Transcript Document

Oakland University
Development Information Services
Assistant Dean / Business
Manager Training
Understanding Gift Accounting
1
Training Topics
1)
2)
3)
4)
Banner Advancement – Part of SunGardHE
Gift Accounting Department
Banner Advancement Definitions
Gift Designations
a)
b)
c)
d)
5)
6)
7)
8)
9)
10)
Reporting Data
Finance Data
Endowment Fund Data
Financial Aid Data
Gift Types
Feed-to-Finance Process
Monthly Reconciliation
The Link Back to Advancement
Detail Gift and Pledge Data
Summary Gift and Pledge Data
2
Training Topics - continued
11)
12)
13)
14)
15)
16)
17)
18)
19)
20)
Viewing Constituent Information
Pledge Write-Offs
Quid Pro Quo Contributions
Games of Chance
Gifts-In-Kind
Corporate Sponsorships vs. Advertising
Contributions vs. Contracts (Exchange Transactions)
Scholarship Gifts
Endowments
Access to Banner Advancement / More Information
3
We hope this training makes your job a little bit easier!
4
Banner
STUDENT
SYSTEM
-Admissions
-Registration
-Courses
-Grades
-Majors
-etc.
FINANCE
SYSTEM
-GL
-Purchasing
-A/P
-Budgets
-etc.
HR
SYSTEM
-Applicant
-Compensation
-Payroll
-Benefits
-etc.
A-Tuition & fees
B-Alumni data
C-Pledges/gifts/membership fees
D-Scholarship recipients/amounts
E-Scholarship amounts
F-Payroll deduction gifts
G-Payroll and benefit costs
Shared Data:
-Name
-Address
-Phone
-E-mail
ADVANCEMENT
SYSTEM
-Constituent /
Organization
-Gift and Pledge
-Membership
-Prospect
-Event
-etc.
FINANCIAL
AID
SYSTEM
-Funds Management
-History and Transcripts
-etc.
5
Gift Accounting Department

Structure
– Reports to D.I.S. (Development Information Services)
– 2.75 Gift Accountants (Maria Cavallaro, Debbie Misztura,
Dianne Brantley)
– 1 Manager (Theresa Allen)

Responsibilities
– Gift, pledge and pledge payment processing – approx. 14,000
transactions annually
– OUAA membership processing - 2,000 transactions annually
– Designation maintenance - over 600 active gift designations
– Address changes
– Name changes
– Data maintenance
6
Gift Accounting Department

Policy
– Gifts and pledges must be submitted to Gift Accounting
the same day as received (Admin. policy 500).


Deliver to cashier’s office - take the completed gift register,
check and any supporting documentation in an inter-office
envelope addressed to Gift Accounting to the Cashier’s Office.
Or:
Deliver to John Dodge House – take all of this information
personally to Gift Accounting in the John Dodge House.
– Supporting documents must accompany the gift


T

used to determine if it is a gift
how to properly code it in Banner
helps alleviate calls from GA
7
Gift Entry / Receipt Form
OU employee contact info for possible questions
-Owner of the asset
-Address
-Owner of the asset
-Address
-X030
is for
If CC info is on
-X030 is gifts
backup docs, no
info tois enter
on backup
for gifts -needIf CC need
here.
docs,
no
need
to
enter
here.
gift
-need gift
fund
fund
-memo (soft) credit
-in memory/honor of
-memo
credit
-extra data
not(soft)
in backup
-in memory/honor of
-extra data not in backup
T
8
Banner Advancement Definitions

Person
– Someone with no fundraising relationships with OU (not a donor, an
alum, or a prospective donor).

Non-Person
– A company with no fundraising relationships with OU (not a donor
or a prospect).

Constituent (subset of “Person”)
– Someone who has fundraising relationships with OU (a donor, an
alum, or a prospect).

Organization (subset of “Non-Person”)
– A company with a fundraising relationships with OU (a donor or a
prospect).

Prospect
– A person or organization that is being cultivated to make a gift.
9
Advancement Definitions-continued

Pledge
– A donors promise to give (one time or in installments)

Gift
– A 100% transfer of assets from the donor to OU with “no strings
attached”

Pledge Payment
– A 100% transfer of assets from the donor to OU with “no strings
attached” applied to a previous pledge

Soft Credit
– Credit for gift recognition to another constituent.

