Office of Development
Approved by the Board of Trustees
October 21, 2011
Washington & Jefferson College - Gift Acceptance Policy
I. INTRODUCTION
Washington & Jefferson College is a private, liberal arts educational institution committed to offering high quality undergraduate degree programs. The College's mission is: to graduate men and women of uncommon integrity, competence, and maturity who are effective lifelong learners and responsible citizens, and who are prepared to contribute substantially to the world in which they live. To this end, the College promotes the development of skills, knowledge, personal qualities, and a worldview that characterizes a well-educated person.
The College encourages the solicitation and acceptance of gifts to the College that will help further and fulfill its mission. The following Gift Acceptance Policy (Policy) has been developed to establish standards by which gifts will be evaluated, as well as a formal process for carrying out such evaluations.
The purpose of the Policy is to give guidance and counsel to those individuals within the College community concerned with soliciting gifts and to inform those who support the College through charitable gifts. All gifts are to be accepted or rejected in accordance with the policies set forth herein. To prevent misunderstandings and conflicts, these guidelines should be viewed as flexible and realistic in order to accommodate unpredictable fundraising situations and donor expectations. Such situations and expectations, however, must be consistent with the College's mission and this Policy.
II. GENERAL GUIDELINES
Washington & Jefferson College encourages gifts in support of its mission as a private, liberal arts educational institution. The College seeks to implement a gift acceptance policy that will protect:
• the best interests and confidentiality of the donor;
• the welfare of Washington & Jefferson College;
• Washington & Jefferson College employees charged with the management of the charitable gift program; and
• volunteers who are assisting in charitable gift activities on behalf of the College
Donors are encouraged to consult with their personal advisors (accountants, certified estate or financial planners, attorneys, investment brokers, etc.) before making any gift to the College, particularly a planned gift. Advisors are likewise encouraged to contact the College as gifts are being considered.
Donations of gifts for unrestricted, general purposes are encouraged because of the flexibility they provide in meeting the most pressing needs of Washington & Jefferson College. The College reserves the right not to accept certain gifts, including but not limited to those from which the College will realize little or no financial gain, which are made for purposes that are inconsistent with the College’s educational mission, which have restrictions that violate the College’s ethical standards, which require illegal discrimination, or which are deemed to be not in the College’s best interest.
The College shall acknowledge all gifts and donations in a manner that respects the donor, including issues of confidentiality, and is consistent with current IRS regulations. In accepting a gift, the College also accepts a responsibility to the donor to steward that gift.
For the purpose of this Policy, a “gift” is defined as a voluntary and gratuitous transfer of cash, securities, real property and/or other assets to the College without consideration.
III. ADMINISTRATIVE RESPONSIBILITY AND AUTHORIZATIONS
Overall responsibility for ensuring compliance with the requirements of this Policy is assigned to the Vice President for Development & Alumni Relations. The Office of Development is responsible for managing the process of solicitations by staff, volunteers, faculty and others in accordance with approved gift policies and shall review all gifts to Washington & Jefferson College.
In special cases where there is a question about gifts being in the best interest of the donor and/or the College, gift proposals shall be further screened by the Gift Acceptance Committee. It is recommended that all gifts valued in excess of $5 million be subject to review by the Gift Acceptance Committee.
Gift Acceptance Committee
The Gift Acceptance Committee consists of the following individuals:
• Vice President for Development & Alumni Relations
• Chief Financial Officer
• Chair, Development Committee of the Board of Trustees
Other representatives from departments, centers, academic or other program areas of the College will be included for discussion of gifts in question as appropriate. As needed, legal advice will be obtained. Consensus is required. If consensus cannot be reached, the final decision to accept a gift will be made by the President, who may further consult with the Chair of the Board of Trustees as needed.
IV. APPRAISALS
Legal and ethical requirements, designed to protect the donor and the College, prohibit the College from appraising gifts. Such appraisals, if required by law or particular circumstances, are to be conducted by appraisers independent of the College. Generally, the cost of such an appraisal will be the donor’s responsibility.
V. EVALUATION OF COSTS
Proposed gifts of property and gifts in-kind must be evaluated to determine whether the costs to the College associated with receiving the gift can be accommodated prudently and evaluated related to the mission of the College. There may be circumstances where in which the associated costs might weigh against acceptance of a gift. The authority and responsibility for prompt, careful evaluation of such costs rests with the Vice President for Development & Alumni Relations, who shall, after conferring with other departments as appropriate, confer with the Chief Financial Officer regarding acceptance of a gift. Should the Vice President for Development & Alumni Relations and the Chief Financial Officer disagree about whether to accept a gift, the matter shall be referred to the Gift Acceptance Committee for a final determination.
