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Gift Acceptance Policy
The purpose of this policy of the Southeastern Illinois College Foundation (referred to as the “Foundation” in the following sections of this policy), is to serve the best interests of the Foundation, its donors, and Southeastern Illinois College by providing policies for negotiation and acceptance of various types of gifts for various types of funds. One goal of the Foundation is to help a wide variety of donors fulfill their philanthropic interests by providing an appropriate vehicle for giving that is easy, personally rewarding, and cost effective. Simultaneously, the Foundation seeks to use the funds donated to it for the benefit and betterment of Southeastern Illinois College by providing leadership and by creating partnerships with the College in identifying and addressing institutional needs. Given the increasing complexity of IRS regulations, 501(c)(3) compliance, anti-discrimination laws, the volume of real estate and other property gifts, and applicable state and federal laws, the Foundation recognizes the value in carefully screening proposed gifts. From time to time the Foundation may accept or refuse gifts subject to policies outlined herein and review by its Executive Committee.
The purpose(s) of a gift must fall within the broad charitable purpose of the Foundation and be consistent with the goals, objectives, and missions of the Foundation and Southeastern Illinois College. Gifts accepted by the Foundation shall not place other assets of the Foundation at risk or increase the operating costs of the Foundation and must be, or easily converted into, assets that fall within the Foundation's Investment Policy (see Appendix A). The Foundation also reserves the right to determine whether or not it is equipped to administer the terms of a gift in accordance with a donor's wishes and the Foundation's Investment Policy and may accept or refuse the gift accordingly.
Foundation staff should disclose to all prospective donors the benefits and potential costs that could reasonably be expected to influence the donor’s decision to make a gift to the Foundation. Donors will be encouraged to consult with legal counsel and financial advisors in making their decision. In particular, donors should be made aware of the following items:
- The irrevocable nature of a gift;
- Prohibitions on donor restrictions;
- Items that are subject to variability (e.g., market value, investment return, income yield and the amount of distributions);
- Donor’s responsibility for obtaining necessary appraisals, filing appropriate tax returns and defending any challenges to claimed tax benefits;
- Administrative and other costs, if applicable, associated with making the gift and administering the fund;
- The Foundation’s “variance power” with respect to future use of proceeds from a restricted or designated fund;
- The Foundation’s responsibility to provide periodic financial reports on donor funds; and
- The Foundation’s responsibility to provide a donor bill of rights to donors.
Staff shall maintain a written record of discussions with donors. The role of Foundation staff shall be to inform, guide and assist a donor in fulfilling his or her philanthropic wishes, but never to pressure or unduly influence a donor’s decision.
Due to the complexity of charitable gift transactions and their tax consequences, staff should encourage every prospective donor to consult with his or her own legal counsel and other professional advisors prior to making a gift to ensure that the donor receives a full, accurate and independent explanation of all aspects of the proposed gift.
ROLE OF THE FOUNDATION STAFF
The Foundation's Executive Officer, on behalf of the Board of Directors, shall officially receive all gifts to the Foundation. The Executive Officer will develop the terms, restrictions, and conditions that apply to each gift in accordance with this policy. Any potential gift that is either not covered by this policy, or includes non-standard terms, restrictions or conditions must be reviewed by the Foundation's Gift Acceptance Committee (“Committee”) prior to final acceptance. In circumstances where the Committee cannot make a clear determination about a particular gift, the matter will be submitted to the Executive Committee for consultation with legal counsel or other professionals for ultimate decision by the Board of Directors.
The Executive Officer shall be responsible for the maintenance of lists of donors, prospective donors, and friends of the Foundation. The Executive Officer shall also work with the Executive Committee and Foundation Directors at large to actively solicit gifts from the community.
Staff shall provide quarterly reports to the Committee detailing gifts accepted, but not requiring prior review and approval according to the policies established herein, by the Foundation. Such list shall provide summary detail outlining the donor name, market value of the gift, asset composition, type of fund, and restrictive provisions, if any. Gifts referred to the Committee for review and approval/declination shall be reported by staff to the Committee. Staff shall provide a quarterly report of all gifts accepted/declined by the Foundation to the Board.
