INTRODUCTION

The University of Alabama at Birmingham (UAB) encourages its faculty and staff to seek private support as a mean of enhancing the quality of UAB's educational, research, and service programs. To maximize the opportunity for success and to ensure that the institution and its priorities are properly represented in all appeals for private support, institutional coordination and approval of such appeals are essential. This policy sets forth UAB’s approach to acceptance of gifts received by UAB and its associated entities. Donors should always consult their own tax advisors regarding contributions.

SCOPE

Rule 411 of The Board of Trustees of The University of Alabama ("the Board") specifies that certain categories of gifts must be accepted by the Board. UAB administers acceptance of all gifts in accordance with the provisions of that Board Rule. In general, whenever the term "the Board" is used in this policy it refers to The Board of Trustees of The University of Alabama or to matters generally handled by the Board or by the University of Alabama System. The terms "UAB", "the University", and "the University of Alabama at Birmingham" are used generally for matters over which UAB has control, but, in some instances for readability, the terms are used for UAB's relationship to gifts and matters controlled by the Board. Use of the terms "UAB", "the University", or "the University of Alabama at Birmingham" in this policy is not intended to imply that UAB will handle any matters normally under the purview of the Board. 

Additionally, this policy does not apply to sponsored contracts, grants, and cooperative agreements for research purposes.

DEFINITIONS

Gift

The dictionary defines gift as "something that is voluntarily transferred by one person to another without compensation." As generally understood, a gift is a transfer that is motivated by detached or disinterested generosity or out of affection, respect, admiration, charity, or similar impulses. Generally, gifts are irrevocable, and beyond a possible designation of use, the donor does not impose contractual requirements or subsequent reports as a condition of the gift. The donor may specify the general use of the fund or it may be an unrestricted gift for use in meeting needs identified by the University, college, or related support organization. For scholarship gifts, the donor may not participate in the selection of the recipient but may designate specific criteria for selection of recipients. 

A transfer of assets does not qualify as a charitable contribution for tax purposes, regardless of how it is styled by the parties to the transfer, if it is, in fact, a quid pro quo transaction. A quid pro quo is defined as any transfer in which the donor receives or expects to receive a benefit, commonly termed as a gift with "strings attached." Examples of such transfers, which do not qualify as charitable gifts, include:

• Gifts to personally benefit an individual;

• Gifts that move with an individual faculty member;

• Payments to "sponsor" events or performances in which tickets and/or promotional considerations are involved;

• Payments for services rendered by University employees;

• Payments for tickets or admission to events, unless benefits are declined by written documentation;

• Payments for scholarships where the recipient is determined solely by the donor; or

• Payments that support research by faculty where the award is directed at satisfying specific grantor requirements.

When UAB holds a fundraising auction, the winning bid will not be considered a gift but will be recorded by the University as "Other Income" in an amount up to the displayed fair market value of the item. Any funds given above the displayed fair market value of the item will be recorded as a gift, and the donor will be issued a gift receipt. Please note, if no fair market value is displayed at the time of bidding, there can be no gift component, per IRS regulations. 

For fundraising events, all invitations, posters, brochures, etc., should declare the value of goods and services received in exchange for a ticket purchase. Also, an option to decline benefits should be placed in a conspicuous manner on any reply cards. 

Grant

Funding agencies such as philanthropic foundations sometimes use words like "gift," "grant," "contribution," "donation," etc., interchangeably. Although grants and gifts sometimes share similar characteristics, such as resulting from an unsolicited proposal, having line-item budgets, or involving reports on the use of funds, the difference is judged on the basis of the intention of the awarding agency, the legal obligations incurred by the institution in accepting the award, and the way in which the funds are handled and accounted. Any of the following kinds of arrangements between outside organizations or agencies and UAB must be handled as grants or contracts and processed through the Office of Sponsored Programs:

• Any project or arrangement which involves any explicit quid pro quo other than routine stewardship reports concerning how the funds were used;

• Any project which involves issues requiring UAB review including the use of human subjects or laboratory animals, assignment of patents or copyrights, ownership of data or equipment, allocation or re-allocation of UAB space; or any research involving recombinant DNA, radioactive materials, or hazardous materials;

• Any project or proposal which contains language requiring UAB to pay a particular individual or to provide specific direct support to a particular individual;

• Any project or proposal which requires a line-item budget detailing expenditures by activity, function, or project period which must be adhered to as a condition of funding and which includes a right to audit expenditures and/or requires that some or all of the unexpended funds must be returned at the end of the project period;

• Any funding awarded in response to submission of a specific research protocol which specifies the scope of work or line of inquiry, performance targets, timeframe, level of personnel, etc.; or

• Any arrangement or request which eventually will be paid through any governmental (federal, state, or local) agency.

