Gift acceptance and processing

The purpose of this Policy is to govern the solicitation and acceptance of gifts made to Lynn University and to provide guidance to prospective donors and their advisors when making gifts to the University.

Lynn University reserves the right to treat each gift on an individual basis, and thereby reserves the right to accept, reject or modify any agreement and/or gift. It is the policy of Lynn University to gratefully accept gifts of cash, security and property that are designated for the mission of the university in accordance with the procedures/guidelines set forth in this policy and applicable law.

Cash gifts—all cash, check or credit card, provided they support the mission of the university.

Corporate matching gifts—donations made by corporations and organizations matching employees’ donations based on pre-established formulas and limits.

Donor/benefactor—an individual, corporation, foundation, or organization that has made a gift to the university.

Endowment—funds that are kept intact and permanently invested, a portion of the earnings from which are applied to purposes designated at the outset by the donor.

Gift—gifts/pledges of money, securities, or real or personal property that is intended to be liquidated for cash, as well as gifts-in-kind.

Gift in kind—a Gift of goods which may be used in the operation of the organization, or may be converted to cash assets with the authorization of the donor, at the discretion of the university. Gifts in kind are approved by the gift acceptance committee.

Grants—gifts made by a government or other organization for a purpose and usually bound by a contract.

Planned gift— a donation made in present day, and allocated to a future date; most often when the donor passes.

Restricted gift—gifts given or paid wherein the donor or granting and contracting organization has specified that the gift is to be used to support specific programs or projects.

Tribute gifts—gifts “in memory of” or “in honor of.”

Unrestricted gift—nature of a gift that it is donated to be used where it is most needed by the university as determined by the organization's leadership.

I. Authority to solicit and accept charitable gifts

The President and Vice President for Enrollment and University Advancement, on behalf of the Board of Trustees, are the officers working with relevant individuals and groups to solicit and accept all contributions to Lynn University. All gifts to the university, solicited or unsolicited, of any description are immediately reported to, and receipted by, the Office of University Advancement gift processing office.

The management and reporting of gifts are guided by the standards of accounting and reporting established by the Internal Revenue Service (IRS), the Council for Advancement and Support of Education (CASE) and the National Association of College and University Business Officers (NACUBO).

Naming opportunities and levels of gifts are determined by the university President and the Vice President for Enrollment and University Advancement.

II. Gift acceptance

As a general rule, a solicitation for a gift or bequest stresses the advantages of an unrestricted gift in the form of cash or liquid securities. Other forms of giving, such as planned gifts, are acceptable and may offer qualified donors an attractive alternative. Such gifts may enable donors to significantly increase the level of their gifts while taking advantage of some meaningful commemorative or named gift opportunities. Individuals should consult their tax advisers concerning the treatment of these specialized gift techniques for their individual circumstances. The university advises all donors to seek their own tax and legal counsel and does not render tax, legal or financial advice.

Gifts are valued on the date the donor relinquishes control of the assets in favor of Lynn University. The university adheres to the rules of gift acceptance required by the IRS:

1. Mail: the postmark date;
2. Hand delivery: the date of physical receipt;
3. Wire/electronic transfer: the date received in the brokerage account of the university;
4. Journal entry: the date of transfer into the university’s account;
5. Charitable remainder trusts, charitable lead trusts and charitable gift annuities are created on the date they are funded according to the above rules. No payments may be made to an income beneficiary until that date.

When a gift is given to Lynn University, it is not considered legally consummated until Lynn University agrees to the conditions and notifies the donor of acceptance of the gift. If a gift or bequest is received without disclaimer by Lynn University, the university assumes the legal obligation to administer the gift or bequest in a manner consistent with the terms specified by the donor.

Prior to acceptance, a restricted gift must be appraised to assure it does not place unreasonable constraints on Lynn University.

Scholarship gifts may not be accepted by Lynn University if they are offered on the condition, or with the understanding, that the award will be made to a student of the donor’s choice.

As a condition of gift acceptance, Lynn University pays no fees to any person in consideration of directing a gift or for the completion of a gift instrument to Lynn University.