GIFT ACCEPTANCE COMMITTEE
One of the most important responsibilities of the Board of Directors is the safeguarding of the Foundations assets. Because acceptance of certain types of gifts may subject the Foundation to liability, proper review of all proposed gifts is essential to avoid jeopardizing the Foundations assets. The primary role of the Gift Acceptance Committee (“Committee”) is to review the proposed gift transactions as specified below. The Committee shall also adopt standard forms for agreements with donors, and shall, from time to time, submit recommendations for changes to the Gift Acceptance Policies to the Board for approval.
The Executive Officer, Chairman of the Board of Directors, Treasurer of the Board of Directors, and the Chairman of the Finance Committee shall constitute the Committee.
PROCEDURES FOR GIFTS NOT REQUIRING COMMITTEE APPROVAL
Some gifts pose little threat to the assets of the Foundation, and authorized staff members may accept those type of gifts (identified below) without the prior review or approval of the Committee, subject to the gift being consistent with these Policies and the purposes and Bylaws of the Foundation, the mission and purpose of Southeastern Illinois College, and being made pursuant to the standard Fund Agreements approved by the Foundation’s Executive Officer and legal counsel. The Executive Officer, or any other officer or staff member designated by the Committee from time to time, shall be authorized to accept gifts that do not require prior review and approval of the Committee and to negotiate the terms of and execute any gift agreement related thereto on behalf of the Foundation.
Gifts that may be accepted without Committee approval are:
- Cash and Cash Equivalents; and
- Publicly-Traded Securities; and
- Gifts of Tangible Property for Foundation Use; and
- Various charitable trust instruments, including charitable remainder trusts and charitable lead trusts if funded with marketable securities and/or cash and further provided that the Foundation does not serve in a trustee capacity.
PROCEDURES FOR GIFTS REQUIRING COMMITTEE APPROVAL
In conjunction with their tax and financial planning, some donors may be interested in making gifts of specific assets that create more risk for the Foundation. Those types of gifts (identified below) will require a review by staff and approval of the Committee prior to being accepted. In addition, the Executive Officer may, in his discretion, refer any other proposed gift transaction to the Committee for review and advice if he has any concerns about the valuation, disposition or other issue which suggests a review of the proposed gift is warranted.
- Non-Public Securities, including S corporation stock, partnership interests
- Real Property
- Tangible Property which is not readily needed for the Foundation’s use or related to its purpose
- Life Insurance policies whose premiums are not paid up
- Retained Life Tenancy
- Any gift which falls outside the ordinary purposes, Bylaws, and procedures of the Foundation
- Any gift proposed to be made pursuant to an agreement that is substantially or materially different from the standard Fund Agreements approved by the Committee and the Foundation’s legal counsel. Any gift that includes a restriction or suggestion regarding the Foundation’s use of funds that would raise legal, ethical, policy or practical concerns for the Foundation
ACTING AS TRUSTEE
It is the general policy of the Foundation not to act as trustee for the various donor vehicles. The Board and staff of the Foundation must avoid personal conflicts of interest with respect to any gift to the Foundation. No Board member or staff member may knowingly serve as a trustee, conservator, executor, or personal representative for one of the Foundation’s donors or prospects unless specifically approved in writing by the Committee and the Foundation's legal counsel. The Board of Directors will be made aware in writing of such trusteeships. Such relationships shall be reported annually to the Board of Trustees. Exceptions to this general policy must be approved by the Committee the Foundation's legal counsel.
