2200 Gifts to the University

Responsible Official: 
Controller
Responsible Office: 
Finance
Effective Date: 
November 1, 2000
Revision Date: 
June 2, 2017

Policy Sections

2200.1 Taxation

2200.2 Receipt of Gifts

2200.3 Acknowledgment of Gifts

2200.4 Tax Implications to the Donor

2200.5 Gifts from Yale University Employees

2200.6 Gifts from Third-Party Payers

2200.7 Administration of Gifts

2200.8 Quality Assurance

2200.9 Group Gifts

Scope

This policy covers the transmission, acceptance, recording, disposition, acknowledgment and management of gifts made to the University.  The policy applies to all University offices but does not cover grants; Procedure 1304 PR.02 Distinguishing Between Gifts and Sponsored Awards covers more details on this matter.

Policy Statement

Gifts to the University must be transmitted, negotiated and recorded without delay, deposited promptly, credited to the proper University account, and acknowledged to the donor promptly and appropriately.

The University is obligated to use gifts in a manner consistent with the stated intentions of the donor.  Because the University must comply with donor restrictions, only gifts that are consistent with federal and state laws and do not contradict the University’s mission may be accepted.

The University’s administration of gifts must comply with all relevant federal and state regulations.  The financial management of gifts should follow the guidelines set forth in Policy 2100 Revenue Principles, General.

Reason for the Policy

This policy seeks to ensure that gifts to the University are properly received, recorded and administered using appropriate internal controls and sound financial business practices, and that the University’s acceptance and management of gifts are in compliance with external regulations and the University’s fiduciary obligations to donors.

Definitions

Bequest - A gift of real or personal property made at death by a will or a trust.

Endowment gift - A gift that requires the corpus of the gift to be held in perpetuity, and permits the expenditure of a portion of the investment return on that corpus.

Spendable gift - A gift that may be spent in its entirety.

Gift - A voluntary transfer of property made without consideration, which may or may not be restricted as to its use.

Cash - Money, currency, checks, money orders or cash equivalents.

Securities - Stocks, bonds, options, warrants, notes, or similar instruments, either publicly traded on an exchange (public) or not publicly traded (private).

Gift-in-kind - A gift that is a tangible item, for example, a work of art, equipment, or a literary collection.

Internal Revenue Code (IRC) - The codification of federal tax law, including income, estate and gift tax. Such laws are augmented by regulations and rulings and are administered by the Internal Revenue Service (IRS).

Matching gift - A gift made by an individual or a group in accordance with its own program designed to encourage employee contributions.

Policy Sections

The University is a tax-exempt organization under Internal Revenue Code §501(c) (3) and, therefore, is relieved of the obligation to pay taxes on income related to its mission as an educational institution.  The University is eligible under IRC §§170(c), 2055 and 2522 to accept contributions that are tax deductible by its donors for income, gift and estate tax purposes.

The University regularly receives charitable gifts of various types. Generally, gifts may take the form of:

  • cash or checks;
  • real property;
  • tangible personal property (gifts-in-kind);
  • securities;
  • bequests; or
  • corporation and foundation gifts.

The Development Office or the director of the receiving collection/department shall fully review all non-standard contributions before acceptance.  Non-standard gifts that may expose the university to liability or that obligate the university shall also have legal review by Office of General Counsel.

The following describes by type how gifts must be received and processed:

  • Cash or Checks: The University Development Office is responsible for the acceptance and recording of all gifts of cash.  Donors should be instructed to mail gift checks directly to the Development Office post office box.  Departmental collection of gifts is strongly discouraged.
    • In the event that a department receives cash or checks, the gift must be deposited promptly using the on-campus deposit system in accordance with Procedure 2801 PR.01 Recording and Depositing Cash Receipts, or deliver the gift to the Contribution Processing unit of the Development Office.
    • All proposed gifts for pooled income funds, or charitable trusts should be discussed with the Executive Director of Planned Giving, and should be delivered according to specific instructions from Planned Giving.
  • Real Property: The Development Office is responsible for approving and overseeing the acceptance of all gifts of real property (income producing and residential properties, land, limited partnerships in real estate, etc.).  Donors should be instructed to contact the Development Office directly.
  • Gifts-in-Kind: Notice of proposed gifts-in-kind should be directed to the Development Office.  The acceptance of gifts made to University collections shall be overseen by the directors of those collections, and donors should be instructed to contact them directly.  Gifts of tangible personal property not made in furtherance of a University collection shall be made to the Development Office.  The Development Office should notify the Controller of gifts of equipment.
  • Securities: Donors who intend to transfer securities should be instructed to contact the Development Office directly.  In the event that a gift of securities is received directly by a University department, the department administrator must contact the Development Office immediately for instructions.
  • Bequests: The Office of Planned Giving is charged with monitoring trusts and estates in which the University has an interest.  All information regarding bequests or trusts must be sent to the Office of Planned Giving in a timely manner to ensure that the University’s interests are safeguarded.
  • Corporation and Foundation Gifts: The Corporation and Foundation Relations Office in the Development Office is responsible for managing the University’s overall relationships with corporations and foundations.  The Corporation and Foundation Relations Office must confer with the Office of Sponsored Projects to determine whether specific transfers are gifts or sponsored awards (see Procedure 1304 PR.02 Distinguishing Between Gifts and Sponsored Awards).  Gifts are administered by the Development Office, and grants and sponsored awards are administered by the Office of Sponsored Projects.

