Gift Policies and Procedures

Date of Original Implementation: January 22, 2002

Date of Last Revision: October 2011

Reason for this Policy:

The function of these policies is to update and clearly delineate the kinds of gifts the College will accept, under what circumstances, and how they shall be assigned, acknowledged, valued and reported based upon standards developed by the Council for the Advancement and Support of Education (CASE), 2009, which have been thoroughly researched and and are aligned with accepting accounting practices and the U. S. federal reporting requirements. It also outlines procedures to be followed regarding the handling of gifts to the College.

I. Definitions and Authorizations

A. Definitions

  1. The legal name of the institution is Cambridge College.

  2. A gift is any voluntary, nonreciprocal transfer of cash or other asset from individuals or private organizations, such as corporations and foundations, to Cambridge College.

  3. Gift restrictions must be agreed to at the time the gift is established and must be fully documented in writing. The College reserves the right in the gift designation agreement to broaden the purpose of a gift should it be determined by the Board of Trustees at some future date that the purpose for the gift no longer best serves the mission of the College.

  4. A grant is a transfer of assets to Cambridge College from a foundation, corporation, association or governmental entity for specific purposes governed by a formal agreement between the College and the donor and subject to specific reporting requirements. Some grants by the nature of their reciprocal requirements are not donative in intent but are contractual.

  5. A bequest is a completed gift by will of tangible, intangible, or real property. A bequest intention is a promise, revocable during the donor’s lifetime, to make a gift by will; therefore, a bequest intention is not a completed gift.

  6. The definitions of other planned giving vehicles as used by Cambridge College are included later in this document.

B. Authorizations

1.  No solicitation of funds may be undertaken on behalf of Cambridge College without the approval of the President or his/her designee.

2. The President is responsible for the development for Board approval of policies for the solicitation, acceptance and use of gifts and for the subsequent implementation of these approved policies.

3. The Office of Institutional Advancement is responsible for

  1. Coordinating and controlling the solicitation and receipt of gifts to the College.

  2. Transmitting cash and non-cash gifts to the Financial Services Department for timely depost and safeguarding of gift receipts.

  3. Acknowledging all gifts, entering the records on to the gift records database, documenting all gift receipts and ensuring the stewardship of gifts, including reporting on all grants and gifts according to the donating entities’ written requirements.

  4. Maintaining files of proposed grants, gifts and contracts.

  5. Maintaining files of awarded grants, gifts and contracts.

  6. Convening a Gift Acceptance Committee, representing the Institutional Advancement and Financial Services Departments, when it is necessary to recommend procedures to the President for requests for waivers to general policies or for acceptance of non-routine gifts, which may in turn require Board approval.

4. The Financial Services Department is responsible for

  1. Initiating the sale of any gift of non-cash assets according to the College’s investment policy.

  2. Monitoring the investment of gifts in accordance with policies established by the Board of Trustees.

C.   Gift Assignment

  1. All gifts and pledges will be assigned to a specific restricted or unrestricted gift account under the Unrestricted, Temporarily Restricted or Permanently Restricted categories prescribed by generally accepted accounting principles.

  2. Pledges will only be recorded and credited if in writing.

  3. Pledge payments for specific projects or capital campaigns will generally be limited to five years, except for anticipated income from a charitable lead trust. The President, in consultation with the Development Committee of the Board of Trustees, must approve a pledge payment schedule of longer duration.

  4. The total anticipated income to the College as beneficiary of a charitable lead trust may be recorded as a pledge, and the pledge period may not exceed the period of the trust.

  5. Corporate matching gifts will be credited to the purpose for which the donor’s original gift was made.

  6. Information about gifts, pledges, and donors is confidential and will be released only on authority of the President. Employees with access to confidential gift, pledge and donor information are duty bound to maintain the confidentiality as a term and condition of employment and may only share such information with authorized College officials on a need to know basis or as otherwise authorized by the President.

II. Valuation and Acceptance of Non-Cash Gifts A. General

  1. College personnel will inform, guide, and otherwise assist donors in completing their philanthropic transfers, but at no time shall College personnel provide tax or legal advice to donors. The legal and financial costs of transferring non-cash gifts to the College shall normally be borne by the donors.

  2. No gift will be accepted if the acceptance would cause the College to incur an obligation, financial or otherwise, which the President deems burdensome. Similarly, the College reserves the right to dispose of gifts of property at any time, unless otherwise agreed to with a donor.

  1. Gifts will be credited against fundraising goals at their face/ market value on the date of the completion of the transfer of the asset to the College or to its designated representative. If there is no ready market for the asset, the gift will be valued at one dollar until the donor provides third party market valuation or the College is able to do same and will be carried on the financial accounting system as determined by the Vice President for Finance and Administration. Similarly, the College will not perform valuations for a donor’s tax purposes.

  2. Neither gains nor losses realized by a sale of a non-cash gift or assets in trust will affect the value credited towards fundraising goals.

