Administrative Policies and Procedures Manual - Policy 1030: Gifts to the University
Date Originally Issued: 07-01-2003
Revised: 08-01-2006, 01-10-2014, 12-12-2016
Authorized by UNM Regents' Policy 7.13 "Receipt and Investment of Gifts to the University"
Process Owner: President, UNM Foundation
The University of New Mexico seeks and values private philanthropy to help it support, maintain, and grow its dynamic faculty; recruit and retain talented students; and support and enrich its libraries, museums, and research capacity. Any intended gift and any restrictions on its use, however, should be acceptable to the University and support its mission.
In 1979, the University of New Mexico Foundation, Inc. was established as a separate non-profit corporate entity, for the purpose of soliciting, accepting, distributing, and managing private gifts that benefit the University. Though the Foundation is charged with overseeing the University’s fundraising activities, other affiliated non-profit fundraising organizations work in concert with the Foundation on common goals, often to support a particular school, college, program, or other unit.
The Foundation maintains a record of all gifts that are provided to or for the benefit of the University and its affiliated organizations. To ensure the accuracy and completeness of this record and of the Foundation’s annual report on giving, the University and its affiliated organizations should report all non-cash gifts valued at two hundred and fifty dollars ($250.00) and above to the Foundation. At their discretion, the University and its affiliated entities may report gifts of lesser value.
To report a gift, please go to the Foundation’s website to obtain the necessary forms and instructions.
2. Cash, Securities, and Other Related Gifts
The Foundation is authorized to accept all gifts for the benefit of the University in the form of cash, checks, electronic funds transfers, credit or debit card transactions, and securities. Any gifts in these forms that are submitted directly to the University should be transferred to the Foundation for acceptance, acknowledgement, and reporting.
To make a deposit, please go to the Foundation’s website to obtain the necessary forms and instructions.
3. Endowed Gifts
Both the University and the Foundation are authorized to accept gifts, including endowed gifts. Funds that were endowed prior to the formation of the Foundation, or endowments established with University or state matching funds, are accounted for and owned by the University. All other endowments are accounted for and owned by the Foundation.
Prior to acceptance of an endowed gift, the donor’s intended uses and restrictions should be reviewed with the head of the University unit that would benefit from the gift (“the receiving unit”) and other appropriate University officials and, if found acceptable, expressed in a written gift agreement to be signed by the donor, the Foundation, and the head of the receiving unit. Special approval requirements exist for endowed faculty chairs, as specified in Regents’ Policy 5.18 (“Endowed Faculty Chairs”).
There are two basic types of endowments: true endowments and quasi-endowments.
3.1. True Endowments
For true endowments, donors stipulate that the principal or corpus should be invested to generate income, and the corpus is intended to be held in perpetuity. The University’s Board of Regents has designated the Foundation to accept all new true endowments that benefit the University.
The Foundation’s Investment Committee is authorized by the Regents to oversee the investment and distribution of both University and Foundation endowments through a unitized pool known as the Consolidated Investment Fund. The fund is managed in accordance with the University and Foundation’s joint “Consolidated Investment Fund Endowment Investment Management Policy.” Spending distributions, a percentage of the Consolidated Investment Fund’s average market value, are made to the University on an annual basis for purposes specified by the donors of the endowments.
Quasi-endowments differ from true endowments in that they either (a) are established for a fixed term and not left intact in perpetuity, or (b) are established to permit the principle or corpus to be expended. The Regents must approve the initial establishment of quasi-endowments with University funds, all transfers of University funds to established quasi-endowments, and expenditures of principal that exceed ten percent (10%) in any given fiscal year. To initiate a quasi-endowment with University funds, a college, school, department, or program should complete the Request to Establish a Quasi- Endowment Fund Form that is available on the Foundation's website, obtain the required approvals, and forward the form to the Foundation to implement the quasi-endowment.
4. Gifts of Property
Gifts of property help the University to carry out its mission of teaching, research, and public service. The process for considering and accepting gifts of property depends primarily on the form of property being donated and whether the University will use it in its donated form. When the University intends to use gifts of property in their donated form, generally they should be made directly to and be accepted by the University. When the University does not intend to use the gifts in their donated form, generally they should be made to the Foundation, subject to the approval of its Gift Acceptance Committee.