RIGHT OF REFUSAL
The Foundation reserves the right to refuse gifts. Reasons for refusing a gift include: 1) The cost to manage the asset exceeds the eventual benefit of the gift to the Foundation, or 2) The gift or gift purpose could potentially jeopardize the Foundation’s tax exempt status, or 3) The gift or gift purpose is believed to be illegal, unethical, or immoral in nature, or 4) the gift or gift purpose is not consistent with the mission, goals, and objectives of the Foundation or Southeastern Illinois College, or 5) the gift or gift purpose compromises the integrity of the Foundation and Southeastern Illinois College. The Committee has the authority to refuse gifts that clearly do not benefit the Foundation or the College. If the benefit is questionable or difficult to determine, the Board of Directors, after seeking legal advice, shall make the final decision whether to accept or refuse.
The Foundation accepts the following forms of assets subject to the conditions described by each asset type. In order to provide written substantiation of gifts, donors must provide a legal name and a complete address so that the Foundation can comply with Internal Revenue Service and State of Illinois gift substantiation requirements.
Gifts of cash should include a statement of purpose or identify the specific fund to which the contribution is being made. Cash gifts are receipted on the date received by a Foundation representative. The Foundation may accept gifts by wire transfer to its account. If a donor wishes to wire a gift to the Foundation’s account, staff will provide the account number.
Checks must be made payable to the Southeastern Illinois College Foundation. The specific fund should be noted in the lower left corner (memo section) on the face of the check or within the written documentation, that accompanies the check. Checks are receipted on the date received in the Foundation office. Checks that are dated at the end of the year must also show a postmark no later than December 31st for consideration as a gift by the donor in the current year. Checks that are postmarked or hand delivered in January will be receipted as January gifts regardless of the date on the check. This complies with all Internal Revenue Service requirements.
3. Securities (publicly traded)
Securities for which there is a recognized market are valued at the arithmetic mean between the high and low selling prices on the date the stock is transferred multiplied by the number of shares tendered. The value of over-the-counter stocks for which no high and low sale prices are reported on the date of the gift usually will be based on the arithmetic mean between the bid and asked prices on that date. The value of a share in a mutual fund is its public redemption price (the “bid price”) in effect at the time of the gift.
The date of the gift is the date the security is:
a) Unconditionally delivered or mailed in proper negotiable form to the Foundation or its agents identified by the postmark;
b) The date the security is transferred and held in “street name” on the books of a brokerage firm; or
c) The date the security is transferred on the books of the issuing corporation when delivered to the corporation for transfer into the Foundation’s name.
Publicly traded stocks and bonds may be transferred electronically, re-registered in the name of the Foundation or conveyed through use of a properly executed stock power form. Staff will provide donor with delivery instructions upon request.
The Foundation will make no agreement with the donor prior to or subsequent to the gift regarding its disposition. The Foundation will make all decisions regarding the sale or retention of marketable securities. Generally, they will be sold as soon as possible following receipt. The Foundation will not knowingly accept securities which (1) may create a liability for the Foundation, (2) by their nature may not be assigned (e.g., series “E” savings bonds), or (3) have no apparent value.
Any stock subject to restrictions on sale under Rule 144 of the Securities Exchange Commission will be held until the restriction expires and then will be sold.
Contributions of Non-Public Securities raise special issues that bear on the advisability of accepting the gifts and shall be reviewed on a case-by-case basis with the Committee. Staff will review the relevant documentation to obtain a clear understanding of the Issuer’s business activities, the underlying assets and liabilities, the nature of the interest proposed to be conveyed, the actual or potential liabilities, if any, associated with holding such securities (e.g. unrelated business taxable income “UBIT,” capital calls, or contingent liabilities).
Generally the Foundation does not accept gifts of general partnership interest due to potentially unlimited liability. In addition, the tax-exempt status of the Foundation may be jeopardized if the IRS considers participation as a general partner to constitute non-charitable activities. If the Issuer is a limited partnership, attention will be paid to how allocations are made among the partners, the nature of the partnership’s business activities and the potential for any tax or other liability for the Foundation.
