June 30, 2014
Gift Acceptance and Campaign Counting
All university employees and volunteers must adhere to this policy, which also acts as a guide for prospective donors and their advisors, providing assurance that all donors are treated equitably.
To ensure the highest possible gift and campaign integrity, all charitable contributions to USC will be counted and recorded into the University Advancement database of record in accordance with the standards set forth by the Council for Advancement and Support of Education (CASE). Any exception to CASE standards must be approved by the Senior Vice President for University Advancement.
The university will make every effort to accommodate and accept all charitable contributions from donors. However, it will not accept gifts that:
- Violate the terms of this policy;
- Are too difficult or expensive to administer;
- Could create unacceptable liability or cause the university to incur future unanticipated expenses;
- Are for purposes that do not further the university’s mission;
- Could damage the reputation of the university;
- Would jeopardize the university’s tax-exempt status; or
- Provide a donor with goods or services of financial value in exchange for said donor’s gift unless such value is fully disclosed in the time and manner as required under federal and state law and regulations.
If a gift falls into one of the above categories, the dean or development officer working on the gift must notify the Senior Vice President for University Advancement, who will make the final decision as to whether to accept it.
Submitting and Executing Gift Agreements
- A written gift agreement is required for all charitable contributions or pledges of $25,000 or more. All gift agreements and pledges should be in the form of the templates prepared by University Advancement and approved by the Office of the General Counsel, which are available on the internal University Advancement website. Questions on use of the gift agreement templates should first be directed to the Stewardship Office in University Advancement.
- Multi-year pledge payment schedules will only be permitted if the annual payment is at least $5,000 per year. The maximum pledge payment schedule is five years. Any request for a pledge to be paid over more than five years must be approved by the Senior Vice President for University Advancement.
- Any deviations from the standard gift agreement templates must be approved by the Senior Vice President for University Advancement in consultation with the Office of the General Counsel.
- The Senior Vice President for University Advancement, and the donor(s), must sign all gift agreements, and additional signatures may be required for gifts restricted to certain purposes (see below). The university signatures should be obtained prior to the donor(s) signature(s), in the event that the university requires any changes to be made prior to donor agreement.
- The signature of the Provost and Senior Vice President for Academic Affairs is required to establish a new chair/professorship, or for the creation of any academic institute, center, or program within the university, or with respect to related naming rights. University Advancement, in consultation with the Office of the General Counsel, shall refer to the Provost and Senior Vice President for Academic Affairs any proposed gifts or gift terms that appear to violate university policy or deviate from established practice.
- Gift agreements, including agreements structured as corporate or foundation grants, should never include terms creating an exclusive relationship between USC or one of USC’s units, and an outside entity. Exceptions to this rule must be approved by the Senior Vice President for University Advancement after consultation with the Office of the Provost and will rarely be granted.
- The President of the university has the authority to approve the names of portions of campus buildings and moveable objects. Names of schools, campus buildings, grounds, thoroughfares, and amphitheaters shall be recommended by the President of the university to the Executive Committee of the Board of Trustees for approval.
- The dean’s signature is not required, but may be appropriate as an acknowledgment and approval for the use of the gift within his or her school in accordance with the terms of the gift agreement.
- Pledges from individual donors that are likely to be paid in full or part through either a private or family foundation or a donor-advised fund should be written in the form of a non-binding statement of intention in order to prevent the donor, foundation or donor-advised fund from potentially violating certain provisions against self-dealing under the federal tax laws. In these circumstances development officers should consult with the Office of Gift Planning for assistance in drafting the agreement.
- All university employees must comply with the policy on Fundraising Coordination.
The University Advancement Office of Gift Services and Data Integrity (Advancement Gift Services) will provide a gift receipt to all USC donors that is prepared in accordance with applicable government requirements.
Gift Designations and Restrictions
- The university may accept gifts with specific designations to a particular school, unit or program.
- The university will not accept gifts with restrictions requiring that beneficiaries or scholarship recipients be chosen on the basis of race, color, national origin, ancestry, religion, gender, sexual orientation, age, physical or mental disability, or any other characteristic which may from time to time be specified in the university’s Equal Opportunity, Affirmative Action, and Non-Discrimination policy. Any potential gifts which include consideration of these factors must be reviewed and approved by the Senior Vice President for University Advancement in consultation with the Office of the General Counsel.
- The donor will not be permitted to choose any individual recipient(s) or beneficiary(ies) of their gift. For example, donors may not choose the holder of an academic chair or professorship, or the individual recipients of a scholarship award.
- Whenever possible, any restrictions related to the use or purpose of a gift should be written as “preferences” to allow the university the greatest latitude in ensuring future use. When that is not possible, it is desirable to reserve the authority of the Board of Trustees to change the use or purpose of the gift as may be called for by changed circumstances.
- Unless waived by the Senior Vice President for University Advancement, gift agreements concerning gifts of endowment must include the standard clause regarding frustration of purpose/changed circumstances.
