Gift Funds

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Policy Number:
UW-3010
Old Policy Number:
131
Responsible Office:
Accounting Services, Division of Business Services

University Policy

Rationale/​Purpose:

The University of Wisconsin–Madison (the University) has a fiscal responsibility to ensure appropriate and compliant acceptance and administrative stewardship of gifts made directly to the University, and gifts made to the Wisconsin Foundation and Alumni Association (WFAA) in support of the University.

This policy defines the gift criteria and the standards for accepting and using gifts.

Definitions:
Gift
Voluntary contribution in the form of money where no goods or services are expected in return that are not insubstantial.
Scope:

This policy applies to University employees involved in the receipt and use of gifts. University division leaders have a responsibility to ensure that employees accepting and using gifts are fully informed of the gift acceptance and expenditure standards in this policy and related procedures.

Policy:

  1. Gift Acceptance

    To be classified as a gift, a monetary contribution must meet all the following criteria:

    1. The gift must provide funding for activities, such as professorships, scholarships, building projects, fellowships, and other activities in support of the research, instruction, and service mission of the University. The donor may specify the use of funds to a particular program area or purpose.
    2. No detailed technical or fiscal reports are required as a condition of the gift.  The division or department involved may provide the donor with a summary of the results of supported activities and/or a statement that expenditures were made in accordance with the intent of the gift.
    3. The gift does not grant the donor with rights to, or impose any restrictions with respect to patents, copyrights and other intellectual property rights that result from activities supported by the gift.
    4. The gift does not impose limiting stipulations, such as delays or advance notices concerning publication or dissemination of data and information derived from activities supported by the gift.
    5. The gift is irrevocable by the donor.

    Due to IRS regulations, employees of the University are prohibited from making a tax-deductible gift, either individually or through a foundation or donor advised fund, that is restricted to support or directly benefit their own work or that of an immediate family member at the University.  However, a gift is permissible, including support to an employee’s own department, when:

    1. The gift is for general purposes and control over the use of the gift lies with the employee’s school/college/division Dean, Department Chair, or Director.
    2. Any personal benefits to the employee as a result of the gift are incidental.

    Employees of the University must not pursue and/or accept a gift that, in their own judgement:

    1. Is inconsistent with the standards outlined in this policy.
    2. Violates a federal or state law.
    3. Is too difficult or expensive for the University to administer.
    4. Is known or suspected to be acquired by other than legal means.
    5. Is too restrictive in purpose that it compromises academic freedom.
    6. Is donated for a purpose that does not further the mission of the University.
    7. Causes damage to the reputation of the University.
    8. Jeopardizes tax-exempt status of the University.
    9. Provides a donor goods or services of financial value in return for the gift unless such value is fully disclosed in written acknowledgement to the donor.

    Employees of the University involved in the receipt of an individual gift of $25,000 or more directly to the University must make an effort to authenticate the identity of the prospective donor and must exercise and document donor risk-based due diligence. The donor identity authentication process must be performed one time per donor and must include screening donors against tools such as Google advanced search, Bizapedia, or Dun and Bradstreet. The authentication process must also include requesting the University Export Control Office to screen prospective domestic and international donors against available denied/excluded parties lists. A due diligence checklist can be used to evidence characteristics of prospective donors and aid the gift acceptance decision-making process. A due diligence checklist can include, but is not limited to:

    1. What business is the donor involved in and associated with?
    2. Does the donor’s business include industries or sectors inconsistent with the mission of the University?
    3. Has the donor received unfavorable media attention?
    4. Has the donor been involved in litigations?
    5. Is the donor a Politically Exposed Person? A Politically Exposed Person (PEP) is defined by the Financial Action Task Force (FATF) as "an individual who is or has been entrusted with a prominent public function", and includes the following:
      1. Current or former government officials appointed to domestic government positions, or positions in a foreign government. This may include heads of state or individuals working in executive, legislative, administrative, military, or judicial branches, in elected and unelected roles.
      2. Officials appointed to roles in major domestic political parties or in foreign countries.
      3. Senior Executives serving in roles such as directors or board members in government owned or international universities or commercial enterprises.
      4. Relatives and close associates who are immediate family members of a government or political official or senior executive, i.e., spouses, parents, siblings, children.

    The University Controller may override a University employee’s decision to accept a gift should the University Controller determine that accepting such gift is noncompliant with laws and regulations the University is subject to, or any of the standards enclosed in this policy.

    All gifts accepted by the University directly must be acknowledged in writing.

    Employees of the University shall not provide financial planning, legal, accounting, or tax advice to donors. Donors should be encouraged to seek the assistance of their own financial advisors in matters relating to their gifts.

    Revenue generated from activities supported by gift funds belongs to the University.

  2. Gift Expenditures

    All gifts must be used in accordance with donor intent, and in compliance with laws and regulations the University is subject to and with University and University of Wisconsin System policies.

    As a general principle, gifts provided to WFAA for the benefit of the University shall be expended by way of University fund 233 projects or fund 533. Gift funds must be readily available at WFAA or in funds 233 and 533 prior to incurring expenses against these funds. Incurring expenses in funds 233 and 533 in anticipation of a gift may result in negative cash balances, which must be restored to zero or positive balances by June 30 of each fiscal year.

    When expenditures are not allowable per University or University of Wisconsin System policies, the University may submit requests to WFAA to pay funds directly to vendors. Such requests will be evaluated by WFAA for compliance with WFAA disbursement policies.

  3. Consequences for Non-Compliance

    Non-compliance with this policy or related procedures may result in disciplinary actions through established employment policies.

  4. Responsibilities

    • Dean/Director’s Office: Serves as a liaison between the campus department and Gift Management Accountant and provides signature as authorized approval of a gift.
    • Division of Business Services Accounting Services Director of Financial Information Management: Reviews and provides signature as an authorized official for gift agreements between the University of Wisconsin-Madison and the donor, when necessary.
    • Gift Management Accountant: Responsible for the oversight, including monitoring and reporting gifts received by the University of Wisconsin–Madison.
    • Office of Legal Affairs: At the request of the Gift Management Accountant or Dean/Director’s Office, reviews gift agreements for potential legal issues.
    • Tax Compliance Manager: Advises on and reviews donor tax forms when necessary.
    • UW-Madison Campus Personnel: Works with the donor to obtain appropriate gift documentation. Completes the Gift Deposit Routing Form and UW Foundation Check Request Form to provide to its Dean/Director’s Office for signature.
    • Wisconsin Foundation and Alumni Association: WFAA is an independent Wisconsin nonstock corporation organized and incorporated in 1945, for the purpose of stimulating voluntary private support from alumni, parents, friends, corporations, foundations, and others for the benefit of the University of Wisconsin–Madison.
Related UW–Madison Documents, Web Pages, or Other Resources:
External References:

Policy Administration

Approval Authority:
Assistant Vice Chancellor of Business Services and Controller
Policy Manager:
Gift Management Accountant
Contact:
Gift Management Accountant -- April Cook, giftmgt@bssvc.wisc.edu, (608) 262-0726
Effective Date:
12-12-2017
Revised Dates:

07-30-2018, 04-11-2022

Reviewed Dates:

07/30/2018

Retrieved:
03-30-2023 22:42:14