Prior to the acceptance of a gift of non-public securities, the donor will be required to provide, at his or her own expense, the following:
1. A written agreement signed stating the terms of the gift and the value as provided by the donor. The Foundation shall carry the value of such gift as $1.00 for accounting purposes;
2. A statement that there are no restrictions of the Foundation’s right to use or convey the gifted property;
a. Donor will agree to the payment from the affected fund any UBIT and other taxes and all other expenses associated with holding the non-public securities, or, if cash in the fund should be inadequate to pay the taxes and expenses, to make further contributions to pay them
b. To indemnify the Foundation and hold it harmless from any liability in the event the Issuer becomes bankrupt or otherwise able to satisfy its obligations or arising from litigation or other claims against the Issuer
c. To fund any further contributions of capital or other amounts required to be paid; and
3. To obtain any written consents required to be given by other owners of the Issuer pursuant to the agreements to which the donor is a party.
Note: It is the donor’s responsibility to file a completed and signed IRS Form 8283
Generally, if the non-public securities are readily marketable they will be sold as soon as possible. The Foundation will not guarantee or pre-arrange a sale of the non-public securities or make any other agreement that might imply or cause the imposition of a material restriction on the property. The Foundation will advise the donor if the Foundation sells, liquidates, or otherwise disposes of any non-public securities listed on IRS Form 8283 within two years of receipt of the gift. The Foundation is required to file a report with the IRS on Form 8282 reporting the actual proceeds and other facts about the sale of securities, and a copy of such report shall be provided to the donor.
If the non-public securities are not readily marketable at the time of the gift the Foundation will hold them in safekeeping until they can be redeemed. The value of the securities based upon sale proceeds will be reflected in the value of the donor’s fund account.
4. Non-Cash Gifts
It is the donor’s responsibility to provide the valuation of tangible personal property exceeding $5,000 in value (art, antiques, rare books, jewelry, gems, collections, etc.), and closely held stock exceeding $10,000 for purposes of filing the 8283. The Foundation shall carry the value of such gift as $1.00 for accounting purposes. If the Foundation sells the property within two years, the Foundation must file IRS Form 8282 informing the donor and the IRS of the sale price of the property. The donor shall pay the cost of an appraisal.
Non-cash gifts with a fair market value of less than $5,000 may be reported by the donor at the value declared by the donor. Personal property and closely held stock shall be sold at the highest possible price as soon as practical after conveyance, unless the property is to be used in connection with the Foundation’s exempt purpose. The Foundation discourages gifts of personal property that cannot readily be sold or which require unusual expenses prior to sale, unless such gifts are so unique and/or beneficial to the college (e.g., valuable art, needed equipment for CTE program, etc.) for ownership and use. The college must express a desire for such acquisition. If a lengthy selling period is anticipated, the Foundation may refuse the gift or request that the donor cover the expenses with an additional cash gift.
5. Life Insurance
A donor may make a gift of life insurance by irrevocably assigning to the Foundation all right, title and interest as the owner and beneficiary of the policy or by designating the Foundation as the only beneficiary or a partial beneficiary of a policy owned by the donor.
If the donor wishes to transfer ownership of a policy, the Foundation, through its Committee, will decide on a case-by-case basis whether to accept the gift. If the Foundation accepts a policy, the Foundation may choose either to cash in the policy for its current cash surrender value or continue ownership and/or payment of the premiums.
Prior to accepting any policy for which premium payments are to continue to be made, staff will discuss with the donor whether the donor is willing to continue to pay the premiums in the future. The donor has the option of agreeing to pay the premiums directly or to make a contribution to the Foundation for the amount of the premium at least 10 days prior to each subsequent due date. The Foundation will not assume responsibility for payment of delinquent premiums. If the policy is surrendered, the cash value will be added to the restricted or unrestricted fund in the donor’s name based on the donor’s instructions and value of assets being transferred according to the policies outlined herein.
The Foundation discourages the contributions of life insurance policies subject to policy loans and or other assignments. The Foundation will not enter into any split dollar arrangements.