- If a designation or account of a contribution needs to be changed at a later date, Advancement Gift Services requires written approval from the donor and the Senior Vice President for University Advancement.
Specific Types of Gift Assets
- Gifts of cash under $25,000 that are paid in full do not require a written gift agreement or any prior approvals. However, the donor may request or the development officer may choose to execute a gift agreement to clarify any restrictions and to outline stewardship responsibilities.
- Unrestricted gifts of cash will be used to support the university’s highest priorities and may be added to the university’s endowment.
Marketable securities (stocks and bonds)
- The minimum value for any gift of marketable securities is $1,000.
- The Investment Office approves and coordinates acceptance of all gifts of marketable securities.
- The Investment Office will calculate the value of the gift by using an average of the high and low trading price on the date of the gift.
- In most cases, gifts of marketable securities will be promptly sold in accordance with established university practice. The Investment Office and the Senior Vice President of University Advancement must approve any request by a donor that USC hold and refrain from selling a marketable security.
Non-marketable or closely-held securities
- The minimum value for any gift of a non-marketable or closely-held security is $10,000.
- These securities include: partnerships, limited partnerships, limited liability companies, closely-held companies, stock of entities that fall under SEC Rule 144, legend stock or bonds of entities that are thinly traded, and stock of entities held for sale at the request of a donor.
- The Investment Office approves and coordinates acceptance of all gifts of non-marketable or closely-held securities and should be notified prior to the acceptance of any such gifts. Because of the unique nature of these securities, special due diligence review may be required prior to acceptance.
- The value of these securities will be determined based on the fair market value of the securities on the date of gift, using an appraisal or alternative method of valuation acceptable to the Investment Office and the Senior Vice President for University Advancement.
- The minimum value for any gift of real estate is $100,000, net of all fees, expenses and commissions.
- The university may accept gifts of many types of real estate, such as residential, commercial, apartment buildings, vacation properties and undeveloped land.
- The Office of Real Estate and Asset Management coordinates and approves all gifts of real estate, and has specific due diligence review requirements that must be followed prior to the acceptance of any gift.
- Gifts of real estate which are subject to mortgages are rarely acceptable, as they may result in financial liability for the university and can cause adverse tax consequences for the donor(s). All such gifts require prior approval of the Senior Vice President for University Advancement.
- The Office of Real Estate and Asset Management and the Senior Vice President for University Advancement must approve, in advance, the receipt of any real property where there are donor-imposed restrictions on the sale, or if it is not readily marketable.
- The value of gifts of real estate will be determined based on the fair market value of the real estate on the date of the gift.
- Retained life estates—the university may accept a gift of a personal residence which is subject to a retained life estate. The Office of Real Estate and Asset Management and the Office of Gift Planning coordinate the due diligence review process on these gifts. It is required that the donor assume responsibility for ongoing property taxes, insurance and maintenance for the duration of the life estate. Consistent with CASE standards, retained life estates will be counted and donors credited with the appraised market value of the property on the date of the gift. Gift receipts will be issued in accordance with Internal Revenue Service (IRS) guidelines.
Gifts of tangible personal property which are to be sold
- The minimum value for a gift of tangible personal property to be sold is $10,000, net of expenses and commissions.
- Gifts of tangible personal property include: automobiles, boats, art, jewelry, furniture, etc.
- The Office of Real Estate and Asset Management is responsible for conducting due diligence review on, and approving the acceptance of, all gifts of tangible personal property. It also manages the sale of such assets.
Gifts of tangible personal property which are to be kept and used by USC
- The university often receives gifts of tangible personal property that it plans to keep and use in furtherance of its mission. Examples include: artworks, software licenses, computer hardware, laboratory equipment, athletic equipment, etc.
- A dean of a school or a head of a unit may authorize acceptance of tangible personal property to be kept and used.
- If there is any question about the acceptability of any potential gift of tangible personal property, the dean or unit head should first seek approval from the Senior Vice President for University Advancement before proceeding.
- Information about any gift of tangible personal property should be forwarded to Advancement Gift Services, which will credit the donors and prepare an appropriate gift receipt.
Charitable gift annuities
- The university is registered in California and certain other states to offer charitable gift annuities. The minimum amount to establish a new gift annuity is $20,000.
- The Office of Gift Planning oversees the university’s gift annuity program, and is responsible for the issuance of all new gift annuities.
- Consistent with CASE standards, gift annuities will be counted and donors credited with the face value of the annuity on the date of the gift. Gift receipts will be issued in accordance with IRS guidelines.
- In limited cases the university may accept real estate, tangible personal property, or other illiquid assets in exchange for charitable gift annuities, subject to appropriate due diligence review and approval by the Office Real Estate and Asset Management.
Charitable remainder trusts
- The university may accept gifts of a remainder interest in charitable remainder trusts. The Office of Gift Planning is responsible for due diligence review with respect to all charitable remainder trust gifts.
