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Frequently Asked Questions

What policies govern gifts and fund raising?

I, the Donor,

Who can contribute to a gift fund?

Any person, corporation, foundation or other non-governmental entity may make a charitable-deductible contribution to a gift fund. In doing so, they agree to the terms and conditions governing allowable expenses, investment policy and other terms.

Departmental funds may not be used to contribute to gift funds (i.e., general fund dollars cannot be transferred to a restricted fund).

Federal and state funds may be added to gift funds in rare cases (usually a one-time, small transaction), but the revenue is not considered gift revenue (it is other revenue). Contact the Office of Sponsored Programs for more information.

Give X to UVM

What can be given?

Donors may contribute by cash, checks, credit card or marketable securities (stocks, bonds).

Most forms of personal property or other tangible assets are allowed, however, these transactions should be reviewed with Development and Alumni Relations before accepting the gift to ensure compliance with IRS regulations, GASB standards and other policies.

Many other forms of revenue can be deposited to a gift fund, but not all. For example, an event may be held where proceeds benefit a gift fund. Each situation is different and departments might need additional authorizations to accept income. Contact Alumni and Parent Programs to initiate these types of fund raisers.

For Y Purpose

What is a gift fund?

A gift fund (sometimes called gift account) is a restricted fund, including endowed funds, to which donors make gifts. Most of the revenues qualify as charitable deductions for donor tax purposes.

A gift fund is a restricted fund because donors contribute to the fund with the expectation that the gift will be spent in a particular way (governed by the restrictions on the fund).

Donors may contribute to the University without any restriction on the use of the gift. These gifts benefit The UVM Fund (sometimes referred as president's unrestricted fund or annual giving fund).

What kinds of expenses are allowed?
                                                    
Each fund has its own set of restrictions or allowable expenses, which can make knowing the allowable expenses difficult. Here’s why:

  • Some funds are very restrictive and others are virtually unrestricted.
  • Simply having a "gift fund" does not necessarily mean the fund is unrestricted.
  • The name of the gift account or other codes might not convey the true allowable expenses.
  • A document governs the allowable expenses.

No special phrase exists to differentiate an "unrestricted" type gift fund—the type of flexible fund most departments want—from a gift fund with many restrictions. Some phrases used to mean unrestricted are “annual fund” or "discretionary fund" or "gift account". "Unrestricted" here means there are no restrictions, aside from the college/school, department, or program in control of the fund. To verify if a gift fund is truly unrestricted, consult the governing fund language document.

A gift fund might be named after a donor or an emeriti faculty member or a department, etc. Because of this, the name of a gift fund does not necessarily relate to its purpose. For example, “The Chris Jones Endowed Chair Fund” might be an endowed chair gift fund which allows for research expenses only and not salary or fringe.

All restrictions are outlined in the terms and conditions governing the fund, including allowable expenses, and are recorded either in the Treasurer's Office or in the Gift Records Office of Development and Alumni Relations. The document is sometimes called "fund language" or "memorandum of understanding". For a copy of the terms and conditions governing a fund, contact the unit business manager or Gift Records.

What happens if a donor's gift is more restrictive than a gift fund?

Sometimes a donor is more restrictive with his/her gift than the gift fund. For example:  UVM might have a HOCKEY TEAM FUND, with no other restrictions. UVM might also have a HOCKEY TEAM EQUIPMENT FUND, which allows equipment expenses only. A donor might be more restrictive than either of those funds, by writing "Here's my gift of $xxx for the Hockey Team to buy hockey sticks only". For auditing reasons, this gift must be tracked separately and here is how it is done:

  • If the gift is $10,000 or more, it will be deposited to a totally new gift fund, perhaps called "Hockey Team Sticks Fund".
  • If the gift is under $10,000, it will be deposited to HOCKEY TEAM GIFT HOLDING FUND with a note to the department that the gift is for "hockey sticks only ".

In Peoplesoft, “Source” is used to identify revenue from educational and operating programs, sponsored projects, donor contributions and endowments.

chart string

An "unrestricted" (or discretionary) type gift fund has a Source code of 400001 – Pooled Gifts. This has to be used in conjunction with other chartfields to know the restrictions, i.e., the other chartfields are the only controlling factors over the gift fund. For example, if there is only an operating unit and department with no program, nor purpose code, then these are discretionary gifts for the department.

