Gifts: Solicitation, Acceptance, and Management

Effective April 18, 2024
Executive Sponsor: Vice President for Development
Policy Owner: Director, Texas Gift Operations, University Development Office

Policy Statement

The University of Texas at Austin (“University”) will use a systematic and strategic approach to fundraising efforts to secure private Gift funding from individuals, corporations, foundations, and other organizations. This approach is designed to maximize philanthropic support and ensure these resources support the University’s priorities. Faculty, staff, students, University leaders, and alumni will work as partners in fundraising for the University and are encouraged to attract private Gift support. The responsibility for maximizing philanthropic support is delegated to the vice president for Development.

Reason for Policy

These policies are designed to ensure that all private support is properly recorded and reported for institutional and public accountability and Gifts are accepted and administered consistent with Federal, state, UT System, and University requirements. Additionally, this policy assists to maintain the trust of the donor and the public by ensuring donor intent is appropriately documented and honored in the utilization of the Gift and its proceeds.

This policy outlines administrative roles, responsibilities, and procedures for solicitation, acceptance, and management of Gifts to the University in accordance with The University of Texas System ("UT System") Board of Regents’ Rules and Regulations and UT System policies. This policy also ensures the university can efficiently and appropriately receipt and acknowledge charitable Gifts to support the donor’s charitable deductions and certifications to the IRS and similar organizations.

Scope & Audience

This policy applies to all faculty, staff, students, and constituents; and includes anyone or any organization who may be involved in Gift solicitation, acceptance, and management on behalf of the University.

This policy applies to “Gifts” as defined in Section IV below. The definition also notes exclusions.

Definitions (specific to this policy)

Gifts:
For purposes of this policy, the University follows the Council for the Advancement and Support of Education (CASE) Global Reporting Standards for defining and recording Gifts.

Gifts are defined to include:
A gift is a voluntary and irrevocable charitable contribution from an individual or an organization. Gifts may either be unrestricted or restricted. An unrestricted gift may be utilized for any purpose, while a restricted gift must be used for a particular purpose or project as specified by the donor and agreed to by the University.

All Gifts must include the following elements:

Provided without the expectation of significant benefit in return (i.e. no quid pro quo);
Provides control of the funds to the university (while gift funds may be restricted to a specific program, department, or purpose consistent with the University’s mission, the administrative control rests with the university once the transfer is completed);
Upon acceptance of a Gift there is both an ethical and legal obligation that the university track and follow the donor’s intent for their Gift, including retaining documentation as appropriate;
A donor’s interest, and potential or actual financial support shall not be permitted to create a conflict-of-interest by attempting to bring undue influence on institutional decisions including but not limited to faculty appointments, admissions decisions, coach selections, program priorities, and university policies;
Furthers the University’s mission of education, increasing knowledge, and providing service to the citizens of Texas and the public in general.

All donors making a Gift to the institution will receive a timely Gift receipt (ideally within 72 hours of making the Gift) and the appropriate donor recognition and stewardship regarding the impact within a reasonable timeframe.

Gifts generally do not include the following elements:

Requirements for provision of services, goods or other deliverables;
Detailed financial reporting beyond providing accountability and good stewardship to the donor, such as through progress reports or project summaries;
The requirement for seeking prior approval by the donor for specific expenditures or minor modifications in budgets;
Granting of rights to University-developed intellectual property;
Restrictions on the University’s right to publish research results;
Requirements for insurance, indemnification (other than for in-kind gifts, where appropriate), or warranties of any sort;
Requirement to return unspent funding; or
Requirement that funding be returned if performance objectives are not met.

Pledges:
Written agreements to make Gifts over a period of time, usually not to exceed 10 years. These are enforceable agreements that may be relied on to fund positions, initiate programs, or complete capital projects. Certain Pledges may be included in the university’s financial reports if they meet the appropriate accounting standards set by the CFO’s office. Verbal Pledges will not be accepted or recorded.

Bequests and other forms of future Gifts:
When a donor informs the university in writing accompanied with the proper documentation that they have included the University as a beneficiary in their will, trust, or other financial or estate planning instrument, the Gift will be appropriately recorded and documented as an expected future Gift, including the donor’s intent for the use of the funds to assist with the facilitation of the transfer at the appropriate time. The following bequests and other forms of future gifts may be recorded as irrevocable: Charitable Remainder Trusts, Charitable Gift Annuities, Pooled-Income Funds, and Remainder Interest in Property per the VSE standard.

Grant:
A grant is a financial award from an individual, an organization, or a governmental entity that is intended to support a particular charitable purpose. A grant is received by the University for either unrestricted or restricted purposes, with limited terms and conditions. Non-governmental grants may qualify as gifts unless they have quid pro quo elements (such as defined scope of work, deliverables, intellectual property rights) that disqualify the grant as a gift. Governmental grants, and grants with quid pro quo elements, qualify as sponsored awards. The terms and conditions of the grant define its classification.