- The university may serve as trustee of a charitable remainder trust, provided it is named irrevocably as a beneficiary of at least 50% of the remainder, and that the minimum value of the trust is $100,000.
- Consistent with CASE standards, gifts to fund charitable remainder trusts will be counted and donors credited with the face value of the trust on the date of the gift. Gift receipts will be issued in accordance with IRS guidelines.
- Pursuant to a private letter ruling obtained from the IRS, the university may invest the principal of a charitable remainder unitrust with the university’s endowment, provided the university is named irrevocably as the sole (100%) remainder beneficiary.
Charitable lead trusts
- The university may accept designation as the beneficiary of a charitable lead trust. The Office of Gift Planning is responsible for due diligence review with respect to all charitable lead trust gifts.
- Due to the potential for liability, the university may accept an appointment as trustee of a charitable lead trust only upon review of all relevant circumstances and approval by the Senior Vice President for University Advancement.
USC’s donor advised fund
- The minimum amount required to establish a donor advised fund at USC is $1,000,000. The Office of Gift Planning is responsible for due diligence review prior to the establishment of all new donor advised funds.
- The university requires that at least 50% of the donor’s gift to their fund at USC (including any earnings thereon) must eventually go to some purpose at the university. The other 50% may go to any other qualified U.S. charities.
- Donor advised funds will be invested in the university’s endowment, or upon request of the donor, in a money-market equivalent maintained by the university.
- The university may accept a designation as beneficiary or owner of a life insurance policy. The Office of Gift Planning is responsible for due diligence review prior to acceptance with respect to all new life insurance policies where the university may be an owner or have other responsibilities.
- The university will not accept policies where the university is obligated to make any future premium payments unless the donor commits to making annual gifts to cover such payments and/or understands that the university may unilaterally exercise its right to surrender the policy for its cash surrender value.
- Life insurance policies will be booked for gift and campaign counting purposes in accordance with CASE standards, and donors will receive gift receipts in accordance with IRS guidelines.
Revocable bequest intentions
The university welcomes notification by donors that they have included USC in their wills or estate plans, records this information in the Advancement database, and honors their generous intentions with an invitation to membership in the Trojan Legacy Circle. However, the university does not book or count revocable future gifts or bequests, and per IRS regulations, the university does not provide any gift receipt to donors until the gifts are realized.
Irrevocable bequest intentions (also known as “life pledges”)
In accordance with CASE standards, the university may recognize and count irrevocable pledges where donors have included USC in their estate plans, provided that such donors (1) are age 70 or older at the time of the gift, (2) sign a written pledge agreement that makes their commitment legally binding and irrevocable, and (3) own sufficient assets to satisfy the amount committed, as best as the university can ascertain. These gifts will be entered into gift accounting records as a pledge. Although the university may provide an acknowledgement of the pledge for recognition purposes, per IRS regulations the university will not provide any gift receipt to such donors until the pledge is satisfied.
Donors’ Estate Administration; Drafting of Wills; Providing Bequest Language; Planned Giving Forms
- Neither the university nor any of its employees acting on behalf of the university may agree to act as the successor trustee of a living trust or the executor of any will in which the university is named as a beneficiary, without the approval of the Senior Vice President for University Advancement.
- University employees acting on behalf of the university shall not draft wills or living trusts naming the university as a beneficiary, regardless of whether such employee is licensed to practice law, without the approval of the Senior Vice President for University Advancement. (This provision does not apply to employees drafting their own will or wills for family members, naming the university as a beneficiary.)
- University employees may provide donors with suggested bequest language or assistance with other language pertaining to gift designation within USC.
- The Office of Gift Planning may provide donors and their counsel with approved form documents for planned gifts such as charitable remainder trusts, charitable lead trusts and life estates.
- All matured testamentary gifts (trusts and estates) are administered through the Office of the General Counsel. All trustees, executors, and other administrators of estates and trusts that provide for a gift to the university are to be directed to the Office of the General Counsel.
Providing Legal or Financial Advice
No employee of the university shall provide any legal advice or financial planning services for any donor. Prospective donors should be encouraged to seek the assistance of their own legal and financial advisors in matters relating to their gifts and the resulting tax and estate planning consequences. Further, to avoid conflicts of interest or the appearance of improper influence, the university shall not pay legal or other fees for the preparation of a donor’s will or living trust which names USC as a beneficiary.
Qualification and Registration
The university qualifies under both federal and state law as a tax-exempt public charity to which charitable contributions are deductible to the full extent of the law for income, gift, and estate tax purposes. The university’s federal tax identification number is 95-1642394. The university is registered with the City of Los Angeles to solicit charitable gifts generally within the city limits pursuant to Information Card No. T2599 issued by the Los Angeles Police Commission, Charitable Services Section on November 29, 2012.
Elizabeth Garrett, Provost and Senior Vice President, Academic Affairs
Todd R. Dickey, Senior Vice President, Administration
University of Southern California