Third Party Payments (TPP’s)
– A TPP is when someone makes a payment on another
person/company’s pledge.
10
Gift Designations / Funds



Fund - Banner Finance term
Designation - Banner Advancement term
Designations feed to Funds in the GL
– Gift Funds:



The majority of all gift and endowment spending funds begin
with “3”. (some “5” and “7” funds)
OU Endowment corpus funds begin with “6”
Contributions from donors can only go to gift or endowment
funds.
– Creation of Gift Funds:


Create new funds for things that will be ongoing or large dollar
amounts vs. one-time gifts for odd purposes.
The “gift comment” feature in Banner, printed on your regular
reports, is used to notify you of a gift for a special purpose that
has been deposited into a general gift fund.
11
Gift Designations / Funds

Banner Designation Table (ADADESG)
–
–
–
–
University Designations
Foundation Designations
College / Unit Association
Type
EN-Endowment
 RE-Restricted
 SC-Scholarship
 UN-Unrestricted

12
Gift Designations / Funds

Designation Table cont. (ADADESG)
– VSE Association (Voluntary Support of Education Survey)
– Group
EN-Endowment
 OP-Operating
 PP-Physical Plant

– Department within College / Unit
– Finance Information for Automatic Feeds
13
Gift Designations / Funds

Designation Table cont. (ADADESG)
– Designation ID’s


Establishing Donor
Annual Report Recipient
– Designation Comments (ADACOMT)



Fund Purpose
Spending Criteria
Spending Fund
– Designation Attributes (ADADESG)


A way to further “code” designations
Query purposes – coding designations for stewarding
– Fund to be stewarded (STEW)
– Steward when partially funded (STE1)
– Inadequate data to steward (STE2)
14
Designations Attributes
15
ADADESG – Donor Information

Designation ID’s
When each of the people types below have
Banner ID’s, they are linked to the designation
– Donors
Establishing Donor (ESTA)
 Establishing Donor 2 (EST2)

– Fund Report Recipients (donors may be deceased)
Annual Report Recipient (ENDR)
 Annual Report Recipient c.c. (ENDC)

16
Designation ID’s
17
ADADESG – Endowment Info

Designation Comments and Subject Comment Codes
The way we describe detailed information about
designations
– GTVSUBJ – Subject Index Validation Table

This is a “general” or “shared” validation table to which we add special
subject comment codes, link them to designations for descriptive
purposes.
– Summary Information for Catalog (ENDCAT)
to feed into the undergraduate catalog and scholarship website
– Fund Purpose (ENDPUR)
– Award/Spending Criteria (ENDCRI)
– Full Name of Fund (ENDFNM)
– Spending Fund 1 (ENDSPF)
– Spending Fund 2 (ENDSP2)
– Endowment Corpus Fund (ENDCPF)
– Miscellaneous Notes (ENDNOT)
18
Subject Comment Codes - GTVSUBJ
19
Designation Comments - ADACOMT
20
Subject Comment Codes for this Designation
Clicking the
“down arrow”
gets you this
box
21
Fund Purpose Comment
22
Award / Spending Criteria Comment
23
Miscellaneous Notes Comment
24
Spending Fund Comment
25
ADADESG – Financial Aid Information


Financial Aid Funds
A link between the endowment funds in
Advancement and the student receiving the
award/scholarship
Designation Financial Aid Query (ADIAWRD)
A form showing by student, by term, based on the
“link” above:
– Award amount
– Amount accepted
– Amount paid

Need to work closely with FA staff
26
Financial Aid Fund Code
•We want a one-to-one
relationship between
spending/endowment funds
and FA funds
•Reduces awarding from
“general funds”
27
Getting to Financial Aid Award Information
28
Actual Financial Aid Award Information (ADIAWRD)
An award could be
offered and not accepted
or could be offered,
accepted and not paid
(yet or ever).
29
Gift Types
T
GIFT
CODE
DESCRIPTION
1A
1S
2A
AS
BP
BQ
CA
CC
CK
CL
CR
CS
DP
EF
GA
GN
GR
GT
LC
LI
MC
ME
MG
OL
PD
PR
RO
SE
One Life Annuity-Check
One Life Annuity-Stock
Two Life Annuity-Check
Annuity Surrender
Bequest-Previous Deposit
Bequest-Check
Charitable Gift Annuity-Check
Credit Card
Check
Charitable Remain Lead Trst-Ck
Charitable Remainder Trust-Ck
Cash
Previous Deposit
EFT/Wire Transfers
Appreciated Property-GIK
Non-Tangible Gift-in-Kind
Real Estate Gift-in-Kind
Tangible Gift-in-Kind
Life Ins-Cash Surrender Value
Life Insurance Premimums-Check
Matching Gift-Credit Card
Matching Gift-EFT
Matching Gift-Check
OnLine Giving
Payroll Deduction-NOT USED
Automated Payroll Deducts
Recognition Only
Securities
DOES
RULE ADVANCEMENT
CLASS FEED IMPACT
CODE
GL?
ASCK
ASLM
ASCK
ASLO
ASLO
ASCK
ASCK
ASCC
ASCK
ASCK
ASCK
ASCH
ASLO
ASEL
ASLN
ASLN
ASLN
ASLN
ASLO
ASCK
ASCC
ASEL
ASCK
ASLO
ASLP
ASDE
ASLO
ASLM
Yes
Yes
Yes
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No - JV is done
Not yet
Not yet
Not yet
Not yet
No
Yes
Yes
No - JV is done
Yes
No - Deposit or JV
No - JV is done
Yes
No
Yes
30
Feed to Finance Process