Corporate Sponsorships:
Corporations and other organizations often give money to institutions to sponsor activities, events, or projects and in return receive acknowledgment on campus, at the event, or in accompanying publications. The main consideration in determining if the entirety of the Gift is eligible or excluded is whether the recognition the corporation receives constitutes advertising. Advertising in this case is defined as recognition above and beyond reasonable acknowledgement proportional to the Gift, including pricing advantages or access or displays distributing product, recruiting or other information concerning the organization. . If the recognition fits this definition of advertising, it may be considered a quid pro quo transaction and not a Gift. Furthermore, advertising may never imply endorsement by the university of a product or service. Name or logo placement, without more, is not typically considered advertising or an endorsement.

Different forms of Gifts have specific documentation, acceptance, and valuation requirements. Texas Gift Operations staff should offer guidance on the appropriate steps to document and accept any type of Gift.

Gifts to the University exclude:

Contracts:
A contract is a legally binding agreement between the University and an outside entity that creates an exchange transaction or tangible benefit relationship between the University and the external entity. Examples of contracts include sponsored research agreements, service agreements, purchase orders, and clinical trial agreements. Because of the quid pro quo nature of the transaction, a benefit received under a contract does not qualify as a gift.

There are some transactions, particularly from foundations and other nonprofit organizations, that will be considered Gifts and may not rise to the level of a binding contract but will still need to be managed as sponsored programs to ensure that the university can track and meet its risk management and reporting requirements. To facilitate this process, UDO and OSP will regularly share proposals-in- process and notifications of awards and work closely with colleges, schools and units to ensure the transaction is managed in the least restrictive manner while also allowing the University to manage its risk and oversight obligations. UDO will also ensure that appropriate information is provided to the donor/sponsor to meet any requirements of the awards or agreements.

The following conditions require a transaction to be considered a contract and not a Gift

IP Rights:
The agreement assigns to the funder any full or partial rights to intellectual property that may result from the program or activity. This exclusion extends to the provision of royalty-free licenses (whether exclusive or nonexclusive) to the funder, and to granting the funder first option or similar exclusive rights to purchase the rights to any subsequent commercial opportunities. If the written agreement includes any actual or potential future benefit of this kind, the funding will not be considered a Gift.

Exclusive Information:
The funder is entitled to receive Exclusive Information or other privileged access to data or results emerging from the program or activity.

Exclusive Publication:
The funder is entitled to exclusive rights to publication of research or other results through their own branded communication channels (website, report, etc.).

Clinical Trials:
A Clinical Trial is an industry-sponsored organized medical study of a new or existing drug, medical device, or biological treatment for the purpose of identifying the potential beneficial effect on treating human or animal illness and/or determining safety and efficacy.

Other forms of financial benefit:
Consultancy for the funder or a linked organization is included as part of the agreement. Any other direct financial benefits are required by the funder as a condition of the funding (e.g., discounted courses, training, etc.).

Other Exclusions from Gifts:

Tuition payments.
Monies received as a result of exclusive vendor relationships, such as “pouring rights” agreements, incentive payments, or other revenue sharing arrangements or exclusive partner contracts.
Proceeds from the sale of merchandise, unless the merchandise is sold as part of a fundraising program and the charitable portion of the transaction is clearly identified.
Royalties from affinity agreements.
Surplus income transfers from ticket-based operations, except for any amount equal to that permitted as a charitable deduction when identified to donors as a Gift in advance of their ticket purchase.
Tickets purchased at fair market (face) value.
Raffle revenue. Participants are making a payment for an opportunity to win a prize (this includes raffle tickets, door prizes, etc.). While the proceeds might support a charitable purpose, the purchase of a raffle ticket is not a charitable Gift.
Investment earnings on Gifts are not countable as a Gift.
Contributions of professional expertise or services are not charitable contributions from an IRS perspective and therefore generally not counted as Gifts. The services may be valuable to the university, and it is appropriate to express appreciation, but they should not be receipted or added to Gift totals.

Website (for policy)

https://secure4.compliancebridge.com/utexas/public/getdoc.php?file=3-2031

Contacts

CONTACT	DETAILS	WEB
Vice President for Development University Development Office (UDO)	Phone: 512-471-4124	Website: https://www.utexas.edu/about/leadership
Director of Development, Texas Gift Operations, University Development Office	Phone: 512-471-5424 or 512-232-1729	Website: https://giving.utexas.edu/contact/

