Rensselaer Gift Procedures

1. Rensselaer Gift Procedures Policy overview of gifts defined by the Institute

2. Gifts Defined • A gift is a voluntary and irrevocable transfer of money, services, or property from a donor without any expectation of, or receipt of, direct economic benefit or provision of goods or services from Rensselaer other than recognition.

3. Donor Designation of Gift Purpose • Within the parameters established by the Institute’s policies on gift acceptance, restrictions, and minimums, donors may designate gifts and pledged commitments to future gifts as:

4. Unrestricted expendable, i.e., immediately usable for current purposes. • Restricted expendable, i.e., the gift is immediately usable for a specific purpose. • Permanently restricted (endowed), i.e., to be invested and held in perpetuity, with only the investment returns available to support university purposes. These endowment gifts may be designated for a specific purpose or they may be undesignated.

5. Designations • Designations of gifts and pledges must be in writing from the donor. The usual form is a document originating from and signed by the donor explicitly stating the intended use of the gift or pledge (e.g., letter, memo, e-mail, memo line on donor check).

6. Gift Processing • Gifts to Rensselaer must be sent to Student Records & Financial Services, Gift Processing Troy Building, 1st Floor. • Send completed gift processing form filled out with appropriate signatures with donor check/credit card information. • Attach all original correspondence pertaining to the gift. • Include the postmarked envelope or delivery receipt to ensure the proper gift date is verified and recorded.

7. Endowed Fund Agreement • A written understanding between the Institute and a donor on how the income from an endowed fund will be spent. • Document includes who is responsible for overseeing the expenditures. • Agreement is signed by the donor and the President.

8. Type of Endowed Funds • Chaired Professorship • Fellowship • Scholarship • Prize • Library Fund • Departmental Fund

9. When Someone Wants to Endow a Fund • Contact Manager, Stewardship Program (Lynn Hopwood, ext. 8545) • Draft agreement will be provided. • Once terms are finalized, originals will be signed by the donor and the President. • Document will be distributed as necessary.

10. Institute Responsibilities • P.I. must abide by the terms of the agreement. • The donor will be provided with an annual stewardship report which includes (a) the value of the fund (b) how much was spent (c) what the income was spent on.

11. Endowment Funds • The endowment fund is an aggregation of assets invested by the Institute to support its educational mission in perpetuity. • Two types of endowment funds: • True Endowment • Quasi Endowment

12. True Endowment Funds • Donor stipulates the corpus must be held inviolate and in perpetuity and invested to generate income to support a specified purpose • Corpus funds begin 6xxxxx • Endowment Income funds begin 24xxxx

13. Quasi Endowment • Funds are designated by the Board of Trustees to be invested in the endowment with the income designated for a specified purpose • Corpus can be invaded with Board of Trustee approval • Quasi endowment fund can be established by a donor as well; donor must document that corpus can be expended.

14. Quasi Endowment cont. • Corpus funds begin 5xxxxx • Endowment Income funds begin 23xxxx

15. Endowment Income Spending • Income allocation is calculated by the Treasurer’s Office • Income is allocated to the endowment income funds (“23” and “24” funds) on a monthly basis; 1/12 of the annual income is credited to account 4511 each month

16. Endowment Income Spending cont. • Endowment income is surcharged at 10%. Surcharge is debited to account 559. • Expenses can be recorded in advance of the income allocation, but only to the extent of the annual allocation • Expenditures must be in accordance with the restrictions stated by the donor.

17. Questions about Endowment Funds?

18. Restricted Gift Funds(H Funds) • Expendable Gifts restricted by a donor for a specific purpose • Documentation from the donor specifying the restriction is required to establish a new gift fund • Balances carry forward from one fiscal year to the next • Over expenditure is not permitted

19. Restricted Gift Funds(H Funds) cont. • Three categories of restricted gift funds within Banner: • Fund Type H1 Research Gifts • Fund Type H2 Non-Research Gifts • Fund Type H3 Gifts with Waived Surcharge • Restricted Gift Fund Hierarchy defines how restrictions are categorized

20. Administrative Surcharge on Restricted Gifts • Established July 1984 to recoup costs associated with activities such as fund raising and gift processing • Applies to: • Expendable restricted gifts • Cash gifts for facilities • Income from restricted endowments

21. Administrative Surcharge on Restricted Gifts cont. • Not applicable to: • Expendable scholarships and fellowships • Unrestricted gifts and bequests • Life income gifts, annuities, gifts-in-kind • Exceptions (approvals required): • Extraordinary circumstances (VP Institute Advancement and VP Finance) • Foundations whose by-laws prohibit surcharge (VP Institute Advancement)

22. Administrative Surcharge on Restricted Gifts cont. • Administrative surcharge is assessed on expenditures as incurred • A specific percentage is applied based on the fund type and the account code charged • Refer to Gift Surcharge Implementation Detail when managing gift fund balances

23. Questions on Restricted Gift Funds?