Additionally, fee-for-service arrangements and purchasing contracts must be processed through University Contracts. Further guidance on determining the appropriate categorization of a particular relationship with an outside organization may be obtained by contacting the Office of Sponsored Programs, University Contracts, or University Development.

POLICY STATEMENT

Because of the potential damage which can be caused to UAB's overall fundraising programs by uncoordinated solicitation of gifts, all efforts within UAB to raise funds from private sources including corporations, foundations, individuals, or other private philanthropic entities must be approved by the Office of the Vice President for Advancement (VPA) prior to their initiation. To support the University’s missions, increase private giving, and ensure the University meets regulatory and ethical expectations in its fundraising efforts, the VPA office is charged with collecting and maintaining donor and prospective donor information, honoring donor rights and reasonable restrictions to the extent of the law, and providing donors with the appropriate receipts for income tax filing purposes in accordance with relevant professional standards (e.g., AFP Code of Ethical Standards, APRA Statement of Ethics, DMA Ethics Guidelines, PPP Model Standards, and Donor Bill of Rights). In fulfilling its responsibility for oversight, the VPA works closely with and through management of University units to develop fundraising and donation processes that meet their specific priorities and needs.

Fundraising and Gift Solicitation

The Office of University Development is responsible for coordinating all fundraising and gift solicitation activities at UAB. That office has responsibility for overseeing the entire development process, including the identification, cultivation, solicitation, and stewardship of sources of private financial support for UAB and the valuation, recording, and acknowledgement of gifts received by the institution or any of its units.

Prior to the initiation of a formal request for solicitation approval, the Office of University Development is available to consult with those who wish to approach potential funding sources. That office will assess the appropriateness and timing of such a solicitation in light of institutional priorities and any known financial commitments by those considered to be potential donors.

Once a formal solicitation request has been approved by the VPA office, the Office of University Development will work with the respective school, department, unit, or individual faculty or staff member to identify and evaluate prospects, to suggest solicitation approaches, and to assist, as appropriate, in the solicitation process.

It is recognized that individuals, corporations, foundations, or other entities may themselves initiate contact with UAB faculty and staff regarding funding opportunities. While individual staff and faculty members are encouraged to answer questions and to discuss gift opportunities with potential donors, those inquiries must be reported promptly to the Office of University Development. That information is critical to the overall coordination of fundraising and development activities.

Recording and Deposit of Gifts

UAB, as a public institution and as a steward of public funds, is responsible for ensuring that all monetary funds received by UAB or any of its units are deposited in a timely manner. Therefore, all gifts and pledges, whether solicited or unsolicited, which are sent directly to a unit or to an individual must be delivered promptly to the UAB Office of Gift and Biographical Records along with copies of any accompanying documentation such as letters, cards, notes, and agreements. The Office of Gift and Biographical Records will ensure that the funds are deposited in the proper UAB account, will issue an official receipt for income tax purposes, and will initiate the preparation of acknowledgements of major gifts. For further guidance, see the UAB Cash Receipts Policy. and the UAB Stewardship Program Standards.

The responsibility for accepting gifts in the manner set forth in the Standard Operating Procedures for Gift Acceptance rests with each Development Officer. Appropriate documentation should be provided to Gift Records at the time gifts are processed. Gift Records will be responsible for reviewing and monitoring all gifts for appropriateness to ensure that the Standard Operating Procedures and any applicable procedures have been followed.

The Office of Advancement Services maintains the official database of records for the storing of all gifts, pledges, and other data collected in support of Development activities. UAB treats such information confidentially to the extent of the law and provides access only to individuals and offices that require it to perform their prescribed duties and responsibilities, including development offices and other unit offices with development employees, or otherwise with written permission of the VPA. Use of this information for any purpose other than the performance of required functions is prohibited.

