This downloaded copy is unofficial. Check www.mun.ca/policy for the official version.
Memorial University of Newfoundland
Approval Date: 2015-07-09
Effective Date: 2015-07-09
Review Date: 2019-07-09
The President and the Board of Regents through the Office of Development.
To outline the authority and responsibilities in matters of gift acceptance and administration, and to provide guidance to employees, volunteers and members of the Board of Regents.
Charitable donations to the University and separately incorporated entities (SIEs).
Advantage — What a donor may receive in return for his or her donation (e.g., a meal, tickets to a show etc.), and it must be taken into consideration when determining the eligible amount of a gift for receipting purposes.Determining the Fair Market Value of an advantage is similar to determining the Fair Market Value of a Gift in Kind. However, while only donations of property can be receipted as Gifts in Kind, the Fair Market Value of any type of advantage (e.g., services, accommodation, meals etc.) must be taken into consideration when determining the eligible amount of a gift for receipting purposes.
Beneficiary (Trust, Life Insurance Policies, And Registered Funds) — The person for whose benefit the trust was created. For Charitable Remainder Trusts, the donor is normally the income beneficiary (income interest) and the University is the capital beneficiary (remainder interest). The University may be the beneficiary of life insurance policies and hence is entitled to the death benefit. Furthermore, the University may also be named the beneficiary of Registered Retirement Saving Funds.
Bequest — Property received from the will of a deceased person.
Canadian Cultural Property — Any property that has been certified by the Canadian Cultural Property Export Review Board. Gifts of Cultural Property are subject to enhanced tax benefits.
Charitable Remainder Trust — A planned gift where the donor transfers property into a trust. The donor retains a life interest in the property but makes an irrevocable gift of the residual interest to the University. An official tax receipt can be issued for the fair market value of the residual interest in the property at the time that the residual interest vests with the University. At no time may the capital of the trust be encroached upon by anyone.
Charitable Trust — An irrevocable trust established for charitable purposes.
CRA — Canada Revenue Agency.
CUSIP — A nine-character alphanumeric code that identifies a North American financial security for the purposes of facilitating clearing and settlement of trades.
Designated Gifts — Are intended to promote and carry on specific work of the University with no further restrictions, other than the designation, as to the use or administration of the funds.
Eligible Amount — The amount that the Fair Market Value of the property gifted exceeds the amount of the advantage, if any, received by the donor with respect to the gift. The eligible amount is the amount claimed on the donor’s tax return.
Endowment Funds — Consists of donated funds, endowed trusts or other funds of a permanent nature. External funds may be invested in the Endowment Fund, including funds of partner organizations, where the funds invested are long-term in nature and significant in size and where the President of Memorial University has granted approval.
Fair Market Value — The eligible amount of a gift for receipt is the amount that the Fair Market Value of the gifted property exceeds the amount of an advantage, if any, received or receivable for the gift. The advantage is generally the total value of all property, services, compensation, or other benefits that the donor is entitled to as partial consideration for, or in gratitude for, the gift. The advantage may be contingent or receivable in the future, either to the donor or a person or partnership not dealing at arm's length with the donor.Gifts for which the donor received an advantage will still be considered a gift for purposes of the Income Tax Act as long as the transfer of property was made with the intention to make a gift. An intention to make a gift will be presumed where the Fair Market Value of the advantage does not exceed 80% of the Fair Market Value of the transferred property.
Gift Agreement — Contains conditions and terms of the gift, including payments or transfers required of the donor and uses for the donated gift by the University.
Gift in Kind — Also known as non-cash gifts, are gifts of property. They cover items such as real estate, artwork, equipment, securities and cultural and ecological property.A contribution of service, i.e. a commitment of time, skills or efforts, is not property and therefore does not qualify as a gift or Gift in Kind for purposes of issuing official donation receipts.
Life Insurance — Gifts where a life insurance policy is purchased with the University as the owner, if ownership is gifted to the University at a later date, or if the death benefit is assigned to the University as a beneficiary. A tax receipt may be issued for the premiums paid only when the University owns the policy. The University will not own or accept ownership of any Life Insurance policy that is not a permanent policy.
Outright Gift — The Income Act of Canada defines a gift in sections 248 (30) and (31). A gift is a voluntary transfer of property where the donor demonstrated intent. In most cases, intent exists when any advantage (benefit) received by the donor as a consequence of making a gift does not exceed 80% of the total amount contributed.
Premiums, Life Insurance Premium — Cash payment that is required to fund an insurance policy. Premiums are always required for the lifetime of the insured. Depending on the type of insurance policy, the Premiums may be paid by the donor on a regular basis or after a certain number of Premiums have been paid from fund accumulated.