III. Outright contributions

1. The Office of University Advancement provides a tax receipt and an acknowledgement letter as well as additional recognition appropriate to the gift level.
2. Gifts may be made anonymously.
3. Gifts may be made in honor or in memory of individuals. In such cases, the family of the person honored or remembered is given a notice of all donors’ names and addresses (if requested). Donors’ gift amounts are not shared.

Outright gifts may be given for:

1. Current operations (unrestricted or restricted for a particular college, athletics or other purposes).
2. Capital purposes (buildings, improvements to facilities and equipment).
3. Endowment (unrestricted or restricted).

Outright gifts may be given as follows:

1. Cash – Gifts in the form of cash and pledges are recorded in the amount of the actual gift.
   1. Any amount is welcomed.
   2. Unrestricted contributions are encouraged. A donor has the option to restrict some or all of a gift to a specific program or department.
   3. The donor is credited with the full amount of the cash gift. In cases where the donor receives something of value in return for the donation, the donor is made aware of the cost of the benefit received. In these cases, the gift processor deducts the cost of the benefit received against the donation.
   4. Gifts of cash may be made in the form of currency, personal check, credit card charge, cashier’s check, money order, or fund transfer. All checks are made payable to Lynn University and not to an employee, agent, or volunteer for the credit of the university. Checks are deposited in the ordinary course of business and no employee or agent of Lynn University shall delay deposit of such.
   5. Donors may make gifts to Lynn University through donor-advised funds or charitable checking accounts. Receipts are not generated for gifts from donor-advised funds or charitable checking accounts, however, acknowledgment letters are completed as requested by the organizations or charities administering the accounts.
   6. Donors whose gifts are matched by a company receive soft credit for the matching amount. The donor is recognized for the combined total of the donation and the matching gift in any donor listing. A tax receipt is sent to the matching gift company.
2. Marketable, publicly traded securities – Stocks, bonds and other negotiable securities that are regularly traded on a public stock exchange
   1. Marketable, publicly-traded securities are receipted at the average of the high and low market value on the date the donor relinquishes control of the assets in favor of Lynn University or other valuation techniques approved by the IRS.
      1. Stock certificates mailed to Lynn University are recorded according to the postmark date.
      2. Stock certificates sent to Lynn University via a third party provider, such as UPS or Federal Express, are considered to be legal gifts as of the date of receipt by the university.
      3. Stock shares transferred electronically are considered legal gifts as of the date the stock is credited to the account of the university.
   2. Lynn University’s policy is to immediately liquidate any gifts of publicly-traded securities unless retention of the specific security is consistent with the university’s investment practices.
   3. If a donor is an officer or director of the issuing corporation, the university inquires as to whether any Securities and Exchange Commission (SEC) Rule 144 restrictions apply that limit the university’s ability to sell the donated securities.
   4. Lynn University does not receive or process proposed transfers of stock that have no current market value (i.e., “worthless stock”) at the time a transfer to the university is proposed.
   5. Securities controlled under SEC Rule 144 are held until the restriction on the sale expires and then they are immediately sold in the matter indicated above.
   6. If the fair market value of gifted securities is greater than $500, the donor must complete Section A of Form 8283 and attach such to the donor’s current tax return.
3. Closely-held stocks – A gift of stock of a private or family-held corporation, which includes not only debt and equity positions in non-publicly traded companies, but also interests in limited partnerships and limited liability companies or other ownership funds.
   1. Any amount is welcomed, provided the stock may be readily sold or is likely to be redeemed.
   2. The donor is credited with the appraised fair market value of the stock, or an estimated value if an appraisal is not available.
