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College-wide Policies

Gift Administration Policy

Responsible office
Advancement
Responsible party
Vice President for Advancement
Last revision
September 2016
Approved by
The Cabinet
Approval date
April 2013
Effective date
April 2013
Last review
September 2016
Additional references
CASE Reporting Standards & Management Guidelines; IRS policies; FASB; Donor Bill of Rights

Scope

All financial and administrative policies involving community members across campus are within the scope of this policy. If there is variance between departmental expectations and the common approach described through college policy, the college will look to the campus community to support the spirit and the objectives of college policy.

Policy

Gift Acceptance Committee

The college has established a Gift Acceptance Committee whose responsibilities include interpreting and enforcing all Gift Administration policies. The committee will also ensure that gifts:

  • are appropriate to the mission and needs of the college;
  • impose no undue financial burdens on the college;
  • all gifts in general are in compliance with all legal and financial standards; if restricted, the donor’s terms are reasonably broad and flexible to maximize their usefulness to the college; and the donor permits the college to apply the gift to a related purpose in the event that the designated purpose is no longer practical, necessary, or able to be performed.

The Gift Acceptance Committee also:

  • approves all conditional pledges and pledge commitments that exceed five years;
  • evaluates requests from donors to waive the immediate sale of readily marketable securities, which is customary for gifts of securities;
  • evaluates gifts of securities that are not readily marketable;
  • partners with head(s) of  appropriate departments and/or committees on the acceptance of gifts of personal property and gifts-in-kind valued at $5,000 and higher, as well as approval of any restrictions sought by the donors of such gifts regarding the sale, maintenance, administration or display of property donated;
  • approves gifts of real estate;
  • reviews gifts of real estate encumbered with a mortgage;
  • reviews all non-standard gifts as defined by the IRS;
  • reviews and approves gifts that may require, as a condition, the establishment of a separate governing body;
  • resolves any gifts that are not consistent with the college’s gift acceptance policies or that are complex and unique in nature in any way that could not be resolved by the Vice President for Advancement;
  • seeks the advice of legal counsel and/or other subject matter experts when appropriate (at a cost that the college has deemed to be reasonable).

Should the Gift Acceptance Committee find itself unable to resolve a procedural or policy issue regarding a gift, the issue will be referred to the President for final resolution.

The Gift Acceptance Committee shall include the Vice President for Advancement, the Vice President for Finance and Administration, the Dean of the College, and a member of the President’s Cabinet (selected by the President).  The Cabinet member selected by the President should not have a direct interest in the gift under review.  In the spirit of the college’s Conflict of Interest and Code of Ethical Conduct guidance, the Vice President of Advancement is an ex-officio, non-voting member of the Gift Acceptance Committee and any committee member with a potential conflict shall recuse him/herself from a vote on that particular gift.

Gifts of Real Estate

The college will accept appropriate gifts of real estate with the exception of real estate valued at less than $100,000; timeshares; real estate contaminated by hazardous waste; and real estate for which the ownership or operations might expose the college to liability under federal, state, or local environmental laws, ordinances, and regulations, or to other negative legal or title implications. 

If the real estate is encumbered with a mortgage(s), the matter will be advanced to the Gift Acceptance Committee for its review and decision. If unencumbered, prior to acceptance, the college will perform an evaluation, review legal title, and obtain a recent qualified independent appraisal.

When water, mineral, and/or oil interests are part of the gift offer, the college may retain these rights.

Gifts of commercial properties and businesses may be accepted and will be evaluated in accordance with the college’s current criteria.

The Gift Acceptance Committee should approve all gifts of real estate prior to acceptance.

Monetary Gifts

The college will accept monetary gifts including cash, checks, and credit cards, regardless of the dollar amount, unless the donor does not appear to have legal ownership of the funds. (See definition of monetary gift below.) The college administers gifts of cash in accordance with all applicable external requirements, including but not limited to the U.S. Patriot Act.

Gifts of coin or currency collections should be evaluated by a reputable dealer to determine their gift value and if they should be accepted at a fair market value different than their face value. If so, then the gift is received as a gift-in-kind rather than a gift of cash.

In accordance with the college’s protocol for anonymous gifts, any gift of cash from a truly anonymous donor will be reviewed by the college’s Gift Acceptance Committee.

Pledges

The college will accept pledges as donor commitments to make future gifts.