The University must acknowledge all gifts in a timely manner.  Federal regulations require the University to provide receipts for contributions with a value of $250 or greater.

The Contribution Processing unit of the Development Office is responsible for acknowledging charitable gifts on the University’s behalf.  In the event that a gift has been received in a department, that department must immediately forward all pertinent information regarding the gift to Contribution Processing.  Such information should include:

  • donor’s name and address;
  • description of the gift, including restrictions on use of the gift;
  • date of the gift;
  • exact value of the gift, if known, or approximate value; and
  • whether the donor received anything in return for the contribution, e.g., meals, goods, services, discounts at University facilities.

Deans, department chairs, lead administrators, and other individuals with an interest in a gift are also encouraged to thank donors in their own capacity.

Gift Valuation

Gifts that do not have an easily ascertainable value shall be assigned a value for internal accounting purposes only. The Contribution Processing unit of the Development Office is responsible for assigning such values according to guidelines defined by the University Controller, who also performs quality assurance on gift valuation. Any questions about gift valuations should be referred to the Contribution Processing unit or to the University Controller.

Special Situations

  • Gifts-in-kind: The University does not include a value on a donor receipt for gifts-in-kind.  It is the donor’s responsibility to establish value in order to substantiate the taking of a charitable deduction for tax purposes.  Gifts-in-kind valued at over $5,000 may require the completion of additional tax forms.  The University must report to the IRS if it disposes of gifts-in-kind valued at over $5,000 within two years of receipt.
  • Pledges: The Development Office is responsible for valuing pledges (including discounts and allowances) and managing pledge receivables (including adjustments) according to guidelines developed and monitored by the University Controller.  The Development Office confirms pledges and also issues pledge reminders when and where appropriate.
  • Donor benefits: In certain cases, the University must issue a special disclosure statement if the donor receives a benefit in return for a contribution of more than $75.  Examples of such benefits include meals, items of more than token value or special discounts at University facilities that the donor receives in exchange for contributions.  A charitable contribution is generally limited to the amount by which the donor’s contribution exceeds the value of any goods and services received in exchange.

Departments and individuals are encouraged to consult with the Senior Director of Information Management and Donor Services prior to initiating such solicitations in order to ensure compliance with statutory requirements.

The University cannot provide specific tax advice to donors.  Under IRS regulations, gifts to the University are generally tax deductible if the donor does not retain control over the gift and does not receive any benefit from the gift.

Tax Deductible Gifts

Yale employees and members of their immediate families (e.g. spouse, domestic partner, child, parent, sibling) may make tax deductible gifts to the University to support approved University priorities, including student financial aid, faculty and research support, and the construction or renovation of facilities, when the following three conditions are met:

  • The employee has no direct control over the use of the gift;
  • The gift is not directed for the use or benefit of any specific individual; and
  • Neither the employee nor other members of his or her family may derive any personal benefit, direct or indirect, from the use of the gift.

Yale employees and members of their immediate families wishing to make a gift to the University should consult their school or unit’s Lead Administrator to ensure that the terms of the gift conform both to university policy and Internal Revenue Service regulations covering tax-deductible gifts.  If the gift exceeds $25,000, a written gift agreement must be approved by the applicable Department Chair and Dean and the Vice President of Development.  Approval by the Provost may also be required.

All gifts made to the University are subject to the institution’s giving policies found at http://giving.yale.edu/gift-policies.

Gifts that are Not Tax Deductible

Gifts made by Yale employees and members of their immediate families to an account that is either directly or indirectly controlled by the employee or provides the employee with a personal benefit are not tax deductible.