Tangible personal property is gifted in many forms, including works of art, manuscripts, literary works, personal papers, digital archives, musical instruments, archaeological and ethnographic objects, natural history specimens, stamp collections, rare coins, rare and valuable books, jewelry, gemstones, precious metals, home furnishings and appliances, motor vehicles, and computer hardware and specialized equipment for instructional or research purposes. Similarly, gifts of intangible personal property are provided in many forms, including patents, copyrights, subscription lists, goodwill, trade names and trademarks, player contracts, installment obligations, general or limited partnership interests, and certain rights to tangible property, such as oil and gas or mineral production royalties or other payments.
4.1. Museums and Collections
In that the University’s diverse group of museums and collections have unique collection goals and purposes, each has developed an internal policy on accessioning and deaccessioning items, including gifts. These internal policies conform to the accreditation standards of the American Alliance of Museums and other applicable professional standards, as well as to UAP 6410 (“Museums and Collections”). Upon acceptance, the University becomes the owner of a gift to a museum or collection, but the receiving unit has authority to determine the use or disposition of the gift, unless separate arrangements have been made in writing between the University, through the receiving unit, and the donor. When donors do not specify that gifts are intended for particular University units, the Foundation will consult with the UNM Council on Museums to identify appropriate receiving units for the gifts.
4.2. College of University Libraries and Learning Sciences
The College of University Libraries and Learning Sciences (“University Libraries”) directly accepts gifts for its holdings in the form of books, personal papers, manuscripts, sound recordings, and other materials that enrich its assets and further the University’s research and scholarly activities. Upon acceptance, the University becomes the owner of the material and the University, through the University Libraries, reserves the right to make retention, location, cataloging, and other decisions relating to the use or disposition of the items. University Libraries may decline gift offers for a variety of reasons, including that the intended gifts duplicate, or fall outside the scope of, current holdings or are in poor condition.
4.3. Acceptance of Part of a Gift
Offers of extensive collections by donors often warrant a careful and lengthy analysis of each part of the gift, after which a receiving unit may decide to accept part of the intended gift and decline the rest. As part of its service to the University, the Foundation, with the consent of its Gift Acceptance Committee and in collaboration with the receiving unit, may accept the remainder of the gift for resale and credit the net proceeds to the receiving unit as specified by the donor.
4.4. Acceptance of a Gift with the Intent to Sell
When a gift is accepted for the purpose of selling the gift and using the proceeds to provide an income stream for a unit, with the consent of the Foundation’s Gift Acceptance Committee, the donor should transfer title to the gift to the Foundation, rather than to the University. As part of its service to the University, the Foundation will accept the gift for resale and credit the net proceeds to the receiving unit as specified by the donor.
4.5. Acceptance of a Fractional Interest in a Gift
Ordinarily, the University prefers to have complete ownership of a gift. In unusual circumstances, however, the University will accept a fractional, or shared, interest in a gift.
4.6. Gifts of Equipment
The University accepts donations of equipment to enrich its teaching, training, and research capabilities. Prior to accepting such gifts, the receiving unit should ensure that it has the necessary resources to properly maintain, house, and use the equipment. Written approval for the acquisition of the gift must be obtained from the cognizant chair and dean on the Check List for Donations of Equipment Form found on the Foundation’s website. A proposed gift of equipment that raises health, safety, or liability concerns should be evaluated by the University Safety and Risk Services Department. If the donor requires the University to sign a contract or agreement relating to the gift, the document must be reviewed and signed by an individual with signature authority in accordance with UAP 2010 ("Contracts Signature Authority and Review Policy").
4.7. Deed of Gift
A formal, legal agreement called a deed of gift is used to transfer ownership of and legal rights in tangible and intangible property from a donor to the University or Foundation. As necessary, receiving units should contact the Office of University Counsel for assistance in developing a deed of gift specific to their needs.
4.8. Promised Gifts
Promised gifts, such as items provided to the University as long-term loans, are not gifts. The receiving unit should arrange for the promised gift to be converted to a deeded gift as soon as the donor is willing or at the time of the donor’s death. The receiving unit may not commit the University to storage costs or other future expenditures related to the promised gift without the prior written approval of a person holding a dean, director, or above position. The receiving unit should work with the Office of University Counsel to ensure that proper documentation is in place prior to agreeing to any restrictions associated with the promised gift or to having the gift transferred to University property.
