Gift Acceptance Policies and Procedures

Policy Statement

The University will adhere to the following requirements for receiving and processing gifts. The following includes minimum endowment levels for cash donations including one-time donations and endowments and accepting in-kind gifts as well as contributed securities. Only the University’s Development office is authorized to accept and acknowledge donor gifts.

Reason for Policy

These gift acceptance policies provide guidance and counsel to donors and to those individuals within the University community involved with planning, promotion, solicitation, receipt, acceptance, application and disposition of gifts. Charitable gifts to the University are accepted in accordance with the policies set forth herein.

Spending of Gifted Funds

As noted below, this policy establishes minimum levels for setting up a distinct named donation fund and for endowments. These criteria do not change the already established policies and procedures for gift classification and spending. When any gift is received, the Finance office will continue to make the determination if the gift has an unrestricted purpose and the funds should be spent in the year given or temporarily restricted if the purpose is difficult to meet in the current year. The requirements to spend unrestricted donations and unrestricted endowment payout are still applicable regardless of what department the funds are recorded to. All fund administrators should always most effectively use the funds at their disposal by spending in the following order of priority:

• Grant Funds
• Temporarily Restricted Endowment Payout
• Temporarily Restricted Donations
• Unrestricted Endowment Payout
• Unrestricted Donations (Whether included in the a separate Named Donation Fund or in
  their operating department)
• Operating Funds

Minimum Levels for Endowments

Gallaudet has a current minimum endowment value for a newly created named fund of $25,000. At the discretion of the University, Gallaudet does accept endowed gifts under this amount with the stipulation that no payout will be made from the endowment until the minimum endowment value is reached and interest has accrued. At this time, until the minimum level is reached, any prorata earnings allocated to the endowment will be reinvested to the principal to help achieve the minimum endowment level.

To create a named endowment fund, a donor must initially contribute a minimum of $5,000 and has 5 years to reach the minimum endowment level of $25,000. If the minimum level cannot be met within that timeframe, the funds will be combined into the University’s General Endowment Fund which supports areas of the University’s greatest need. Until the first $5,000 is received, the funds will be held in a designed restricted temporary account and will not be invested in the endowment pool until the $5,000 amount is reached.

If at any time it becomes impractical or impossible to fulfill the articles and provisions of this agreement, the donor consents to allow Gallaudet to apply Fund monies for any purpose that, on the basis of a judgment made in good faith, most closely fulfills the Founding Donor's original intentions and furthers Gallaudet's educational mission. If necessary Gallaudet may also utilize other provisions of the Uniform Prudent Management of Investment Funds Act of 2007, to successfully use the Fund monies if Gallaudet is unable to fulfill the original donor purpose.

A donor creating an endowed fund will be presented an endowment gift agreement and a pledge document to sign from Development. The pledge indicates the gift schedule and the annual gift amounts that will be made within a five-year period, and will have a first-year gift amount of at least $5000 and total five-year gift amount of at least $25,000. The pledge indicates the name on the endowed fund is temporary until it qualifies for distribution. If the pledge document is not signed within a year of the first gift for the endowed fund, or if the pledge agreement is unfulfilled during a year, and the total gifts received are less than $25,000, the donor will be notified in writing by Development that the funds will be transferred to the University’s General Endowment Fund in 60 days unless the donor’s pledge is current.

Timing of the Initial Distribution for New Endowments

Any endowment which has been in existence for a minimum of 12 months after meeting the minimum dollar value will receive a distribution as calculated by the current policies authorized by Gallaudet’s Board of Trustees. In the interim, before a distribution is received, any earnings will be accumulated as temporarily restricted investment earnings attributed to this individual endowment and therefore will be available for future distributions.

Minimum Levels for One-time Named Donation Funds

In order to create a named donation fund for an unrestricted one-time gift, a donor must contribute a minimum of $10,000 within one year from the original gift date. If the entire $10,000 isn’t initially received, a pledge agreement to arrive at the $10,000 within one year must also be signed. If the minimum level is not reached in that timeframe, the funds will be added to the related operating department to carry out the unrestricted purpose designated by the donor.

One time unrestricted donations under $10,000 will be directly recorded to the operating department that will be carrying out the donor’s purpose. When these donations are received by the Development office, the related operating department must be provided to the Finance office when the donation is initially set up. The set up form will also request information on when the donation department should be closed.

In-Kind Donations

An in-kind gift is any gift other than cash or donated securities. Gifts-in-kind might include such items as real and personal property, artwork, equipment, software, software licenses, printed materials or other items used for hosting dinners, etc.

