Gift Handling Policy
A. Designated for Annual Purposes:
1. Budget-relieving annual gifts go into the appropriate designation of the Annual Fund
- Financial Aid/Fellowships (Scholarships) (Fund 111000, Account 520041)
- Faculty Support (Fund 111000, Account 520042)
- Campus Life (Fund 111000, Account 520043)
- Library/Technology (Fund 111000, Account 520044)
- Campus Preservation (Fund 111000, Account 520045)
- Where most needed (Fund 111000, Account 520011).
These funds are either immediately expended or invested through the college’s cash management policy. Any interest income is credited to interest income (Fund 111000, Organization 80001, Account 530011, Program 00).
2. Restricted annual gifts go into the designation supporting the purpose specified by the donor.
B. Designated for Capital Purposes:
1. Unrestricted capital gifts are recorded in Capital Funds Unrestricted (Fund 214019-60001-520116-40). Using the 60/40 ratio of endowment to capital expenditures formula and the projected needs for Board approved capital funds expenditures, the Comptroller transfers immediately the amount necessary to the Quasi Endowment (Fund 510007) if the 60/40 ratio is not met.
2. Restricted Capital Gifts
a. For an item in the “Capital Needs List”:
Gifts designated “for endowment” are deposited immediately in Quasi Endowment (Fund 510006-200031-520116-40).
Gifts for professorships, fellowships or other named Funds are set up in the Endowed Funds. Each year an allocation determined by a formula mandated by the Board of Trustees is used for the endowment purpose; excess earnings and appreciation are added to principal.
Gifts for equipment or plant improvement or other projects are expended for the project or invested until the project can begin. Interest earned is credited to interest income (Fund 111000, Organization 80001, Account 530011, Program 00) or towards the project as decided by the Vice President for Finance and Business Affairs.
No interest income will be accumulated in a particular fund account unless: 1) the gift is $10,000 or more, 2) there is a request from the donor or donors for the interest to be credited to the account, and 3) granting the request may encourage additional future gifts.
b. For an item not designated as an institutional priority or listed in “The Gift Opportunities List” the President recommends to the Board to accept or not accept. Accepted gifts are treated as in B.2.a.
C. Undesignated Gifts:
1. $25,000 or under is treated as a gift “Designated for Annual Purposes”: follow A.1, unless otherwise deemed appropriate by the Vice President for Development.
2. Over $25,000 is treated as a gift “Designated for Capital Purposes”: follow B.1.
GIFTS OF REAL ESTATE
When gifts of real estate are offered to Rhodes, there must be an on-site inspection and environmental survey prepared before the gift can be accepted by the Vice President for Finance and Business Affairs.
If the gift of real estate is accompanied by a valid appraisal, it is entered on the college books at that value (in the case of multiple valuations, the average). Absent a valid valuation, it is entered at a value of $1.00. A development officer works with the donor to determine the purpose of the gift.
If the value of the gift is to be added to the endowment as a restricted designation, the designation is set up, and the gift is acknowledged at the time the gift is made, but the income to the college does not begin until the property is sold and converted to cash. While the sale price does effect the size of the account and the cash flow, it does not change the amount credited to the donor by Rhodes. The amount credited to the donor is determined by a valid appraisal at the time of the gift. According to IRS regulations, the gift acknowledgment to the donor describes the property, but does not include a dollar amount.
The President upon the recommendation of the Vice President for Finance and Business Affairs recommends to the Investment Committee whether to sell or hold gifts of real estate. A list of all property held will be prepared by the Vice President for Finance and Business Affairs and submitted to the Investment Committee periodically.
If the real estate is sold the income flows through the “Gifts of Cash or Securities” and expenses are deducted from the gross proceeds.
If the real estate is held the property is booked at appraised value in the assets of the Current, Restricted, or Endowment fund.
If the rental, lease or other income is undesignated the funds are credited to the appropriate current fund account: Fund 111000, Organization 80001, Account 560020, Program 00 Royalties or Fund 111000, Organization 80001, Account 560016, Program 00 Miscellaneous Income.
If the rental, lease or other income is designated the funds flow to the appropriate account or project.
GIFTS OF TANGIBLE PROPERTY
The President upon the recommendation of the Vice President for Finance and Business Affairs recommends whether to hold or sell all individual gifts of tangible property (furniture, jewelry, art work, equipment, books, etc.) valued at $5,000 and over to the Investment Committee of the Board. The President will decide the disposition of gifts valued up to $5,000 and will report those decisions to the Investment Committee at the January Board meeting.
If the property is sold the income flows through the “gifts of cash or securities” and expenses are deducted from the gross proceeds.
If the property is held the item will be appropriately booked at appraised value in and added to the college’s inventory system.
GIFTS OF LIFE INSURANCE
Rhodes College must be the owner and beneficiary of any whole or universal life insurance policy given to the college. (Term life insurance will not be accepted and will not be credited in the campaign.) At the time the policy ownership is transferred to the college, all donors must confirm in writing that they will pay in a timely manner all future premium payments, whether known or unknown at the time the gift is made.