Publicly Traded Securities — Shares, warrants, rights or debt obligations that are traded on a prescribed stock exchange.
Receipt — Registered charities can issue official donation receipts (also referred to in this policy as "tax receipts") to acknowledge gifts. An official donation receipt is subject to particular requirements under the Income Tax Regulations including identification that it is an official receipt for income tax purposes. See the definition "Eligible Amount" of gift for further information.Note: Memorial University also issues other forms of receipts to acknowledge acceptance of services or items that are not gifts. These are not tax receipts and are clearly distinguished from the tax receipts issued to acknowledge gifts.
Recognition — Actions that communicate to the donor or the public a form of acknowledgement that express gratitude and appreciation from the University on receiving a gift. Acknowledgement ranges from activities that are automatic organizational responses to giving, such as thank you letters, to those that are undertaken with the involvement of the donors, as is the case with named space.
Unit — Academic or administrative unit as defined in the University Calendar.
Unit Head — Term used to refer to Deans, Department Heads, Division Heads, Heads of Schools, Directors, Executive Directors, University Librarian, University Registrar and other senior administrators at a comparable level; Associate Vice-Presidents and Vice-Presidents, as applicable.
University — Memorial University of Newfoundland ("University").
Unrestricted Gifts — Are intended to promote and carry on the work of the University with no restrictions as to the use or administration of the funds.
Fundraising practice at the University is donor-centered and encourages donors to make outright gifts insofar as these gifts are consistent with Memorial University’s vision, mission, and values and are in the best interest of the University. The request for solicitation of gifts is addressed in the Donor Prospect Clearance Policy.
The University has a responsibility to be accountable in fundraising and accepting philanthropic donations. A description of the types of gifts accepted, the types of designations that donors can select and the principles that guide professional fundraising staff and volunteers are described in this policy.
2.0 LEGAL FRAMEWORK
Informed decisions are made on the acceptance of gifts giving consideration to:
Accurate reporting of all gifts and consistent, ethical and equitable relations with alldonors are required. As a registered Canadian charity, the University abides by the rules and regulations of the Canada Revenue Agency (CRA).
The University’s Canadian registered charitable number is 10769 0273 RR0001.
The University can also accept donations from alumni living in the United States, as well as their family members [defined as brothers and sisters (whether by whole or half-blood, or by adoption), spouse, ancestors, lineal descendants, and adopted descendants], as per a Canada-United States Tax Treaty (Article XXI, Section 5). In this case, “alumni” refers to anyone who is or was enrolled at Memorial University or any of its predecessors. If the donor does not meet the above criteria, then donations may be made to Friends of Memorial University of Newfoundland, a 501(c)(3) organization in the U.S. Donors in such instances can suggest to the Friends of Memorial University of Newfoundland board of directors their preference for the use of their gift. The final decision on the use of such gifts rests with the board of directors. Donations to the Friends of Memorial University are receipted and are deductible by U.S.taxpayers just as with any domestic U.S. charity.
Gifts to the University shall be reported in a manner consistent with the principles recommended by the Canadian Association of University Business Officers (CAUBO),the Council for the Advancement and Support of Education (CASE), the Canadian Council for the Advancement of Education (CCAE) and the Association of Fundraising Professionals (AFP). A gift may be declined if it is not in keeping with the vision, mission and values of the University. The authority to decline or return a gift rests with the President who may consult with the Development Advisory Committee, the Vice-Presidents, and others, as appropriate.
The Office of Development is solely responsible for issuing official charitable tax receipts for the eligible amounts of all charitable gifts received by the University consistent with the requirements of the Canada Income Tax Act, Canada Revenue Agency guidelines and in accordance with procedures established by the University. In certain situations, the University may return a gift to the donor.
The Office of Development maintains records required by Canada Revenue Agency. Access to these records is restricted to appropriate staff, senior executives and others acting in an official capacity in specific conditions on behalf of the University.
All matters relating to donors, gifts and gift activity shall be handled with confidentiality and in accordance with the Access to Information and Protection of Privacy Act, other legislation to which the University is subject and University policies. All persons involved in any process related to this policy are expected to maintain confidentiality.
5.0 DONOR PREFERENCES
The University receives and administers gifts in accordance with donor’s preferences whenever possible.
6.0 GUIDING PRINCIPLES IN ACCEPTING GIFTS
Conflict of Interest
Any real, potential or perceived conflicts of interest must be handled in accordance with the Conflict of Interest policy.