Many forms of tangible personal property, such as artwork, photographs, and manuscripts also have an intangible property component that is protected by federal copyright law. Under federal law, copyright protection is available to all works of authorship that have been fixed in a tangible medium (including books, personal papers, manuscripts, sound recordings, pictorial, graphic, and sculptural works, photographs, prints and art reproductions, maps, globes, charts, diagrams, models, technical and architectural drawings). Copyrights are divisible and may be conveyed separately or in their entirety. Ownership of the copyright is distinct from ownership of the material object. Whenever a gift is conveyed to the University that has a copyright component, the deed of gift shall identify which, if any, copyrights are being retained by the donor. Whether or not copyright is conveyed in a gift may significantly affect the value of the gift.
4.10. Visual Artists Rights Act
The Visual Artists Rights Act of 1990, 17 USC § 106A, provides special protections to visual artists. The Act grants the creator of a work of visual art a limited right to maintain control over the work even after it has been sold. The artist has the right to claim authorship of the work and the right to prevent any intentional distortion, mutilation, or other modification of the work. These rights belong to the artist, even if the artist is not the copyright holder. They extend for the life of the artist and cannot be transferred, although they can be waived.
4.11. Gifts of Real Property
Gifts of real property are defined as gifts of land interests together with all improvements and fixtures, easements, rights-of-way and appurtenances, and all liens and encumbrances. The University may accept gifts of real property if the University intends to use the property for its own activities. Prior to accepting a gift of real property the University requires a due diligence review by the University’s Real Estate Office and the Board of Regents' approval. If the University does not wish to use the proffered property gift in support of its mission activities, the Foundation may consider acceptance of such property, in accordance with donor intent, after consideration and approval by its Gift Acceptance Committee.
4.12. Naming Rights
Any naming rights proposed as part of a financial gift must be reviewed in accordance with UAP 1020 (“Naming Facilities, Spaces, Endowments, and Programs”).
5. Gifts by Wills and Trusts
A person may give the University or Foundation a bequest or devise by will, or may make the University or Foundation the beneficiary of inter vivos trust (established while the donor is living) or a testamentary trust (established by will). The gift may provide that the University or Foundation receive the residue of a decedent’s estate or the remainder of a trust, a specific dollar amount, a percentage of the estate or trust, gifts of specific securities, real or personal property, or business interests. A trust may be established with income beneficiaries receiving benefits for a fixed term or for life, with the University or Foundation receiving all or a portion of the residual principal. The Foundation will work with estate administrators and personal representatives to manage the transfer of the bequest to the University or Foundation. Or, if property is involved and the University intends to use it in its current form, the donor should transfer the bequest directly to the University. Subject to the approval of its Gift Acceptance Committee, the Foundation will accept bequests of personal and real property on behalf of the University or a unit of the University.
Donors may arrange for gift annuities that benefit the University through contracts with the Foundation.
6. Factors to Consider Prior to Accepting Proposed and Promised Gifts
In deciding whether or not a proposed gift should be accepted, a unit should consider:
- the relationship of the proposed gift to a unit’s mission statement, existing collections, teaching, research, or service activities;
- the operating costs of the gift, including the initial installation and on-going maintenance expenses as well as sources of payment of these expenses;
- whether the gift is consistent with planned future departmental activities;
- whether current faculty or staff have the expertise to benefit from the gift;
- the condition of the gift, including its anticipated useful life; and
- whether the gift poses any health or safety risks.
7. Special Tax Rules Regarding Gifts of Property
The Internal Revenue Service (“IRS”) has established complex rules for donors who wish to receive a charitable donation deduction for gifts of property. In that tax laws are complicated and subject to change, donors should seek professional tax advice as needed. Under no circumstances may the University or the Foundation give tax advice to a donor.
Donors may request that the University or Foundation sign the “Donee Acknowledgment” section of IRS Form 8283 (“Noncash Charitable Contributions”), confirming receipt of their gifts. If the University received the gift, then the individual designated by the head of the receiving unit to acknowledge receipt of the gift should sign the acknowledgement. If the Foundation received the gift, then the Chief Financial Officer of the Foundation should sign the acknowledgement.
