Purchase College Foundation Gift Acceptance Policy
TABLE OF CONTENTS
- Policy Statement
- Gift Acceptance Responsibility
- Gift Definition
- Restricted Gifts
- Gift Acceptance Conditions
- Types of Acceptable Gifts
- Planned Gifts
- Approval Procedures
- Foundation Acceptance of Gifts and Grants
- Gift Acknowledgement
- Policy Amendment and Review
- Professional Advisors
- Policy Effective Date
The Purchase College Foundation (the “Foundation”) is responsible for raising and accepting private gift and grant funds on behalf of Purchase College (the “College”). The Board of Directors of the Foundation, with an understanding of its mission and responsibilities, has established the following Gift Acceptance Policy (the “Policy”).
The Foundation is organized and operated exclusively as a not-for-profit organization and is not organized for the private benefit of any individual. The Foundation qualifies as a Code Section 501(c)(3) organization under the Internal Revenue Code of 1986, as amended (the “Code”). The specific purposes of the Foundation are to promote and assist the College to receive gifts, property and funds to be used exclusively for the benefit of College programs.
The Foundation strongly encourages the solicitation and acceptance of private gifts and grants which enable it to assist the College in fulfilling its mission of teaching, scholarship and community service.
Gifts may be sought from individuals, corporations and foundations. The Foundation values and will protect its and the College’s integrity, independence, and academic freedom.
Notwithstanding the foregoing, the Foundation is not able to accept gifts that are not consistent with the Foundation’s mission and values, and with its tax-exempt status. For example, gifts that may expose the College to adverse publicity, that require expenditures unrelated to the mission of the Foundation, or that involve unnecessary responsibility, will not be accepted.
Furthermore, the Foundation will not accept gifts that are too restrictive in purpose. Nor may the Foundation accept any gifts which cause it to violate any applicable law or regulation, including any gift which involves unlawful discrimination based upon race, sex, age, national origin, color, handicap or any other basis prohibited by federal, state, and local laws and regulations.
The purpose of the Policy is to provide guidance and counsel individuals within the College community and the general public to facilitate the gift-giving process. The Foundation encourages philanthropic creativity. Consequently, this Policy is to be interpreted liberally so that prospective donors may enjoy the greatest flexibility in formulating their gifts.
The Vice President of Institutional Advancement (VPIA, who is also Executive Director of the Purchase College Foundation) is responsible for formulating, implementing and amending the Policy. The Vice President will report to the Executive Committee of the Foundation Board as needed.
The Vice President accepts gifts on behalf of the Purchase College Foundation Board and the President of Purchase College, who is also a trustee. All gifts of $10,000 or more are reported at the full board meetings of the Purchase College Foundation trustees.
For tax purposes, a gift is defined as a transfer of assets made voluntarily, without consideration. Gifts usually take the form of cash, securities, real property or personal property.
Payments for goods or services are considered operating revenue and are not gifts.
A gift may be either unrestricted or restricted to a general area of use that contributes to the benefit of the College or one of its component units. Restriction(s) placed on the use of the funds contributed to the Foundation may be rendered illegal, unreasonable or unable to be fulfilled due to circumstances, including, but not limited to: the termination of a College program; a surplus of funds available from other sources to fulfill the designated purpose; the insufficiency of the restricted funds to fulfill the designated purpose where no funds from other sources are available to supplement the restricted funds; or the designated purpose is no longer consistent with the mission of the College and its individual programs. If the donor(s) are unavailable to alter the account restriction(s), the Foundation, if reasonably practicable, will consult with the donor’s representative or close family members to restructure the gift.
One form of restricted gifts is endowments. Endowments are lifelong funds in which the principle sum remains permanently invested through the Purchase College Foundation and generates annual interest. The minimum level of contribution to establish an endowment is $50,000. An endowment can be established through a single gift or multiple gifts to benefit a particular department or program at Purchase College, at one of several levels: chair, professorship, visiting professorship, visiting fellowship, lectureship, and scholarships.
