SECTION I. PURPOSE
The College of St. Scholastica has an obligation to all of its stakeholders to seek a wide variety of funding sources to ensure the mission and the vision of St. Scholastica are fulfilled to the maximum extent possible. Donors generously provide one of these funding sources through gifts. The purpose of this policy is to outline the types of gifts that may be accepted by St. Scholastica and the conditions that may be placed on those gifts.
SECTION II. POLICY SCOPE AND APPLICABILITY; POLICY APPROVAL
This policy applies to all gifts received by or on behalf of St. Scholastica, as defined below. The expectations set forth in this policy apply to all St. Scholastica students, employees (faculty, staff and student workers), contractors, and volunteers, and all schools, divisions, departments and other units, including athletic teams and alumni and student clubs and organizations. Approval of this policy, amendments, or exceptions is reserved to the St. Scholastica Board of Trustees or its authorized committee(s), which are referred to in this policy as the Board. The policy may be amended at any time at the Board’s discretion.
SECTION III. CORPORATE NAME
College of Saint Scholastica, Inc., 1200 Kenwood Avenue, Duluth, MN 55811. St. Scholastica is recognized as an organization exempt from income tax under Section 501c(3) of the Internal Revenue Code. Federal Taxpayer Identification Number: 41-0698301.
SECTION IV. GIFT ACCEPTANCE
College Advancement has been charged by St. Scholastica’s Board of Trustees with receiving, processing, and reporting all gifts in accordance with all federal, state, and local legal codes and in conformity with the standards established by the Council for Advancement and Support of Education (CASE). In turn, the Vice President for College Advancement coordinates all aspects of St. Scholastica’s fundraising activity and authorizes all procedures related to gift acceptance.
The Vice President for College Advancement is authorized to accept a gift if:
- It will directly benefit the College, its faculty or staff, or its students.
- It is aligned with the mission and values of the College.
- It will enhance the reputation or standing of the College.
- It is consistent with all relevant policies of the College.
- It has a purpose which can be met.
- It will not expose the College to material, financial, or reputational harm.
- It will not result in a conflict of interest.
- It is not conditional on the donor retaining control over academic appointments, scholarship recipients, or admission decisions.
- It does not require the College to return the gift if certain conditions are not met or
additional funds are not attained or provided.
The Vice President for College Advancement may convene a Gift Acceptance Committee to evaluate a gift or the conditions of a gift to ensure that it agrees with this policy. This committee is comprised of the President, Vice President for College Advancement, the Director of Advancement Services, the Vice President for Finance (or designee), and the chair, director, or dean of the area that would be the recipient of the gift. Any gift agreements that differ substantially from the approved Gift Agreement Form must have approval of the Board.
SECTION V. GIFT TYPES
Outright Gifts
A. Cash or Cash Equivalent
Cash and cash equivalents include all U.S. or foreign currency, checks, credit/debit card payments (Visa, MasterCard, American Express, and Discover), wire transfers, money orders, and payroll deductions. Checks must be payable to The College of St. Scholastica.
B. Donor-Advised Funds
Donor-advised funds are IRS approved public charities managed by investment companies and community foundations that serve as conduits for gifts. Donor-advised gifts are treated as gifts from the foundation with appropriate recognition to the individual donor.
C. Third-Party Assignment of Income
Third-party assignment of income is where the organization is reporting the payment as income to the individual, and the individual has requested that the payment go to St. Scholastica.
D. Matching Gifts
Matching gifts come from employers or former employers of donors. St. Scholastica adheres to the national guidelines for administration of matching gifts. Matching gifts from corporations or foundations are unrestricted unless designated differently by the donor and are in accordance with the corporate matching gift guidelines.
E. Real Estate
Contributions of real estate will be accepted only on approval from the Executive Committee of the Board of Trustees. Gifts of real estate (immovable property) include developed property and undeveloped property as well as gifts that are jointly owned or subject to a prior life interest. Prior to acceptance of real estate, St. Scholastica may require, at the donor’s expense, an independent appraisal of the property’s fair market value and, at the College’s discretion, an environmental study to ensure that the property has no environmental damage or other issues that would expose the College to liability. Factors to be considered in acceptance of the property shall include: usefulness of the property for the purposes of the College; marketability of the property relative to its condition; any restrictions, reservations, easements, or other limitations associated with the property; carrying costs such as insurance, property taxes (taking into account that St. Scholastica is not eligible for any homestead exemption), mortgages, or notes associated with the property; the results of the environmental study report; and any potential liability for cleanup or restoration of the property that may be imposed under current law to a transferee.