  3. A Gift Acceptance Committee representing the Institutional Advancement and Finance offices and appointed by the President will meet as needed to review pending non-cash gifts and recommend their acceptance to the officers authorized by the Trustees to make such decisions.

B. Gifts of Real Property

  1. Gifts of real property must have a clear and marketable title and not be contaminated by hazardous waste. Acceptance of such property is subject to the prior review of the Gift Acceptance Committee and approval by the Board of Trustees. A gift of real property will be subject to the following requirements:

Personal inspection by staff

Title search

Minimum of level one environmental audit

Marketability review by at least two knowledgeable brokers

Qualified appraisal obtained by the donor

  1. If a trust is involved, a written agreement must be signed by the donor to provide additional funds to the trust, to provide for ongoing expenses and maintenance of the property until it is sold.

  2. If the property is used for commercial purposes, a completed real estate checklist, including detailed financial information on the property is required.

  1. Mortgaged real property may not be accepted. A donor who owns mortgaged real property should be encouraged to pay off or transfer the mortgage before making the gift.

  2. Contributions of personal residences or farms may include a reserved Life Estate, subject to a satisfactory agreement detailing the donor’s responsibility during the life estate.

C. Gifts of Tangible Personal Property or Capital Equipment

  1. The Gift Acceptance Committee will consider and recommend to the President the acceptance of tangible personal property or capital equipment in relation to its applicability to the mission of Cambridge College and its burden on the College (See IIA 2), unless the gift is made with the explicit understanding that the property is to be sold and the proceeds applied to a college purpose.

  2. If the property is accepted, the donor is responsible for obtaining a qualified appraisal of the property’s fair market value.

D. Gifts of Securities

  1. The Office of Institutional Advancement may accept gifts of marketable securities as processed by the College’s authorized broker. Non-marketable securities or securities with investment restrictions attached will be referred to the Gift Acceptance Committee for recommendation to the President and Board (as applicable).

  2. All negotiable securities will be valued at the mean of their market values on the date of delivery. The date of delivery is the date all transfer documents are in the custody of the College or the date the security is deposited by wire transfer into an account authorized by the College.

  3. The College will normally sell securities received for charitable purposes and apply the proceeds to the fund account(s) corresponding to the donors’ stated purposes.

E. Gifts of Life insurance or Retirement Plan

1. For gift acceptance, the College must be an assigned irrevocable beneficiary of an insurance policy or retirment plan (if the College is not the owner as well as

  1. the beneficiary of a life insurance policy, the beneficiary designation is revocable). If premiums remain to be paid, the donor must agree in writing to give sufficient funds annually on a timely basis to the College in order for it to pay the premiums, or the donor must agree to pay the premiums directly. The College reserves the right to cash in a policy or take other actions available to the owner of a policy at any time. The College will not undertake to secure insurance on the life of a donor or otherwise at the request of a donor, nor will it accept ownership of policies subject to a loan or in connection with a “split dollar” or similiar arrangement where the proceeds are to be divided between charitable and non-charitable interest. However, in all other circumstances, the College may be named as a beneficiary of a death benefit on a life insurance policy. The face value of a life insurance policy will be credited as a pledge towards fundraising goals.

  2. If the College receives the proceeds of a policy or retirement plan that had not previously been recorded as a pledge, the full amount received will be reported as a gift.

  3. If the donor pays further premiums on a life insurance policy, the value of these
    premiums will be credited as gifts. If the College pays further premiums, the cost will be an operating expense and will not change the surrender value or face value of the policy.

F. Planned Gifts

  1. Gift Annuity: fixed payment for life in exchange for an irrevocable transfer of assets. The payout rate on a gift annuity contract should be no higher than that recommended by the American Council on Gift Annuities. A deferred gift annuity allows for payment of the annuity to start at a later time than the date of the gift. The minimum amount to establish a gift annuity is normally $10,000. The minimum age to establish a gift annuity is 60, while the minimum age to establish a deferred gift annuity is 50.

  2. Charitable Remainder Trust: payment as a fixed percentage determined annually (unitrust) or as an annuitized amount (annuity trust) of the trust assets will be made to named beneficiaries. When each separately invested trust terminates, the value of the trust will be transferred to the College. The minimum amount to establish a charitable remainder trust is normally $100,000.

  1. Charitable Lead Trust: income interest from a donor’s trust is paid to the College until the termination of the trust, when the principal reverts to the named beneficiary. A minimum transfer of $500,000 in assets is usually required to establish a charitable lead trust.

  2. The cost of management fees for the outside management of trusts will be the responsibility of the trust.

III. Bequests and Bequest Intentions

A. Bequests

  1. Completed gifts under the will of a deceased donor.

  2. If the purpose is unrestricted, the Board may place the assets in a restricted quasi-endowment fund, but the Financial Services office will consider it to be unrestricted, for accounting purposes.

B. Bequest Intentions

1. Definition: Notifications from donors during their lifetimes that Cambridge College is an intended beneficiary under the donor’s will. Although these gifts are revocable, crediting of such pledges to fundraising achievement totals for donor recognition may be allowed, based on the testator’s age and the receipt of relevant documentation that includes a reasonable estimate of the value of the intended gift.

