SUBJECT: Donations to The University of Memphis PROCEDURE: 2A:09:03A DATE: November 1, 1997 SUPERSEDES PROCEDURE NO.: 2A:09:03A DATED: February 1, 1992 A. Responsibility for Acceptance of Gifts 1. The Vice President for Advancement is responsible for the coordination and acceptance of all gifts (personal or real property, services, and cash) to the University. The Office of Development should be advised immediately upon learning of the probability of the offer of a gift or donation of any type. After securing all appropriate information, a recommendation to accept the gift or donation will be submitted for approval as detailed in this procedure. Depending on the value, the President or the Vice President for Advancement will make a final decision on acceptance of the proposed gift or donation. 2. For non-cash donations, a Donation Report Form (Attachment I) must be initiated by the receiving department and approved through appropriate channels. No acceptance or delivery of the item/service can be made until the Donation Report Form is fully completed, with all applicable approvals, as detailed below, secured in advance. The Office of Development coordinates all notification of acceptance/rejection to the donor. B. General Definitions and Requirements 1. "Gifts-in-Kind," for the purpose of this procedure, refers to all gifts which are not in cash or marketable securities and includes tangible property or services. 2. The valuation of gifts-in-kind is an internal designation only. Material gifts-in- kind will be recorded in University accounts as both revenue and expenditure. Values for recording purposes will be determined based upon valid documentation. Exceptions, however, will occur when the University accounts for such amounts for "matching funds" purposes or giving the donor credit for various gift levels and similar reasons, i.e., Athletic Department Tiger Clubs. 3. In accordance with University Operating Procedure No. 2D:03:05A, Purchasing, donations of real property, insurance, and capital outlay are subject to the approval of the Chancellor of the Tennessee Board of Regents or his designee. The Office of the Vice President for Business and Finance will secure such approvals. 4. Restricted gifts-in-kind used to meet "matching funds" requirements received from a different donor or sponsor should be coordinated through the Office of the Vice Provost for Research, in addition to the other requirements detailed in this procedure. 5. Gifts-in-kind in the form of incidental volunteer personal services (fund raising telethons, public relations, alumni-sponsored fund raisers) are generally not recorded. The Donation Report Form described below is not necessary for volunteer services (except as noted below). 6. The value of donated professional services such as medical, engineering, or architectural may be recorded where such services normally would have been purchased. 7. As noted below, the department should reasonably estimate costs associated with renovation, installation, and annual maintenance for property and equipment donations. Such initial and ongoing costs will be part of the determining factors in accepting or rejecting the gift. Also, the University will not routinely replace donated items. C. Real Property and Testamentary Gifts The Office of the Vice President for Business and Finance is responsible for the coordination and acceptance of all donations and gifts of real property and testamentary bequests and devises in coordination with the Office of Development. The same information shall be secured for these type donations or gifts as outlined above. D. Donations of Hardware, Software, and Related Services Specific guidelines must be followed for any acquisition of data processing equipment, software and related services. The term acquisition, according to Tennessee Board of Regents Guidelines, encompasses gifts as well as purchases, leases, etc. Responsible parties contemplating acceptance of such gifts are referred to University Operating Procedures No. 2D:03:05A, Purchasing, and No. 2D:03:05C, Contracts for Acquisition of Hardware, Software and Related Services, for more detailed information. E. Tennessee Board of Regents Approval The Office of the Vice President for Business and Finance shall be responsible for securing the approval of the Tennessee Board of Regents when appropriate. University Operating Procedure No. 2D:03:05A requires approval at the TBR level for acquisitions of real property, insurance or capital outlay donations. F. Gift-in-Kind Valuation 1. Values for Gift-in-Kind recording in University accounts are determined based upon valid documentation. The value of the in-kind gift is for internal purposes only and should not be used by the donor for tax deduction purposes. It is the responsibility of the donor, not the University, to secure appropriate information and forms for his/her personal IRS reporting. Refer also to University Operating Procedure No. 2D:01:08A, Tax Law Concerning Gifts of Noncash Property, for additional information. 