Pledges, payments, and outright gifts are
processed and fed to Banner finance
nightly.
31
Feed to Finance Process

DESIGNATIONS
– Donors can designate their gift/pledge to
almost any area of the university.

Designation Examples
– 30085-FD SEHS Gift Fund (no longer used)
– 30085-OU SEHS Gift Fund
32
OU Designation
33
Feed to Finance Process

GIFTS
– When the transaction is processed (automatic feed
nightly)

Credit Entry
– Fund: 30085 (OU fund)
– Acct: X030 (gift revenue)

Debit Entry
– Fund: 30085 (OU fund)
– Acct: 1001 (cash)
34
Feed to Finance Process

PLEDGES
– When the transaction is processed (automatic
feed nightly)

Credit Entry
– Fund: 30085 (OU fund)
– Acct: X028 (pledge revenue)

Debit Entry
– Fund: 30085 (OU fund)
– Acct: 1576 (pledges receivable)
35
Feed to Finance Process

PAYMENTS ON PLEDGES
– When the transaction is processed (automatic
feed nightly)

Credit Entry
– Fund: 30085 (OU fund)
– Acct: 1576 (pledges receivable)

Debit Entry
– Fund: 30085 (OU fund)
– Acct: 1001 (cash)
36
Monthly Reconciliation

Gift Accounting Manager:
– Generate MSAccess reports
– Compare Advancement activity with Finance activity for the
month.
– Reconciliation is performed.
– Reports by Unit/Dept/Fund distributed
 Outright Gifts
 Pledge Payments
 Pledges
– Business Manager’s responsibility to share these reports
with the appropriate areas in their unit.
T
37
Monthly Reconciliation

TPP’s (Third Party Payments)
– TPP’s are recorded as “gifts” in Banner
Advancement on the record of the “hard credit”
donor so they feed to finance as an X030, not
1576.
– During monthly pledge reconciliation, we
identify any TPP’s processed for the month and
do a manual JV to reduce the pledge on the
Finance side.
T
38
The Link Back to Advancement

View data that was “fed”
– Gift Report
– In FGITBAL

Get Document Reference # / Gift #
– From gift report
– FGIDOCR

Find Gift in Advancement
– ADAGIFT

T
See Additional detail info if needed
– AGCGIFT
39
Business Manager Report - Gifts
OAKLAND UNIVERSITY
Gifts Made Directly to OU Units By Unit with Subtotals by Department and Designation
7/1/05 to 7/31/05
Date
Input
Amount
Gift Date
Gift
Type(a)
Gift
#
Pledge
#(b)
Transferr
ed to GL
Fund#(c)
GL
Doc. #
7/25/2005
CK
0323527
0000000
30230
F0015043
Brown, Thomas
BS0607812
7/14/2005
CS
0323431
0000000
35122
F0014991
ANONYM OUS, General
BS0607812
7/14/2005
CS
0323430
0000000
35122
F0014991
Donor Name/Gift Comment
UNIT: Finance & Administration
Department: Meadow Brook Hall
30230-OU
7/27/2005
MBH Garden Club Gift Fund
$300.00
Designation Total
35122-OU
T
Larsen-Becker, Brenda
SS0607825
$300.00
Meadow Brook Hall Gifts and Donations
7/15/2005
$1.00
7/15/2005
$97.00
7/22/2005
$500.00
Comerica, Inc.,
SS0607821
7/20/2005
CK
0323489
0000000
35122
F0015027
7/28/2005
$2.00
Brown, Thomas
BS0607826
7/27/2005
CS
0323542
0000000
35122
F0015056
Designation Total
$600.00
De partment Total
$900.00
40
View of FGITBAL
T
41
View of FGIDOCR
T
42
View of ADAGIFT
Use F7 to put form in query mode
then enter gift #. F8 to execute.
T
43
View of AGCGIFT
T
44
Detailed Gift Data
AGCGIFT – List of all gifts for donor
– GIFTS