For certain donations, the IRS requires donors to submit appraisals to the IRS along with the Form 8283 noted above. Donors, and not the University or the Foundation, are responsible for identifying the value of the donated items for IRS purposes, and for retaining and compensating an appropriate appraiser of value at their own expense. Receiving units are encouraged to ask donors to provide the University or the Foundation with appraisals or other valuations of their gifts, though donors are under no legal obligation to provide this information.
In the event that a donor declines to provide the University or the Foundation with an appraisal or value for a gift, then the collections manager, curator, or other appropriate individual in the receiving unit may attempt to estimate the value, based on auction records or other appropriate standards, for internal gift counting and insurance purposes.
9. Inventory Control
9.1. Gifts for Museums and Collections
Gifts to the University’s museums and collections are not tagged as “equipment” under the University’s centralized inventory system. For the purposes of this section on Inventory Control, the holdings of the University Libraries are considered a collection. The units receiving gifts for the University’s collections of art, books, anthropological objects, biological specimens, and other special treasures have established their own internal procedures for inventorying and documenting their holdings. The University’s collections are protected and preserved, subject to the receiving units’ accessioning and deaccessioning policies and, as applicable, UAP 6410 (“Museums and Collections”) and other professional standards.
Though museums and collections are exempt from the University’s annual inventorying requirement, they should submit information to the Inventory Control department about additions and deletions to their collections as part of the University’s annual inventory process.
9.2. Other Gifts
With the exception of gifts to museums and collections, all gifts of tangible property valued in excess of five thousand ($5,000.00) received by the University, and all gifts of computers, should be reported to the Office of Inventory Control, which will issue the receiving unit a report and a tag for the equipment. The receiving unit is required to tag the equipment and return the inventory report to the Office of Inventory Control within thirty (30) days of receipt.
10. Administration of Gifts
All gifts, whether made to the University or the Foundation, require the following activities:
- documentation of the gift and the donor’s intention for use of the gift;
- submittal of information about the gift to the Foundation using the appropriate form;
- an acknowledgement by the receiving unit expressing appreciation and gratitude to the donor, but which must not state the value of the gift;
- a formal gift acknowledgement from the Foundation for the donor to submit for tax purposes, except for gifts of equipment.
11. Disposition of Gifts
11.1. Disposing of a Gift by the University
There are a number of reasons, including practical considerations, for disposing of gifts. A limited budget may make it necessary for a receiving unit to sell less important or duplicative works in order to expand or improve an overall collection. Additionally, the costs of space, climate control, security, and curatorial care may limit a receiving unit’s ability to exhibit or store items.
Once the University accepts a gift, it becomes University property. As such, the gift must be disposed of in accordance with University policy, state and federal law, any applicable professional standards and internal policies of the receiving unit, and any restrictions imposed by the donor on the University or Foundation in a deed of gift or other appropriate legal instrument.
11.2. Disposing of a Gift within Three (3) Years
Disposing of a gift of property within three (3) years of acceptance could have tax consequences for a donor and trigger special requirements for the University or Foundation. The special requirements come into play when the University or the Foundation had signed a Form 8283 to certify “Donee Acknowledgment” of a gift that later was disposed of within three (3) years of acceptance. The IRS requires the receiving unit that signed the “Donee Acknowledgment” to (i) notify the donor of the disposition of the gift, (ii) to file a Form 8282 (“Donee Information Return”) with the IRS, and (iii) to provide the donor with a copy of the Form 8282.
11.3. Disposing of a Gift through the Surplus Property Department
Gifts that can no longer be maintained by a receiving unit, or which a receiving unit has determined no longer support its mission, may be disposed of, or deaccessioned, through the University’s Surplus Property Department, in accordance with the state statutes on the disposition of property by:
- a donation to another unit of the University
- a negotiated sale or donation to any New Mexico Native American nation, tribe, or pueblo
- a negotiated sale or donation to other state agencies, local public bodies, school districts, state educational institutions or municipalities
- a donation to a state museum
- a competitive sealed bid or public auction
- a donation to a 501(c) (3) tax-exempt entity, in the event that the University is unable to dispose of a gift that has no value
- a repatriation through the Native American Graves Protection and Repatriation Act to a federally recognized Native American tribe
The deaccessioning of items in a museum or collection should conform to the requirements of UAP 6410 (“Museums and Collections”) and other applicable standards or regulations. The deaccessioning should advance the museum or collection’s mission and any net proceeds from the sale should be used for the future acquisition or direct care of items in the museum or collection.