Solicitation & Acceptance of Gifts
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Gifts of Tangible Personal Property and Equipment (Gift-in-Kind)
Gifts of Securities, Limited Partnerships & Other Intangible Property
Charitable Remainder Trusts (Unitrust, Annuity, Trust, Lead Trust)
The University Advancement program at Cal State San Marcos is designed to enhance the awareness of and support for the University and its diverse constituencies.
The External Affairs staff is responsible for coordinating the University's outreach programs to alumni, the community, business and industry, the media, and governmental and private agencies. These separate but interdependent functions are carried out by offices such as Legislative Affairs, Communications, University Development, and Alumni Affairs under the leadership of the Vice President of External Affairs. The External Affairs staff is committed to helping the University achieve its goals so that academic quality and service to the region can be maintained and advanced.
State-assisted universities, in order to maintain academic quality and provide appropriate access in a time when traditional funding sources are diminishing, must look to the private sector - and to their friends in the community, business and industry - for additional support. As these partnerships develop, the mutual benefits increase. Funds for scholarships, faculty research and professional development, state-of-the-art equipment, visiting lecturers and artists are only a few examples. The community benefits as it accepts university graduates who have received a high quality education provided by outstanding faculty. Our faculty benefit by maintaining currency in their fields through appropriate professional development opportunities. The community and the university benefit when scholarships are available to bring promising students to the campus.
This policy statement has been adopted by the Foundation Board of Directors to provide general information about the criteria and framework by which donations may be accepted or recommended to the Board for acceptance. This information should not be interpreted as legal advice nor is this policy intended to override current IRS code and regulations.
Title 5 of the California Code of Regulations (Section 42500) provides the broad authority for the Foundation to function as the recipient/donee of gifts, bequests, devices, endowments, trust and similar funds under the terms of an appropriate agreement between the CSU Chancellor, on behalf of the State of California, and the Foundation.
The Foundation is an IRS qualified Section 501(c)(3) tax exempt charitable-educational organization. The State of California has classified the Foundation as a public benefit corporation under the Nonprofit Corporation Law.
Only gifts, bequests, devises, endowments, trusts, and similar funds which further the mission of the University and are designed for use of (in trust for) the University or to the Foundation for University programs or projects may be considered for acceptance.
Except as provided below, the Foundation Director, or designee, has authority to accept gifts or related funds and instruments designated by the donor/grantor for purposes or uses previously approved by the Board of Directors, or for established, instructional or support programs and functions of the University authorized by the University President or his designee.
Gifts which are exceptions to these policies may be submitted for consideration to the University President or designee and the Foundation Director.
New University programs or donations involving a substantial or unique obligation of the Foundation shall be submitted to the University President or designee and the Foundation Director for review and consideration as to acceptability and conformance with CSU regulations (particularly California Code of Regulations Section 42500(c) regarding real property) and then to the Foundation Board of Directors for approval.
Gifts of Tangible Personal Property and Equipment (Gifts-In-Kind)
Prior to acceptance of donations of personal property or company product, other than books or materials donated to the Library, the following information about the proposed donation must be provided on/or accompany the Gift-In-Kind form with required signatures:
Description of item(s)
Estimated value of gift (or qualified appraisal as required in IV.C.1)
Area in which item is to be used and/or stored.
Proposed use of item, or plan to convert asset.
Restrictions on gift.
Acceptance.
Gifts of tangible, personal property (e.g., artwork, antiques, furniture, automobiles) are accepted only upon written approval by the University President or designee and the Foundation and based upon a reasonable plan to use, sell or otherwise convert the property to a usable asset.
Gifts of equipment related to the academic mission of CSUSM are accepted only upon written approval by the University President or designee and the Foundation.
Gifts of books, documents, art objects, artifacts, and related materials to be housed in the Library, are accepted only upon written acknowledgment by the Dean of Library or designee.
Items to be used for resale or auctioning for fundraising purposes are to be deemed acceptable and received by a University Development Officer. The Gift-in-Kind Form for Fundraising Events is to be used for documenting receipt of these gifts.
Gifts of software are to be received only upon written approval of the University President or designee and the Foundation.
Valuation.
For donations valued in excess of $5,000 the donor is responsible for acquiring a qualified appraisal. The donor must submit an appraisal with the Gift-in-Kind form.
Donors are responsible for determining the value of donated tangible property with values of less than $5,000 for purpose of charitable deductions related to their personal tax filings.
Gifts of software are to be valued according to the following CSU policy:
Book the educational discount price.
Only the license value of the software is to be booked. The number of seats is not be considered in determining the value.
Any fee charged to the campus or department for the license is to be deducted from the total gift value booked.
No software gift should be booked for more than three years when received as a multi-year gift.
If the donor provides IRS Form 8283, book the gift according to the Form, unless the amount is known to be more than the educational discount.
The acceptance of a gift does not indicate the Foundation's or the University's agreement with the valuation provided by the donor or the appraisal.
Resale or usage.
If donated property in excess of $5,000 is sold, exchanged or otherwise disposed of within two years of receipt, an information return must be filed with the IRS by the Foundation.
The department utilizing the donated property is responsible for arranging transfer, receipt, and maintenance and storage of the equipment.
Prior to acceptance, gifts of real property must:
Have completed a satisfactory title search for residential property and a satisfactory Phase I Environmental Site Assessment for commercial and other non-residential property.
Present a recent, qualified appraisal no older than six months.
Be approved in writing by the Chancellor's Office, where the amount of the property transaction is $250,000 or more.
Acceptance.
Gifts of real property are accepted only upon approval in writing by the University President or designee and the Foundation, based upon the outlined criteria for acceptable property and based upon a reasonable plan to use, resell or otherwise convert the property to a usable asset.