FY
Gift Date
Amount
Split (not used – does not mean split designation)
– Campaign / Designations






Campaign
Designation
Payment
Gift Type
Gift Type Description
Vehicle
T
45
Detailed Gift Data
AGCGIFT – continued
– Gift Classes
 Gift
Class
 Gift Class 2
 Gift Class 3
 Memo Amount
 College
T
46
Detailed Gift Data
AGCGIFT – continued
– Gift / Pledge Number

Gift Number (same as document reference # in Finance)
– To view document feed # and feed date
• Click on down arrow
• Select “Gift Detail”
• Select “Additional Gift Information” tab






Receipt
Adjusted
Pledge Number
Session
Solicitation
Match
T
47
Detailed Gift Data
AGCGIFT – continued
– Campaign / Designation Type
Acknowledgement
 Campaign Type
 Designation Type
 Designation VSE
 Designation Department
 Auxiliary Amounts
 Associated ID’s

T
48
TPP Postings-AGCGIFT
T
49
TPP Postings-FGIDOCR
This is the posting from the
actual gift.
T
50
TPP Postings-FGIGLAC
- TPP
•This is the JV reducing the
pledges receivable.
•The other side of this entry
reduces the pledge (X028)
T
51
Payroll Deductions

Processed differently than most other pledge
payments:
– Payroll Deducts used to be processed manually requiring
a JV to reduce pledge receivables
– Automatic Banner process initiated January 2007
1) A pledge is created in Advancement with monthly installments
(pledge code “PD”)
2) Pledge fed to the Payroll system for approval
3) At the month-end, Payroll process is run creating the GL postings
below (a temporary holding spot):
T
a. Credit fund 99603 (P/R AUFD Clearing), account 2074 (Employee
Deduction Liability)
b. Debit fund 99603 (P/R AUFD Clearing), account 1001 (Cash &
Pooled Investment)
52
Payroll Deductions

continued:
4) Advancement process is run creating the GL postings below
(moving the posting from the temporary holding area to the fund
designated by the donor):
a. Credit “gift fund” (donor designated), account 1576 (Pledge
Receivable)
b. Debit “gift fund” (donor designated), account 1001 (Cash & Pooled
Investment)
c. Debit 99603 (P/R AUFD Clearing), account 2074 (Employee
Deduction Liability)
d. Credit 99603 (P/R AUFD Clearing), account 1001 (Cash & Pooled
Investment)
T
– Each pledge payment directly impacts the General Ledger
and is processed with a rule class code of “ASDE” and a
gift type of “PR”.
53
Payroll Deductions-FGIDOCR
T
54
Detailed Pledge Data

AGCPLDG – list of all pledges for donor
– Basically same data as AGCGIFT

Exceptions
– Shows amount of pledge actually paid
– Feed date and document number in “Finance Feed” tab
– Pledge Number (same as document reference # in
Finance)
T
55
Summary Gift and Pledge Data

Designation Gifts Form (ADAGIFT)

Designation Pledges Form (ADAPLDG)
T
56
Viewing Constituent Information

Constituent Summary (APASBIO)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Address
Employment
Cross References
Children
Academic Information
Biographic Information
Comments (locations where they exist)
Navigation to other information
Activities Information
Constituent/Solicitor Information
Prospect Information
Membership Information
Gift Society Information
Constituent Categories
57
View of APASBIO
58
Pledge Write-Offs






Pledges feed to the GL
Most but not all pledges get completely paid
All older uncollectible pledges will be written off
every between January and March.
Pledge revenue and pledge receivables will be
reduced.
Allowances for doubtful pledges are recorded in a
central fund however, if a pledge is written off, the
departmental fund would see the entire write off in
that year.
Units should never spend from pledge receivable
balances, only from actual cash.
59
Quid Pro Quo Contributions

Work with your Development
Officer

IRS Definition
IRS Regulation Highlights
Fair Market Value (FMV) at Fundraising
Events
Fundraising Auctions



60
Quid Pro Quo Contributions
61
Quid Pro Quo Contributions

IRS Definition
– A payment made to OU from a donor partly as a
contribution and partly in consideration for goods
or services (e.g. fundraising dinner).
– The value of the benefits (premiums) the donor
receives is a key factor in determining the amount
of the actual gift.
– The actual gift is only the amount of the
contribution that exceeds the value of the benefits
received by the donor.
62
Quid Pro Quo Contributions

IRS Regulation Highlights:
– The items must have a “substantial” value to be
considered as benefits and therefore, to be subtracted
from the donors contribution. Items that have
insubstantial (token) value need not be subtracted
from the contribution.
63
Quid Pro Quo Contributions

Token Value Benefits
– Small items of merchandise or other benefits
(bookmarks, calendars, key chains, mugs,
posters, tee shirts, etc.) offered when donors
make a contribution.