All professional staff and volunteers who may be fundraising on behalf of the University must conduct themselves in accordance with an applicable code of conduct and ethics, as outlined in the AFP Donor Bill of Rights and the CASE Statement of Ethics.
Volunteers and professional staff help donors and their advisors propose gifts that meet each donor’s philanthropic and financial objectives within the context of the University’s needs and may inform, guide or otherwise assist donors who wish to support the University’s activities. Under no circumstances should they pressure or unduly persuade a donor to give to the University.
Legal and Professional Counsel
While the University may encourage donors to seek independent counsel, such as in the case of negotiating a major gift, at no time does the University warrant or certify the competence or integrity of any advisor.
Memorial University’s vision, mission, and values
Donor Prospect Clearance Policy
Conflict of Interest policy
Access to Information and Protection of Privacy Act
Canada Income Tax Act
Canada-United States Tax Treaty
Office of Development (709) 864-4354
Sponsor: Executive Director, Office of Development
Category: External Relations
There is at least one previous version of this policy. Contact the Policy Office to view earlier version(s)
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Procedure for Appraising and Accepting Outright Gifts
Approval Date: 2018-06-14
Responsible Unit: Office of Development
The University accepts gifts based on a set of prescribed procedures.
1. Generally, the University accepts the following types of gifts: cash and gifts in kind (including publicly traded securities or privately held shares). In addition, where the gift is in keeping with its vision, mission and values, the University may consider accepting the following: cultural property, art, real estate and life insurance. Any or all of the following may be required in consideration of proposed gifts:
For property that is not inventory (e.g. inventory of a business, publicly traded securities, real estate or Canadian Cultural Property), the University may need to:
2. A written gift agreement may be required. All gift agreements shall first be reviewed and approved by the Executive Director, Office of Development or their designate. The review and approval process may be delegated in certain circumstances and any such delegation must be made in writing.
3. The Executive Director, Office of Development, in consultation with the Development Advisory Committee, and where appropriate the applicable Vice-President(s), will recommend whether to accept or reject the following types of gifts in order to protect the interests of donors and the University:
Indicators that a gift is acceptable include:
At times, the University may choose to decline a gift. SEE PROCEDURE FOR DECLINING A GIFT.
Methods for Accepting Outright Gifts
Gifts of Cash
Gifts of "cash" (cash, cheque, money order, bank withdrawals, payroll deduction and credit card) are accepted by the University.
The University's official name for purposes of all wills and similar documents is "Memorial University of Newfoundland".
Sample bequest language will be made available to donors and their lawyers to ensure that the bequest is appropriately designated, is deemed feasible at the time of designation, and that the proper legal title for the University is used.
A bequest of an appropriate amount can be used to create named Endowment Funds or Term Funds. Donors are encouraged to frame the designation as broadly as possible and identify in their wills their intention to create these funds. A gift agreement confirming the donor's wishes may be prepared.
Donors are invited and encouraged to provide information to the University about their bequests and, if they so choose, to send the University a copy of the relevant section of their will. This will allow for appropriate recognition during the donor's lifetime.
University staff do not provide professional consultation to donors in the preparation of their wills, or become involved in the execution or witnessing of a will in which the University is named as beneficiary. Neither University staff nor the University may be named as executor in such situations.
During the administration of an estate the Office of Development may engage professional expertise, as appropriate. Any professional fees associated with administration of the estate are deducted from any gift designated to the University from the estate. The net value of the bequest will be directed to the purpose specified by the donor whenever possible.
Following receipt of the designated gift, the University will issue to the estate a charitable tax receipt in the value of the gift.
Gift of Life Insurance
The University encourages gifts of life insurance. There are various methods by which a life insurance policy may be contributed to the University.
The administration of a gift of life insurance is overseen by a representative from the University's Office of Development or designate.
This representative or designate will request a copy of the donor's life insurance policy, confirming the University's designation as owner and beneficiary. In cases where a donor designates the University as the irrevocable owner and beneficiary of a life insurance policy, the policy must be officially signed over to the University and the policy statements held by the University. Where a donor designates the University as the beneficiary only, the donor is encouraged to share a copy of the policy information with the University for gift planning purposes.
In the case of policies in which the University is both the irrevocable owner and beneficiary, and for which premiums are still owing, tax receipts will be issued to donors for the dollar value of the premium paid by the donor in the tax year. For a donor to receive a tax receipt for premiums paid on life insurance policies, the University must be both the beneficiary and the irrevocable owner.
If the original donor is no longer willing or able to make the required premium payments, the University may continue the premium payment or take other appropriate action. The University representative or designate may consult with an actuary, as feasible, to receive advice as to whether to continue to pay the premiums or cash in the policy. The Vice-President (Administration & Finance) will determine the action to be taken after ascertaining the type of policy.
