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Gift Acceptance Policy

Adopted: 2000. Updated: 2001, 2004

This policy is designed to provide direction to the three campuses of the University and the general public to facilitate the gift-giving process. This policy is to be interpreted so that prospective donors may enjoy the greatest flexibility possible in formulating their gifts consistent with policies established by the Board of Regents.

Overview

The University of the Pacific strongly encourages the solicitation and acceptance of gifts that enable it to fulfill its teaching, research, and community service missions. For any university, and especially a private university, gifts are essential. Without gifts, it is difficult for any university to survive and impossible for any university to prosper; however, to ensure institutional integrity, the solicitation, receipt, acceptance, application and recognition of gifts must adhere to the following general guidelines.

Acceptance

Gift Acceptance Committee: The University values and will protect the integrity, independence and the academic freedom of the University community. Gifts which because of their source, conditions or purposes may expose the University to undue adverse publicity, require unacceptable expenditures of additional University resources, or force upon the University inappropriate responsibilities will not be accepted.

A Gift Acceptance Committee, staffed by individuals drawn from the Business and Finance Division, Development Office and Office of the Provost, will review all potential gifts where any issues relating to restrictions, terms, or valuations of a proposed gift may arise. The Committee will review such restrictions, terms or valuation questions and advise the President on the acceptance of said gift. The President of the University then recommends action to the Board of Regents.

Unrestricted Gifts

The most useful gifts are those with the fewest possible restrictions. Unrestricted funds allow the University to address its most pressing needs and important opportunities. Gifts donated without any express limitation placed upon them will be credited to the unrestricted fund account.

Restricted Gifts

The University will seek and accept gifts from individuals, corporations and foundations for designated purposes which have received appropriate academic or administrative approval. A gift in any amount may be accepted as a contribution to an existing fund earmarked for a specific need of the University so long as the terms and conditions of the existing fund so permit.

The University will not accept a gift if its restrictions:

are inconsistent with the institution's stated academic purposes and priorities;
inhibit the University from seeking gifts from other donors, be they similar or different, foreign or domestic;
involve unlawful discrimination based upon race, religion, sex, age, national origin, color, handicap or any other basis prohibited by federal, state, and local laws and regulations;
obligate the University to violate any other applicable law or regulation, or which violate the University's charter, articles or incorporation, or by-laws.

Endowed Gifts

The University will establish special purpose endowment funds upon acceptance of gifts or commitments that meet approved criteria. The prestige and discretionary funding usually associated with an endowed position can often be persuasive in the recruitment and retention of outstanding faculty. Endowed funds are also often established to provide perpetual scholarship support or to assure the continuance of academic programs. At Pacific, there are two types of endowed positions:

An Endowed Chair is created when an endowment gift (or gifts) made to name a position totals at least $2.0 million. These positions are critical to the academic reputation of the University and are awarded to faculty who have distinguished themselves at the national level with their teaching, scholarship and service in the field designated by the endowed position.
An Endowed Professorship is created when an endowment gift (or gifts) made to name a position totals at least $1.0 million. Faculty who receive this honor have distinguished themselves by their contributions in teaching, scholarship, and service in the field designated by the endowed position.

Other common endowments and the thresholds for their funding are as follows:

An Endowed Fellowship may be established to provide supplemental funding for visiting professionals or to enhance scholarly faculty activities by supporting travel, teaching improvement, research and publication projects, or other faculty development opportunities with a minimum gift of $500,000.
An Endowed Lectureship may be established to assist in short term guest lectureship and faculty exchange programs or to conduct special seminars and colloquia with a minimum gift of $250,000.
An Endowed Scholarship may be established with a minimum gift of $25,000. A fund of $500,000 given in 1999 is sufficient to endow a full tuition (with room and board) scholarship at current rates of tuition and room and board.
The University is willing to work with prospective donors on the terms and conditions of other restricted or unrestricted endowment funds, provided they support traditional institutional activities or functions and are large enough to yield a meaningful annual income.