While specific campaigns or programs may be shorter, pledge commitments may be for any period of time, not to exceed five years. Any pledge commitment that exceeds five years must be approved by the college’s Gift Acceptance Committee.

Conditional pledges and any change to the terms of commitments of $100,000 or more also require approval of the Gift Acceptance Committee.

The college has adopted the following accounting practices:

  • Booking Pledges
    • Testamentary pledges are booked when we anticipate we will receive an estate distribution for a deceased constituent following the year of his/her death, and we know the estimated dollar amount of the distribution.  We will not necessarily know a payment schedule or designation;
    • When an individual makes a personal pledge, and then generates “payment” from their family foundation or a donor-advised fund, these gifts will be booked as outright gifts and will not be applied to the personal pledge, according to IRS guidelines.  We will, however, decrease the pledge by adjustment for the corresponding amount;
    • Verbal pledge commitments (non-DIALogue) will not be booked in the college’s fundraising database;
    • Matching gifts will not be applied as pledge payments, nor can a donor include matching gifts in his/her pledge commitment.
    • Volunteer gifts of reimbursable expenses will not be applied as pledge payments.
  • Writing Off Commitments

All pledges (conditional and unconditional) should be reviewed according to the following schedules to see if further discussions or actions with the donor should be taken.

  • When a donor dies, outstanding commitments will be written off unless:
    • The donor is assigned to a relationship manager; the relationship manager will contact the family for disposition;
    • The commitment is $5,000 or more, and the donor is not assigned to a relationship manager; the director of stewardship will determine if follow up is needed with the family for disposition.
  • DIALogue pledges:  Approximately 30 days after fiscal-year close, write off 100 percent of the remaining outstanding balances on pledges made prior to 12/31 of the fiscal year just completed. Approximately 30 days after calendar-year end, write off 100 percent of the remaining outstanding balances on pledges made during the previous fiscal year;
  • Non-DIALogue pledges under $5,000: Approximately 30 days after fiscal-year close, review and write off 100 percent of the remaining outstanding balances unless an alternate payment schedule is arranged with the donor;
  • Non-DIALogue pledges $5,000-99,999: Write off 100 percent of the remaining outstanding balance on pledges that meet the conditions below.  Gift officers will be notified of the pledges that will be written off unless a new payment schedule is arranged with the donor. 
    • Partially paid pledges dated seven or more years ago (as of the end of the last fiscal year) for which no payments have been made in more than four fiscal years;
    • Pledges dated three or more years ago for which no payments have been made and the payment schedule indicated a first payment due two years ago or longer.
  • Non-DIALogue pledges of $100,000 or more: Pledges that meet the conditions below should be reviewed by the Gift Acceptance Committee prior to write off to determine the appropriate next steps, including communication with the donor.
    • Partially paid pledges dated seven or more years ago (as of the end of the last fiscal year) for which no payments have been made in more than four fiscal years;
    • Pledges dated three or more years ago for which no payments have been made and the payment schedule indicated a first payment due two years ago or longer.

Gifts of Securities

The college will accept gifts of securities which are readily marketable through public exchanges or through approved private buyers. 

These readily marketable securities will be valued at the mean price per share on the date the securities are transferred into the college's name and sold immediately once the donor is identified. An exception may be made related to the sale of the securities at the request of the donor and evaluated by the Gift Acceptance Committee for further action.  At times, the college’s broker may suggest holding onto securities due to market conditions; these exceptions should be approved by the Vice President for Finance and Administration.

Gifts of securities which are not readily marketable may be accepted after evaluation by the college’s Gift Acceptance Committee. If accepted, the securities will be valued at the fair market value shown on a qualified evaluation or at the value determined jointly by the donor and the Vice President for Finance and Administration.  The fair market value must be at least $5,000. If not immediately sold, the donor must supply the audited financial statements for the issuing entity, initially and annually thereafter for reevaluation purposes.

Gifts of securities that will not be accepted include:

  • Securities which have a lien against them or in any way could create a liability for the college;
  • Securities prohibited by the college's investment policy;
  • Securities which cannot be assigned (such as series “E” savings bonds);
  • Securities which, upon investigation by the college’s securities broker, have no apparent value and for which a written estimate of that cannot be substantiated by the college's securities broker;
  • Securities for which we are unable to identify the donor. 