St. Scholastica will comply with all IRS requirements. St. Scholastica will not accept real property in which St. Scholastica becomes a principal in a partnership, joint venture, or other business activity where it becomes subject to institutional risk.
F. Property
Property includes both tangible and intangible personal property including artwork, collectibles, artifacts, library collections, gemstones, coins, and equipment. Property gifts must be unencumbered and free of contamination. Gift acceptance, compatibility, maintenance, storage, and transportation costs must be approved by the appropriate designated St. Scholastica official and the Vice President for College Advancement. Property gifts may be liquidated at any time. Donors of such contributions will receive an acknowledgment of the gift only when complete transfer has occurred. The acknowledgment will include a description of the gift but will not provide the value of the contribution(s). If the donor(s) desire an appraisal, it is the responsibility of the donor(s) to obtain an appraisal at their own expense.
G. Gifts-In-Kind
Gifts-in-kind include non-cash donations of material or long-lived assets other than property. A value of $1 will be assigned to all gifts-in-kind that are submitted without a purchase receipt or formal appraisal. Gifts-in-kind over $500 are subject to the gifts-in-kind approval process and must have a Gifts-In-Kind Approval Form completed prior to acceptance. St. Scholastica will not accept gifts-in-kind for an unrelated use, as defined by the IRS.
H. Publicly Traded Securities
It is understood that the donor, in transferring ownership of the securities, is making a charitable contribution and, as such, has no rights concerning the disposition, sale, or retention of any securities given to St. Scholastica. The donor should notify St. Scholastica of the securities being transferred, the number of shares, the intended gift date, and the intended designation (if any) of the contribution. Contributions of securities, for charitable contribution purposes, will be valued at the mean of the high and the low of stock value on the date in which St. Scholastica takes ownership of the securities.
Donors should instruct their broker to transfer the number of shares desired to College of Saint Scholastica Donor Gift Account, Clearing Number 0015, Account Number 694128493 at Morgan Stanley Smith Barney. Federal Taxpayer Identification Number: 41-0698301.
I. Privately Held Securities
Contributions of privately held stock will be valued based on a qualified, independent appraisal at the time of transfer. Generally, gifts of privately held securities cannot be accepted when they carry risk of additional costs and provide no income. These gifts are subject to approval by the Gift Acceptance Committee.
Planned Gifts
A. Bequests and Estate Gifts
Bequests and estate gifts are provisions of a will, trust, or other testamentary legal document. St. Scholastica will not prepare these documents for the donor but may suggest wording for a donor’s attorney. College Advancement representatives should not be named in a donor’s will or trust or act in any official capacity of that document. Gift agreements can be prepared for bequest and estate gifts to ensure that the gift will be used according to the donor’s intentions. Undesignated bequests will be added to an unrestricted account until directed by St. Scholastica’s administration and/or Board of Trustees.
B. Life Insurance Policies
Life insurance policies may be accepted as revocable gifts when St. Scholastica is named as a beneficiary and the donor is paying the premiums. Life insurance policies may be accepted as irrevocable gifts when St. Scholastica is named as both the policy owner and beneficiary and the donor is paying the premiums. There may be rare exceptions where St. Scholastica chooses to continue paying premiums for the donor. Term insurance policies will be carefully evaluated before acceptance.
C. Charitable Lead Trust
A charitable lead trust (CLT) is a vehicle that allows all or a percentage of the interest income to be given to St. Scholastica while allowing the principle to revert to the donor or be transferred to someone else at the fulfillment of the trust. A charitable lead annuity trust (CLAT) makes a fixed-dollar payment annually to charity. The annual payout for a CLAT will not vary. A charitable lead unitrust (CLUT) pays a fixed percentage of the market value as determined annually to the charity. The annual payout for a CLUT will vary. Under normal circumstances St. Scholastica will not serve as trustee. Exceptions must be approved by the Vice President for College Advancement and the Vice President for Finance. Trustee expenses, tax preparation and similar costs should be discussed between the Trustee and St. Scholastica. In most cases, taxes due and payable will be the responsibility of the Trust.
