IX - 5.30 - Gift Acceptance Policy
I. Purpose
The university accepts charitable gifts and contributions that promote Bowie State University’s goals as Maryland’s first historically black public university that empowers a diverse population of students to reach their potential by providing innovative academic programs and transformational experiences as they prepare for careers, lifelong learning and civic responsibility. The university seeks gifts that support a dynamic, student-focused community stimulated by cultural and intellectual diversity and built upon a foundation of integrity, creativity, and openness to the exploration of new ideas. The university solicits gifts that support the university’s commitment to excellence in the creation, dissemination, and application of knowledge.
II. Policy Statement
This policy statement is designed to assure that all gifts to, or for the use of, Bowie State University are structured to provide maximum benefits for the donor and the university. This policy has been developed to establish standards by which all gifts will be evaluated, as well as provide a formal process for carrying out such evaluations. This policy is intended as a guide and allows for some flexibility on a case-by-case basis.
III. Guiding Principles
Gifts accepted by the university are guided by the following gift acceptance principles:
Principle 1: Support of Mission. The university accepts gifts that are in furtherance of the mission of the university and the students and community we serve.
Principle 2: Reputation and Core Values. The university will not accept a gift which may damage or compromise the university’s reputation, is not in the best interests of our students or community, or is not consistent with our core values.
Principle 3: Right to Refuse and Rescind Gifts. The university has the right to refuse any gift from any donor and the right to rescind its acceptance of a gift that does not adhere to these principles of gift acceptance or does not meet the criteria set forth in this policy.
Principle 4: Donor-Centric Gifts. The university seeks to only accept gifts that are in the interest of the donor. A determination of the donor’s “interest” shall include, but not be limited to, the donor’s financial situation and philanthropic priorities, as well as any tax or other legal matters related to their giving. The university will not knowingly encourage any gifts that are inappropriate in light of the donor’s disclosed personal or financial situation.
Principle 5: Confidentiality. Information concerning all transactions between a donor and the university shall be held in confidence and may be disclosed only with the permission of the donor or the donor’s designee or as required by law including the Maryland Public Information Act, Maryland Code Annotated, General Provisions, Title 4 as amended from time to time. To the fullest extent permitted by law, the university shall respect the wishes of any donor offering anonymous support and shall implement reasonable procedures to safeguard such donor’s identity.
IV. Responsibility
Responsibility to Donors
The university and the Division of Philanthropic Engagement, its staff, and representatives endeavor to assist donors in accomplishing their philanthropic objectives. Information concerning all transactions between a donor and the university shall be held in strict confidence and may be publicly disclosed only with the permission of the donor or as required by law including the Maryland Public Information Act. The university will respect the wishes of any donor who wants to make a gift anonymously and will take reasonable steps to safeguard the donor’s identity.
Ethical Standards
The university is committed to the highest ethical standards guided by the most current “Code of Ethical Principles” published by the Association of Fundraising Professionals as well as “Model Standards of Practice for the Charitable Gift Planner,” adopted by the American Council on Gift Annuities and the National Committee on Planned Giving.
Restrictions on Gifts
The university will accept unrestricted gifts and gifts for specific programs and purposes if such gifts are consistent with its stated mission, purposes and priorities. The university will not accept gifts that are too restrictive in purpose, too difficult to administer, and/or are for purposes outside the mission of the university. If circumstances change such that a gift cannot be used as the donor specified, the donor must approve change(s) in the original restriction or the university must receive permission as per the University of Maryland Foundation policy and consistent with the laws of the state of Maryland. All final decisions on restructuring the nature of a gift, and its acceptance or refusal, shall be made by the Gift Acceptance Committee.
Gift Acceptance Committee
A Gift Acceptance Committee serves in an ad hoc capacity to review proposed complex assets to the university. The committee represents the university’s best interest in evaluating each gift for a use related to the university’s mission.
The five (5) voting committee members include the:
- Vice President, Philanthropic Engagement
- Vice President, Administration and Finance or Designee
- University Counsel
- Provost or Designee
- Chief Financial Officer, University Foundation
A non-voting ad hoc member may include a representative of the project or program to benefit from the proposed gift. All decisions of the committee shall be determined by majority vote.
