University System of New Hampshire

K. Gift Counting Policy

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K. Gift Counting Policy

  1. State Delegation of Authority
    1. State law (RSA 187-A:16) delegates to the Board of Trustees authority and responsibility for the management and control of all income received and due from all sources, including the authority to use the same in such manner as the Trustees may determine.
    2. Further, State law (RSA 187-A:16 VII and VIII) states that the Trustees are authorized to "accept legacies and other gifts to or for the benefit of the university or any of its divisions or departments" and "...all gifts of securities and property, real and otherwise..."
  2. Introduction
    1. Purpose
      1. The purpose of this policy is to provide guidance on valuation methods to be used when counting different types of gift revenues accepted by the campus. Note that there may be instances where gift values reported using the below criteria vary from the revenue amount recorded for the gift in the USNH financial system. In all instances the USNH financial system value will represent the gift total determined using Generally Accepted Accounting Principles for governmental entities.
    2. Gift Counting Policies and Procedures
      1. Each Each University System component unit (i.e., University of New Hampshire, Keene State College, Plymouth State University, Granite State College, UNH Foundation, Keene Endowment Association, etc.) is responsible for developing their own gift counting policies and procedures consistent with this USNH policy. Institutional policies may be more restrictive than USNH policy but not less restrictive. Institutions are encouraged to seek review of their policies and procedures by the USNH Treasurer.
    3. Appraisals
      1. The value of certain gifts must be determined by a qualified independent appraisal as described below. In such instances the cost of the appraisal should be paid by the donor.
  3. Valuation Methods Required for Counting Specific Types of Gifts
    1. Gift Counting Standards
      1. Gifts of Cash and Securities
        1. Gifts of cash shall be reported at full value as of the date of receipt.
        2. Gifts of publicly-traded securities should be valued at the average of the high and low quoted selling prices on the date the donor relinquishes control of the assets to USNH. The date control has been relinquished by a donor depends upon the method of delivery of the securities to USNH. Internal Revenue standards will be followed in determining whether or not a gift has been made.
        3. Gifts of closely held stock will be valued at the per-share cash purchase price of the closest transaction, if available and reasonably recent. If the total value using this method exceeds $10,000 a qualified independent appraisal of the gift must be done prior to receipting the donor. In such cases the gift should be counted at the appraised value.
      2. Gift Pledges
        1. Pledges of future gifts in the form of cash or publicly-traded securities, whether for endowment or current use gifts, may be counted at the full value of the future payment stream as of the date the signed pledge commitment is received.
      3. Gifts-in-Kind - Real and Personal Property
        1. All gifts of real property including land, buildings, and easements, must be accompanied by a qualified independent appraisal which will be used to determine the value of the gift.
        2. Gifts of personal property should be counted at their fair market value. If the fair market value as declared by the donor is $5,000 or less, the gift may be counted at that amount after review by a qualified expert on the faculty or staff of the institution. Gifts of equipment shall generally be counted at their educational discount value which, for purposes of these gift counting standards, shall be deemed to be fair market value.
        3. If the value of a gift of personal property is deemed to exceed $5,000, a qualified independent appraisal of the gift must be done prior to receipting the donor. In such cases the gift should be counted at the appraised value.
      4. Gifts of Royalties, Patents and Copyrights
        1. Gifts of royalties from property that USNH does not own (possible examples could be oil, gas and mineral rights) should be counted as a gift each time a separate royalty payment is received. No pledge should be counted in anticipation of receipt of future royalty payments as there is no guarantee of the amount or continuation of such payments.
        2. The fair market value of certain forms of intellectual property rights such as patents, copyrights, or software under development may not be known or readily ascertainable at the time the gift is made. In such instances, the value of the gift shall be recorded and reported in the year the value becomes known.
      5. Planned Giving
        1. Planned giving arrangements include gifts from Charitable Remainder Trusts, Charitable Lead Trusts, Pooled Income Funds, Charitable Gift Annuities, and gifts to separately-held trusts with directives to distribute periodic payments to USNH. The value of these gift instruments is generally counted at the discounted present value of the related payment streams. Most often these values can be determined using existing software programs, or with the assistance of third-party administrators. Due to the complexity and unique terms of individual arrangements, such calculations should be reviewed by the USNH Treasurer whenever there is a question of valuation.
      6. Gifts of Retirement Plan Assets
        1. USNH may be named as the beneficiary of individual retirement accounts. USNH institutions may count pledges of retirement plan assets if the following requirements have been satisfied: (i) the donor is at least 65 years of age at the time of the pledge; (ii) USNH has a means to establish a credible estimate of the future value of the retirement plan account at the time the commitment is made; and (iii) USNH must receive verification of the commitment in the form of a letter from the donor or donor's representative.
      7. Testamentary Gifts
        1. USNH may also be named as a beneficiary in individual wills. USNH institutions may count testamentary pledges if the following requirements have been satisfied: (i) the donor is at least 60 at the time of the pledge; (ii) if the pledge is a joint pledge to be paid at the death of a survivor, all named survivors must also be at least 60 at the time of the pledge; (iii) the commitment must be for a specified amount or specific asset or assets or, if based on a percentage of the estate, the donor must be willing to provide a credible estimate of the value of the estate at the time the commitment is made; and (iv) the commitment must be verified through one of the following forms: a letter from the donor or donor’s attorney, a deferred pledge agreement or a contract to make a will.
      8. Gifts of Life Insurance
        1. USNH institutions may count commitments of life insurance gifts if the institution is the owner and irrevocable beneficiary of the policy using the following valuation methods.
          1. Paid-up life insurance policies will be valued at the cash surrender value, or at the discounted present value of the policy's death benefits provided the donor is age 60 at the time of the pledge. If a policy is a 'second to die policy', each insured must be at least age 60 at the time of the pledge.
          2. A life insurance policy that is not fully paid up on the date of pledge may be counted at the existing cash surrender value. Note that increases in the cash surrender value will not be counted until the time the policy benefit is received. In addition, where the payment of premiums is pledged over a fixed period, the discounted value of premiums to be paid may also be counted as part of the pledge.
          3. Premiums paid for policies owned by the institution may also be counted as current gifts.
  4. Fundraising Reports
    1. Grant income from private, non-government sources may be counted in fundraising reports only if the award is a non-exchange transaction and significant effort of Advancement staff was spent in securing the award.
    2. Amounts reported in internal fundraising reports should agree with revenues reported annually for Strategic Indicator 16, "Gifts by Donor Category and Intention".