Gift Acceptance

UAB actively solicits gifts from individuals, corporations, foundations, and other entities to help fulfill its mission of instruction, research, patient care, and service. Whenever it appears that a gift—because of its source, its conditions, or its intended purpose—could expose UAB to adverse publicity, could extend UAB's resources beyond reasonable limits, or could involve UAB in new and unplanned activities, the matter must be referred to the VPA office, which will confer with appropriate UAB officials prior to final acceptance of the gift.

While UAB appreciates the financial support and goodwill of donors, special care is required to ensure that the acceptance of a gift will not involve a continuing financial commitment or other obligation on the part of UAB that is disproportionate to the usefulness of the gift. While donors often wish to specify the general purpose for which a gift is given, UAB will not accept gifts which are too restrictive in nature or which do not support its overall mission. UAB will not accept a gift which bears with it any discrimination prohibited by UAB's Equal Opportunity and Discriminatory Harassment Policy . or by prevailing law. Moreover, UAB is not responsible for fundraising activities undertaken by external organizations or individuals not sponsored by UAB that may choose to donate proceeds to UAB.

UAB will not accept gifts which are restricted to social activities for UAB faculty and staff because UAB expenditures for employee social activities generally are regarded by the State of Alabama Department of Examiners of Public Accounts as unallowable costs. UAB should not accept gifts for student social activity costs which the State of Alabama Department of Examiners of Public Accounts would consider to be unallowable costs. Under no circumstances will UAB accept a monetary gift for the purchase of alcoholic beverages.

UAB reserves the right to review and approve any language used on institutional donor signage. Inscriptions should not be perceived as politically or religiously coercive. Inscriptions are meant to honor individuals and/or organizations and should protect the good name and character of such. Inscriptions that are outside of sample parameters may be subject to review and approval.

The following is to provide general guidance to prospective donors and their advisors as well as to UAB officials in determining what kinds of gifts are acceptable to UAB:

Conflict of Interest

All prospective donors—particularly those making large gifts or planned gifts—are strongly urged to seek the assistance of personal legal and financial advisors in matters relating to their gifts and the resulting tax and estate planning consequences. UAB will, in turn, seek the advice of the Office of Counsel in matters relating to the acceptance of gifts involving formal gift agreements and in other cases in which such involvement is warranted.

Internal Revenue Service Rules and Regulations

UAB will comply with the prevailing rules and regulations of the Internal Revenue Service when accepting and structuring the various types of gifts covered by this policy.

Named Gifts

See the section of this policy entitled "Endowment Standards" and Board Rule 411 for information concerning endowment gifts, naming of a building or part of a building for a donor or a donor's designee, and naming of an academic program for a donor or a donor's designee.for information concerning endowment gifts, naming of a building or part of a building for a donor or a donor's designee, and naming of an academic program for a donor or a donor's designee.

Types of Gifts

The following criteria govern the acceptance of each indicated type of gift. Any gifts offered to UAB which are in categories requiring acceptance by the Board of Trustees will be forwarded by the UAB President to the Chancellor for Board consideration. In most cases, gifts requiring Board approval also require a formal gift agreement between the donor and the University. (Contact the Office of Stewardship and Donor Relations for information concerning which of the following categories require Board acceptance of the gift.)

1. Cash or Check. Cash is acceptable in any form. Checks are to be made payable to The University of Alabama at Birmingham. Cash and check gifts must be delivered immediately to the UAB Office of Gift and Biographical Records with instructions regarding their use or application (see the section entitled "Recording and Deposit of Gifts").

2. Securities. UAB accepts both publicly-traded and closely-held securities. However, UAB does not accept stock options as gifts. Stock/security receipts are issued to donors with a description of the security, the number of shares, and the date of transfer to UAB. No valuation appears on the receipt. Contact the UAB Office of Gift and Biographical Records for further guidance concerning procedures for accepting gifts of securities.

a. Publicly-Traded Securities: Gifts of readily marketable securities will be credited at the mean of their market value on the date the securities are transferred to a UAB account or delivered to a UAB representative. Marketable securities may be transferred to an account maintained by UAB at one or more brokerage firms or may be delivered physically with the transferor's signature or stock power attached. All marketable securities will be sold upon receipt. Neither gains nor losses realized by UAB's sale of the securities after their receipt will affect the credited value. Any brokerage fees are considered UAB operating expenses.

b. Closely-Held Securities: Securities which are not readily marketable may be accepted; however, such gifts must be reviewed prior to their acceptance to determine that there are no restrictions on the securities that would prevent UAB from eventually converting those assets to cash. The Vice President for Financial Affairs and Administration and the Office of Counsel, or their respective designees, must approve acceptance of closely held securities. Donors will provide the audited book value of those assets, adjusted to the date of the gift. Every effort will be made to convert non-marketable securities to cash as soon as possible.