Upon receipt of confirmation of the irrevocable transfer of a life insurance policy to the University as owner and beneficiary, or receipt of annual confirmation of the policy’s paid-up status, the University will issue a charitable tax receipt for the appropriate value.
Gift of Public and Private Securities
Under most circumstances, the University will accept gifts of publicly traded securities. The gift must be made in-kind to the University for the donor to receive the capital gains tax exemption. Donors are encouraged to identify a preferred designation for their gift of securities. A gift agreement confirming the donor’s wishes may be prepared for both the donor and the University to sign.
Where possible, an electronic transfer of securities is encouraged.
The administration of a gift of securities is overseen by a representative of the University's Office of Development or designate in consultation with the Board of Regents' Investment Subcommittee of its Finance Committee.
In the instance of an electronic transfer of public securities, this representative will:
The University may accept privately held securities. In the instance of a gift of private securities, the donor would sell the shares and donate the proceeds to the University.
It is the University's practice to transfer immediately to the designated University account the funds equal to the value at donation. Instruction is given to the University's investment broker to sell the shares as quickly as possible; normally, it is not the University's intent to retain donated securities as part of the institution's financial holdings.
Upon confirmation of the receipt of a gift of public securities, the University will issue a tax receipt for the value of the gift on the date the University takes ownership of the shares. The amount indicated on the tax receipt is based on the value of the shares on the market at the close of the day they are received by the University.
Gifts of Art, Manuscripts, Books or Other in Kind Publications
The University requests a written letter or form that confirms the offer of the transfer of ownership from a donor before proceeding with the establishment of a fair market value and retains the right to process donations within a reasonable time frame or to decline donations. In the case of a gift of Artwork, a gift agreement, rather than a letter or form, is required. See also the Acquisitions section of the Art Collection policy.
The University will seek appraisal for gifts of art, manuscripts, books or other in-kind publications in accordance with guidelines of the Canadian Cultural Property Export Review Board and CRA.
The ongoing maintenance of the gift is the responsibility of the University. The cost of appraisal(s) and any shipping and related expenses may be donated or otherwise paid for by the donor or paid from the proceeds of the sale of the gift, if agreed upon by both the donor and the University.
With gifts-in-kind and, in particular gifts of artwork and cultural property, the University will ensure full compliance with CRA directives.
Gifts of Retirement Plan Assets
Gifts of Registered Retirement Savings Plans, Registered Retirement Income Funds, or other retirement plans can be a tax advantageous method of making a planned gift, and are encouraged, provided that the donor, upon consultation with their advisors, determines that this is compatible with their overall estate plan and philanthropic goals.
Outright gifts of assets from retirement plans will only be accepted provided the donor, in consultation with their professional advisor, determines that they can part with such assets without compromising the financial security of their retirement years and that the tax consequences are acceptable.
Gifts of Real Estate
The University requires an appropriate level of written appraisal of the property. From time-to-time, it may be necessary for the University to secure an additional independent appraisal in order to establish fair market value and the amount of the income tax receipt.
In addition, the University may require any or all of the following to ensure the real estate does not present a liability:
At any time, the University may also request other appraisals or inspections to ensure there is no liability to the University in accepting a gift of real estate.
The University will also seek assurance that there is no lien on the property and the donor has full and clear title.
The University sells gifts of real estate, as soon as possible. In rare situations, and in keeping with An Act Respecting The Memorial University of Newfoundland, property may be retained for University investment purposes or for use in accordance with the vision, mission and values and plans of the University.
Canadian Cultural Property
The Cultural Property Export and Import Act encourages Canadians to keep cultural property outstanding significance and national importance in Canada by providing incentives for Canadians who give this type of property to designated institutions and public authorities.
A charitable trust may be established with cash, securities, real estate or other assets. Upon request, the University may provide a sample gift agreement. The actual gift agreement is reviewed and final decision about acceptance remains at the discretion of the University's Board of Regents.
University staff will not provide professional consultation to donors in the preparation of their trust.
Charitable Remainder Trusts
In the instance of a gift of residual interest from a charitable remainder trust, the donor shall be responsible for real estate taxes, insurance, utilities and maintenance of the asset after transferring title, unless otherwise agreed by the University. The University retains the right to inspect the property from time-to-time to ensure that its interest is properly safeguarded.
The donor is entitled to a charitable tax receipt for the present value of the gift calculated in current dollars. This valuation, known as "discounted value", is determined by actuarial calculations provided by the CRA.