D. Charitable Gift Annuity and Deferred Charitable Gift Annuity
A charitable gift annuity (CGA) and deferred charitable gift annuity (DCGA) are a combination of an irrevocable gift to St. Scholastica and an annuity. They are an agreement between the donor and St. Scholastica in which St. Scholastica will pay income to one or two individuals named by the donor. They are not insurance under the by-laws of any state, are not subject to regulation by any state insurance departments, and are not protected by any state guaranty association funds. Some states do require registration and annual filings. The Charitable Gift Annuity Disclosure Statement is the guiding document for St. Scholastica regarding gift annuities. A
minimum amount of $10,000 is required to establish a charitable gift annuity.
St. Scholastica uses the rate table of the American Council on Gift Annuities as a guide for determining the gift annuity rate. Gift annuity distributions will be designated in the Charitable Gift Annuity Agreement.
E. Life Estate
With a life estate agreement, the donor signs over the deed of their personal residence to St. Scholastica while retaining full use and rights of the property while they are alive. Donor(s) must sign a Life Estate Agreement with St. Scholastica to clarify responsibilities of the property. Life estates must meet all conditions and procedures required for real estate gifts.
F. Bargain Sale
A bargain sale is a sale or exchange of property for less than the property’s fair market value. Because the sale or exchange of property is less than the property’s fair market value with the intent to make a gift, the transaction is partly a sale or exchange and partly a gift. In addition to following all policies and procedures for real and person property, a bargain sale must also include a gift agreement outlining the terms and conditions of the gift. Bargain sales must also be approved by the Vice President for Finance to ensure that funds are available for such an agreement.
G. Charitable Remainder Unitrust and Charitable Remainder Annuity Trust
A charitable remainder unitrust (CRUT) is an irrevocable trust that distributes a fixed percentage of the market value as determined annually to the donor or the donor’s specified beneficiary; and at its expiration, the remaining balance is distributed to St. Scholastica. A charitable remainder annuity trust (CRAT) pays a fixed amount of income each year to the donor or the donor’s specified beneficiary, and at its expiration the remaining balance is distributed to St. Scholastica. St. Scholastica recommends a minimum starting trust value of $75,000. St. Scholastica also recommends using a gift agreement referenced in the trust to provide direction on ultimate use of the remainder versus specifying within the trust. Trustee expenses, tax preparation and similar costs should be discussed between the Trustee and St. Scholastica. In most cases, taxes due and payable will be the responsibility of the Trust. St. Scholastica may serve as trustee of a charitable trust that has multiple beneficiaries as long as St. Scholastica is at least a fifty percent (50%) remainder beneficiary.
H. IRA Rollover
Individuals who have reached the IRS requirements and must take a Required Minimum Distribution (RMD) may gift up to $100,000 of their RMD directly from their IRA to St. Scholastica. Donors should contact their IRA trustee, administrator, or custodian to initiate the process.
Special Situations
St. Scholastica is aware that there are other special ways to donate (ex. cryptocurency). St. Scholastica will only consider these gift types on a special case by case basis with the approval of the Board of Trustees.
SECTION VI. PLEDGES
Donors may wish to make gift contributions totaling a greater amount over a number of years. Gift pledges must be documented in writing. For pledges under $10,000, an email or letter will suffice. For pledges of $10,000 or more, a gift agreement or similar document is required. A pledge document must include the total gift dollar amount, the gift designation or restriction, and the payment schedule which may not exceed five years without prior approval by the Vice President for College Advancement. Phone pledges for the All Saints Annual Fund will be recognized with a pledge form mailed to the donor following the call. Pledges may not include or be satisfied by payments from a third party, such as a community foundation, a donor- advised fund, or a matching gift. If a payment is made by a third party, the gift will be credited to that party and the pledge amount will be reduced. St. Scholastica will send reminders of upcoming pledge payments.
SECTION VII. RESTRICTED ENDOWMENT FUNDS
Frequently, donors require that gifts be used by St. Scholastica in particular ways (by either restricting the uses or the manner in which the gift may be invested or spent). It is the responsibility of St. Scholastica to comply with such requirements if the gift is accepted.
Restricted endowment funds must have a minimum corpus of $25,000 to be separately established and must follow the pledge guidelines outline above. Spending from restricted endowment funds will not occur until the minimum corpus is met and earnings allow for a disbursement. If a restricted endowment fund does not reach the minimum corpus within the timeline outlined in the pledge document, the balance will be rolled into the General Endowment Fund unless the benefactor presents a plan to complete their endowment pledge.
College Advancement shall not encourage donors to utilize spending policies other than those established by the Board. College Advancement will monitor each endowment fund on a case- by-case basis. Endowed scholarship funds and endowment funds are generally included as part of the College’s consolidated investment portfolio to maximize long-term growth and earnings.