VI. TYPES OF GIFTS
The following types of gifts and guidelines for acceptance criteria are outlined below. It is understood that special gifts or circumstances might require a case-by-case review and might not be addressed by this document. While these general guidelines may be communicated to donors, neither the College nor the Office of Development shall provide any legal, tax, investment or other advice to the donor, such advice being reserved to the donor’s advisors.
CASH
Cash is acceptable in any form. Checks or money orders shall be made payable to Washington & Jefferson College and shall be delivered to the Office of Development. Gifts may also be made by credit card, automatic debit, electronic transfer and W&J payroll deduction in accordance with College procedure.
PLEDGES
A pledge is a signed and dated commitment to make a gift over a specified period, generally two or more years, payable according to terms set by the donor and accepted by the College. Pledges must be documented by either a Memorandum of Understanding or other written documentation signed by the donor and countersigned by the Vice President for Development & Alumni Relations and the Chief Financial Officer. Pledges for $5,000,000 or more are also countersigned by the President of the College. Pledge documentation is to include:
Name of Donor
Name of Gift (if applicable)
Pledge Amount
Payment schedule (amounts and dates due)
Type of Gift (i.e. current use fund; endowed fund)
Purpose of Gift
Authorizations (i.e. publicity and donor recognition)
Statement that the pledge is legally binding
Other information as applicable (i.e. additions to fund; change of the fund’s use should stated purpose no longer be possible)
In general, pledges for major gifts should not exceed five years. Exceptions for very large or unusual gifts may be made by the Gift Acceptance Committee.
TANGIBLE PERSONAL PROPERTY
The College may accept tangible personal property as a gift. The property must be readily saleable and the donor must agree that it can be sold, but the College has sole discretion whether or not the item is sold or put to a use related to its exempt purposes. Property with an attached lien will not be accepted. The donor is responsible for establishing the value of the gift. If the perceived value is over $5,000, the donor is required to obtain a qualified appraisal and submit a copy to the College as well as submit an IRS Form 8283, in accordance with current IRS regulations.
Gifts of tangible personal property shall be examined in light of the following criteria:
• Does the property fulfill the mission of the College?
• Is the property readily marketable?
• Is a lengthy selling period anticipated?
• Are there any undue restrictions on the use, display or sale of the property?
• Are there any carrying costs for the property?
• Are there environmental issues or pre-existing conditions that need to be remediated?
Gifts of automobiles and other types of vehicles can be considered and will be evaluated per the above criteria. Other criteria considered before accepting a vehicle or other tangible personal property may include transportation and storage costs, cost of insurance, selling, maintenance or repair. If the gift is accepted, gift valuations must be determined by the donor per current IRS regulations.
Once tangible personal property is donated, the donated item becomes the property of the College. The College retains the right to dispose of the item as it deems fit to do.
SECURITIES
The College can accept both publicly traded securities and closely held securities.
Publicly Traded Securities
Securities that are traded on any recognized stock exchange and are readily marketable may be accepted by the College. As a general rule, all marketable securities shall be sold upon receipt unless otherwise directed by the Chief Financial Officer, or in consultation with the Gift Acceptance Committee. In some cases, marketable securities may be restricted by applicable securities laws; in such instance the final determination on the acceptance of the restricted securities shall be made by the Gift Acceptance Committee.
For electronic transfers, the value of a gift of securities for gift crediting and accounting purposes will be determined by taking the mean average of the high and low sale transactions of the security on the date that the transfer is received by the College’s broker, multiplied by the number of shares tendered. For stock gifts delivered by mail (endorsed physical stock certificates), the value of gift is determined by taking the mean average of the high and low sale transactions of the security on the postmarked date of the mailing or the date of hand-delivery to the Office of Development. In addition, physical stock certificates delivered by mail or by hand also require executed stock power forms, which must be delivered in separate envelopes from the actual stock certificates. Stock transfer procedures are detailed in the document “Making a Gift of Appreciated Securities” available from the Office of Development.
Closely Held Securities
Non-publicly traded securities can be accepted subject to the approval of the Gift Acceptance Committee. Gifts of this nature must be reviewed prior to acceptance to determine:
• The costs associated with such a gift;
• If there are restrictions on the security that would prevent the College from ultimately converting those assets to cash;
• If the security is marketable;
• Whether the security will generate any undesirable tax consequences, cash calls, or create a net liability for the College;
• That the value of the security is $100,000 or greater.