Token value in relation to the amount contributed
Burdensome to inform each donor of the amount of
the payment that is deductible.
Inconsequential or insubstantial so that the full
amount of the donor’s payment should be deductible
as a contribution.
IRS has provided rules under which a donor may
disregard the value of token benefits and deduct the
full amount of a payment.
64
Quid Pro Quo Contributions

Token Benefit Rules (2010)
– A payment is fully deductible if:



The fair market value of all the benefits received by the
donor is not more than $96 or 2% of the payment,
whichever is less, or
The donor’s payment is $48 or more and the only
benefits received are token items that bear OU’s name or
logo and have an aggregate cost of no more than $9.60.
(DON’T WORRY – WE HAVE EXAMPLES !)
65
Quid Pro Quo Contributions
TOKEN BENEFIT EXAMPLES BASED ON IRS RULES FOR 2010
1
2
3
4
5
6
7
Required Payment
Donor Benefits (premiums)
Mug
Keychain
T-shirt
2 concert tickets(NOT token
Lapel pin
Total
FMV as % of Required Payment
FMV of benefits is less than or
equal to 2% of the required
payment or $96, whichever is
less. (yes or no)
Required payment is $48 or
more. (yes or no)
Total cost of benefits is $9.60 or
less. (yes or no)
Donor was informed of the FMV
of benefits?
Tax Deductible Amount
Example 1
$25.00
Cost
FMV
$0.25
$0.25
2.0%
$0.50
$0.50
Yes
No
Yes
Yes
$25.00
A payment is fully deductible if the answer in line #3 is "Yes" or if the answer in lines #4 and #5 is "Yes", otherwise
the payment is partially or totally non-deductible.
66
Quid Pro Quo Contributions
TOKEN BENEFIT EXAMPLES BASED ON IRS RULES FOR 2010
1
2
3
4
5
6
7
Required Payment
Donor Benefits (premiums)
Mug
Keychain
T-shirt
2 concert tickets(NOT token
Lapel pin
Total
FMV as % of Required Payment
FMV of benefits is less than or
equal to 2% of the required
payment or $96, whichever is
less. (yes or no)
Donors required payment $48 or
more. (yes or no)
Total cost of benefits is $9.60 or
less. (yes or no)
Donor informed of the FMV of
benefits. (yes or no)
Tax Deductible Amount
Example 1
$25.00
Cost
FMV
$0.25
$0.25
2.0%
$0.50
$0.50
Example 2
$50.00
Cost
FMV
$1.00
$2.00
$1.00
4.0%
$2.00
Yes
No
No
Yes
Yes
Yes
Yes
Yes
$25.00
$50.00
A payment is fully deductible if the answer in line #3 is "Yes" or if the answer in lines #4 and #5 is "Yes", otherwise
the payment is partially or totally non-deductible.
67
Quid Pro Quo Contributions
TOKEN BENEFIT EXAMPLES BASED ON IRS RULES FOR 2010
1
2
3
4
5
6
7
Required Payment
Donor Benefits (premiums)
Mug
Keychain
T-shirt
2 concert tickets(NOT token item)
Lapel pin
Total
FMV as % of Required Payment
FMV of benefits is less than or
equal to 2% of the required
payment or $96, whichever is less.
(yes or no)
Donors required payment is $48 or
more. (yes or no)
Total cost of benefits is $9.60 or
less. (yes or no)
Donor informed of FMV of benefits.
(yes or no)
Tax Deductible Amount
Example 1
$25.00
Cost
FMV
$0.25
$0.25
2.0%
$0.50
$0.50
Example 2
$50.00
Cost
FMV
$1.00
$2.00
$1.00
4.0%
$2.00
Example 3
$50.00
Cost
$3.00
$1.00
$8.00
FMV
$5.00
$2.00
$10.00
$12.00
$17.00
34.0%
Yes
No
No
No
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
$25.00
$50.00
$33.00
A payment is fully deductible if the answer in line #3 is "Yes" or if the answer in lines #4 and #5 is "Yes", otherwise
the payment is partially or totally non-deductible.
68
Notice the tickets did
not cost OU anything
but they did cost
somebody something
and are NOT a token
item.
TOKEN BENEFIT EXAMPLES BASED ON IRS RULES FOR 2010
Quid Pro Quo Contributions
1
Required Payment
Donor Benefits (premiums)
Mug
Keychain
T-shirt
2 concert tickets(NOT a token item)
Lapel pin
Total
2 FMV as % of Required Payment
FMV of benefits is less than or equal
3 to 2% of the required payment or
$96, whichever is less. (yes or no)
Donors required payment $48 or
more. (yes or no)
Total cost of benefits is $9.60 or
5
less. (yes or no)
Donor informed of FMV of benefits.
6
(yes or no)
7 Tax Deductible Amount
4
Example 1
$25.00
Cost
FMV
Example 2
$50.00
Cost
FMV
$1.00
$0.25
$0.25
2.0%
$0.50
$0.50
$1.00
4.0%
$2.00
$2.00
Example 3
$50.00
Cost
$3.00
$1.00
$8.00
FMV
$5.00
$2.00
$10.00
$12.00
$17.00
34.0%
Example 4
$75.00
Cost
$3.00
FMV
$5.00
$5.00
$0.00
$10.00
$80.00
$8.00
$95.00
126.7%
Yes
No
No
No
No
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
$25.00
$50.00
$33.00
$0.00
A payment is fully deductible if the answer in line #3 is "Yes" or if the answer in lines #4 and #5 is "Yes", otherwise
the payment is partially or totally non-deductible.
69
Quid Pro Quo Contributions