Generally, real property gifts which are not acceptable include:
Property with no resale value or that is not eminently resalable.
Property that is mortgaged or in some other way indebted or if it would incur unreasonable or unacceptable indebtedness once accepted.
Valuation.
Property will be accepted at the appraised value as of the date of acceptance based upon the qualified appraisal no older than six months.
California State University, San Marcos and the Foundation have no responsibility for affixing value to any gift on behalf of the donor.
The donor will bear the costs of the qualified appraisal.
Resale or Usage.
Property to be held.
Property intended to be held must be held as a California State University San Marcos or Foundation asset.
Its use must be implemented within the guidelines of the Campus Master Plan or the Foundation's Business Plan.
Property to be sold:
All property to be sold will be sold by the Foundation or the University.
Costs of the sale of property will be deducted from the sale proceeds.
If property is accepted in trust, the donor may be asked to make additional gifts to cover any additional costs that cannot be deducted from the sale proceeds.
Gifts of Securities, Limited Partnerships and Other Intangible Property
Gifts of securities meeting the criteria below will be accepted.
Gifts of readily marketable (publicly traded) securities will be accepted.
Gifts of securities which are not readily marketable (publicly traded) will be accepted under the following conditions:
Gifts of closely held corporate stock will be accepted on the condition that a qualified appraisal of the stock's value is supplied by the donor.
The stock's sale can only be restricted for the length of time agreed upon by the university and the donor at the time of the gift.
Gifts of bonds and other securities or papers that require a "holding" period or have a maturity date will be accepted.
Gifts of securities meeting the criteria below will not be accepted:
Securities which could create a liability to CSUSM or the Foundation.
Securities which, by their nature, may not be assigned (e.g., series "E" bonds).
Securities which, upon investigation, have no apparent value.
Valuation.
Gifts of readily marketable securities will be valued in accordance with IRS code and regulations.
Gifts of securities which are not readily marketable will be valued based upon the qualified appraisal supplied by the donor as of the day of acceptance and in accordance with IRS code and regulations.
Resale or usage.
Gifts of cash-equivalent instruments (i.e., stocks, bonds, etc.) will be converted to cash as soon as possible unless market conditions at the time of the gift favor holding the instruments until a more appropriate time for liquidation.
Prior to acceptance of donations of insurance policies naming the Foundation as owner or beneficiary, when acceptable, the following information about the proposed donation must be provided.
Description of the type of life insurance policy.
Face value.
Premium payment schedule.
Interest or dividend rate.
Age of insured(s).
Purpose of gift.
In general, insurance policies must meet the following conditions:
Insurance with cash value, which is fully paid up:
Donor must agree for policy to be cashed in immediately for its cash surrender value.
CSUSM Foundation must be named the owner (not just beneficiary) of the policy.
Insurance with cash value, which is partially paid or on which no payments have been made at the time of the gift:
Gift must have a cash value of at least $1,000.
CSUSM Foundation must be named as the beneficiary.
Donor must make a written pledge to continue paying the premiums on the policy.
If no payment is received from the donor within sixty (60) days of the premium due date, the Foundation shall determine whether to continue the policy in force or surrender for its cash value.
Term life.
CSUSM Foundation must be named as the owner or beneficiary.
Donor must make a written pledge to continue paying the premiums on the policy.
If no payment is received from the donor within 30 days of the premium due date, the Foundation may continue to pay premiums on the policy at its option or the policy will be allowed to lapse.
Acceptance. Gifts of life insurance will be accepted upon written approval by the University President or designee and the Foundation.
Valuation.
University recognition will be given equal to annual premiums made by donor if CSUSM Foundation owns the policy.
The value of paid-up life insurance gifts will be recorded and reported at cash surrender value rather than face value of the policy, in accordance with CASE/NACUBO guidelines.
Charitable Remainder Trusts (Unitrust, Annuity, Trust, Lead Trust)
Acceptable under the following conditions:
When the gift's vehicle irrevocably transfers the remainder interest of the asset's value to the CSUSM Foundation upon the:
Death of the named income beneficiaries, or
End of a specified term of no more than 20 years.
Donor can name himself or herself and/or others as income recipients, with payments payable concurrently or consecutively.
Donor cannot stipulate in the trust agreement that the original assets placed in the trust be retained for the life of the trust.
Minimum Funding Level
The minimum suggested amount to establish a charitable remainder trust shall be $100,000.
Should other factors indicate an exception would be in the best interests of the University or the Foundation, the amount of the initial gift may be less than $100,000 with prior University President and Foundation approval.
Minimum Age Levels
The minimum age of beneficiaries of all life income gifts is 55 years of age at the time payments begin.
For trusts of terms of years, the minimum age requirement and payment rate are subject to negotiation with acceptance by the University President and the Foundation.
Rate of Payment
In accordance with current IRS code and regulations, the fixed percentage cannot be less than the amount allowed by current IRS code and regulations and is established when the trust is created and cannot be changed. The maximum payment limitations are dependent upon the ages of the beneficiaries, types of trust, anticipated investment strategy and prevailing economic conditions.
The fixed percentage rate is established by the donor; however, rates higher than 8% require University President or designee and Foundation approval.
The Foundation will periodically review the administration and income distribution activities of charitable trusts.
The maximum number of income beneficiaries shall be no more than two generations of income beneficiaries.
Funding Assets
Gifts of cash and appreciated securities are appropriate for these charitable trusts.
Gifts of real estate or other non-liquid assets may be appropriate when the net income from the real estate or other non-liquid assets exceeds the required payout.
Policy B-2
Issue Date: 2/25/93
Effective Date 2/25/93
Last Revision 8/22/02 - Revision ratified by Board at 8/22/02 Board Meeting