Procedures for Accepting In-Kind Gifts
When prospective donors want to donate an in-kind gift they should be put in contact with the Office of Development for review prior to University acceptance. The University reserves the right to decline an in-kind gift based on University needs or conditions placed on the gift. A committee consisting of the Executive Director of the Development office and the Controller will determine if an in-kind gift is acceptable for use by Gallaudet University. For donations of real property,

Gallaudet may require an environmental assessment as well as an independent qualified appraisal at the donor’s expense.

The gift can be accepted by the University once Development provides written approval. The donor is responsible for making arrangements to deliver the gift as appropriate. After receiving the gift, Development will record a description of what was received and provide an acknowledgment to the donor.

Valuation
Gallaudet University does not appraise or place a value on in-kind gifts. The U.S. Internal Revenue Service has specific rules affecting appraisal and deductibility of certain in-kind gifts, which the donor must follow.

• Gallaudet will provide to the donor an Internal Revenue Service (IRS) form 8283
  (Non-cash Charitable Contributions) with each receipt for in-kind gifts over $500.
  Also Gallaudet is required by the IRS to file an IRS form 8282 (Donee Information
  Return) for gifted items with an appraised value of $5,000 or more that are sold or

  Gift Acceptance Policies and Procedures

  Policy statement and procedures
  Revised April 1, 2015

  Gift Acceptance Policies Page 4 of 10
  disposed of within two years of the date of gift. The donor(s) will receive a copy of this form which will list the “Amount Received Upon Disposition”.

• Services In-kind – As per IRS regulations, no value can be receipted for in-kind services given to the University.

Contributed Securities

Procedures for Accepting Contributed Securities
Gallaudet will accept stocks, bonds, and mutual funds as contributions. Tax treatment of appreciated securities may make such gifts especially advantageous to the donor. Mutual funds may involve special arrangements for transfer, so development officers should advise donors to allow extra time for the transfer to occur.

The Development office personnel who are advised by a donor of a transfer should send the donor the instructions as well as ensure they obtain documentation from the donor regarding the use of the proceeds.

Securities held in the street name (i.e., by a broker) should be electronically transferred to the University’s account at Merrill Lynch. The transferring broker should be provided with the Merrill Lynch contact and transfer instructions to process the electronic transfer.

Merrill Lynch should inform, via e-mail, Gallaudet University’s Finance Department Accountant and the Executive Director of Development once any stock has been received and sold.

Merrill Lynch should forward checks from all stock donation proceeds to the Development office where they will be recorded in Raiser’s Edge and deposited through the normal Development Office procedures. The documentation of the deposit should include copies of the supporting documentation from the contributed stock receipt and sale.

Valuation
It is the policy of Gallaudet to sell all securities received as gifts as soon as practical. The proceeds are then credited to the funds according to the donor’s instructions. Because market values of publicly traded securities change throughout the day, the proceeds from securities gifts will vary from the donor’s gift value. Only the proceeds will be credited to the appropriate fund, as Gallaudet does not expect the difference between the donated value and the liquidated value to be significant. The donor must be acknowledged for his/her gift value without regard to the proceeds realized. In the instance that contributed securities are material and a significant gain or loss has occurred since the date of donation, the Finance office will notify the Development office so that appropriate changes can be made to the donation value recorded in Raiser’s Edge. This is to ensure that in accordance with accounting rules both Raiser’s Edge and PeopleSoft appropriately reflect the donated amount as the value at the time it was contributed rather than the value upon liquidation.

Acknowledgement
The acknowledgement letter from Development office should report the type of investment, and number shares contributed by the donor and the date of stock transfer. The Development office should report to the donor the fair market value of the stock on the date the gift was made. The fair market value for publicly traded securities is the mean value between the high and low trades on the date of the gift.

Deferred Gift Policy

The Office of Development will coordinate the receipt of all deferred gifts.  Deferred gifts include bequests made through wills or living trusts, retirement plan designations, life income plans, charitable lead trusts, and retained life estates.  Donors of life income giving arrangements may designate the remainder value of their gift to any approved program within the University.

The Office of Development in conjunction with the Finance Office and the Vice President of Administration and Finance will review all legal documents associated with deferred gifts. Explicit approval from the Vice President of Institutional Advancement and the Vice President of Administration and Finance is required before any legal document may be executed by an approved University representative.