V. Acceptable Gifts and Risk Classification
The following are acceptable gifts from individuals, corporations, foundations and other entities:
Cash
Cash is acceptable in any form and will count at full face value. Gifts made with foreign currency will be valued based on the exchange rate on the day the gift is received and count at full face value.
Securities
The university can accept both publicly traded securities and closely held securities.
Publicly Traded Securities
Marketable securities may be transferred to an account maintained at one or more brokerage firms or delivered physically with the transferor's signature or stock power attached. As a general rule, all marketable securities shall be sold upon receipt unless otherwise directed. In some cases, marketable securities may be restricted by applicable securities laws. In such instances, the final determination on the acceptance of the restricted securities shall be made by the Gift Acceptance Committee.
Closely Held Securities
Closely held securities, which include not only debt and equity positions in non-publicly traded companies but also interests in LLPs and LLCs or other ownership forms, can be accepted subject to the approval of the Gift Acceptance Committee. It is the donor’s responsibility, for gifts of non-publicly traded securities exceeding $10,000, to have the securities valued by a qualified independent appraiser as required by the Internal Revenue Service.
Gifts must be reviewed prior to acceptance to determine that:
- There are no restrictions on the security that would prevent the university from ultimately converting those assets to cash.
- The security is marketable.
- The security will not generate any undesirable tax consequences for the university.
If potential problems arise on initial review of the security, further review and recommendation by an outside professional may be sought before making a final decision on acceptance of the gift. The final determination on the acceptance of closely held securities shall be made by the Gift Acceptance Committee. Every effort will be made to sell non-marketable securities as quickly as feasible.
Tangible Personal Property
Gifts of tangible personal property or gifts in kind can be accepted if they further the mission of the university. The university may reject gifts of personal property at its sole discretion.
Gifts of property valued at $5,000 or more must be approved by the Gift Acceptance Committee. By law, the university cannot report to the donor, or estimate, the dollar value of the tangible personal property gift. The valuation must be professionally assessed, which is the responsibility of the donor.
Real Property
Gifts of real property may include developed property, undeveloped property, or gifts subject to a prior life interest. Prior to acceptance of real property, the university shall require an initial environmental review of the property to ensure that the property has no environmental damage. The cost of the environmental audit shall generally be an expense of the donor.
When appropriate, a title binder shall be obtained by the university prior to the acceptance of the real property gift. The cost of this title binder, and all expenses incurred as part of the valuation of the property (including, but not limited to, a fair market value appraisal), shall generally be an expense of the donor.
Deferred Gifts
Deferred gifts are decided upon or given now but received at some time in the future, often at the end of the donor’s (and the donor’s spouse’s) lifetime.
The most common deferred gifts are listed below:
- Bequests
- Retirement Plan Beneficiary Designations
- Life Insurance
- Charitable Gift Annuities
- Charitable Remainder Trusts
- Charitable Lead Trusts
- Real Property Through Charitable Bequest
- Remainder Interest in Property
Bequests
Donors and supporters of the university will be encouraged to make bequests under their wills and trusts. A bequest of non-publicly traded securities, real property, tangible personal property and other assets must be approved by the Gift Acceptance Commitment. Bequests are revocable gift commitments.
Retirement Plan Beneficiary Designations
Donors and supporters of the university will be encouraged to name the university as beneficiary of their qualified retirement plans (for example, an IRA, a 401(k) plan or a defined contribution plan). If the university is anything other than an outright beneficiary of such assets, the gift must be reviewed and approved by the Gift Acceptance Committee. Retirement plan beneficiary designations are considered revocable gift commitments.
Life Insurance
Donors and supporters of the university will be encouraged to name the university as beneficiary or contingent beneficiary of their life insurance policies. A gift of life insurance can be in the form of an irrevocable commitment in which the university is named as both the irrevocable beneficiary and owner of an insurance policy or a revocable commitment in which the donor retains ownership of the policy and names the university as a beneficiary or contingent beneficiary of the insurance policy.
The following criteria apply to insurance gifts when the university is the owner and beneficiary:
- The premium must be a lump sum payment or annual premium payments as made by the donor.
- The policy may not be a term insurance policy.
- The donor agrees to be responsible for making additional premium payments if the interest rates fall below expectations and additional premium payments are required.
- The minimum face value for acceptance of a gift of life insurance when administrative handling by the university is required is $100,000.