Fair Market Value (FMV): The value of
benefits received by the donor must be based
on the FMV of the benefits (except for token
items), not necessarily the cost of the items.
Raffles: No portion of a payment made
resulting in an opportunity to win a prize
(raffle tickets, door prizes, etc.) is a gift.
Preferential Seating: If a donor receives the
right to purchase preferred seating for an
athletic event in return for their gift, only
80% of their contribution is tax deductible.
70
Quid Pro Quo Contributions

Fundraising Events:
– The value of benefits received (round of golf,
dinner, drinks, gifts, etc.) by the donor must be
based on the FMV of the benefits determined
through a “good faith” effort, not necessarily the
cost of the item.
– OU has a procedure for determining FMV for goods
and services provided to donors at fundraising
events where something of value is exchanged for a
payment.
– OU has an Excel template to help determine the
FMV of the goods and services.
71
Quid Pro Quo Contributions

Fundraising Events:
– The following steps should occur for all fundraising events
where something of value is exchanged for a payment:


The annual giving department is to be notified by the event organizer
prior to event materials being created.
The annual giving department will work in collaboration with the
event organizers to complete the fair market value (FMV) excel
worksheet which will determine:
– An estimated per person cost for the event
– The payment amount to attend the event
– The FMV of any and all goods and/or services provided to the payee in
return for their payment to attend the event.


The annual giving department will provide the costs, payment
amount and FMV to the director of development information
services for review and approval.
The vice president or associate vice president of university relations
will receive the documents for final approval.
72
Quid Pro Quo Contributions

Fundraising Events:
– The FMV Calculation:




Determine all the costs (direct and indirect) associated
with the goods and services received by the donor.
Determine the average cost per person.
The FMV is what the average person would pay for a
“like” event at a “like” venue, not necessarily the cost.
Therefore, if the calculated cost per person is $100,
but the average person would pay $75 for a “like”
event at a “like” venue, the FMV would be $75.
The FMV must be communicated to the donor on
marketing materials.
73
Quid Pro Quo Contributions

Donors Opting out of Receiving Goods
and Services:
– Needs to be communicated to OU prior to the
event and prior to processing the payment.
– We can’t give a donor an amended receipt with a
higher gift amount because they told us after the
event that they were not able to attend.
– The IRS says even if a donor does not take
advantage of the benefits, the benefits were still
provided.
74
Quid Pro Quo Contributions

Fundraising Auctions:
– The bidder must know the FMV of the item
being auctioned prior to bidding in order to
claim they had charitable intent by bidding in
excess of FMV,

if not:
– No charitable donation was made by the
winning bidder,

because:
– The winning bid becomes the basis for the
FMV as the transaction became a
“purchase”.
75
Quid Pro Quo Contributions

Impact on You:
– Gift Registers: The amount received from the
donor may not be entirely tax deductible. You
will need to break out the gift amount vs. the
quid pro quo amount on the gift register.
76
and because it's always time to poke fun at the IRS...
77
Games of Chance

