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Policy on the Administrative Fee on Gifts Made to the University of California, Santa Cruz (Regents) and the UC Santa Cruz Foundation: UR0001
Effective Date: January 1, 1983
Last Revision Date: July 1, 2010


Policy on the Administrative Fee on Gifts Made to the University of California, Santa Cruz (Regents) and the UC Santa Cruz Foundation

(Policy UR0001)

I. Purpose of the Policy

In accordance with Chapter III. H. of the UC Development Policy and Administration Manual, campuses may assess a gift fee, which may be reviewed and revised periodically. The gift fee is assessed for the purpose of strengthening the development program and defraying a portion of related administrative costs. This policy does not apply to grants administered by the Office of Sponsored Projects nor to non-cash gifts (gifts–in-kind) made to the University that are to become inventoried useable assets of the University.

II. Definitions

1. Current use fund: a fund established to receive and expend gifts intended by the donor to be used for current purposes or programs; a fund that is not an endowment.
2. Endowed fund: a fund established to receive and invest gifts intended by the donor with the earnings to be used for restricted or unrestricted purposes or programs; an endowed fund protects the gift in perpetuity by responsibly investing the principal and distributing an annual payout realized from a portion of the investment income allowing the fund’s real value to increase over time.
3. Gift: the charitable and irrevocable transfer of money or property that is voluntary and motivated by something other than consideration or expectation of financial return or contractual obligation.
4. Grant: the transfer of money or property that specifies a scope of work and time frame and includes contractual obligations; may include the return of unexpended funds at the end of the granting period.
5. Gift-in-kind: the charitable and irrevocable transfer of tangible property that is voluntary and motivated by something other than consideration or expectation of financial return or contractual obligation.
6. Pledge: the promise of a gift made legally binding by signed agreement.
7. Principal: the actual amount of the gift; often referred to as “corpus” of an endowment.


III. Background

Prior to August 2003, UCSC did not assess a gift fee. On August 1, 2003, a 5% gift fee was established on current use gifts, and 3% on endowment gifts.

At the time of this policy update, all UC campuses administer a gift fee.

Recently, UCSC made a commitment to a comprehensive development campaign in order to meet increasing demands for private support. The amount of private support to UCSC has increased substantially in recent years and the benefits to our academic programs have been evident. At UCSC an administrative fee is assessed on all gifts made to the University of California at Santa Cruz (The Regents) or the UC Santa Cruz Foundation. All funds resulting from the gift fee are reinvested within the University Relations Division to support a small portion of the fund raising effort. At UCSC, the administrative fee policies and procedures are fully disclosed, and all gifts must be deposited through the University Relations Gifts Administration Office.

IV. Detailed Policy Statement

Effective July 1, 2010, all gifts made to the University of California at Santa Cruz (The Regents) or the UC Santa Cruz Foundation will be assessed a 6% fee. There are no additional fees on the expenditure of gifts. Gift agreements, including documented pledges, are subject to the gift fee, applicable at date the agreement was executed. The gift fee is assessed on the gift principal and will be deducted at the time of receipt.

Assessment of a gift fee does not affect the tax-deductible amount of a donor’s gift to the University of California at Santa Cruz (The Regents) or the UC Santa Cruz Foundation. Donors will receive one receipt for the full amount of their gift.

Rather than the fee being deducted from the gift principal when the terms of the gift specifically disallow a fee or cost recovery, the department or division benefiting from the gift may elect to pay the fee from a non-state, non-federal, or non-restricted departmental fund source. The benefiting department must complete the Gift Fee Waiver Authorization Form that includes FOAPAL information and required authorizations for the payment method.

A donor may wish to make a gift that ensures that the program benefiting from their gift receives a specific amount (“net”). In this case, they may be allowed to provide a gift calculated as the net amount intended for the department plus 6% of that value. The Development Officers must complete the Gift Fee Waiver Authorization Form (http://giving.ucsc.edu/documents/GIFT_FEE_WAIVER_FORM.pdf) and obtain Associate Vice Chancellor, Strategic Philanthropy authorization, as this gift total will vary slightly from the formula that Gifts Administration uses to calculate the fee (94% of the total gross gift amount).

The Vice Chancellor, University Relations has the authority to grant a waiver from the gift fee in specific cases. A waiver of the entire fee is used in rare cases only. A compelling justification must be included on the Gift Fee Waiver Authorization Form. This waiver requires Associate Vice Chancellor, Strategic Philanthropy review and initials prior to Vice Chancellor authorization.

Any gifts received by Gifts Administration without a completed Gift Fee Waiver Authorization Form will be assessed the 6% fee.

V. Getting Help

University Relations provides training and assistance to campus units (including help with completing forms, carrying out procedures, or interpreting policy).

If you need help with ...  Contact ...
Questions regarding this gift fee policy 


Sarah Schuster Kudela (831) 459-1717 
Director, Stewardship & Donor Communications

Mary Sweeley Castro (831) 459-1078
Assistant Vice Chancellor Operations and Planning

Questions regarding gifts processing  Brian Duisenberg (831) 459-1661
Director of Advancement Services
Kathryn Buckholdt (831) 459-1908

Questions regarding grants administration
 Office of Sponsored Projects (831) 459-5055

Determining if a donor is making a gift or a grant 
Development Officer for initial determination. Final determination by Office of Sponsored Projects Director according to UC Policy.

