Matching (Attachment III)

d. Memorial/Honorific Fundraising (Attachment IV)

e. Gift of Property (Attachment V)

f. Dean’s Letter (Attachment VI)

g. Estate Intention (Attachment VII)

h. Anonymous Estate Intention Letter (Attachment VIII)

i. Will Language for a Non-Endowed Gift (Attachment IX)

j. Will Language to Create an Endowment (Attachment X)

k. Qualified Retirement Plan Beneficiary Designation Language (Attachment XI)

l. Sample Insurance Owner/Beneficiary Designation Language (Attachment XII)

m. Trust Language to Create an Endowment (Attachment XIII)

n. Trust Language for a Non-Endowed Gift (Attachment XIV)

06.06 Gift and Memoranda of Understanding (MOU) Received from the Donor

a. The gift may be outright or a combination of gift and pledge. If a pledge, at least 20% of the total should be received before presenting it for approval. Full payment on the pledge is due within five years of the pledge date. If the pledge is not fulfilled within the stated length of time agreed upon with the donor as stated in the MOU, personal follow-up will be made to determine the legitimacy of the pledge and a revised MOU will be developed and signed. If no communication can be made with the donor or family members of the donor, the pledge will be written off.

b. It is strongly recommended that the donor provide a signed MOU including proscribed language that serves to preserve and protect the gift as a permanent endowment and allows the gift to follow the university’s standard investment policies. The MOU is designed to outline the gift or pledge (including payment schedule) and the type, name and purpose of the endowment. The donor should be advised to seek independent tax or legal counsel before executing a legal document such as an MOU. See samples mentioned above in Approval Items.

c. The MOU should never be prepared on university letterhead.

d. All drafted endowment MOUs should be reviewed by the VPUA prior to gaining the donor’s signature. This is to help ensure, before the donor signs, that the instrument is acceptable under university policies and procedures.

e. If a signed document cannot be obtained, the MOU can be a letter from the donor, a letter from the dean or the appropriate department chair to the donor outlining the understanding of the donor’s wishes in establishing the endowment. Such a letter should contain the following two paragraphs of the sample MOU as an explanation of Texas State’s method of administering endowed funds.

“The university’s standard endowment policies are intended to apply to all gifts for endowment. Therefore, the contributed funds may be merged or comingled with other funds held by Texas State University-San Marcos for investment purposes, in accordance with the university’s policies and procedures. Funds distributed from the endowment in a year may be retained and expended for the purposes of the endowment, in subsequent years, and a portion may be designated, at the discretion of the Texas State University-San Marcos President, Provost, VPUA and VPFSS as a permanent addition to the principal of the endowment.

Such endowment shall never become a part of the General Fund of the State of Texas, and shall never be subject to appropriation by the legislature of the State of Texas. All future additions to the endowment, made by any party, shall be subject to these provisions and shall be considered permanent endowment funds. If in the opinion of the President, Provost, VPUA and VPFSS future circumstances change so that the purposes for which the endowment is established become illegal, impractical, or can no longer be carried out to meet the needs of Texas State University-San Marcos, said parties may designate an alternative use for the endowment payout to further the objective of the university, in the spirit of its original purpose.”

07. PROCEDURES FOR PROCESSING ACKNOWLEDGMENT LETTERS

07.01 The VPUA will generate the following acknowledgment letters and receipts to donors when gifts have been made to the university:

a. A letter from the President to the donor if the value of the gift is $1,000 or more, and a letter from the VPUA, including a receipt for income tax purposes.

b. A letter from the VPUA or appropriate staff to the donor if the value of the gift is $500 or more, including a receipt for income tax purposes.

c. All gifts will be acknowledged with a receipt for income tax purposes.

07.02 In addition to the above, gifts restricted to a given department or program may be acknowledged in writing by an appropriate person (program director, chair, dean, etc.) and a copy forwarded to the VPUA.

08. PUBLICITY

08.01 The VPUA, in coordination with the faculty or staff contact person, the donor, and University News Service, will coordinate all publicity related to gifts. In all cases, any special desires of the donor will be followed to the extent possible.

09. REVIEWERS OF THIS UPPS

09.01 Reviewers of this UPPS include the following:

Position Date

Director, Donor Relations June 1 E5Y

Assistant Vice President of June 1 E5Y

Development

10. CERTIFICATION STATEMENT

This UPPS has been approved by the following individuals in their official capacities and represents Texas State policy and procedure from the date of this document until superseded.

Director, Donor Relations; senior reviewer of this UPPS

Vice President for University Advancement

President