3. Personal Property or Other Non-Cash Charitable Contributions. Gifts of personal property or non-cash items such as books, scientific or medical equipment, artworks, or similar items generally are accepted by UAB where UAB has some related use for the donated items or if they can be readily converted to cash. The following criteria are considered:

• Can the property/item be used in fulfilling the mission and/or strategic priorities of the unit?

• Is the property/item marketable?

• Are there any undue restrictions on the use, display, or sale of the property/item?

• Are there any maintenance, storage, appraisal, disposal, or other additional costs associated with acceptance of the property/item?

Respective department/unit heads, directors, or deans must notify the Office of the VPA of their acceptance of all gifts of personal property or non-cash items.

Donors will inform University Development of items valued at $5,000 or greater that may require the completion of IRS Form 8283 in order to claim a deduction for the item on their taxes. In cases where IRS Form 8283 is submitted to UAB, the receiving department should provide information to the donor as to whether their intention is to keep the item for three years or to sell the item and convert to cash in less than three years. Under no circumstances will UAB provide appraisal services or pay appraisal fees on behalf of the donor for gifts of property or non-cash items.

4. Donation of Services. Donations of time or services by local corporations, entities, or individuals which are not recognized by the Internal Revenue Service as contributions for income tax purposes are appreciated by UAB but are not recorded and maintained centrally. The Office of Gift and Biographical Records is capable of putting a "soft-credit" (courtesy credit) on the donor’s record as a method of tracking comprehensive giving by the donor. Contact the Office of Gift and Biographical Records for more information.

5. Real Estate. Gifts of real estate may include developed property, undeveloped property, or gifts subject to a prior life interest. Because real estate is a highly specialized field and numerous rules and regulations govern the transfer and disposition of donated properties, all potential gifts of real estate are reviewed, and must be approved, by UAB's Real Estate Committee prior to recommending acceptance. All gifts of real property are accepted by the Board upon recommendation of the Chancellor and the campus President and upon receipt of an appropriate environmental review and assurance of a clear title.

a. Transfer of Deed: Ordinarily, a transfer of property becomes effective for tax purposes at the time a properly executed deed is delivered to the University by the donor.

b. Appraisals: Contributions of real estate or other property with a value of $5,000 or more must be accompanied by a qualified appraisal. Under no circumstances will UAB provide appraisal services or pay appraisal fees on behalf of the donor for gifts of real estate.

c. Sale of Gifted Real Property: For properties not included in UAB’s campus master plan, it is UAB’s usual practice to recommend to the Board of Trustees the sale of gifts of real estate as soon as is practical after legal transfer of title, except where the donor legally limits the University's right to dispose of the property or limits its use of the property. In any case, gifts of real estate do not necessarily result in cash being available to UAB, and departments/units should not assume that sales proceeds would be available at any specific time, if ever. In the meantime, the department/unit receiving the gift is responsible for paying for all associated operating costs (including, but not limited to, maintenance, repairs, utilities, environmental cleanup costs, debt service, and rental management fees).

6. Gift of Remainder Interest (Retained Life Estate). The University will accept a gift with a retained life estate in a personal residence, farm, or vacation home subject to the real property guidelines contained in the "Real Estate" section of this policy. The donor or other specified tenants may continue to occupy or use the real property for the duration of the stated life(s) or tenancy. After death of the donor or other designated individuals, or after the stated term of any tenancy agreement with individual(s) other than the donor, the University may use the property or may sell it to obtain the cash proceeds. In cases in which the University receives a gift of a retained life estate, expenses for maintenance, real estate taxes, hazard and casualty insurance, and any property indebtedness are to be paid by the donor or primary tenants.