   3. Gifts of closely-held stock exceeding $10,000 are receipted at the fair market value placed on them by a qualified independent appraiser as required by the IRS for valuing stocks that are not publicly traded. Gifts of less than $10,000 may be valued at the per share cash purchase price of the most recent transaction. All such gifts of closely-held stock are held until liquidated, at which time the funds are used consistent with the gift intentions of the donor and the established policies of the university.
4. Gifts of real estate – Gifts of real estate may be accepted by the university. Almost any type of real property can be donated to the University including, but not limited to, personal and vacation homes, farms and ranches, commercial and rental properties, and undeveloped lots. The real estate may be given outright or by using a variety of planned giving methods. In such cases, the University administration works with the donors and legal counsel.
5. Bargain sales – A donor may elect to sell a piece of real estate to Lynn University at a price less than fair market value. The IRS considers the difference between the fair market value and the selling price to be a gift and therefore produces an income tax deduction for the donor. Lynn University benefits by acquiring property or by selling the property to a third party at market value.
   1. Bargain sales are receipted, reported and recognized at fair market value (less any encumbrances) at the time the asset is transferred to Lynn University. The fair market value of real estate gifted through a bargain is determined by an independent, qualified appraiser in the employ of the donor.
   2. Gifts of mortgaged real estate are treated as bargain sales are accepted only on prior approval of the President, Vice President for Finance, and the Vice President for Enrollment and University Advancement. Generally, the university does not accept a gift of mortgaged real estate unless:
      1. There is an assurance that the stated property can be sold within a reasonable period of time.
      2. There is substantial equity in the property that will be realized at the time of sale.
6. Gifts of tangible personal property (gifts-in-kind) – Gifts of personal property (i.e., antiques, works of art, collections, musical instruments, etc.) are welcomed by the university with prior approval from the Vice President for Enrollment and University Advancement and in cooperation with other appropriate university staff. In most cases, the donor is responsible for delivering the gifts to the University. Gifts of tangible personal property valued at $5,000 and above are credited and recognized at the appraised value of the property at the time it is transferred to the university. The donor is responsible for securing appraisals on such property according to IRS guidelines. In certain circumstances, Lynn University may secure its own appraisal. When an appraisal is not available (e.g. gifts of technology), an invoice for like new property along with the age of the property may be accepted.
7. Gifts of equipment (gifts-in-kind) – Gifts of equipment may be accepted by the university. However, when such equipment requires additional and/or ongoing maintenance that is not yet budgeted, prior approval must be received from the Vice President for Enrollment and University Advancement and other appropriate vice presidents. All gifts of equipment are governed by the policies and procedures applicable to the acceptance of gifts of tangible property as outlined above.
8. Challenge gifts or pledges – Challenge gifts, grants or pledges requiring matching funds by the university are accepted and acted upon only through collaboration with the university’s President and the Vice President for Enrollment and University Advancement and other appropriate university representatives.
9. Grant process - The grant review committee (Vice President for Enrollment and University Advancement, Vice President for Academic Affairs, Chief Financial Officer and Treasurer, Director of Finance Operations, and Director of Annual Programs) reviews grants via email.
   1. Faculty contact the Advancement regarding grant request.
   2. Director of Advancement researches the grant to assure it meets the university standards.
   3. Director of Advancement sends an email to grant committee for review and approval/denial
   4. The committee reviews the request for the following:
      1. What is the size and scope of the grant?
      2. Is the corporation/foundation one that should be associated with Lynn University?
      3. What is the level of involvement from the Office of Development?
      4. How much reporting is required?
      5. What is the cost to the university? And can those costs be included in the grant?
      6. Does the grant require hiring employees?