Gifts of Tangible Personal Property and Gifts-In-Kind

Acceptance of gifts of tangible personal property and gifts-in-kind, as well as approval of any restrictions sought by the donor on the sale, maintenance, administration or display of property donated, is subject to review and approval by the head(s) of the appropriate department(s) and/or committees of the college before the gift can be accepted. In the case of gifts valued at $5,000 or more, acceptance of the gift is also subject to the review and approval of the Gift Acceptance Committee.  The Committee should be engaged during early discussions with the donor especially for more complex tangible gifts. 

The college may accept gifts of personal property and gifts-in-kind after consideration of the following factors:

Use or display of property; condition of property; storage; transfer of ownership; maintenance and repair; potential sale value. Certain departments within the college may have additional restrictions on the gifts they will accept due to space and/or staffing issues, or because the college already has access to sufficient similar materials.

Works of art or artifacts, both self-created and purchased may be accepted by the college under the following conditions:

  • The decision to display, store, and maintain the art or artifacts will rest with the President of the College or her/his designee;
  • Donor may be required to prove ownership;
  • No commitment will be made to keep and/or display the art or artifacts. If they are not suitable for the college, they may be sold or disposed of in an appropriate manner.

Gifts of automobiles, airplanes, boats, and other vehicles may require the following:

  • Donor must supply documentation of clear title;
  • Vehicles may be reviewed by a certified mechanic prior to acceptance by the college;
  • Vehicles may be accepted if they are in working order and marketable;
  • Vehicles will be valued at the NADA blue book prices, less any necessary repairs;
  • Vehicles not needed for use by the college will be sold;
  • Costs associated with this supporting documentation are the responsibility of the donor.

Gifts of discounted product (bargain sale)

Will be booked as a gift-in-kind for the discounted amount. Also, donors must use the educational discount amount, if available, as their retail amount from which the discount is deducted.

Gifts Valued Under $5,000

For gifts of personal property and gifts-in-kind under $5,000, the donor is responsible for stating the fair market value of the donated item(s).

Gifts Valued Over $5,000

Gifts of personal property and gifts-in-kind valued by the donor at $5,000 or more require an independent appraisal of the fair market value of the item(s). The donor is responsible for the costs associated with obtaining an appraisal.

Donor Considerations

The donor is responsible for costs associated with transporting the gift to the college. “Gifts” of service are not charitable donations and should not be accepted as a gift from a donor.

Gifts of Life Insurance

The college will accept gifts of life insurance policies, including whole life, variable, and universal life policies, where the college is named the sole owner, and irrevocable beneficiary of the policy, and which meet the criteria stated below. The college does not, however, accept life insurance policies that involve premium financing.

The donor must provide a statement of cash value from the insurance company which administers the insurance policy at the time of the gift.

Policies that are paid up as of the gift date will be accepted and counted at the cash surrender value and reported as a current outright gift.

Policies that are not paid up as of the gift date must have:

  • A minimum face value of $100,000;
  • A policy payment schedule of twelve years or less;
  • A written pledge from the donor which equals or exceeds the total premiums due and pledge payments scheduled within 45 days of the premium due date.

If the donor does not continue to make their donation that covers the premium payments, the college must be able to:

  • Convert the policy to paid up insurance; or
  • Surrender the policy for its current cash value; or
  • After one annual premium has not been covered in full by the donor’s pledge payment(s), the college may take one of the actions listed above at such time as the college deems appropriate.  

For gifts intended for new, named endowment purposes, the face value of the policy must meet the college’ s minimum funding requirement for endowments in effect at the time of the gift.  

Deferred Gifts

The Gift Planning team within the Development Office has the responsibility of assisting donors and their professional advisors in establishing such gifts and for coordinating the process of review and acceptance in consultation with the Vice President for Advancement and the Gift Acceptance Committee.

 Once Colorado College is named the irrevocable beneficiary of a deferrer’s gift, the donor may not re-designate the remaining interest to be redistributed to another charity. 

Prior to accepting any deferred gift, a reasonable assessment, aligned with IRS regulations, should be conducted to determine the estimated value of the gift upon completion of any defined term.  If the value of such a gift is deemed to be diminutive, either because of the nature of the payout, the investment strategy, the length of the term, or other reasons, the Gift Acceptance Committee should be consulted prior to acceptance.  The College should not accept such gifts where a reasonable chance exists that it will lose money on said gift.  