7. Life Insurance Policies. All gifts of life insurance to the University are handled by The UAB Educational Foundation (UABEF) according to its policies and procedures. Only policies in which the University or the UABEF is named as both owner and beneficiary of the policy are accepted. The gift will be valued at its interpolated terminal reserve value, or cash surrender value, at the time a change in ownership is validated. New or existing policies must meet specific criteria as outlined in the UABEF Life Insurance Acceptance Guidelines. UAB accepts and acknowledges as a planned gift commitment only cash value or permanent policies; term and group life insurance policies are not accepted. Where questions exist based on specific circumstances, the Office of Planned Giving makes determinations about whether a policy may be accepted. The Office of Planned Giving serves as the facilitator of life insurance gifts and assists the UABEF in the management and maintenance of the same.

If the donor contributes future premium payments, those payments will be credited as gifts in the year they are received.

If the donor does not elect to continue making premium contributions for the policy, UABEF may choose one of the following options according to its policies and procedures:

• Continue to pay the premiums;

• Convert the policy to paid-up insurance; or

• Surrender the policy for its current cash surrender value.

8. Charitable Remainder Trusts. The University may accept designation as a remainder beneficiary of a charitable remainder trust. These gifts will be valued using the present value of the remainder interest as calculated using Internal Revenue Service tables. The University will not accept appointment as Trustee of a charitable remainder trust.

9. Charitable Lead Trusts. The University may be named as an income beneficiary of a charitable lead trust. A suggested minimum initial funding for a charitable lead trust is $1,000,000.

10. Charitable Gift Annuities. Charitable Gift Annuities are offered by the UABEF, permitting the donor(s) to designate the remainder of a gift annuity to a preferred area of UAB. Charitable gift annuities are available to residents of Alabama and certain other states. Annuity payout rates vary based on the age of the income recipient(s) which may or may not be the actual donor. UABEF follows the payout rate schedule as recommended by the American Council on Gift Annuities which is subject to periodic change. The minimum amount required to establish a charitable gift annuity is $25,000 as of October 1, 2013. Donors interested in establishing a charitable gift annuity should contact the Office of Planned Giving for more information.

11. Charitable Beneficiary Designations. UAB supporters are encouraged to include the University in their estate or financial planning documents using the legal name: "The Board of Trustees of The University of Alabama for The University of Alabama at Birmingham." Charitable beneficiary designations can be made through last will and testament documents, revocable living trusts, retirement accounts, bank accounts, securities accounts, and life insurance policies. Donors who establish charitable bequests or other charitable beneficiary designations known to UAB, and who provide the requested support documentation, are recognized in the UAB Torchlighters Society (unless the listing is declined). Potential donors and their legal, tax, or financial advisors should consult with the Office of Planned Giving for guidance on planned gift vehicles, preferred verbiage, requested documentation, etc., for planned gifts benefiting one or more areas of the University.

ENDOWMENT STANDARDS

Standards and guidelines for creating named endowments at any of the three campuses of the University of Alabama System have been issued by the University's Board of Trustees (see Board Rule 411). Part of the purposes of those rules and guidelines is to ensure equity among the campuses and to ensure that the amount used to create an endowment will generate sufficient income to accomplish the intended purpose. The amounts established by the Board for named gifts to the University are minimum amounts, and individual campuses may adopt higher minimums for each category of named gift.

All gifts given for the purpose of establishing an endowment must be formally accepted by the Board. Establishment and management of endowment funds present a significant legal and financial commitment on the part of the University. Recognizing that such sums must often be accumulated over a period of years, the University generally is cooperative in working with a donor who wishes to spread the payments toward an endowment over a period of time that is typically five years. However, an endowment fund is not activated until the minimum level has been reached.

An endowment fund may be designated for a specific purpose, program, or campus unit depending on the wishes of the donor and is subject to approval of the University. Generally, only the spendable income produced, as defined by the University’s endowment spending policy, from the investment of the principal (corpus) of the endowment may be spent for the intended purpose (see Board Rule 404). In the case of a pure endowment—that is, one created where the donor specifies that a contribution is to be used for an endowment—the principal may not be expended under circumstances not expressly set out in gift documents. In the case of a quasi endowment—that is, one created by the University itself using funds that were not specifically designated for an endowment—the principal may be invaded only after review and approval of the Board. (See also UAB Policy Concerning Separately Invested Endowments.)