Original policies shall be maintained in the Foundation’s office. Staff shall cause the cash surrender value of the policies to be updated on an annual basis as noted in the statements provided it by the various insurance companies.
Gifts of newly purchased life insurance policies, in which the Foundation is both owner and beneficiary, shall be reported at the amount of premiums paid, in the year the premiums are paid.
The value of a paid-up ordinary life insurance policy accepted as a gift is its replacement cost. The value of a nonpaid-up life insurance policy is determined by adding to the “interpolated terminal reserve” of the policy (which, in a policy that has been owned for a while, will be approximately equal to its cash surrender value) plus an unearned premium and accrued dividends, less any policy loan. The issuing insurance company shall be consulted for assistance with both the transfer of the policy and its valuation.
When a policy is owned by the Foundation, regardless of whether the donor or the Foundation pays the premiums, the difference between the cash value and the insurance company’s settlement at the death of the donor is not reported as a gift, but rather as a gain on the disposition of assets. In those cases where the Foundation receives the proceeds of an insurance policy in which it was named beneficiary but not owner, the full amount received shall be reported as a gift on the date received.
6. Real Property
If a donor wishes to contribute real property, or an interest in real property, to the Foundation either directly or through a life estate arrangement, the Committee shall consider all facts and circumstances in determining whether to recommend accepting the gift. Final acceptance of any gift of real estate shall require Board approval.
Prior to acceptance of a gift of real estate, the donor will be required to provide, at his or her own expense, a signed, written agreement stating the terms of the gift and the value of the gift. The Foundation shall carry the value of such gift as $1.00 for accounting purposes.
The Foundation will advise the donor if the Foundation sells, liquidates, or otherwise disposes of any real estate listed on IRS Form 8283 within two years of receipt of the gift. The Foundation is required to file a report with the IRS on Form 8282 reporting the actual proceeds and other facts about the sale, and a copy of such report shall be provided to the donor.
Real property that is encumbered will be accepted only in exceptional circumstances. Prior to acceptance of a gift of real property, the donor and the Foundation must agree, in writing, on the arrangements of paying expenses associated with the property, including taxes, assessments, insurance coverage, and maintenance costs.
Each potential gift of real property will be reviewed individually with consideration given to an expeditious liquidation. The property will be sold at the highest possible price as soon as possible after conveyance, unless the property is to be used in connection with the Foundation’s exempt purpose or part of a life estate.
Issues in Acquiring the Property:
A. Title Review and Insurance – The Foundation shall make certain that there is evidence of clear title to the property being donated by the donor. If multiple donors are named on the title each owner must agree in writing to the gift. The Foundation will require the donor to provide title insurance which the Foundation Committee, in its discretion, may pay for the cost of the title insurance.
B. Survey of the Property – Particularly for commercial properties, a prior survey will be requested or a survey will be done to determine encroachments, easements or other details that cannot be ascertained from the title company. The determination of the need for a survey and party to pay for the survey shall be determined by the Committee.
C. Type of Deed Involved – Property being gifted by individuals will require a warranty deed. In special circumstances a warranty deed will not be required, such as property being conveyed by a trust.
D. Environmental Review – For any gifts of real estate the Foundation reserves the right to require both a physical inspection and current baseline environmental assessment (Phase I environmental survey and Phase II survey if determined by the Committee to be needed based on the Phase I survey), particularly if commercial or income-producing property is involved. The donor shall bear the cost of such reviews unless agreed to otherwise by the Committee. As a general rule, the Foundation will require adherence to the provisions of the Natural Resources and Environmental Protection Act, as it exists from time to time, which affords protection to entities acquiring property without acquiring environmental liability, provided a baseline environmental assessment has been conducted before or within 45 days after the date of ownership of the property. Refer to appendix for a real estate checklist.
E. Expenses – A thorough review of expenses related to the carrying cost of the property shall be conducted prior to acceptance and, in those instances where such costs are deemed significant and/or the anticipated time period to complete the sale of real estate is sufficiently long, the donor will be asked to provide for payment of expenses via an additional cash donation(s).