VI. Applicability and Authority

This policy on Gift Fee applies to all campus gifts made to the UC Regents or the UC Santa Cruz Foundation, except the following:
Grants administered by the Office of Sponsored Projects; and
Non-cash gifts (gifts-in-kind) that are to become inventoried usable assets of the University.

This policy supersedes previous gift fee policy, dated August 1, 2003.

The campus Vice Chancellor of University Relations is the campus authority for the Gift Fee policy. This policy was reviewed and approved by Campus Provost/Executive Vice Chancellor, David Kliger in December, 2009.


VII. Related Policies/References for More Information

Related Policies and Procedures
UCSC Policy and Procedure Manual (PPM)
http://www.ucsc.edu/ppmanual/index.html

Contracts and Grants Manual, Section 9: Gifts and Endowments
http://www.ucop.edu/raohome/cgmanual/chap09.html

Development Policy Manual, January 1989 (Revised Spring, 1992), http://www.ucop.edu/ucophome/policies/devpol/

Chapter I: Soliciting and Accepting Private Funds
http://www.ucop.edu/ucophome/policies/devpol/dpa1toc.html

Chapter III. D.: Is it a Gift or a Grant? http://www.ucop.edu/ucophome/policies/devpol/dpa3d.html

Chapter III. H.: Notification to Donors Regarding Gift Fees http://www.ucop.edu/ucophome/policies/devpol/dpa3h.html


Implementation Procedures

Gift Fee Procedure: All gifts will automatically be assessed the full 6% fee on gift principal at the time of receipt unless one of the following conditions are met:

The department or division benefiting from the gift may elect to pay the fee (rather than the fee being deducted from the gift principal) when the terms of the gift specifically disallow a fee or cost recovery. Campus units may not pay the fee from a state, federal, or restricted fund sources that do not allow for payment of this type of fee. The benefiting department must complete the Gift Fee Waiver Authorization Form (http://giving.ucsc.edu/documents/GIFT_FEE_WAIVER_FORM.pdf) that includes FOAPAL information and authorization for the payment method. The form will be implemented in January 2010. Gifts Administration will process the gift principal in its entirety and the fee recovery will occur as a separate transaction.

A donor may wish to make a gift that ensures that the program benefiting from their gift receives a specific amount. In this case, they may be allowed to provide a total gift calculated as the net amount for the department plus 6% of that value. Development Officers must complete the Gift Fee Waiver Authorization Form (http://giving.ucsc.edu/documents/GIFT_FEE_WAIVER_FORM.pdf) that includes approval by Associate Vice Chancellor of Strategic Philanthropy, as this gift total will vary slightly from the formula that Gifts Administration uses to calculate the fee (94% of the total gross gift amount). Gifts Administration will process the specific gift amount to the benefiting department and the gift fee recovery. Donors will receive a receipt acknowledging their entire gift amount.

The Vice Chancellor of University Relations has the authority to grant a waiver from the gift fee and this is used in rare cases only. Development Officers must complete the Gift Fee Waiver Authorization Form (http://giving.ucsc.edu/documents/GIFT_FEE_WAIVER_FORM.pdf) including a compelling justification. This waiver requires Associate Vice Chancellor of Strategic Philanthropy initials and Vice Chancellor of University Relations authorization. Gifts Administration will process the gift with the waiver as authorized.

Any gifts received by Gifts Administration without a completed Gift Fee Waiver Authorization Form will be assessed the 6% fee.

Roles and Responsibilities

1. Departments

a) Submit gifts (with complete Gift Notification Form (http://giving.ucsc.edu/documents/GiftNotificationForm.xls) to the University Relations Gifts Administration Office for processing in accordance with University policies and procedures.

b) Submit the Gift Fee Waiver Authorization Form with department head authorization if there is a request to pay the fee from a departmental fund.

2. All campus fund raising staff

a) Inform potential donors of the fee via solicitation materials or verbal discussion.

b) Submit the Gift Fee Waiver Authorization Form if the gift received is not sufficient to provide the benefiting department with donor-specified amount and provide a 6% fee. Any deviation from the gift fee requires Associate Vice Chancellor Strategic Philanthropy authorization. To waive the gift fee entirely requires Vice Chancellor University Relations authorization.


3. University Relations/Gifts Administration Office

a) Process all gifts in accordance with University policies and procedures.

b) Deduct the 6% fee from the principal of all gifts unless completed Gift Fee Waiver Authorization Form is attached.

c) Issue donation receipts with a statement informing donors of the fee policy.

4. UC Santa Cruz Foundation

a) Transfer all gifts made to the UC Santa Cruz Foundation to the campus.

Disclosure of the fee policy is made to donors on the gift receipt and at the time of solicitation via the online giving form and on the UR website. In addition, explicit written or oral disclosure of the fee to donors at the time of solicitation is suggested. Fee information must be included in any proposals or gift agreements issued to prospective donors. Appropriate disclosure language for fund raising literature or letters of gift purposes is as follows:

“As is standard among all non-profit institutions, UCSC assesses a fee on gifts in order to partially defray development and administrative costs. As of July 1, 2010, the gift fee is 6%.”

Requests to use modified language must be directed to the University Relations Stewardship and Donor Communications Office for approval.

References
The Gift Fee Waiver Authorization Form (http://giving.ucsc.edu/documents/GIFT_FEE_WAIVER_FORM.pdf) is effective January 2010.


UC Santa Cruz Policy

University Relations, Operations and Planning                                                                          maryc@ucsc.edu; (831) 459-1078