Unless a specific exception is granted by the VPIA, the Foundation will not accept any gift that:
- violates any federal, state or local statute or ordinance;
creates a fund with restrictive clauses that could cause embarrassment to the College, or that reserve to the donor or his/her representative the right to designate the recipient;
requires the Foundation to manage and collect debts or loans;
contains a condition that requires any action on the part of the College that is unacceptable to College administration;
commits the College to name a fund where the gift is potentially revocable in any way;
requires the College and its administration to employ a specified person at a future date;
contains unreasonable conditions (i.e. a lien or other encumbrance) on gifts of partial interests and property;
requires tuition payments for a family member of the donor;
exposes the Foundation to litigation or other liabilities;
requires the payment of maintenance costs or other expenses (e.g. debt service) for which no specific provision has been made;
provides a sponsored research grant that should go through the Research Foundation, provided, however, that College management can work with the Vice President for Development regarding exceptions;
generates unrelated business income tax; or
appears to be financially unsound.
Gifts are either given outright, immediately at the disposal of the Foundation, or are planned, to take effect at some time in the future. In addition to cash gifts, the Foundation accepts gifts of securities, real property, and tangible personal property, subject to the limitations set forth in the Policy. Planned gifts, also called deferred gifts, are most often arranged with the Foundation during the donor’s lifetime, but the benefits to the College do not accrue until a later time, usually after the death of the donor or his/her beneficiaries. Bequests are the most common deferred gift. Other such gifts include naming the Foundation as the beneficiary of a life insurance policy, a charitable gift annuity and a life income agreement.
Unless a specific exception is granted by the VPIA, the Foundation will immediately sell all gifts of property (including stock) so that it can invest the proceeds in accordance with the Foundation’s investment policies.
Notwithstanding any other provision of this Policy, all naming gifts must be approved by the VPIA prior to acceptance.
The Foundation has approved the following types of gifts subject to the guidelines and policies set forth below and established policies to be followed in the solicitation and acceptance of gifts and grants to the College.
Cash and Checks
Generally, cash and checks will be accepted regardless of the amount without prior VPIA approval, as long as any purpose or restriction on such gifts are consistent with the Policy, and are not given in consideration of a naming opportunity.
Gifts of cash are valued at their U.S. monetary worth.
Checks should be made payable to the Purchase College Foundation or Friends of the Neuberger Museum.
Securities that are traded on the New York and American Stock Exchanges, as well as other major U.S. and foreign exchanges and the NASDAQ; corporate bonds; government issues and agency securities may all be accepted by the Foundation without prior GAC approval as long as any purpose or restriction on such gifts are consistent with the Policy, and are not given in consideration of a naming opportunity.
The value of a gift of securities is the mean (average) of the high and low of the stock(s) or bond(s) on the day the transfer is affected by the donor to the Foundation. The value of less actively traded securities, rarely traded securities or a security that does not trade on the gift date should be determined according to IRS Publication 561. Neither losses nor gains realized by the sale of the securities after their receipt affect the gift value credited to the donor.
The Foundation will sell all securities as soon as possible after the securities have been transferred to the Foundation. Any brokerage fees incurred and changes in value resulting from such sale are considered gains, losses or operating expenses or earnings of programs benefiting by the gift.
Mutual Fund Shares
Mutual fund shares may be accepted by the Foundation without prior approval by the VPIA.
The fair market value of mutual fund shares can be determined by the public redemption price of the shares on the date of the gift. If such a price is not readily available, then the value will be determined as if the shares were untraded securities under IRS Publication 561.
Closely Held Securities
Closely held or non-publicly traded securities, sole proprietorships, general or limited partnership interests, interests in real estate investment trusts (“REITs”) and limited liability company interests may be accepted only after prior review and approval by the VPIA.
Valuation of closely held securities may be difficult due to infrequent trading which makes it difficult to establish fair market value. If a donation of closely held stock is being considered, IRS Publication 561 should be followed in valuing this type of security. Unless there is an active market for a security, if the value of the gift is estimated to be $5,000 or more, the donor will provide a documented appraisal prepared by a qualified appraiser.
The VPIA will consider the marketability of closely held securities before accepting such a gift. It is the intention of the Foundation to sell all securities as soon as possible after the transfer from the donor. If it appears that a gift of closely held securities will take longer than twelve months to sell, or if the Foundation is restricted from selling the securities, the VPIA may decline the gift.