Acceptance of such gifts must be approved by the applicable Department Chair, Dean, and in some cases the Provost and may be subject to additional oversight and limitations.

Payroll Deduction

Employees of the University may choose to make a recurring donation to the University via payroll deduction.  (See Gift to Yale Payroll Deduction Request form (Form 3501 FR.41), available on the Quick Forms website.)

Gift Letter

Sample Language for a gift letter:

I am pleased to make a gift of $__to support ____________in the Department of____, of which I am a faculty/staff member.

I recognize that this is a gift to Yale University and that it will be administered by the Dean or Department Chair, in accordance with Yale’s policies on financial oversight and expenditure control.  In the event that I should leave the Department of ____ or its work should be discontinued, the University shall use the gift funds to support research in a related area, at the discretion of the Dean or Department Chair.

Third-party payers also make contributions to Yale that may be used to support conferences and other educational activities.  These payments should continue to be classified as gifts unless the donor is receiving a direct benefit from the contribution (i.e., an educational session held exclusively for the donor’s employees).  The intention of the payer should determine the classification of the payment, not the overhead rate that will be charged.

Gifts must be used in a manner consistent with the stated intentions of the donor.  Gifts must be established to manage them in accordance with donors’ wishes.  The Provost is responsible for assigning gifts to specific purposes within the University.

Gifts are generally classified as either endowment gifts or spendable gifts.

  • Endowment gifts are gifts that are held in perpetuity and the investment income is spent for the purpose designated by the donor or, if no purpose is designated, for unrestricted use.
  • Spendable gifts are gifts to unrestricted income or gifts that will be spent in the near future for a specific purpose (e.g., a building renovation).

The financial management of charitable gifts should conform to the guidelines set forth in Policy 2100 Revenue Principles, General.

Gift Accounting is responsible for ensuring that the University is in compliance with applicable laws pertaining to the management of charitable gifts and that it honors its fiduciary responsibility to its donors.  It is the duty of each department or school to use gifts in accordance with the donor’s intentions.

Original gift documentation must be provided to the Contribution Processing unit of the Development Office, where it shall be maintained in accordance with Policy 1105 Retention of University Financial Records.  The Contribution Processing unit is responsible for maintaining gift and donor information in the Hopper database.  In the event that the University is unable to put a gift to the use originally intended by the donor, it must be referred to the Office of the General Counsel for further consideration.

A gift clearing account should be used to record all gifts in the operational General Ledger prior to the assignment by the Provost of such gifts to a final gift account.  The Contribution Processing unit is responsible for reconciling the Hopper gift database with the General Ledger.  Gift Accounting performs quality assurance reviews to ensure that gifts are assigned to the correct accounts and that expenditures meet expressed purposes.

The success of group fundraising efforts largely depends upon adherence to established guidelines.  Detailed Group Gift Guidelines can be found on the Development Office’s website.

Special Situations/Exceptions

Exceptions to this policy must be approved as follows:

  • Exceptions with regard to the appropriateness of gifts or gift vehicles must be approved by the Vice President for Development;
  • Exceptions with regard to gift valuation must be approved by the University Controller; and
  • Exceptions with regard to use of gifts must be approved by the Provost.

Roles and Responsibilities

Controller - Develops guidelines for gift valuation, including valuation of receivables. Performs quality assurance on valuation of gifts and receivables and approves exceptions to valuations.

Contribution Processing - Reconciles the Hopper system to the operational General Ledger.

Department Administration - Promptly deposits any gifts received directly in the department in the form of cash or check in accordance with University procedures. Provides gift documentation to the Contribution Processing unit of the Development Office.

Gift Accounting - Responsible for ensuring University compliance with laws pertaining to the management of charitable gifts and ensuring that the University honors its fiduciary responsibility to donors.  Performs quality assurance reviews to ensure that gifts are assigned to correct accounts.

Office of the General Counsel - The Office of the General Counsel monitors the University’s adherence to donor requirements regarding gifts.  It also considers gifts that cannot be used according to stated purposes.

Office of Development - Responsible for the acceptance, formal acknowledgement, and recording of all gifts. Maintains gift documentation so that it is accessible for management purposes.  Responsible for valuing and managing gift pledges.

Office of Planned Giving - Responsible for monitoring estates in which the University has an interest.  Responsible for valuation of securities received as gifts.  Administers and invests gift annuities, charitable trusts and pooled income funds.

Provost - Assigns all gifts to specific purposes within the University in accordance with any donor restrictions.

Vice-President for Development - Has general oversight of gifts to the University.