(The threshold amounts shown become effective on January 1, 2000, and will be periodically reviewed and adjusted.)

A donor may contribute the minimum corpus required for an endowment fund over a period of up to five years. The funds will be placed in a holding account and will accrue interest for the donor specified purpose, but no funds will be released for program purposes until the corpus reaches the appropriate fund threshold. If a donor is unable to complete the funding of an endowment, he or she will have the option of directing that his or her gifts be aggregated with other endowment gifts (perhaps of a more general purpose), or expended to support a specific program.

Because conditions change over time, all endowment instruments shall contain the following language:

The principal of this endowment fund shall be held in perpetuity in accordance with applicable California State laws which govern the management of such funds. It is the practice of the University to credit gains, realized and unrealized, to the fund principal on an annual basis.

In the event that, at some future date, the purposes for which this fund is established can no longer be satisfied for reasons not now foreseeable, the University's Board of Regents, after taking into consideration the expressed intent of the donor, is authorized to use the annual distribution from this endowed fund to benefit the University in a manner which will most nearly meet the donor's intent.

Naming Gifts

These gifts are intended to assist in the construction of new facilities, the renovation of existing ones and in recognition of donors who seek to name existing spaces and academic units. The Board of Regents must approve each capital project. Based upon that approval, naming opportunities for an entire building, various rooms or an academic unit will be established.

New and Renovated Facilities

A gift of at least 50% of the total construction costs (including all design, engineering, site and landscaping expenses as well as costs related to furniture fixtures, and equipment) of a new or renovated facility is required for a building naming opportunity. Individual room naming opportunities will be established as a derivative of the building-naming target.

Existing Facilities

A pricing formula based on square footage that - through the use of a set of multipliers - puts a premium on visibility and exposure of existing spaces will be developed and applied. Based on the formula, the Administration will create and maintain a list of unnamed existing facilities with their associated naming levels.

Academic Units

The gift level set for the naming of an academic unit will be established in consultation with the Board of Regents.

Review Procedures

With proposed naming gifts of $200,000 or more, the President, in consultation with the Campaign Steering Committee, will recommend to the Regent Advancement Committee whether to accept the gift. The Advancement Committee will then make a recommendation to the Board of Regents as to whether the naming gift should be accepted.

Methods of Giving

Any asset of value may be gifted to the University. A variety of methods of giving to the University allows donors to choose the one most appropriate for their circumstances and interests.

Cash

The most frequent method used to make a gift to the University is a personal check. The postmark date is the gift date for gifts of cash mailed to the University.

Securities

Publicly traded securities, shares of stock in closely held companies, bonds, and government issues may be given to the University.

Publicly-traded Securities

These are securities regularly traded on a public stock exchange. The donor should be advised to (1) notify his/her broker of his/her intent to donate, and asked to instruct his/her broker to electronically transfer the desired stocks to the University's account. The donor should promptly advise the Advancement Services Office of the pending transfer, and indicate in writing the purpose or designation of the gift, if any. The value of the gift will be the mean of the highest and lowest selling prices quoted for the stock on the day of the gift.

Closely-held Securities

These are shares of stock in entities that have been organized for profit-making purposes, and are rarely traded on stock exchanges. Donors may give shares of closely held corporate securities to the University in the same manner as publicly traded securities. However, because closely held stock is not publicly traded, these securities present special concerns and valuation issues. To convert them into cash, the University must own the securities. Thus, it will not, formally or informally, enter into any redemption agreement with the donor. Gifts of closely held securities may be accepted only after review by the Gift Acceptance Committee and legal counsel.

Methods of Delivery

The University prefers that a donor not sign stock certificates or has shares re-registered in the name of the University. It is preferable for the donor, following consultation with University personnel, to transfer securities electronically from his or her personal brokerage account to an appropriate University account and provide a letter of instruction to the University regarding the application of the proceeds of the securities.