Restricted securities (also known as unregistered securities, investment-letter stock, control stock or private placement stock) are infrequently given as gifts because of the difficulty in transferring ownership and determining fair market value. They may be accepted only after approval by the VPIA.
If restricted securities are being considered as a gift to the Foundation, IRS Publication 561 should be consulted when determining the value of the securities. If the value of the gift is estimated to be $5,000 or more, the donor will provide an appraisal report prepared by a qualified appraiser.
Gifts of Real Property
The Foundation may accept gifts of real property, both improved and unimproved, only after review and approval by the VPIA and in consultation with legal counsel.
The VPIA will require the following items to review a gift of real property:
Market Value and Marketability
The VPIA must receive a reasonably current appraisal of the fair market value of the property and of the interest in the property the College would receive if the proposed gift were approved. College development officers will inform the donor that, if the gift is completed, the IRS will require an appraisal made within sixty days of the date of gift. College development officers must understand and communicate to donors that it is the Foundation’s policy to dispose of all gifts of real estate (other than property which the College wishes to retain) as expeditiously as possible. Thus, regardless of the value placed on the property by the donor’s appraisal, the Foundation will attempt to sell the real property at a reasonable price in light of current market conditions, and the donor needs to be informed that any such sale occurring within two years of the date of gift will be reported to the IRS on Form 8282.
Potential Environmental Risks
All proposed gifts of real property, including gifts from estates, must be accompanied by a Phase I environmental audit performed at the donor’s expense. For residential property, exceptions may be granted by the Executive Committee. Even in cases where a Phase I audit is submitted, the VPIA may require that the donor sign an environmental indemnification agreement.
Limitations and Encumbrances
The donor must disclose the existence of any and all mortgages, deeds of trust, restrictions, reservations, easements, mechanic liens and other limitations of record. No gift of real estate will be accepted until all mortgages, deeds of trust, liens and other encumbrances have been discharged, except in very unusual cases where the fair market value of the Foundation’s interest in the property net of all encumbrances is substantial.
Special attention will be given to the receipt of real estate encumbered by a mortgage. The Foundation’s ownership of such property may give rise to unrelated business income tax for the Foundation, and will disqualify certain split interest gifts unless handled in a proper manner.
The donor must disclose the existence and amount of any carrying costs, including but not limited to property owners’ association dues, country club membership dues and transfer charges, taxes and insurance.
The donor must furnish a copy of any title information in the possession of the donor, such as the most recent survey of the property, a title insurance policy, and/or an attorney’s title opinion.
Under Treasury regulations, a donor must pay for any initial appraisal made on the property. Unless waived by the VPIA, it is the responsibility of a donor to cover all the costs involved in an environmental impact study, title search and any other related studies.
The VPIA will review the material presented, including any additional information from the potential donor (i.e., time restrictions, price considerations, potential buyers, etc.) and make a determination whether to accept or reject the proposed gift of real property (or, if necessary, to postpone a decision pending the receipt of additional information).
Gifts of Real Property with Retained Life Estates or Other Restrictions or Limitations
The Foundation may accept a gift of real property with a retained life estate or subject to other restrictions or limitations only after review and approval by the GAC.
A gift of real property with a retained life estate involves the transfer of the title to a personal residence, farm or timberland to the Foundation whereby the donor or another person retains use of the property for a term of years or the life/lives of the donor and/or another person.
The Foundation encourages donors to consult independent tax and/or legal counsel prior to making a gift of this type. The agreement creating the life interest must provide that the donor and/or life tenant will remain responsible for the payment of mortgages, taxes, insurance, utilities, maintenance/repairs and other costs associated with the property, unless other specific provisions are made for the payment of these expenses. Donor(s) will not violate or allow to be violated any environmental laws/ordinances covering any property in which an interest is donated to the Foundation.
Tangible Personal Property
The Foundation will consider gifts of tangible personal property including but not limited to works of art, furniture, and medical equipment, only after a thorough review indicates that the property is
readily marketable; or
needed by the College for use in a manner which is related to one of the purposes for which tax exempt status of the College was granted; that is, for education, health care, research, or a combination thereof; or
needed for a fundraiser to benefit the College.