All pledges must be in writing and include the fund that will benefit from the gift and the anticipated payment schedule along with the signature of the donor. Pledge payment reminders shall be sent to the donor on the first of the month in which the payment is due.
Deferred Gifts (Planned and Testamentary Gifts)
The Foundation’s planned and testamentary giving program encompasses all forms of gifts whose benefits do not fully accrue to the Foundation until some future time (such as a the death of the donor or other income beneficiaries or the expiration of a predetermined period of time), or whose benefits to the Foundation are then followed by the interests of non charitable beneficiaries. Examples of deferred gifts include:
- Retirement assets naming the Foundation as a successor or contingent beneficiary upon death of either the retirement asset owner or spouse
- Charitable Life Estates
- Charitable Remainder and Lead Trusts
- Outright bequests per a Will or Trust Agreement
Donors using planned and testamentary gift techniques may establish any of the fund types listed in this policy, provided that the residual meets the required minimum for that fund type. The governing documents should specify the Foundation as the charitable recipient and name the fund to which the donor’s gift will contribute. The type of fund and purpose of the fund may be described in detail in a separate fund type agreement.
The Committee will review planned gifts offered to the Foundation. The Committee is responsible for assuring that all planned gift instruments are valid and are acceptable to the Foundation and will consult with the legal counsel when necessary. Pertinent information about these gifts will be detailed by the Executive Officer to the donor and to the donor’s advisors, as well as to the representative(s) of the Foundation working most closely with the donor.
All donors contemplating a deferred gift to the Foundation should be encouraged to consult their own financial, legal and tax advisors.
Donors are encouraged to limit restrictions on the use and application of the eventual funds transferred and to keep restrictions within the Foundation’s guidelines. A statement of the donor’s wishes regarding use of the gift (even if designated “unrestricted”) shall be obtained at the closing of the gift and maintained both in the donor file and with the original gift documentation such as the trust instrument.
The handling of estate distributions will be coordinated with the Executive Officer. He or his designee serves as a primary liaison with any outside parties to the transaction, or to a given transaction, (bank trust department, probate court, executor/administrator of the estate, estate counsel and other advisors).
1. Charitable Gift Annuities
Under a charitable gift annuity, a donor irrevocably transfers property to the Foundation in exchange for a commitment by the Foundation to pay the donor (or other beneficiaries designated by the donor) a fixed amount each year for the life or lives of the designated beneficiaries. The amount of the payment depends upon the age of the donor and size of the gift.
The Foundation’s obligation to make the annuity payments is considered a general obligation of the Foundation. Unlike charitable remainder trusts, the assets are not held in a separate trust. Because all of the Foundation's assets are potentially available for meeting the obligation, it shall be the general policy of the Foundation not to accept charitable gift annuities. Under certain circumstances charitable gift annuities can be accepted contingent upon prior review/recommendation by the Committee to the Board for final approval.
2. Charitable Remainder and Lead Trusts
A. Charitable Remainder Unitrust –
A charitable remainder unitrust is a gift vehicle that irrevocably transfers the remainder interest on assets to the Foundation upon the death of the donor or the named beneficiaries, or at the end of a specified term of years.
A straight unitrust must pay a fixed percentage of the net fair market value of its assets, valued annually, to the designated beneficiaries. An income only unitrust will distribute the actual amount of ordinary income earned or the established percentage payout rate, whichever is less. An income only unitrust with make up provision uses excess ordinary income from the trust to pay the beneficiaries income lost during the years when earnings were insufficient. Another variation to the basic unitrust is the flip unitrust, which starts out as a net income unitrust or make-up unitrust. Upon certain events a flip unitrust flips to function as a straight unitrust. Donors who fund their unitrust with assets that are not producing income, such as undeveloped property, often use a flip provision.
The payout, which is determined at the establishment of the trust and must equal no less than 5% of the fair market value of the assets in the trust, is permanent.