IV. Pledges

1. Written pledges – A donor may stipulate the amount, purpose and payment period in a written pledge form to the institution. A letter of intent from Lynn University to the donor may outline the same details based on a conversation held with the donor. The pledge form or letter of intent requires the signature of the donor. Copies of the signed pledge form or letter of intent are provided for the donor’s and the university’s records.
2. Oral pledges – Oral pledges may be made through an authorized telephone solicitation program. These pledges are counted and reported in annual fund totals. A confirmation notice that includes a thank you and a pledge amount is mailed to the donor immediately following the solicitation.
3. Pledge write-offs – The Vice President for Enrollment and University Advancement and major gift officers meet quarterly (January 2, April 1, July 1, October 1) to review all pledges that are past due. They develop a strategy for getting pledges to fulfill and decide which pledges are to be written off. Any pledge of $2500 or more that is written off is sent to the Finance Office (Director of Finance Operations, Controller, and Assistant Controller) to update their records.

V. Planned gifts

Deferred gifts, also called “planned gifts” or “future commitments” are different from outright gifts, as Lynn University does not realize an asset until some point in the future. It is for this reason – the uncertainty of timing of realization – that the university records deferred gifts separately from outright gifts. The university reports the planned gift’s face value and present value.

Planned gifts may be made through the following:

1. Bequest by will or living trust – A donor may name Lynn University as beneficiary in his/her will or trust directing that Lynn University receive an outright distribution or annual payments from the donor’s estate.
2. Gifts of retirement plan assets – A donor may contribute retirement plan assets to Lynn University by means of testamentary bequests and transfers to charitable remainder trusts.
3. Charitable trusts (irrevocable) – Trusts are legal documents and are not the property of the university.
   1. Charitable remainder unitrust – This trust pays a set percentage of the trust’s principal, as calculated annually, to the income beneficiary for life or a set term of years (i.e., the amount of the annual payments fluctuate). Additional gifts may be made to the trust at any time. When the income beneficiary dies or the term of years expires, the principal goes to the university and perhaps additional charitable beneficiaries. Trust assets must be managed separately for each trust.
      1. Proposed charitable remainder annuity trusts for which Lynn University is trustee and/or administrator are funded initially with assets of at least $100,000.
   2. Charitable remainder annuity trust – This trust differs from the unitrust in that the annual income payment is a set dollar amount determined when the trust is established. No additions to the trust are allowed after the trust is established. Trust investments are managed separately for each trust.
      1. Proposed charitable remainder annuity trusts for which Lynn University is trustee and/or administrator shall be funded initially with assets of at least $100,000.
      2. Lynn University recommends that trusts be limited to one- or two-income beneficiaries.
      3. Donors are encouraged to name a trust company, the trust office of their bank, or their community foundation as trustee.
      4. Charitable remainder annuity trust funds for which Lynn University is named as trustee are managed by professional investment managers selected and advised by the board of trustees (or a committee thereof).
   3. Charitable Lead Trust – This trust pays to Lynn University (and perhaps another charitable organization) a stream of payments for a specified period of years, at the end of which time the assets of the trust are distributed to non-charitable designees (e.g., the donor’s children or grandchildren). The assets of this trust must also be managed separately.
      1. Proposed charitable lead trusts shall normally be funded initially with assets of at least $200,000.
      2. Income received by Lynn University as the result of a charitable lead trust is used and/or invested by the university for the purposes specified in the trust agreement. In those cases where the trust agreement indicates no specific purpose, income received is treated as an unrestricted asset of the university.
4. Gift of life insurance – A donor may give all rights to a life insurance policy to Lynn University. The donor makes ongoing annual gifts sufficient to pay the premiums. Such gifts are tax deductible. A donor also may elect to give a single premium policy or paid-up policy (thus, further premiums will not be required).
   1. Lynn University accepts non-fully-paid-up whole life insurance policies if:
      1. Lynn University is designated as owner and sole beneficiary;
      2. The original policy is transferred to Lynn University; and
      3. The donor agrees to continue making premium payments that may qualify for current charitable deductions. Lynn University makes no commitment to continue making premium payments should the donor cease to do so.
   2. The donor may specify that all or a portion of the proceeds be restricted to a specific program or department.
   3. Fully paid or functionally equivalent life insurance policies assigned to the university are credited at the net cash surrender value of the policy as irrevocable gifts.
   4. The assignment of a policy that is not paid up ordinarily is credited at the net cash value of the policy; subsequent premium payments are added to the value credited.
   5. Donors must obtain an appraisal for gifts of insurance valued in excess of $5,000 and Section B of Form 8283 must be completed and filed with their federal income tax returns. If required, the university will file a Form 8282 if the insurance is surrendered for its cash value within two years of receipt.

Retained life estates in real property – In such an arrangement the donor gives a remainder interest in a personal residence, second home or farm. The property is gifted to Lynn University but the donor retains the right to occupy the property until death, at which time all rights to the property pass to Lynn University. The donor usually pays all expenses related to the property during his/her lifetime, but various alternative arrangements may be negotiated by the university President and the Vice President for Enrollment and University Advancement.

For more information regarding this policy, please contact University Advancement.