Types of Deferred Gifts

1. Bequests and Retirement Plan Designations
The University will receive charitable bequests and retirement plan designations, and will generally abide by any restrictions or destinations indicated in appropriate documents assuming such restrictions and designations are applicable to current programs within the University and do not violate University policy.  The University will not abide by any restrictions that are considered to be in violation of federal, state or local laws.  If the intended use does fall outside of the law and/or University policy, the University will adhere to the laws and regulations of the District of Columbia regarding such matters.

2. Life Insurance
The University shall encourage donors to name Gallaudet University as beneficiary or contingent beneficiary of any gifted life insurance policies. Gifted life insurance policies must possess a minimum face value of $5,000.

The University shall encourage gifts of paid up life insurance policies.  If the policy is not paid up, the University shall request that the donor contribute all future premium payments to Gallaudet University.  If the donor does not elect to continue making gifts to cover premium payments on the life insurance policy, the University may: 1) continue to pay the premiums; 2) convert the policy to paid up insurance; and/or 3) surrender the policy for its current cash value.

The Office of Development may consult with professional financial and legal advisors regarding
the valuation of any gifts of life insurance policies.

3. Charitable Gift Annuity
The University will establish and promote gift annuity contracts with donors in accordance with applicable federal law, IRS regulations and the laws and regulations of the District of Columbia. Additionally, the University’s gift annuity program will adhere to the following:

• $10,000 is the minimum contribution to fund either an immediate gift annuity contract or a deferred payment gift annuity contract. The minimum contribution may be adjusted at the discretion of the Vice President of Institutional Advancement.
• All gift annuity contracts must be reviewed by the Office of Development, Office of Finance and the Vice President of Administration and Finance. Explicit approval from the Vice President of Institutional Advancement and the Vice President of Administration and Finance is required before finalizing a gift annuity.
• The payout rates will conform to the applicable published rates of the American Council of Gift Annuities (ACGA). Any deviation from the ACGA rates must first be approved by the Vice President of Institutional Advancement.
• The University may engage one or more third party entities to provide gift administration, custodial, and investment services for its gift annuity contracts.
• All assets given to fund a gift annuity will be invested. Income and principal will be used to pay any annuity obligations of the contract until all income beneficiaries under the contract are deceased or no longer entitled to receive income.
• Gift annuity contracts will be booked at face value for Development and recognition purposes, but only at remainder value for general accounting purposes.

4. Charitable Remainder Trust (CRT)
The University will accept and administer contributions to a charitable remainder trust in accordance with applicable federal law, IRS regulations, and the laws and regulations of the District of Columbia. Additionally, the University will administer its charitable remainder trusts based on the following:

• The University may serve as a trustee for charitable remainder annuity trusts (CRAT) or charitable remainder unitrusts (CRUT) only if it is named as an irrevocable remainder beneficiary of at least 51% of the remainder value of the trust.
• The President, after consultation with the Vice President of Institutional Advancement, will establish from time to time the minimum initial gift to a CRT.
• The University may hire one or more third party entities to provide trust administration and custodial and/or investment services for CRT agreements.
• The Office of Finance and the Vice President of Administration and Finance must review agreements prior to their execution.
• Explicit approval from the Vice President of Institutional Advancement, the Vice President of Administration and Finance and the President of Gallaudet University is required before finalizing a CRT.
• If Gallaudet University is named as trustee and 100% irrevocable remainder beneficiary of a  CRT, the University will charge the trust or the income beneficiary(ies) of the trust direct administrative, management or brokerage fees that are expended to operate the trust.  If the University is named as less than 100% irrevocable remainder beneficiary, any costs incurred by the University to operate the trust must be proportionately shared by any other named remainder beneficiary.
• The University will serve as trustee of a CRT when a donor wishes to donate real estate to the trust only if the donor will accept the trust in the form of a charitable remainder net-income unitrust, with a flip provision. Contributions of real estate to a CRT must follow the University’s policy on real estate contributions and any costs associated with the sale of real estate within a CRT will be charged to trust principal.
• The Office of Development is authorized to establish CRT payout rates at the minimum required by law and up to a maximum of 7%. If a donor wants a payout rate higher than 7%, it must first be approved by the President, after consultation with the Vice President of Institutional Advancement. All CRT payout rates established by the University must also conform to applicable federal law, IRS regulations, and the laws and regulations of the District of Columbia.
• Gallaudet University CRT agreements will be booked at face value for Development and recognition purposes, but only at the remainder value for general accounting purposes.
• When a donor establishes a qualified CRAT or CRUT outside of the University and names the Gallaudet University as an irrevocable remainder beneficiary, the University may book this contribution in the same manner as a CRT upon receipt of a copy of the signed trust agreement.
• Donors may contribute additional gifts of a minimum value of $5,000 to their charitable unitrust for which Gallaudet University serves as trustee.