The VPIA has the authority to accept tangible personal property. Responsibility for valuing any tangible personal property rests with the donor.
The Foundation office will record all gifts of tangible personal property over $250. Contact the Operations department before accepting a gift of tangible personal property to determine all proper documentation needed and processes that must be followed. Gift acknowledgement letters will only be generated when the Foundation is in receipt of documentation verifying the value and purpose of the tangible personal property.
No gift of tangible personal property subject to the requirement of ownership in perpetuity will be accepted without prior approval of the VPIA. No perishable property or property that would require special facilities or security to be properly safeguarded will be accepted without prior approval of the VPIA.
For tangible personal property with an estimated fair market value of less than $5,000, the donor must furnish the Foundation with the following information:
- Donor’s name, address, and telephone number
- Contact person if the donor is a corporation
Brief physical description of the donated asset, including an explanation of the method used to determine the fair market value
Prior to the donation of tangible personal property with an estimated fair market value over $5,000, the donor must furnish the Foundation, in addition to the items listed above, with an independent valuation from a qualified appraiser of the donated asset.
Other Personal Property
Other personal property of any description, including mortgages, notes, copyrights, royalties, partnership interests, closely held business interests, undivided interests in property, future and partial interests and other illiquid financial assets may be accepted only upon prior review and approval of the VPIA.
The Foundation’s legal counsel will review any planned giving agreement that requires execution by the Foundation as to form and substance prior to the Foundation’s execution of the same. It is recommended that prospective donors who are considering gifts to the Foundation that will take effect at their death consult with University development officers or the Foundation’s executive director regarding how to properly designate the gift and to discuss any trust or bequest restriction that is being considered.
The Foundation will accept direct, unencumbered bequests without the prior approval of the VPIA if the underlying assets conform to the guidelines contained in this Policy. If the underlying assets are not in conformance with the Policy, the bequest will be referred to the VPIA for review. The Foundation reserves the right to disclaim gifts that do not fall within the parameters of this Policy.
A bequest to the Foundation is made in the donor’s will. The donor can designate a specific amount, a percentage, or the remainder of an estate to the Foundation.
Donors should be encouraged to notify the Foundation or College development officers when considering a bequest or a gift through a trust to ensure that the assets left to the Foundation meet the criteria set forth in this Policy and to ensure that the donor’s wishes are carried out.
To expedite estate distributions, provisions in a donor’s Will or trust agreement should include the statement: “To the Purchase College Foundation to benefit Purchase College.”
Charitable Gift Annuities
A charitable gift annuity is a contract between the Foundation and the donor. The Foundation agrees to pay the donor (or other person named by the donor) a lifetime annuity in return for a gift of cash or marketable securities. The payment may continue for the life of a second individual, such as a spouse.
The annual payment is a fixed sum, the amount of which is based on the size of the gift and the number and ages of the beneficiaries. Rates of return under a charitable gift annuity are lower than the rates offered by commercial insurance companies so that a significant residuum will remain for the Foundation. The Foundation, like most other charities, relies on the rates recommended by the American Council on Gift Annuities.
The Foundation will not accept charitable gift annuities without prior review and approval by the VPIA. The VPIA may establish minimum funding levels and minimum age levels. Gift annuity agreements will only be issued if the charitable gift, computed using standard government tables, exceeds ten percent (10%) of the amount transferred.
The Foundation currently uses the services of the SUNY Philanthropy Office to invest and administer charitable gift annuities.
Charitable Remainder Trusts
A charitable remainder trust is a gift vehicle which irrevocably transfers the remainder interest of an asset’s value to the Foundation upon the death of the named income beneficiaries or at the end of a specified term of not more than 20 years. The donor may name him or herself and/or others as income recipients, with payments to be made consecutively or concurrently. There are two types of charitable remainder trusts, a charitable remainder annuity trust and a charitable remainder unitrust. In an annuity trust, a fixed sum is paid annually to the income beneficiary, while a unitrust pays the income beneficiary a percentage of the trust assets as valued each year.