OU Policy 435 – Games of Chance
– Types




Bingo
Millionaire parties
Charity games
Raffles
– Authorizing Officer

Vice President for UR
– Application


Form part of policy 435 on website
Complete and return to VP’s office
– State Licenses


Very important
Timing
78
Games of Chance

Raffles:
– You are conducting a raffle if you are charging people or
requiring them to donate or provide something of value to
participate in a drawing where a prize will be awarded.
 University Approval
 Keep separate from gift solicitations
 Withholding and Reporting Requirements
 Record Retention
 House Rules
 Misconception from Michigan Charitable Gaming
Commission
 Raffle Licenses
79
Other Gifts

Gifts-in-Kind
–
–
–
–
–
–
–

Gifts of Services
–
–

Admin. Policy 500
Donated assets and property such as art, books, equipment, automobiles,
inventory, personal property, other physical assets.
Donors must provide the value of the gift-in-kind.
Gifts-in-kind with an apparent value of $5,000 or more, a qualified appraisal
must accompany the gift.
No value from donor, gift entered with a $1 value.
No values for gifts-in-kind shall appear in acknowledgment letters or receipts.
The university does not act as an appraiser of gifts-in-kind.
Gift-in-Kind review form.
Not a countable or deductible gift.
Pay the donor for their services and have them write you a check in return.
Blood
–

Not a tax deductible gift.
80
OAKLAND UNIVERSITY
GIFT-IN-KIND REVIEW FORM
FORM A-1
DEPARTMENT INFORMATION
Department___________________________Contact Person____________________________Phone______________
DONOR INFORMATION
Owner/Donor_______________________________________Contact (if applicable)___________________________
Address_________________________________________________________________Phone___________________
GIFT INFORMATION
(FOR REAL ESTATE USE FORM A-2)
Gift Fund:___________________________________
Gift-in-Kind
Review
Form
(can be
accessed from
OU policy #500)
Description: (include date, model, serial number, brand name, etc.)__________________________________________
_______________________________________________________________________________________________
_______________________________________________________________________________________________

New equipment? Yes □ No □ ● New software? Yes □ No □ ● Educational Discount Value________

Has Facilities Management, Environmental Health & Safety and Risk Management been consulted regarding the
housing of this equipment, possible safety issues to staff/students, etc? Yes □ No □

Has Oakland taken possession of this item? Yes □ No □ ● Date Received: ___________

Will this gift be retained by Oakland? Yes □ No □

Purpose or intended use: ________________________________________________________________________
If yes, will it appreciate in value? Yes □ No □
___________________________________________________________________________________________

Additional costs (installation, insurance, maintenance, etc.)____________________________________________
___________________________________________________________________________________________

Potential liability for university: __________________________________________________________________

Percent of ownership being donated: _____________________ (attach names and addresses of other owners).

Were goods or services provided by Oakland for the gift? Yes □ No □If yes describe: ____________________
_____________________________________________________________________________________________
GIFT DOCUMENTATION
Donor's estimated value_______________________________
Check One: Donor provided: Receipt □
Invoice □ Appraisal □ No Documentation □ ●Appraisal date_________
Signature of employee completing form: _______________________________________Date________________
UPON COMPLETION, SEND TO GIFT ACCOUNTING, 102 JOHN DODGE HOUSE: A receipt describing
the item(s) donated will be issued but no monetary value will be stated.
Contact Gift Accounting with any questions at 248-364-6110
Rev. 02/09
81
Corporate Sponsorships vs.
Advertising




Corporations often give money to sponsor activities,
events, or projects and in return receive recognition on
campus or at the event.
Most sponsorship dollars are gifts as long as the
recognition received does not constitute advertising.
The IRS defines advertising as competitive pricing or
product information displayed because of the donation.
The recognition for a sponsor should be limited to:
–
–
–
Sponsors location, telephone number, internet address
Value-neutral description of sponsor’s products or services
Sponsor’s brand/trade name or product/service listings
82
Contributions vs. Contracts (Exchange
Transactions)

Some contracts may appear to be much like
contributions therefore a careful assessment
of the contract is needed to determine if
OU has given up an asset or incurred a
liability (of commensurate value).
83
Contributions vs. Contracts (Exchange
Transactions)
Factor / Question