Gift Solicitation
1. Identification and Prioritization. UDO, in partnership with the president and executive leaders, will identify and prioritize the University’s needs according to relevant strategic plans. Any project for which outside Gift funding is sought must have endorsement of a faculty member or administrative sponsor.
2. Coordination. Coordination of fund-raising strategies must be initiated through the development officer for the college/unit or otherwise the vice president of Development or his/her designee. Coordination of solicitations of $100,000 or more will include:
  1. A review of existing relationships between the prospective donor(s) and the university so as not to jeopardize existing relationships and funding.
  2. A review and approval of solicitation materials including proposals, letters of solicitation or proposed Gift agreements. All proposals involving the establishment of permanent endowments, naming of university facilities or programs, or not conforming to established, preapproved proposal or Gift agreement templates must be reviewed by director of Development for Endowment Services and Gift Compliance (utendowments@austin.utexas.edu)
  3. Establishment of a formal tracking of the proposal presentation or solicitation in UDO’s prospect management system in partnership with the appropriate CSU Director of Development, or UDO’s Corporate Relations Office or UDO’s Foundation Relations or other staff member as designated by the vice president for Development.
3. Authorization. All Gift projects and Gift funding requests must first gain approval of the dean or relevant unit administrator to ensure that the proposed Gift is consistent with the mission of their college or unit and can practically be administered as proposed. This review is required before a solicitation is conducted.

Acceptance of Gifts

Criteria Used in Considering Gift Acceptance. The University will exercise discretion to enssure it accepts only items that have value to the University.

The Gift must directly benefit the University of Texas in service to its mission.
The administering college, school or unit must be able to practically administer the Gift in a way that meets the donor’s intent and does not impose undue administrative burden or obligation on the university relative to value to the university or in conflict with its academic objectives.
Any assets that are not readily marketable are likely to generate sufficient net value to fund the purpose intended.
The acceptance of the Gift is unlikely to create negative publicity for the university or in some manner erode the university’s reputation as an objective and independent reputable source of knowledge and learning.

Noncash Gifts

The president, or his or her designee, has the authority to accept noncash Gifts to the University, excluding Gifts of real property. Pursuant to Regents’ Rule 60101 (http://www.utsystem.edu/bor/rules/60000Series/60101.pdf), noncash Gifts to the University will be carefully reviewed before being accepted.

Prior to acceptance of a noncash Gift, a recommendation must be transmitted through university administrative channels, including deans and the applicable vice president, to the vice president for Development (or his /her designee), outlining the description of such proposed Gift, the term of the offer and considerations for the Gift’s acceptance and utilization by the University.

The following criteria will be used in considering the acceptance of noncash Gifts:

Potential use by the University, acceptability of donor restrictions, market value (if disposal of the item is permitted by the donor), space requirements (if the item is to be retained for university use).
Expense to the University associated with the Gift, including repairs, maintenance renovations, annual operating expense, shipping, storage, safekeeping, disposal, etc.
When a decision is made to accept or reject a Gift, the decision will be given to the applicable dean and department head or their designee for purposes of communicating the decision to the donor.
Accepted Gifts will then be processed by UDO in accordance with the Regents' Policy and IRS regulations. Note the IRS has specific regulations of the acceptance and receipting of Noncash Charitable Contributions valued as $5,000 or more per item or per group of similar items from the same donor. The University will not provide estimates of value for tax purposes, nor will it attempt to interpret the tax regulations. A copy of IRS Form 8283 (when applicable), signed by an appropriate UDO officer, and other routine acknowledgements are provided to donors. The administering department will be required to track the use and disposition of such items per IRS regulations. In all events, UDO staff will coordinate with the university tax office concerning such gifts.

Processing

Gift contributions to the University must be processed through the Texas Gift Operations (TGO) Department of UDO. The TGO department provides the means through which Gifts are accepted, acknowledged, and deposited to the appropriate University general ledger account. An IRS compliant income tax receipt is generated and transmitted to the donor and the details related to the Gift and relevant back up information is recorded in the alumni and donor database.
All individuals, colleges, schools and units receiving checks, signed pledge agreements, transfers of assets intended as Gifts to any unit of the university shall deliver those items along with postmarked envelopes and transaction documentation to Texas Gift Operations, 1.104 DEV 2901 North IH-35, Suite 4.100, Austin (CAMPUS) on the day that they are received. No Gifts should be transmitted through campus mail or stored in departmental offices for any length of time. Most college, school, unit development offices make deliveries at least once a day. More detailed Gift transmittal information is available https://utexas.app.box.com/s/g59qphf18u5lk20l2gq77407fothfpix
Gifts will be categorized according to UT System Policy UTS142.2, the Governmental Accounting Standards Board Statement No. 33 – Accounting and Financial Reporting for Nonexchange Transactions, and the most recent edition of the Global Reporting Standards for defining and counting Gifts, published by the Council for Advancement and Support of Education (CASE) and National Association of College.
Any questions regarding the administration of Gifts to the University not addressed within this policy should be directed to the vice president for Development for resolution and assistance.
UDO will coordinate as needed with the university tax office on all Gift matters.