If the securities are in the donor's possession, appropriate stock powers, signed exactly as the name (of the registered owner) appears on the stock certificates, should accompany securities that are hand-delivered. A letter of instruction to the University should be attached to the stock certificates. The gift date is the day the securities are received by the University. If the securities are mailed to the University, the value of the gift will be its fair market value (mean of the high and low) on the date the securities were postmarked. Please note as described below, that there are very specific processes for mailing gifts of securities.

A donor should obtain a stock power from his or her banker or broker, signing his or her name exactly as it appears on the certificates, and have that signature guaranteed by the banker or broker. The stock power and a letter of instruction should be mailed to the appropriate development officer under separate cover from the stock certificates. Upon receipt, these original documents will be immediately hand-delivered by the development officer to the Vice President for Finance. The University should be designated on the stock certificate(s), stock power, or related instruments of transfer as the "University of the Pacific." The stock certificate(s) should be sent by registered mail, return receipt requested, directly to the Vice President for Finance. Unendorsed stock certificates are non-negotiable, so leaving them unsigned provides protection against unauthorized redemption of those certificates. The postmark date on the stock power will be used as the gift date when the stock certificate and stock power are mailed, as they always should be, under separate cover.

Real Estate

The University may accept gifts of real estate, including houses, condominiums, commercial properties, farm land, rental property, and undeveloped land after a thorough review of the following factors:

The usefulness of the property for University purposes;
The marketability of the property;
The existence of restrictions, reservations, easements, and/or other limitations;
The existence of encumbrances, such as mortgages and liens;
Carrying costs, such as property owner's association dues, taxes, insurance, and other maintenance expenses; and
Fair market value in relation to the costs and limits listed above as determined by a qualified appraisal conducted in accordance with Internal Revenue Service (IRS) standards.

Prior to the acceptance of any parcel of real property, as a minimum, a Phase 1 environmental assessment of the potential environmental risks will be conducted. This assessment shall include the following:

An inquiry of the present owner regarding his/her knowledge of the history of the property;
A title search to determine who the prior owners might have been;
A consultation with federal, state, and local environmental agencies to ascertain whether the property has any history of hazardous waste contamination; and
A visual inspection of the property for any evidence of environmental hazards.

An environmental audit conducted by a professional service will be required before acceptance of real property in most instances. Exceptions may be made for owner-occupied single-family residences that have not previously been used for other purposes.

For all gifts of real estate, the Gift Acceptance Committee will review the results of such assessment and recommend to the appropriate administrators and Board Committees whether the gift should be accepted.

Personal Property:

The University may accept gifts of tangible or intangible personal property, including works of art, jewelry, antiques, coin, stamp and other collections, automobiles, manuscripts and books. Such gifts may be accepted only after a thorough review indicates the property is readily marketable or may be used by the University in a manner consistent with one of the purposes for which it was granted its charitable and educational status. An essential issue for donors to consider before contributing a gift of personal property is whether they would like the University to use or display the property. Prospective donors should be advised that the University reserves the right to sell or otherwise dispose of the personal property in question, if such action is deemed advisable or necessary. In the case of gifts of art, prospective donors should be notified that the University, except under special circumstances, will sell the donated works as soon as is practicable (i.e. as close to the two-year anniversary of the gift as possible). Whenever possible, the proceeds from these sales will benefit the schools or departments that were the intended beneficiaries of the contributions. The Finance Center will maintain a current inventory of items received as gifts of personal property.

If the University intends to sell a gift immediately, rather than use it, the donor must be informed that IRS rules will probably limit the amount of the charitable deduction to the donor's cost basis. Whenever donors estimate their gifts of personal property at $5,000 or more, they must obtain a written appraisal report following review by a qualified independent appraiser. The University cannot appraise or assign valuation to gifts of personal property. The Gift Acceptance Committee will review and make recommendations regarding acceptance of any gifts of personal property

Inventory:

As with personal property, gifts of inventory or in-kind services may be accepted if those are appropriate to the advancement of the University's mission. Donors should be aware that special rules apply to the valuation of both inventory and services donated to charitable organizations.