REAL ESTATE
Gifts of real property may include developed property, undeveloped property or real estate subject to a retained life interest. The following restrictions on acceptance of gifts of real estate apply unless waived by the Gift Acceptance Committee:
• Gifts of residential, commercial, industrial or agricultural real estate valued at $100,000 or more require approval by the Gift Acceptance Committee.
• The donor is responsible for obtaining an appraisal of the property by a qualified appraiser; the donor is required to share said appraisal with the College.
• All gifts of real estate shall be evaluated in light of the need for an environmental audit. Qualified environmental professionals selected and directed by the College shall perform a Phase I Environmental Audit. The cost of such audit is to be paid by the donor. An environmental professional is an individual who, through academic training or occupational experience, is qualified to conduct such an audit. The environmental audit is to determine whether a hazardous substance is, or in all likelihood could be, present on the property and shall contain in writing all information required by the Gift Acceptance Committee. The College has the discretion to require a Phase II Environmental Audit per the results of the Phase 1 analysis.
• If an environmental audit discloses the presence or likely presence of, or a release or threatened release of, a hazardous substance on the property, the transfer of the property to the College will not be accepted until satisfactory documentation is provided to the Gift Acceptance Committee that federal, state and local environmental authorities have determined that such condition has been remediated. The donor will bear the cost of any environmental cleanup.
• In most instances, no gift of real estate encumbered by a mortgage or lien shall be accepted (except for bargain sales, as discussed below).
• Before the presentation to the Gift Acceptance Committee, a staff member from the Office of Development must conduct a visual inspection of the property. If the property is located in a geographically remote area, a real estate consultant hired by the College, rather than a staff member, may conduct the visual inspection.
• Before presenting the gift proposal to the Gift Acceptance Committee, the donor must provide the following documents:
1. Real estate deed
2. Most recent real estate tax bill and receipt
3. Plot plan or survey
4. Substantiation of zoning status
5. Environmental site assessment
• Before the presentation to the Gift Acceptance Committee, the donor must certify in writing that to the best of the donor’s knowledge:
1. No violations of state, local or federal law exist on the property;
2. There are no restrictions on the title to the property;
3. No unrecorded rights of way, easements or encumbrances are attached to the property;
4. No contractual or other donative commitments to other individuals, corporations or groups are attached to the property;
5. The property is neither the subject of, nor threatened with, litigation;
6. The property is not contaminated with environmental hazards.
• If the donor is giving a retained life estate gift, the donor shall enter into an agreement with the College to pay for all or a portion of the following during the donor’s lifetime:
1. Maintenance costs
2. Real estate taxes
3. Insurance
4. Any other current carrying costs of the property
5. Real estate broker’s commission and other costs of sale; and
6. Appraisal costs
• The donor must be advised before making a gift of real estate that the property will likely be sold upon receipt.
BARGAIN SALES
The College may enter into a bargain sale arrangement in instances in which the bargain sale furthers the mission and purpose of the College. All bargain sales must be reviewed and approved by the Gift Acceptance Committee. Factors used in determining the appropriateness of the transaction include:
• The College must obtain an independent appraisal substantiating the value of the property;
• If the College assumes debt with the property, the debt ratio must be less than 50% of the appraised market value;
• The College must determine that it will use the property, or that there is a market for sale of the property allowing sale within 12 months of receipt;
• The College must calculate the costs to safeguard, insure and expense the property (including property tax, if applicable) during the holding period.
INTELLECTUAL PROPERTY
Gifts of intellectual property (i.e. patents, copyrights, etc.) may be considered and shall require the review and approval of the Gift Acceptance Committee and, at their discretion, review by qualified experts in the industry.
LIFE INSURANCE
The College will accept life insurance policies as gifts only when the College is named as the irrevocable owner and beneficiary of 100% of the policy. If the policy is paid up, the value of the gift for the College’s gift crediting and accounting purposes is the policy’s replacement cost. If the policy is partially paid up, the value of the gift for the College’s gift crediting and accounting purposes is the policy’s cash surrender value. The issuing insurance company will be consulted in the calculation of the value less any policy loan.