IV. Gift Purposes

A. Unrestricted

  1. Unrestricted gifts are given by the donors to the College without any limitation, prohibition or constraint on the use of the gift funds, regardless of any subsequent designation by the College.

  2. The President or his/her designee may assign specific designations to unrestricted gift income accounts; these descriptive identifiers may include but are not limited to:

  1. Annual Fund

  2. in honor and in memory of . . .Fund

  3. Anniversary Fund

  1. Unrestricted Bequests will be credited to unrestricted gift income accounts to support operations or for other purposes so designated by the President.

B. Restricted

Restricted gifts are those given by a donor for a specific purpose.

2. The Financial Services Office will record these gifts in the accounting system under generally accepted accounting principles as either Permanently Restricted or Temporarily Restricted.

C. Temporarily Restricted

  1. Temporarily restricted gifts will be expensed when the College has fulfilled the purpose of the gift, within a reasonable amount of time.

  2. A gift restricted for current operations is to be used wholly and exclusively for the stated specific purpose. These may include but are not limited to education and instruction, financial aid, awards, operation and maintenance of physical plant.

  3. A gift restricted for capital purposes is to be used wholly and exclusively for the state specific purpose. They may include gifts of real estate or tangible property used for instructional or support functions of the College, or gifts for building purchase, construction or reconstruction, or equipment and inventory purchases and maintenance. Gifts that are de minimis in value or the donation of personal services will not be credited as an asset of the College.

D. Permanently Restricted

  1. Permanently restricted gifts are added to the College’s endowment, retained and invested for income producing purposes.

  2. Permanent Endowment

a. Unrestricted Income: Gifts restricted by donors for endowment, but not bearing any restriction by the donor on the use of the income this endowment produces.

b. Restricted Income: Gifts restricted by the donor for endowment with the income also restricted by the donor to a specific purpose.

  1. Term Endowment: similar to permanent endowment, but the principal as well as the income are expendable within a time frame agreed upon by the donor and the College

  2. While donors may restrict the uses of income from endowment funds, the Board of Trustees determines College investment policies and payout rates for endowment funds.

V. Recognition and Stewardship

A. Campaign Gifts

  1. The Board of Trustees may determine that all gifts of any type and accepted for any purpose during the period of an authorized comprehensive campaign may be recognized as “campaign gifts.”

  2. Alternatively, the Board may determine that only gifts accepted for unrestricted and specified restricted purposes during the period of an authorized capital campaign may be recognized as “campaign gifts.”

B. Physical Naming Opportunities

The Board of Trustees may from time to time authorize a list of naming opportunities, with minimum amounts assigned to each project, for buildings, rooms or other capital projects, particularly in conjunction with a capital campaign.

C. Endowment Naming Opportunities

  1. The Board of Trustees may authorize in recognition of a donor’s generosity the naming of endowed funds upon receipt of funds in specified minimum amounts according to the use of the funds. Named endowed funds may support, for example, faculty positions, scholarships or general purposes.

  2. The minimum funding level for a fully endowed named chair is $1.5 million. The minimum funding level for a fully endowed named scholarship is $100,000. If a pledge balance remains unfulfilled after six years and the total received does not equal the assigned minimum level, the College may, in the absence of a satisfactory pledge payment completion schedule, withdraw the endowment naming opportunity and notify the donor that the gifts contributed to date will be added to the general endowment fund. Similarly, endowed named scholarship fund drives that do not reach the minimum endowment funding level after six years will be added to the general endowment fund and efforts will be made to notify all fund drive donors.

D. Reporting Protocols

1. Only gifts and pledges from private entities, including individuals, corporations, and foundations, will be counted as achievement in a comprehensive or capital campaign as prescribed by the Council for the Advancement and Support of Education (CASE)

  1. Federal, state or municipal grants will be recorded by both the offices of Institutional Advancement for crediting purposes and Financial Services for accounting purposes.

  2. The total of outright gifts and pledges received from private entities will be reported at face/market value at the time of the gift.

  3. The total of deferred gifts will be reported at both face/market value and discounted present value.

  4. Fundraising Achievement will be reported to the alumni and other constituents as the combined face/market value (at the time of the gift) of both outright gifts and pledges and deferred gifts.

VI. Administration of these Policies

Oversight of these policies is the responsibility of the Development Committee of the Board of Trustees of Cambridge College with approval of such policies resting with the full Board. The Gift Acceptance Committee is responsible for the administration of these policies. Exception to these policies must be recommended by the Gift Acceptance Committee to the President and the Board (as applicable).

The members of the Gift Acceptance Committee shall be determined by the Vice President of Finance and Administration and the Vice President of Institutional Advancement, in consultation with the President.

Individuals Responsible for Revision and Implementation: Vice President for Institutional Advancement, Vice President for Finance and Administration, Controller.