Factors to aid in
distinguishing
between
contributions and
exchange
transactions.
No one factor will
provide sufficient
information for
appropriate
classification.
From NACUBO
(National
Association of
College / University
Business Officers)
Do funds provide goods/services for a program of the resource provider?
Did the initiative for the project come from the organization providing the
funds?
Do proprietary results belong to the funding organization, in whole or in part,
after the work is completed?
Do the results of the work have specific commercial value for the resource
provider?
Does the resource provider sponsor research and development activities and
retain patents, copyrights, advance and exclusive knowledge of outcomes?
Does payment support the direct/immediate need of government or
organization that provides funding?
Are benefits to the resource provider primary and public benefits are
secondary?
Does the resource provider define performance objectives such as a detailed
report and a timetable for meeting objectives?
Is the time and place for delivery of results specified?
Does the contract fulfill a service as prescribed by the resource provider?
Did the recipient give up benefits of the research to the resource provider?
Will the recipient pay economic/punitive penalties for failure to meet
agreement?
Does the resource provider receive commensurate value in return for
support?
Does the recipient determine ownership of the products of the research?
Does the recipient hold unconditional rights to receive the funds?
Does the recipient retain control and ownership of any work completed after
completion of the project?
Are the funds used to carry out an already existing program of the recipient
organization?
Does the recipient participate actively in determining how the funds will be
spent?
Answer
is Yes
ET
Answer
is No
ET
C
ET
C
ET
C
ET
ET
ET
ET
C
ET
ET
ET
C
ET
ET
C
C
C
C
C
C
84
Scholarship Gifts




No gift if a donor chooses the recipient.
Discourage donors involvement in the selection
process (tax, FERPA, practical issues). OU will
make final decision on all awards.
If OU chooses the student, it is a gift but the
donor still should not list the student’s name on
gift documents.
Need to keep track of recipients for stewardship
purposes
85
Endowments

Endowment Fund
– Quarterly distributions to spending fund
– Gift / pledges usually designated to endowment

Spending Fund
– Receives income distributions from endowment
– Expenses must be incurred out of spending fund vs.
a general fund followed up by a transfer JV
86
Endowments

Underwater Endowments
– When the market value falls below the amount
donated (historical cost)
– No distributions to spending
87
Endowments

Expense Explanation Report
– A report template was developed
– assistant deans and/or business managers to summarize
spending fund financial activity
– To be provided to university relations, along with deans, on
a semi-annual basis
– Reviewed by the accounting office and by the Assistant
Dean in CAS
88
Endowments

Expense Explanation Report - Contents
–
–
–
–
Summary explanation for expenditures from an
endowment’s spending fund
Summary explanation for transfers into and out of an
endowment’s spending fund
Reasons why little or no expenses were incurred from an
endowment’s spending fund
Verification that expenses incurred were in line with the
fund’s purpose
89
Endowments

Expense Explanation Report - Results
–
–
–
Enhanced Stewardship - Spreading reporting and reconciliation
responsibility to those with spending control over the funds
Increase the timeliness of annual endowment letters to donors. Since
units have to provide this information anyway, a more logical and
effective way, with deadlines has been developed (see sample report).
Allows units to stay on top of unspent funds - When done semi-anually
(for December and June), this will allow the assistant deans and business
managers to stay on top of unspent funds and to remember the need to
transfer funds timely when dollars are spent from other funds on specific
endowment purposes (although the best practice is to spend funds
directly from the endowment’s spending fund and not do transfers)
90
Expense
Explanation
Report
91
OAKLAND UNIVERSITY
Annual
Endowment
Report for
Donor
Kurtis Kendall Memorial Scholarship Endowment Fund
2007-2008 Annual Endowment Report
Endowment Fund
Beginning Balance at July 1, 2007
$162,472.59
Gifts Received
0.00
Investment Income / (Loss)
604.15
Transfers
0.00
Distributions to Spending Fund
(6,549.30)
Ending Balance at June 30, 2008
$156,527.44
Spending Fund
Beginning Balance at July 1, 2007
Distributions from Endowment and Gifts
Transfers
Total Awards / Expenditures
Ending Balance at June 30, 2008
Scholarship / Award Recipients
Jane Doe
John Smith
Bill Jones
Gail Smith
Joe Plumber
$3,334.72
6,549.30
0.00
(6,750.00)
3,134.02
Amount
$1,500.00
750.00
1,500.00
1,500.00
1,500.00
92
Where to Get More Information

DIS Website - www.oakland.edu/dis
93
Where to Get More Information
(can link to these, and more, from DIS website)
Business Manager Training on Fundraising
Issues
 Banner Advancement Procedure Manual
 OU Administrative Policy 500 – Gifts, Pledges,
and Grants
 Contact Us Anytime

– Rob Saunders, Director DIS ext-6120
– Theresa Allen, Manager Gift Accounting ext-6115
– Gift Accounting main phone line - 6110
94