The Foundation will not accept a charitable remainder trust without prior review and approval of the VPIA. Where the trust is testamentary, that is, one that arises upon the death of the donor, the Foundation reserves the right to disclaim any interest that would be in violation of this Policy.
The donor cannot require in the trust agreement that the original assets placed in the trust be retained for the life of the trust. The Foundation currently uses the services of the SUNY Philanthropy Office to invest and administer charitable remainder trusts. Prospective donors interested in this giving vehicle may request information on the current descriptions and guidelines from the Foundation office.
Charitable Lead Trusts
A charitable lead trust is a trust in which the income, or “lead” interest, is paid to the Foundation, and the “remainder” interest is given to one or more non-charitable beneficiaries. The amount paid to the Foundation may be either a fixed sum (an “annuity trust” interest) or a percentage of the trust assets as valued each year (a “unitrust” interest). At the conclusion of the payment period, the trust assets are returned either to the donor or to someone designated by the donor.
The Foundation will not accept charitable lead trusts without prior review and approval of the trust agreement by the VPIA. Where the trust is testamentary, that is, one that arises upon the death of the donor, the Foundation reserves the right to disclaim any interest that would be in violation of this Policy.
The Foundation currently uses the services of the SUNY Philanthropy Office to invest and administer charitable lead trusts. Prospective donors interested in this giving vehicle may request information on the current guidelines from the Foundation office.
Designating the Foundation as Beneficiary
The Foundation will accept any proceeds that it receives as a designated beneficiary of a life insurance policy, a deferred annuity contract, an IRA, a defined benefit plan, a 401 (k) plan, a defined contribution (profit sharing) plan or other qualified plan without prior review and approval of the VPIA, unless the designation imposes restrictions or a trust arrangement, or a naming, in which case, VPIA prior review and approval is required.
Life Insurance Policies
The Foundation will accept, without the necessity of prior review and approval by the VPIA, gifts of whole life insurance policies, which meet the following three criteria:
- The policy is paid-up.
- The Foundation is irrevocably designated as the owner and the beneficiary of the policy. While the policy will identify the Foundation as the owner and the beneficiary, a University development officer should work with the donor to clarify the purpose of the gift by attachment of a memorandum, letter, or account agreement to the policy.
- If intended for endowment purposes, the face value of the policy meets the minimum funding standards for endowments for its stated purpose(s) established by the Foundation and in effect at the time of the gift of the policy.
If the life insurance policy meets the above listed criteria, the value of the gift will equal the cash surrender value of the policy, rather than its face value. If the Foundation is named as the beneficiary but not the owner of an insurance policy, the full amount of the proceeds received is reported as a gift on the date delivered.
If a proposed life insurance policy gift does not meet the criteria listed above it must be reviewed by the VPIA before being accepted.
The Foundation is required to adhere to the current SUNY Named Gift Acceptance Policies for the naming of physical locations, faculty positions and departments/programs. Named gifts of $1 million or over will be submitted by the President of the campus to the SUNY Board of Trustees for final review and acceptance. Named gifts of over $500,000 to $999,999 will be submitted to the President of the campus for review and acceptance. Gifts $500,000 and below will be reviewed and accepted by the VPIA.
To submit a naming gift for approval, the information listed in the next section is required, along with the specific naming details.
All Other Gifts/Pledges Requiring VPIA Approval
The University’s development officer submitting a proposed gift for approval will prepare a written summary of the gift proposal and submit it to the VPIA. At a minimum, the summary will include the following information:
Name, address, telephone number of potential donor;
description of the asset;
the purpose of the gift (e.g., an unrestricted gift, a gift to fund an endowed chair or a deferred gift) and the department(s) or endowment(s) to benefit from the gift;
an estimate or appraisal of the asset’s fair market value and marketability;
potential for income and expenses, encumbrances, and carrying costs prior to disposition;
any environmental risks or problems revealed by audit or survey;
credit history or financial statement of financially responsible party, if applicable; and
any special arrangements requested by the donor concerning disposition (e.g., price considerations, time duration prior to disposition, potential buyers, realtors or brokers with whom the donor would like the Foundation to list the property, etc.)