If the donor does not elect to continue to make gifts to cover premium payments on a life insurance policy, the university may continue to pay the premiums, convert the policy to paid up insurance, or surrender the policy for its current cash value.
Charitable Gift Annuities
Each income beneficiary must be 60 years old in order to be issued an immediate single/dual life charitable gift annuity. Deferred payment gift annuities will be issued to donors of any age who are interested in deferring payments until age 60 or later. The face value of the single or dual life policy minimum charitable gift annuity is $25,000. The tax-deductible amount of a charitable gift annuity (as calculated by the policy writer based on accepted practices, an agreed upon annual rate of return, and actuarial tables of life expectancy) is recorded for gift counting purposes and is included as an outright gift in fundraising reports prepared by the university.
Charitable Remainder Trusts
The university may accept designation as remainder beneficiary of a charitable remainder trust with the approval of the Gift Acceptance Committee. The university and the Gift Acceptance Committee will not accept appointment as trustee of a charitable remainder trust.
Charitable Lead Trusts
The university may accept a designation as income beneficiary of a charitable lead trust. The university and the Gift Acceptance Committee will not accept appointment as trustee of a charitable lead trust.
Real Property Through Charitable Bequest
If the donor notifies the university of the intent to gift real property through a charitable bequest, the university may acknowledge the intent to gift after a review of the market value and marketability. A current appraisal is preferred, but not required. If a current appraisal is not available, it is acceptable for a university representative or its authorized agent to complete a walkthrough of the property to generally evaluate marketability. The donor shall pay the costs associated with the conveyance and delivery of the gift.
Intent to gift property through a bequest is a moderate risk gift. A full evaluation of the property will be completed at the time the bequest is realized. This future evaluation, including an assessment of the market value, environmental questionnaire, and phase 1 environmental site assessment as applicable must be communicated to, and understood by, the donor. At the time a bequest of real property is realized, the Gift Acceptance Committee will consider the gift using the same criteria as if the donor were to gift the property during his/her lifetime.
Remainder Interest in Property
The university will accept a remainder interest in a personal residence, farm or vacation property subject to the provisions of the Gift Acceptance Policy. The donor or other occupants may continue to occupy the real property for the duration of the stated life. At the death of the donor, the university may use the property or reduce it to cash. Where the University receives a gift of a remainder interest, expenses for maintenance, real estate taxes, and any property indebtedness are to be paid by the donor or primary beneficiary.
In-Kind Gifts
Prior to acceptance, the donor must secure approval of the donation from the Gift Acceptance Committee. The university will treat in-kind gifts as gifts of tangible personal property that will not be put to a use related to the exempt purposes of the university. As a result, in most cases the donor’s deduction will be limited to the donor’s cost basis in donated goods.
Gifts of Art
Prior to acceptance, the university must secure approval of the donation from the Gift Acceptance Committee. The university has the right to aesthetically modify the gift of art to make it consistent with the university environment. Gifts of art must be valued at the time of donation by a qualified expert, and supporting documentation must be provided to the university. All appraisal costs pertinent to the donation are the responsibility of the donor.
Other Gifts
Other gifts such as promissory notes; gifts of intellectual property (e.g., patents, royalties, trademarks, and copyrights); oil, gas and mineral interests; and other atypical gifts will be evaluated on a case-by-case basis with the Gift Acceptance Committee to determine if these gifts are acceptable.
Gifts by Risk Classification
Categories of risk is a relative term that refers to gifts that are on a spectrum of material risk, which refers to gifts which are generally illiquid and more complex (i.e., gifts of real property) through marginal risk, most liquid, and least complex (i.e., cash).
Gifts are classified into three categories based on the level of risk associated with acceptance:
Gifts of material risk include:
- Gifts of more than $1 million
- Outright gift of real property
- Notification of the intent to gift real property through a bequest
- Gifts of real property when a bequest is realized
- Gifts of real property with retained life interest
- Gifts of personal property with a fair market value exceeding $5,000
- All gifts of real or tangible personal property subject to donor restrictions regarding the disposal of such property
- Non-publicly traded securities
- All gifts of unusual items or gifts of questionable value
All gifts considered to be of material risk shall be approved by the Gift Acceptance Committee before the gifts may be accepted by the university. It is understood that upon acceptance by the Gift Acceptance Committee, all gifts considered to be of material risk shall be documented with a written understanding between the donor and the university.