Procedures

Procedures for Gifts of Real Estate

Typically gifts of real estate will be listed immediately for sale upon receipt of clear title with a broker or brokers in the area in which the property is located, unless the college decides to keep the property. Prior to accepting the donation, the college may perform the following:

  • An evaluation to include:
    • Estimated fair market value. This can be determined initially by review of the of property tax bill, insurance coverage, recent appraisals (within two years), or sales of comparable properties within the last two years.
    • An inspection by a licensed property inspector of the subject property, adjoining properties, and other properties that may impact the subject property. Should the property be received within an estate, this inspection will occur during the subsequent sale of the property. 
    • The college will determine the need for a property inspection to be performed at the donor’s expense.
  • A review of legal title, including:
  • Obtaining a title insurance commitment;
  • Analysis of easements, leasehold interests, water rights, mineral interests, and timber or other natural resource rights.
  • A determination of whether the property, if accepted, should be sold or retained by the College including:
  • An analysis of the prospects for sale or lease of the property by the college;
  • If accepted with the intent to sell the property, an analysis of the overall fiscal impact of that decision;
  • If the proposal is for the college to retain the property, a detailed economic plan for its operation and management.
  • A determination of the need for a qualified environmental audit

The college’s Statement of Analysis for Potential Environmental Problems and Liabilities as well as environmental audits may assist in assessing environmental issues. If an environmental audit is required, it is performed at the donor’s expense.

  • Disclosure of the following:
  • Mortgages, deeds of trust, restrictions, reservations, liens ,and other limitations of record;
  • Carrying costs, including property owner association dues, country club membership dues and transfer charges, taxes, and insurance.

When offered gifts of commercial properties and businesses, the college’s evaluation may include: property and other taxes; mortgage liabilities; possible income tax on unrelated business income; potential use of the property; other risks and benefits.

All accepted gifts of real estate require a recent (within 60 days of the transfer of title to the college) qualified independent appraisal. If the initial market value is estimated to be less than $1,000,000 only one appraisal is necessary with the donor paying for the appraisal. If the initial market value is estimated to be $1,000,000 or more, then two appraisals should be obtained with the college paying for the second.

For gifts exceeding the current IRS-defined threshold, IRS form 8283 should be completed at the request of the donor.

Procedures for Monetary Gifts

  • Gifts of currency that exceed the IRS limit for cash transactions (currently over $10,000) require the completion of the IRS Form 8300.
  • Checks will be managed through the ACH system.

Procedures for Pledges

All pledges must be supported by documentation signed by the donor that specifies the total pledge amount, a payment schedule to include the date payments are to be made, the pledge completion date, and the designation(s) for the commitment.

  • Email confirmation is acceptable as an electronic signature for any size pledge.
  • DIALogue pledges are acceptable as verbal pledges, without a donor’s signature, for which the DIALogue Center issues a pledge confirmation letter containing the terms of the commitment, as well as verbiage encouraging the donor to contact the college if the pledge does not correspond to the donor’s verbal instructions.
  • DIALogue pledges of $1,000 or more must be verified with the donor at the time of their commitment, by the DIALogue supervisor.

Conditional Pledges:

The pledge documentation must include the disposition of any payments that have been accepted before the conditions are met, and if the conditions ultimately are not met. Conditional pledges are not counted in our campaign totals until the condition has been met.  

Procedures for Gifts of Securities

For gifts exceeding the current IRS-defined threshold, IRS form 8283 should be completed at the request of the donor.

Procedures for Gifts of Tangible Personal Property and Gifts-In-Kind

  • For gifts exceeding the current IRS defined threshold, IRS Form 8283 should be completed at the request of the donor.
  • All gifts of personal property and gifts-in-kind will be receipted with a complete description of the item(s) donated, but will not include a dollar amount (per IRS Publication 1771).

Procedures for Gifts of Life Insurance

  • Policies where Colorado College is not named as owner will be recorded as a revocable commitment in the same manner as a bequest expectancy. The full amount of the insurance company’s settlement at the death of the donor should be reported as an outright gift.
  • For policies that are not paid up and the college is paying the premium:
    • Donor’s pledge payments designated for the premium must be sent to the college;
    • Donor will receive gift credit in the year their donation is received.