A Gift Holding ("earmark") type gift fund has a Source code of 499999 – Gift Holding. The reference field in Peoplesoft will contain the specific instructions of the donor. Two options are available at this point to the department: (1) spend the gift by charging expenses to this chartstring or (2) request a new gift fund be established and the gift will be transferred to this new fund.

All other Source codes have unique sets of restrictions and budget managers should consult the governing terms and conditions of those funds.
As new gifts are received starting in FY07, Gift Records will review the restrictions and the chartfields for accuracy. Note, some gift funds with unique a Source chartfield might actually be better classified as 400001 Pooled Gift source instead. This can be updated at that time.

Can we change a donor’s restriction or change an existing gift fund?

This can be extremely difficult. Under Vermont law, any change of any kind to any gift fund must be authorized in writing by all donors whose gifts are unspent.

If a donor is deceased or cannot be contacted, then only the Attorney General can authorize changes on behalf of that donor.

What are the different types of gift funds?

A restricted fund is fully expendable for the stated purpose. For an endowed fund, only the budgeted amount is expendable for the stated purpose.

How do we get a gift fund?

Gift funds are subject to review by and, approval of, the Office of Financial Analysis and Budgeting, the Treasurer's Office and, in many cases, the Provost's Office.
                                  
To start the process, go to "Set Up a New Gift Fund."

With Z in Return

Can a donor get anything in return for a gift?

Yes, however, certain rights, privileges, services, goods or other conditions given to or expected by the donor in return for a gift may alter the charitable nature of the gift based on IRS regulations and other policies.  In addition, the way in which the gift was solicited may dictate the type of fund, according to GASB accounting standards and other policies. Therefore, planning and coordinating solicitations with Development and Alumni Relations is very important to document gift conditions and expectations and to ensure proper accounting and receipting. 

Examples of rights, privileges, services, goods or other conditions given to or expected by the donor in return include:

  • Naming of a room, building, program, college/school, etc.
  • Tickets, hats, jackets, or other tangible substantive products
  • Entrance into a raffle or other game of chance.
  • Sponsorship, usually tied to corporate benefits programs
  • Admission to conference, event, dinner, golf, etc. with no gift
  • See also Grants vs. Gifts vs. Fund Raising

Can an employee give to his/her own department or fund?

An employee cannot donate to a fund he/she manages and receive an official tax receipt. The IRS specifically prohibits this activity. See IRS Publication 526 regarding donor control. To provide employees an opportunity to make gifts in support of his/her department, special gift funds will be created at the dean or provost level where control rests with the supervisor, not the employee. Example, the chair of the department might want to make a contribution to support his/her department. A gift fund will be created in the name of the department but the control will be in the dean's office. Specifically in Peoplesoft, this means the Department chartfield will be that of the dean's office to ensure the donor has given up control of the gift. Gifts to endowments have special considerations and are handled on a case by case basis.
                     
Can an employee provide a free service in exchange for a gift?  

An employee might provide a service (e.g., give a lecture or provide consulting) to a non-UVM organization or company. The employee agrees to do the service free of charge and then the company can choose whether or not it wants to make a gift to UVM. But, most companies still consider this “fee for service” and not a gift. In these cases, the check cannot be accepted because (a) if the employee was acting on behalf of UVM, then the check is service revenue, not a gift and must be deposited as sales/service revenue or (b) if the person was not acting on behalf of UVM, then the check is actually income to the person, reportable on his/her income taxes. For more information, contact Gift Records.

What’s difference between a “reimbursement” and a “gift”?:

An outside group might be willing to cover UVM’s costs for refreshments at a UVM meeting or cover UVM’s costs for a mailing. Even though the group is only paying for UVM’s actual expenses, this is revenue (not a reimbursement, not a credit deposit against an expense) and would be processed as a gift in most cases.

What’s the difference between a “sponsorship” and an “ advertisement”?

The terms sponsorship and advertisement are sometimes used interchangeably. For tax purposes, an advertisement contains a call to action and is not treated as gift revenue, where a sponsorship simply displays basic company information and is treated as a gift. Examples: if a sign displays a company logo with phone number, then it is a sponsorship, but if the same sign also says “call us for free quotes”, then it is an advertisement (not a gift).

What’s the difference between a “gift” and a “grant”?:

The words "gift" and "grant" are used interchangeably by donors and grantors, however, the nature of the transaction drives UVM accounting procedures (not the words). These procedures reflect IRS regulations, GASB standards, UVM policies and other related internal and external requirements. See the Accounting Procedures link for a flowchart for knowing when to contact OSP or DAR.