If the donor contributes future premium payments, the College will include the entire amount of the additional premium payment as a gift in the year that it is made. It is recommended that the College secure a written pledge from the donor to provide for future premium payments. If the donor does not elect to continue to make gifts to cover premium payments on the life insurance policy, or defaults on their pledge to do so, the College may:
• Continue to pay the premiums,
• Convert the policy to paid up insurance, or
• Surrender the policy for its current cash value.
LIFE INSURANCE BENEFICIARY DESIGNATION
Donors and supporters of the College are encouraged to name the College as beneficiary or contingent beneficiary of their life insurance policies.
BEQUESTS
The College encourages alumni and friends to make bequests to the College through their wills and trusts, and to disclose their bequest intentions to the Office of Development in writing to ensure that the College is able to carry out their wishes and that the gifts conform to the principles in this Gift Acceptance Policy. Gifts from estates of deceased donors that do not conform to the College’s policies may be accepted or rejected pursuant to the procedures outlined above and such decision communicated to the legal representative of the estate. If possible, a mutually agreeable plan shall be negotiated between the College and the representative to make the gift acceptable.
CHARITABLE TRUSTS
The College may accept designation as a remainder beneficiary of a charitable remainder trust. The College may also be added as a payment beneficiary of a charitable remainder trust as governed by applicable Internal Revenue Service regulations. The College may accept a designation as income beneficiary of a charitable lead trust; however, in most cases, the College will not serve as trustee of a charitable lead trust. Neither any members of the Gift Acceptance Committee nor any employee or other person acting on behalf of the College shall recommend to a potential donor any corporate fiduciary nor shall such employees or representatives of the College accept an appointment as Trustee of a charitable remainder trust or charitable lead trust.
The minimum contribution required to establish a charitable remainder trust where the College serves as trustee is $100,000. Furthermore, if W&J is the trustee, said trust must: name Washington & Jefferson College as an irrevocable beneficiary; name W&J as beneficiary of 50% or more of the trust and; income recipients/s must be age 55 or older as of the date the trust is established.
CHARITABLE GIFT ANNUITIES
The College may offer charitable gift annuities. Gift Annuities and Deferred Payment Gift Annuities will be accepted for a single life or two life-joint and survivor only, unless the Gift Acceptance Committee approves acceptance under other circumstances.
• No gift annuity that names an income beneficiary younger than age 65 when payments begin shall be accepted without approval of the Gift Acceptance Committee.
• The minimum contribution for a Gift Annuity shall be $10,000; acceptable forms of gifts include cash and marketable securities. The College will not typically accept real estate, tangible personal property, or any other illiquid asset in exchange for a current charitable gift annuity.
• The College will use the payout rate schedule suggested by the American Council on Gift Annuities. Annuity payments may be made on a quarterly, semi-annual or annual schedule. The Gift Acceptance Committee may approve exceptions to this payment schedule.
RETIREMENT PLAN BENEFICIARY
Donors and supporters of the College will be encouraged to name Washington & Jefferson College as beneficiary of their retirement plans, such as their IRA, 401(k), 403(b), and other types of plans.
VII. MISCELLANEOUS PROVISIONS
Restrictions on Gift Levels/Endowment Funds
The College accepts gifts of any size for unrestricted endowment or as additions to existing restricted endowment funds. Generally, a new restricted endowment fund can be established at a minimum level of $10,000. Depending on the purpose of the fund, the level may be substantially higher per the chart of gifts below. If the endowment fund is to be created through residual of a charitable gift annuity, the minimum level required at the time of establishing the gift annuity is twice the listed minimum endowment levels below. The annual amount of support provided by an endowment fund is determined in accordance with the College’s guidelines on endowment spending as established by the Washington & Jefferson College Board of Trustees.
• Fully Endowed Chair (sciences) $2,000,000
• Fully Endowed Chair (non-sciences) $1,500,000
• Full Scholarship $1,000,000
• Named Scholarship $50,000
• Magellan Project Fund $50,000
• General Named Endowment Fund $10,000
(non-scholarship; i.e. prize fund; departmental discretionary fund)
VIII. CHANGES TO GIFT ACCEPTANCE POLICIES
These policies and guidelines have been reviewed by the Development Committee of the Board of Trustees of Washington & Jefferson College and approved by the full Board of Trustees. It is recommended that the Vice President for Development & Alumni Relations review the Policy on an annual basis. Should changes be recommended the Development Committee of the Board of Trustees must approve any changes to, or deviations from, these policies.
Approved on the 21st day of October 2011
Kenneth R. Melani, M.D., Chair, Board of Trustees