The donor will be receipted for the in-kind gift of their life insurance policy to include a complete description of the policy donated, but will not include a dollar amount (per IRS Publication 1771). 

Definitions

  • ACH (Automated Clearing House): A secure payment transfer system that connects all U.S. financial institutions, and acts as a central clearing facility for all electronic fund transfer (EFT) transactions that occur nationwide. When writing a check, the donor authorizes Colorado College either to use information from their check to make a one-time electronic fund transfer from their account or to process the payment as a check transaction.
  • Cash surrender value: The amount available to the policy owner when a policy is surrendered to the company prior to death. 
  • Collection: As defined on IRS Form 8283, are similar items of property of the same generic category or type, such as coin collections, paintings, books, clothing, jewelry, non-publicly traded stock, land, or buildings.
  • Conditional Pledge: Pledges that place requirements on the institution to perform some task or take some sort of action that it might not otherwise initiate, before the donor will satisfy his or her commitment.  A conditional pledge may also depend on some future event over which neither the institution nor donor may have control.
  • DIALogue Pledges: Pledges acquired by student callers.
  • Face value: As it related to life insurance, the amount payable in the event of death.  Also referred to as the death benefit. 
  • Fair market value (FMV): As defined in IRS Publication 561 is “the price that property would sell for on the open market.  It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, nor both having reasonable knowledge of the relevant facts.”
  • Gift of Real Estate: Include but are not limited to outright gifts, gifts in trust, gifts of partial interests, and gifts with reserved life estates.
  • Gift:  A charitable contribution for the use of a qualified organization. It is voluntary and is made without getting, or expecting to get, anything of equal value (IRS Publication 526); gifts cannot be used for personal gain of the donor.
  • Irrevocable deferred gifts:  Include charitable gift annuities, charitable remainder trusts, pooled income fund contributions, and gifts of real estate subject to retained life estate(s).
  • Marketable Securities:  Stocks and bonds that are regularly traded on the major securities exchanges as defined by the Wall Street Journal or other authoritative sources.
  • Mean Share Price: Share price between the published high and low selling prices on the date the securities are transferred to the college.
  • Monetary gifts:
    • CC Payroll Deductions
    • CC-issued Gold Cards
    • Checks
    • Credit Cards
    • Currency and coin
    • Debit Cards
    • Electronic Fund Transfers (EFT/ACH)
    • Expense Reimbursable
    • Money Orders
    • Travelers Cheques
    • Wire Transfers

 

  • NADA Guide (blue book):  Guide of used car wholesale and retail values published by the National Automobile Dealers Association.
  • Paid up policy: Insurance policy on which the policy owner has completed payments, but which has not matured. 
  • Personal property vs. gift-in-kind: See CASE Reporting Standards & Management Guidelines (section 1.2.4).
  • Personal property: Anything other than real property that is subject to personal ownership.  There are two types of personal property: tangible and intangible (intellectual property) assets.  Examples of tangible assets include but are not limited to art, equipment, vehicles, books, printed materials, and gas or oil wells.  Examples of intellectual property include patents, copyrights of cultural, artistic, and literary works, and computer software under development.
  • Premium financing: Involves the lending of funds to a person or company to cover the cost of an insurance premium.
  • Real property: Improved or unimproved, detached, single-family residences, condominiums, apartments buildings, rental property, commercial property, farms or acreage.
  • Recent Qualified Independent Appraisal:  Within 60 days of the transfer of title to the college.
  • Reunion Pledges: Pledges made by alumni during a reunion cycle (January 1 to December 31).
  • Revocable deferred gifts:  Includes wills, trusts, life insurance policies, commercial annuities, IRA and other retirement plans.
  • Unusual Gifts: Gifts that are complex and unique in nature. Examples include, but are not limited to, offers to endow courses that are not institutional priorities; offers to create new institutes or centers that are not institutional priorities; offers to establish new programs that are not institutional priorities; offers to build or change facilities that are not institutional priorities; gifts offered with unacceptable restrictions; example:  a scholarship could be restricted to individuals from a small geographic area making it unlikely to be awarded on a regular basis; other complicated gift vehicles outside our normal gift acceptance policies.
  • Verbal Pledge: Pledge commitments without supporting written documentation from the donor.
  • Written Pledge: Pledge terms are documented in writing by the donor, including the pledge amount, payment schedule, and designation.