2. In general, the value used in recording the gift-in-kind should be the lower of the fair market value on the date of the gift or the reasonable value of the gift-in-kind to the University. The value should be based upon, but is not limited to, the following general criteria: a. Fair market value as it relates to the use and/or actual need for the item by the University. b. Purchase price available to the University by competitive bidding. c. Donor's recommended retail sales price will not be considered if it is not the normal market sales price. d. Published rental rates of item will not be used. e. If there is no need for the item, value will be determined by disposable income. f. Costs of acceptance of the item will be considered. g. If donation/gift is less than complete, i.e., periodic use not to exceed one (1) year, the value will not exceed the cost savings to the department. 3. If the donation is a single item, valid documentation must be included with the Donation Report Form. If amounts are recurring, the value will be determined prior to June 30th. 4. Other departments, i.e. Purchasing and Physical Plant and Planning, may be consulted to assist in determining values. G. Documentation for Gift Values Adequate support documentation which provides a description and other pertinent information concerning a proposed gift/donation must be included with the Donation Report Form when the form is submitted for approval to accept the gift/donation. This includes, but is not limited to, published price lists, appraisals, brochures, etc. Additionally, once the gift/donation is received and it is from a business and/or professional, i.e., food and beverage products, printing, physician, dentist, etc., a bill/statement must be provided as if the goods or services were being sold. For tangible products, the bill/statement must indicate what is being provided, including, but not limited to, name of the product, model number, serial number, quantity, etc. For professional services, i.e., medical services, the bill/statement must identify the service, date of service and identify the individual(s) for whom the services were provided. The department receiving the gift/donation shall approve the bill/statement as if it was going to be processed for payment; provided, however, where the account number is normally indicated, the words "Gift/Donation" should be written. The bill/statement should then be submitted for attachment to the Donation Report Form which was previously approved for acceptance of the gift. H. Disposal and Internal Revenue Service Notification If the University sells, exchanges, or otherwise disposes of "charitable deduction property," as defined under Internal Revenue Codes and Regulations, within two (2) years after receipt of the property, then an information return must be filed with the IRS. The department disposing of the property should refer to University Operating Procedure No. 2D:01:08A and provide information as specified. I. Additional Requirements The Vice President for Advancement will ensure that any additional requirements are met prior to acceptance of the gift. As noted above, if the item requires Tennessee Board of Regents approval, the Office of the Vice President for Business and Finance will be notified. That office is responsible for the coordination and acceptance of gifts requiring the approval of the Tennessee Board of Regents. J. Approval of Acceptance The President's approval is required for all items with a value over $5,000. For items $5,000 or less, only the approval of the Vice President for Advancement is required. The Vice President for Advancement secures the President's approval as necessary. K. Office of Development Actions 1. A complete record of all gifts and donations to the University will be maintained in the Office of Development. 2. Proper acknowledgment of all gifts and donations will be made by the Vice President for Advancement, who will also insure that all letters and publicity concerning gifts and donations are appropriately coordinated prior to release. Departments, i.e. Athletics Department, that receive a large number of gifts and donations may be permitted to handle acknowledgment and publicity. 3. Upon receipt of an offer of a gift/donation, receipt of the required information concerning the item(s), and receipt of the written recommendation to accept, the Vice President for Advancement accomplishes the following: a. Reviews thoroughly the information submitted by the department/activity head. b. Determines that existing Internal Revenue Service requirements have been met. For additional information regarding donations of noncash property, refer to University Operating Procedure 2D:01:08A, Tax Laws Concerning Gifts of Noncash Property. c. Secures the approval of the President if the value of the item exceeds $5,000. d. As needed, reviews the gift/donation proposal with the submitting department and prospective donor, and as appropriate, advises the donor of the non-acceptance and the reasons therefore or the terms and conditions under which the gift/donations will be accepted. e. Advises the concerned department of the decision to accept or not accept the gift or donation. f. Determines if the documentation of value submitted with the Donation Report Form is adequate. g. Coordinates the transfer of ownership and physical possession of the item(s) with the donor and the appropriate University department officials. h. Advises the following offices of the acceptance of the gift or donation. Notification of acceptance will include a copy of the completed and approved Donation Report Form. (1) Accounting Office (2) Department Chairman/Activity Head receiving the gift L. Exceptions and special procedures may be established for departments that receive a large number of gifts and donations, i.e. Athletics Department.