The VPIA will review the material presented by the development officer and either accept or reject the proposed gift, or, if necessary, postpone a decision pending the receipt of additional information.
The Foundation’s Board of Directors will, through the VPIA or other individuals as the Board may designate, accept all gifts to the Foundation, in conformity with the Policy. Those individuals designated to accept or negotiate gifts should follow the guidelines set forth in this Policy, particularly when negotiating or, when authorized, entering into endowment agreements, trust agreements and other restricted gift agreements or deferred gift agreements. As stated in this Policy, certain types of gifts must be reviewed and approved by the VPIA prior to acceptance.
Once the Foundation has accepted a gift, it becomes Foundation property. From the time a gift is accepted, the donor has no direct decision making power regarding the disposition of the gift.
The level of information required by the Foundation to make an informed decision regarding the acceptance of a gift will vary depending upon the nature of the gift. If it appears that a gift may not be acceptable from the outset of discussions with the donor, the VPIA will endeavor to reach that conclusion as soon as possible and convey this fact to the College’s development officer so that he or she can suggest alternate types of contributions to the donor.
If the Foundation accepts a gift, the Advancement Services department of the foundation will be responsible for sending the donor a written acknowledge of the receipt of the gift in a manner which satisfies the IRS’ substantiation requirements set forth in IRC Section 170(f) for the deduction of charitable gifts by individual donors.
It is the intent of the Foundation to disclose appropriate information about the operation of annuities and trust arrangements to donors prior to, but no later than at the time of, the gift. Currently, the Foundation chooses to use the resources of the SUNY Development Office and the SUNY Planned Giving Officer to manage annuities and trusts.
The VPIA has responsibility for review of and recommended amendments to the Policy. This Policy will be reviewed at least annually. To amend these guidelines, the VPIA will prepare and submit a written amendment to the Executive Committee for review and approval.
Finder’s Fees or Commissions
Consistent with the codes of ethics of the Association of Fundraising Professionals, no finder’s fee or commission of any type will be paid by the Foundation to any party in connection with the completion of a gift to the Foundation without the prior written approval of the VPIA.
Reasonable costs of gift acquisition, such as transaction costs and professional fees, will normally be borne by the donor – or will be paid from the gift. However, there may be occasions when a prospective donor conditions the gift on the Foundation’s agreement to pay such costs. The Foundation will verify the reasonableness of the costs and that the cost reimbursement complies with state and federal requirements, including but not limited to, tax laws and professional and ethical guidelines. If appropriate, the Foundation may agree to cover gift acquisition costs from its operating budget.
An administrative fee of 1.5% annually on endowed gifts and a one-time 3% fee on all other gifts will be retained by the Foundation to cover costs associated with administering the gifts except where donors have specified otherwise or with approval of Purchase College Foundation Trustees.
All appraisals of real and personal property contributed to the Foundation will be done in accordance with IRS Publication 561, “Determining the Value of Donated Property.” Appraisals should be prepared by qualified appraisers acceptable to the Foundation.
Expenses incurred to obtain an appraisal will be the responsibility of the donor, unless special circumstances exist that make it appropriate for the Foundation to share the cost. The VPIA must provide prior written approval of any appraisal cost borne by the Foundation.
Donor’s Use of Professional Advisors
All prospective donors will be urged to seek their own counsel in matters of estate planning, taxes and planned gifts. It is not the province of the Foundation to give legal advice, and no employee of the Foundation or the College will provide such advice to a donor. Prior to accepting any gift, the Foundation will advise the prospective donor to seek professional advice from their attorney and/or accountant, particularly if the prospective donor intends to make a deferred gift through use of a will, trust, annuity contract or other instrument. If the prospective donor has not yet established a relationship with a qualified professional advisor, representatives of the Foundation may refer the prospective donor to qualified professionals. The professional receiving the referral must understand that the professional is being retained by the prospective donor to represent only the prospective donor’s interests and not those of the Foundation.
Foundation’s Use of Legal Counsel
The Foundation’s legal counsel will review all specimen agreements upon adoption of this Policy.
Updated: January 10, 2018