Other Types of Gifts
Equipment, software and other types of gifts will be considered on an individual basis in consultation with the donor, Canada Revenue Agency and the Office of Development.
Procedure for Declining a Gift
Approval Date: 2015-07-09
Responsible Unit: Office of Development
A donation may be declined if the gift:
Procedure for Endowment Funds
Approval Date: 2018-06-14
Responsible Unit: Office of Development
Endowment funds are donated funds, endowed trusts or other funds whereby the capital is invested in the University’s pooled investment fund with the intention that it is maintained in perpetuity. The University follows the investment principles and guidelines that are described in the Board of Regents’ Statement of Investment Policy and Objectives for Endowment Funds and Non-Endowed Funds (SIPO).
As stated in the SIPO, a minimum contribution is required to establish an endowment and approval of the fund has to be granted by the President or designate.
Normally, donors may contribute to an endowment over a period of five years. In some circumstances, such as a campaign, the period may be extended up to 10 years. Endowed chairs are exempt from this part of the policy. If the endowment is not fully funded by the specified time, a representative from the Office of Development will contact the donor to discuss options for the donation.
In the event that a donor is unable to fulfill the pledge by the end of five (or in some cases up to 10) years, in consultation with the donor where possible, the funds may be converted as outlined in SIPO.
Naming of a new Endowment Fund must be approved by the Board of Regents or their designate, in accordance with the Naming Opportunities policy and related procedures. A gift agreement must be established and approved/signed by the donor(s), the head of the relevant academic unit(s) (where applicable) and the President of the University. See the Contract Administration policy, the Naming Opportunities policy and the Schedule for Review and Signing Authority for Contractual Obligations.
Changes to the Use of an Endowed Fund
Once an endowment is created, the terms, purpose or existence of that fund may be altered in keeping with the gift agreement or otherwise negotiated with the donor.
Procedure for Gift Acknowledgement and Donor Recognition
Approval Date: 2015-07-09
Responsible Unit: Office of Development
The University has a donor-centered approach to its fundraising programs. Donor recognition guidelines and processes are based on the needs and wishes of donors and allow the flexibility required to respect the individuality of the donor, the donation and the unit. The key purpose of donor recognition is to extend sincere respect and appropriate gratitude to donors who support the University.
Most cash gifts and pledges, regardless of value or designated use, are acknowledged by the Office of Development through official correspondence within seven business days. A charitable tax receipt may also be issued from the Advancement Services and Operations unit in the Office of Development. This document indicates the designation of the gift and the official donation receipt for tax purposes.
All units receiving funds processed by the Office of Development are notified of the gift designation through University financial reports.
Donors are recognized and thanked in accordance with the University’s donor recognition guidelines, which strive to ensure each donor is involved and engaged with the University. Naming recognition follows the Naming Opportunities policy.
Procedure for Issuing Receipts
Approval Date: 2018-06-14
Responsible Unit: Office of Development
Gifts for which the University issues charitable donation receipts must comply with applicable federal and provincial tax regulations.
Gifts of cash, cheques, credit cards or negotiable securities to which no conditions are attached are routinely accepted and administered by the Office of Development.
Within the Office of Development, the Advancement Services and Operations unit is responsible for:
For gifts of publicly traded securities the charitable receipt amount will be determined by:
Electronic Transfer – If the donated securities are sold the day they are received into the University’s account, the fair market value of the gift will reflect the actual gross proceeds to the University. If the donated securities are sold after the day they are received into the University’s account, the fair market value will be determined by reference to the closing market price on the day they were received into the account.
Physical Transfer – Once the donor has transferred the actual share certificates to the University, the fair market value will be based upon the closing market price on the day that the University received the physical possession of the securities.
The University prefers that the donor to makes a gift of securities via electronic transfer. The transferring of shares electronically between two different brokerage firms can sometimes take more than one business day and during this time, price fluctuations can occur. The University sells donated securities as early as possible.
Receipting for Fundraising Events
Receipts may be issued for the charitable portion of ticket prices for University-approved fundraising events at the discretion of the Executive Director of the Office of Development. Normally, the University does not issue these types of tax receipts.
Replacement of Lost Receipts
To replace a lost receipt, the University can re-print the original receipt or may issue are placement. If a replacement is produced, the new receipt must refer to the original receipt number and indicate that it is a replacement.
Receipts are issued to the actual donor of the gift. In the case of a gift by cheque or credit card, the receipt is issued to the person (or people) whose name(s) appear(s) on the cheque or credit card. In the case of a gift of cash, the University refers to accompanying documentation to determine who receives the receipt.