5. Charitable Lead Trust
The University will promote the use of charitable lead trusts (CLT) to donor prospects as a means of reducing income or estate taxes and helping the University at the same time. Income produced by a CLT for the University may be restricted and designated in accordance with policies established for any other cash contributions.  The University will not serve as a trustee of a CLT.

6. Real Estate
The University will consider gifts of real estate on a case-by-case basis. All gifts of real estate shall be subject to the review the Office of Development in conjunction with the Office of Finance and the Vice President of Administration and Finance. Explicit approval from the Vice President of Institutional Advancement, the Vice President of Administration and Finance and the University President is required before any legal document may be executed by an approved University representative.

A University representative with a qualified real estate broker must conduct a visual inspection of the property.  Any expenses associated with such an inspection shall be borne by the donor.

The donor may be asked to provide any or all of the following items to Gallaudet University: a property deed, a property tax bill, a property title report, a property ALTA survey, site plans or development surveys relating to the property, a plot plan, any existing leases or agreements encumbering the property, substantiation of zoning status and verification of title insurance.

Prior to acceptance of real estate gifts, the Office of Development shall be responsible for ensuring that an environmental review of the property is completed and may use environmental inspection forms where appropriate.  If the environmental inspection reveals what the University deems to be a potential problem, the University shall arrange for the retention of a qualified environmental inspection firm to conduct an environmental audit of the property, at the sole expense of the donor.

The Office of Development shall arrange for an appraisal of the property and will obtain a title binder for the property where it deems it to be appropriate.  Expenses for the appraisal and title binder shall be paid by the donor.

The Office of Development in conjunction with the Office of Finance and the Vice President of Administration and Finance is charged with considering the following factors as part of its review of the gift: the fair market value of the property, the projected financial benefit to Gallaudet University, whether the property is useful for Gallaudet University’s purposes and mission, the marketability of the property, the presence of any restrictions, obligations or limitations associated with the property, any carrying costs, administrative costs and/or professional expenses associated with acquiring and selling or maintaining the property and the results of the environmental review and any environmental audits.

Depending on a variety of factors, including the value and desirability of the gift, ease of administration of the gift, the donor’s connection with Gallaudet University, the donor’s past giving record and the donor’s contributions to the organization, the donor may be asked to pay for all or a portion of the following additional expenses: maintenance expenses, real estate taxes, insurance expenses, the real estate broker’s and/or auctioneer’s commission, any other costs of the sale of the property and any additional legal and/or other expenses relating to the administration of the gift or the sale of the property.

6.1 Remainder Interests and Retained Life Interests in Property
Remainder interests in property may be accepted by Gallaudet University subject to the explicit approval of the Vice President of Institutional Advancement, the Vice President of Administration and Finance and the University President and subject to the provisions enumerated in the foregoing “Real Estate” section.

The University will promote and accept gifts of retained life estates in real property if the donor agrees in writing to be responsible for all maintenance, insurance costs, and taxes associated with the property for as long as they retain their right to reside in the property. Gifts with a retained life estate must also conform to all other University policies regarding gifts of real estate.  Gifts of a remainder interest will be credited to the donor in the year the transfer of ownership is completed from the donor to the University at the charitable remainder value of the contributed real estate.

University Conduct and Transparency Expectations

1. Disclosures to Donor
The Office of Development should disclose to a prospective donor the benefits and liabilities that could reasonably be expected to influence the donor’s decision to make a gift to the University. In particular, the donor should be advised that all gifts other than planned bequests are irrevocable, and items subject to variability (such as market value, investment return, and amount of income payments) should be discussed fully.

2. Acting as a Trustee or Estate Executer
No Office of Development staff may serve as the trustee of donor’s charitable remainder trusts, charitable lead trusts, or other trust arrangements, as well as an executer of a donor’s estate.

3. Distribution of Proceeds
Testamentary bequests and other planned gifts are governed by the language of the wills, trusts, or agreements that created them, by relevant law and regulation, and by the articles and bylaws of Gallaudet University. In addition, the University provides written fund agreements that may be prepared in advance by the donor(s) with supplementary details regarding the preferred purpose(s) and management of testamentary and other planned gifts, and these may be updated from time to time during the donor(s)’s lifetime(s). Donors may also submit letters and other signed documents to indicate their wishes.

Additional Contacts

All extensions are voice.

• Finance office (main office, ext. 5299) or (202) 250-2453 (VideoPhone)
• Development office (main office, ext. 5410) or (202) 250-2943 (VideoPhone)