Gifts of moderate risk include:
- Charitable gift annuities
- Charitable remainder trusts
- Charitable lead trusts
- Gifts of life insurance
- Conditional pledges with a value equal to or less than $20,000
- Gifts of personal property with a fair market value of less than $5,000
All gifts considered to be moderate risk may be accepted by the university and Division of Philanthropic Engagement staff after approval by the Vice President, Philanthropic Engagement.
All other gifts are considered to be gifts of marginal risk:
- Cash
- Securities
- Publicly traded securities
All gifts considered to be marginal risk may be accepted by the university and Division of Philanthropic Engagement staff. Full discretion is afforded the Vice President, Philanthropic Engagement through a personal evaluation and assessment of higher risk to advance a gift to the Gift Acceptance Committee.
VI. Other Provisions
Pledges
Pledges are commitments to give specific dollar amounts according to a fixed time schedule. This schedule may not exceed five years for any one gift, unless approved by the vice president, Institutional Advancement. All pledges of $1,000 or more and payable in one year are required to be in writing. The following minimum information must exist to substantiate a pledge:
- The amount of the pledge must be clearly specified;
- There must be a clearly defined payment schedule;
- The donor may not prescribe contingencies or conditions; and
- The donor must be considered to be financially capable of making the gift.
Gift Counting
The purpose of gift counting is to report fundraising activity to internal and external constituencies and provide for opportunities to recognize and showcase donor participation. In 2006, the National Association of Charitable Gift Planners (NACGP) issued guidelines which have been adopted by the Association of Fundraising Professional (AFP) and Association of Healthcare Philanthropy (AHP) and are considered best practice in fundraising. NACGP indicates how all gifts, including current, irrevocable and revocable gift commitments, should be counted and reported in their respective categories.
Outright gifts and pledges are counted at the value of the cash or non-cash assets at the time the commitment is made by the donor. Pledges must be in writing. Planned or deferred gifts are counted in two categories: irrevocable gift commitments and revocable gift commitments and must be documented to count toward production totals.
Irrevocable gift commitments, including charitable gift annuities and charitable remainder trusts, shall be counted at face value for donors at any age except for the donation of life insurance where a policy is not completely paid and the donor is under the age of 60. Documentation of an irrevocable gift commitment is in the form of a binding contract (e.g., charitable gift annuity contract, charitable remainder trust agreement or life insurance policy).
Revocable gift commitments, including bequests or retirement beneficiary designations, shall be counted at face value for donors age 60 and over. Revocable gift commitments must be documented on the university’s Statement of Intention Form and must have a valuation listed by the donor to be counted. Donated life insurance policies that are not paid by the donors under the age of 60 will be considered revocable gift commitments.
Matching Gifts
A fully funded endowment [programmatic or scholarship] may be eligible for consideration of a matching gift, if requested in writing by the donor. If the source of the matching gift is the BSU Foundation, all requests, regardless of threshold, must be reviewed and approved by the Gift Acceptance Committee. If the source is institutional funding, current policies and procedures for review for expenditures should be followed.
Asset Allocation for Donor Naming Opportunities
Formal recognition offered to a donor shall be captured within the Memorandum of Understanding (MOU). In circumstances where the gift is a comprehensive or blended gift, the asset allocation shall be 75% outright/25% irrevocable gift commitment in order to confer a donor naming opportunity. An irrevocable gift commitment higher than 25% which includes a naming opportunity must be approved by the Gift Acceptance Committee.
Changes to Gift Acceptance Policies and Guidelines
The Gift Acceptance Committee shall review the gift acceptance policy, every five years, or soon if needed, to recommend revisions for approval to the University Council.
Conflict of Interest
All prospective donors—particularly those making large gifts or planned gifts—are strongly urged to seek the assistance of personal legal and financial advisors in matters relating to their gifts and the resulting tax and estate planning consequences. The university will, in turn, seek the advice of university counsel in matters relating to the acceptance of gifts in which such involvement is warranted.
Internal Revenue Service Rules and Regulations
The university will comply with the prevailing rules and regulations of the Internal Revenue Service when accepting and structuring the various types of gifts covered by this policy.
Information and questions regarding the Gift Acceptance Policy may be directed to the Vice President, Philanthropic Engagement and Executive Director of the BSU Foundation.
Revised: April 23, 2024