St. Scholastica recognizes that donors may wish to establish a name for the target of their contribution. St. Scholastica wishes to appropriately recognize donors for their significant contributions in advancing the mission and vision of St. Scholastica. To this end, donors should refer to the Naming Policy for guidelines and restrictions surrounding those opportunities.
SECTION VIII. SCHOLARSHIP ENDOWMENT FUNDS
Endowed scholarships are to be used in place of St. Scholastica grants unless specifically restricted by the donor in the Endowed Scholarship Agreement. The Office of Financial Aid selects all student recipients and may choose students who do not receive grants, unless specifically stated otherwise in the Endowed Scholarship Agreement. Endowed Scholarship funds must follow the guidelines of restricted endowment funds outlined above. If an endowed scholarship fund does not reach the minimum corpus within the timeline outlined in the pledge document, the balance will award as annual scholarships according to the agreed-upon criteria until the fund is depleted.
SECTION IX. INTERNAL CONTROLS AND PROCEDURES
Internal controls and procedures for accepting gifts to St. Scholastica are closely coordinated between College Advancement and Finance. The Vice President for College Advancement shall, with the Vice President for Finance, establish appropriate valuation and rate of payment (return) for presentation to prospective donors. It must be understood that these are final only upon receipt of an irrevocable gift. Approval of both departments is required for acceptance of all gifts. Whenever necessary, the Vice Presidents for Finance and College Advancement may set dollar minimums, below which their approval may be assumed.
St. Scholastica may incur and pay reasonable fees for professional services rendered in connection with the completion of a gift. These services may include credit card fees, legal fees, and document preparation services. Appraisal costs are generally the donor’s responsibility, but St. Scholastica may incur appraisal costs for its own internal accounting and all IRS compliance procedures will be followed.
St. Scholastica endeavors to send gift acknowledgement statements within 72 hours after receiving charitable gifts. It is the responsibility of the donor(s) to accurately and properly document their charitable gifts on their IRS tax returns in consultation with their legal, financial, or tax advisors, when necessary.
All endowment fund earnings (interest, dividends, and realized and unrealized gains/losses net of investment management fees) are credited to current fund income. St. Scholastica draws from the endowment according to St. Scholastica’s Investment Policy Statement. The Investment Policy provides for endowment fund growth and financial flexibility for the current fund.
SECTION X. GUIDANCE FOR DONORS
Gifts by individuals to St. Scholastica are generally deductible as charitable contributions, subject to state and federal revenue officials’ rulings. Deductibility may occur at both the state and federal levels.
St. Scholastica encourages donors to review all legal documents, proposals, and agreements with their tax advisor and/or legal advisor. St. Scholastica recommends that donors fully comply with IRS Form 8283 reporting requirements for noncash contributions.
Donors who wish to donate gifts of service (e.g., professional services or time freely given and easily valued at usual market cost; limited use of private property, such as rent-free use of a home, office, piece of equipment, commercial property, or intellectual property; etc.) should be aware that these are not recognized by the IRS as charitable gifts. The Vice President for College Advancement should be consulted prior to accepting these gifts and should determine how soft credit will be awarded to the donor.
SECTION XI. RETURNING GIFTS
If, in rare situations, a donor or other entity requests that a donation be returned, the Gift Acceptance Committee will be convened to review the request and the grounds on which the gift was accepted. The College will comply with all legal regulations and consult legal counsel. If the request is approved, the donation will be returned under the President’s signature, and the donor’s record will be updated appropriately. The donor will be responsible for all tax implications and reporting.
Revision Approval Date: 10/24/2019
Approved By: Board of Trustees
Adoption Date: October 28, 2005
Relevant Form Names:
- Annual Scholarship Agreement
- Charitable Gift Distribution One Beneficiary
- Charitable Gift Distribution Two Beneficiary
- Endowed Scholarship Agreement
- Environmental Checklist for non-Residential Property
- Environmental Checklist for Residential Property
- Gift Annuity Application
- Gift-In-Kind Approval Form
- Life Estate Agreement
- One Beneficiary Charitable Gift Annuity Agreement
- Real Estate Checklist
- Two Beneficiary Charitable Gift Annuity Agreement
Relevant Procedure Names:
- Charitable Gift Annuity Disclosure Statement
- Fund Notification Procedure
- General Gift Procedure
- Matching Gift Procedure