Deferred Instruments:

Deferred Gifts are those for which the asset transfer or a commitment to give is made irrevocably, but from which the University derives benefit at some later date, either upon the passage of a defined time period or upon the completion of some required conditional precedent. The acceptable methods of creating deferred gifts to the University are described below.

Bequest: A bequest is a gift made to the University through a donor's will. Bequests may provide for a specific dollar amount in cash, specific securities, specific personal property or all or part of the residue of the estate. In addition to specific and residuary bequests, a donor can choose to make a contingent bequest. A residuary bequest will give the University all or a portion of the estate after all debts, taxes, expenses, and all other bequests have been paid. A contingent bequest directs specified property or the residue of an estate to the University if other named beneficiaries are not living at the time of the donor's death. Gifts may be made to the University through the execution of a new will or through a codicil to an existing will. Donors may also add specific, residual or contingent codicils to their wills.

Donors may also establish, by will, an annuity trust or unitrust (described below) to provide income for a designated beneficiary. If such a gift is made by will, the principal will become available for use by the University only after the death of the income beneficiary.

Donors are encouraged to recognize that many years may pass following the description of gift restrictions in a will before a gift is realized. During that period, or as endowment earnings are used thereafter, the needs, policies and circumstances of the University can change in unforeseen ways. The University must have the flexibility to make use of funds in the best interest of the institution and in accord with donor interests and specifications. Thus, donors are advised to describe the specific purposes of their gifts as broadly as possible and to avoid detailed limitations and restrictions. Donors considering bequests for a specific purpose are encouraged to consult a member of the University's development staff.
Charitable Remainder Unitrust: A charitable remainder unitrust provides for periodic payment of income to the donor, or another person specified by the donor, for life or a specified term of years, after which the trust assets become available for use by the University. During his or her lifetime, a donor creates a formal trust agreement which irrevocably transfers assets such as cash, appreciated securities, or both to a trustee who then pays the donor, or a person specified by the donor, an income for life or for a defined term of years.

During the donor's lifetime, the trust assets are managed and invested by the trustee as a single fund. The donor cannot borrow or otherwise deal with the trust assets. The designated beneficiary receives payments based on a fixed percentage of the net fair market value of the trust as valued annually by the Vice President for Finance. The donor determines the fixed percentage, which may not be less than five percent, when the unitrust is created. Donors may make subsequent additions to the unitrust during their lifetimes or by bequest. The University will establish a specific charitable remainder unitrust for $50,000 or more. Lesser amounts many be pooled until they reach the minimum threshold.
Charitable Remainder Annuity Trust: The annuity trust shares many common features with the unitrust, the principal difference being the manner used to calculate the payment to the income beneficiary. Whereas the unitrust provides for a payout that varies with each annual valuation, the annuity trust provides for fixed payments based upon the fair market value on the date the trust is established. Another difference is that additional contributions cannot be made to an annuity trust. During his or her lifetime, the donor irrevocably transfers assets to a trustee, who pays the donor, or a person specified by the donor, a fixed dollar amount annually for life. The trust can also provide income for the donor's survivors for life; however, the trust assets become the sole property of the University. A charitable remainder annuity trust for the University may be established with a gift of $50,000 or more.
Life Insurance: Life insurance can also be used to benefit the University. With it, the donor can make a substantial gift for a relatively modest annual outlay. A donor may irrevocably assign to the University an existing life insurance policy that is no longer needed for family protection, making the University both the policy owner and the beneficiary. If the donor does not choose to continue paying the premiums, the University may elect to:
- Continue paying the premiums and receive the full face value of the policy at the death of the donor's or other insured life designated by the donor;
- Convert the policy to paid-up insurance at a reduced amount with no further payments; or
- Surrender the policy for its present cash value

A donor may also make the University the owner and beneficiary of a new policy and make annual contributions with which the University can make the premium payments. The long-term benefit to the University of that modest annual premium payment can be quite substantial.

Before contributing gifts of life insurance to the University, a donor should consult with a member of the University's development staff to ensure that his or her gift will be consistent with the University's needs.