The University has an investment policy (see Board Rule 404) which is designed to preserve the real value and to enhance the purchasing power of earnings so as to keep pace with inflation and with evolving University needs. In order to accomplish this, the Board has established a spending rate which is reviewed annually. Earnings realized beyond those necessary to fund the annual spending rate and costs of portfolio management are added to the principal of the endowment.

Types of endowments (also known as "named gifts") are described below along with the minimum amount required by UAB to officially establish and activate each type of endowment. (See also UAB’s Endowment Expenditure Guidelines.)

Types of Endowments and Minimum Levels

Endowed Chair - $1,500,000
An endowed chair is among the most prestigious and meaningful gifts that can be made to an academic institution. Funds provided by an endowed chair are used to attract and retain nationally or internationally recognized scholars or researchers. An endowed chair may provide full salary or a salary supplement and fringe benefits for the recipient of the chair, for support staff, or for other expenses as the endowment agreement permits.

Endowed Professorship - $500,000
Funds generated by an endowed professorship are used to support the salary or work of the holder, who may also use the honorary title associated with the professorship. An endowed professorship is structured like an endowed chair; however, it provides a lower level of support to the holder.

Endowed Visiting Professorship - $250,000
Distinguished faculty from other institutions often bring new experiences and perspectives to share with students and faculty colleagues. Visiting professors add richness to an academic program and are a valuable addition to campus life.

Endowed Graduate Fellowship - $250,000
Funds provided by an endowed fellowship are used to attract the next generation of outstanding scholars and researchers into academic programs for advanced training in specific disciplines, interdisciplinary fields, or broad areas of study, which may be of interest to the donor. In other cases, donors may wish to give the University greater flexibility in supporting young scholars across a wide range of disciplines.

Endowed Research Fund - $100,000
Income provided by an endowed research fund is used to support research in a discipline, disease, or area of interest as stipulated in an agreement with the donor. The research fund may be named according to the wishes of the donor.

Endowed Lectureship - $75,000
The income from an endowed lectureship often is used to bring a distinguished scholar to UAB each year to lecture on a particular subject or in a specific discipline. The lectureship series may be named according to the wishes of the donor.

Endowed Student Loan Fund - $50,000
Income provided by an endowed loan fund is used to offer loans to students with demonstrated financial need. Students are required to repay over time the amount loaned to them according to guidelines established by the donor. The UAB Office of Student Financial Aid is responsible for administering these loan funds.

Endowed Scholarship - $25,000
Funds generated by an endowed scholarship are used to provide financial assistance to students who meet certain criteria. For example, the donor may wish to benefit students enrolled in a particular school or program or students with a particular grade point average. In other cases, the donor may wish to give the University more flexibility to adapt the criteria based on changes in student recruitment needs.

Endowed Program Support Fund - $25,000
Income provided by an endowed program support fund is used to advance the on-going operations of a specific program designated by the donor. The program support fund may be named according to the wishes of the donor.

Endowed Library Fund - $10,000
An endowed library fund will provide books, periodicals, or resources for the UAB Library in perpetuity. In addition, appropriate acknowledgement of the source of funds will provide an enduring tribute to the donor or designee.

Endowed Award Fund - $10,000
An endowed award fund may be established to provide funding for academic awards, one-time scholarship grants, or similar activities which recognize outstanding performance or achievement.

NON-COMPLIANCE

Confirmed violations of this policy will result in appropriate consequences commensurate with the offense, up to and including termination of employment, appointment, or other relationships with UAB.

IMPLEMENTATION

The Vice President for Advancement is responsible for implementation of this policy.

Related Policies
Board of Trustees Rule 411: Minimum Standards, Acceptance, and Reporting of Gifts and Use of Gift Revenue
Board of Trustees Rule 404: Investment Management Policy
UAB Enterprise Conflict of Interest Conflict of Commitment
Cash Receipts Policy
Policy Concerning Separately Invested Endowments
HIPAA Core Policy: Use & Disclosure of Health Information for Fundraising
 
Related Resources
School-based Guidelines for Relationships with Industry
Crowdfunding at UAB Guidelines
Supplemental Guidance on Gifts from Employees