The President upon the recommendation of the Vice President for Development recommends to the Finance Committee whether to keep the policy in force or to surrender the policy.
If the policy is surrendered, proceeds are treated as “Gifts of Cash or Securities.
If the policy is kept in force, and the donor does not make gifts to support premium payments, the Investment Committee, upon recommendation of the President, should decide if the premiums should be paid and if so, how they should be paid. (Note: see section below on “Accepting Gift” about the expenditure for purpose of gift). At termination of the policy, proceeds are treated as a gift “Designated for Capital Purposes.”
GIFTS OF STOCK IN CLOSELY HELD CORPORATIONS, THE VALUE OF WHICH CANNOT BE DETERMINED, OR FOR WHICH THERE IS NOT A READY MARKET
The college is grateful for such gifts and shall acknowledge receipt immediately and thank the donor. The college will record these at $1.00 until such time as the stock is sold or a professional appraisal acceptable to the Investment Committee of the college is received.
The valuation of such gifts on the books of the college shall normally occur only in the fiscal year in which the gift is sold, except in the case of an acceptable professional appraisal.
The Comptroller will prepare a list of all closely held securities to include in the quarterly report of securities on hand. This report will list the changing value of the security and the asset account into which it has been booked.
The Comptroller shall seek at least twice a year—in May and December—to find a market for such stocks and dispose of them, subject to the approval of the Investment Committee.
The Comptroller shall consult with the Vice President for Development about donor sensitivity before attempting to sell the stock.
ACCEPTANCE AND VALUATION OF NON-CASH GIFTS
The date of acceptance and valuation of any non-cash gift to the college shall be the date the donor has unconditionally parted with dominion and control over the property; delivery directly to Rhodes is not required as long as the donor has relinquished all control over the property. Thus, delivery to a third party who agrees to act as Rhodes’ agent in accepting the property is effective when delivery is made to the agent, but delivery to a third party acting as the donor’s agent is not effective until that agent delivers the property to Rhodes or Rhodes’ agent.
ACCEPTANCE OF GIFT ANNUITIES AND CHARITABLE REMAINDER TRUSTS
The minimum acceptable principal amount accepted for a gift annuity is $10,000. The minimum for a charitable remainder trust for which the college will act as trustee is $50,000.
For gift annuities, the rates offered the annuitant will not exceed the most recently published rates of the American Council on Gift Annuities. Gift annuities will be accepted only when the annuitant is 55 years or older. Deferred gift annuities will be accepted for annuitants younger than 55 depending upon the beginning date of the annuity payment.
Payout rates offered on charitable remainder trusts will be based on negotiated rates acceptable to the donor, the Vice President for Development and the Vice President for Finance and Business Affairs. There is no minimum age requirement on charitable remainder trusts.
Payment of annuities and trusts will begin three months after receipt of gift. The payments will be scheduled only at quarter-end dates.
INTERNAL HANDLING OF GIFTS
All cash or checks are processed by the Development Office and then go immediately to Rhodes Express. Gifts of securities, real estate, other tangible property, life insurance, etc. will be received by the Development or Comptroller’s offices. These offices will notify other interested offices and will complete the appropriate Gift Receipt form (Securities, Real Estate, Personal Property). In the case of securities the Comptroller’s office will follow the Policy for Handling Contributed Securities and as required the Policy Regarding Gifts of Stock in Closely Held Corporations.
IRS FORMS RELATED TO GIFTS
If Rhodes receives from a donor a contribution of property other than cash or publicly-traded securities and the deduction associated with the property is more than $5,000, the donor will need to present Internal Revenue Service Form 8283 to Rhodes for its signature. If Rhodes disposes of this “charitable deduction property” within three years of the date of the donor’s contribution, the Comptroller will report, in a timely manner, such disposition to the Internal Revenue Service on IRS Form 8282. Rhodes will furnish the donor with a copy of the completed IRS Form 8282.
The final determination for acceptance of gifts to the college is the responsibility of the Board, on recommendation of the President.
Unless there are actual returns such as dividends, rent or lease income, no expenditure for the purpose of the gift will be made without the approval of the Board of Trustees until the gift is liquidated or income from the gift is earned.
GIFTS TO THE COLLEGE OF A NON-PERMANENT NATURE
While Rhodes makes every effort to maintain its campus and furnishings to the highest standard, donors of gifts that will deteriorate in time should be told that the college does not guarantee the replacement of such items. These may include garden benches, rugs, and other materials, the durability and appearance of which may erode with passing years. When deterioration sets in, gifts may be replaced by the original donor or by others who wish to make such a contribution to the college.
GIFTS TO ANNUAL BUDGET AND DESIGNATED CAPITAL GIFTS
To minimize the likelihood of donors dictating the budget priorities of the college, to retain budgeting responsibilities with the administration, as charged in the college Bylaws (VII, 1.6), and to maintain flexibility in budgeting among all departments and divisions of the college; all restricted gifts (gifts designated by the donor) will be reckoned as budget-relieving at the college-wide level rather than at the departmental or divisional level.
Revised May 12, 2010.
Revised May 14, 2009.
Revised May 22, 2008.
In effect April 26, 2004.
Vice President for Development.