The present value of the remainder interest must be equal to or greater than 50% of the original contribution to the trust where it is the donor’s intent to fund an endowment. When the remainder interest is non-endowed the minimum residual interest is 10%
Additional contributions may be made to a unitrust.
B. Charitable Remainder Annuity Trust –
Similar to the Charitable Remainder Unitrust, a Charitable Remainder Annuity Trust is an income vehicle that irrevocably transfers remainder interest to the Foundation upon the death of the income beneficiaries.
The annuity trust pays a fixed dollar amount annually to the income beneficiaries. The amount is specified in the trust document as either a dollar amount or a percentage of the initial fair market value of the assets used to fund the trust. This amount must be at least 5% of the initial value. Once the annual amount is set it may not vary over the life of the trust. If income exceeds the payout the excess is added to principal; if it is less the difference is derived from realized capital gain or principal. Once the annuity trust is established no additions to the trust are allowed after the initial contributions. In order to be acceptable to the Foundation, a charitable remainder annuity trust must have an anticipated residuum of at least 50% where it is the donor’s intent to fund an endowment. When the remainder interest is non-endowed the minimum residual interest is 10%. This requires that payout rates and term lengths be carefully evaluated at the time the trust is established.
General policy issues governing Charitable Remainder Unitrusts and Charitable Remainder Annuity Trusts:
- Payout rates of more than 9% must be reviewed for approval by the Committee; Net income makeup trusts do not require this approval;
- Income beneficiaries should be 55 years of age or older;
- The Foundation is named as an irrevocable remainder beneficiary, of at least 50% of the remaining assets for residuals funding endowments;
- The Committee may rely on professional advisors to prepare funding and payout analysis
- Donors will be encouraged to retain independent legal counsel at their own expense
C. Charitable Lead Trusts
A charitable lead trust is an arrangement that provides the income generated on assets contributed to the trust to be paid to the Foundation for a designated period of years. After the time period has elapsed, the assets pass to a non-charitable beneficiary designated by the donor in the original trust. A contribution of the income generated from the assets within the trust must be in the form of either an annuity or a unitrust interest. See “B” above general policy issues governing Charitable Remainder Annuity and Unitrusts, which also apply to Charitable Lead Trusts.
4. Retained Life Estate
The Foundation may accept a gift of a personal residence, vacation home or farm in which the donor retains the right to occupy the property until the death of the donor. During the donor’s lifetime the donor may specify the use of any proceeds from the property. Upon death the property vests in the Foundation.
In deciding to accept a gift of a remainder interest, the Foundation will follow the policies outlined herein for accepting a gift of real property. In addition the Foundation will consider, among other things, the following factors:
- Age of Donor – As a general rule the life beneficiary should be age 55 or older;
- Use of property – The Foundation will take into consideration the potential use of the property during the tenant’s lifetime in order to avoid accepting any property which might cause a liability for the Foundation in future years;
- Disposition – In general the property should be sold within a reasonable time after the donor’s death;
- Costs and expenses- The donor must agree to be responsible for all costs of maintaining the property, including but not limited to property insurance, taxes, repairs and maintenance.
- Refer to Gift Type Section 6, Real Estate, for other requirements, including the need for an environmental review for all real estate gifts.
A bequest is an outright gift to the Foundation through a will or trust. Foundation representatives may actively solicit bequests as long as the purpose of the gift is in accordance with the charitable purposes of the Foundation.
Bequests received through wills and or trusts, without specific language restricting purpose and /or restricting corpus with endowment language, by their nature are unrestricted. It is the general policy that unrestricted bequests in excess of $100,000 will be evaluated by the Finance Committee, and a recommendation made to the Board of Directors on a case-by-case basis to determine the ultimate allocation of such bequest
TYPES OF ENDOWMENTS
An endowment fund is a permanent endowment fund that prohibits granting from the original corpus of the fund.
An endowed chair fund is a permanent endowment fund designed to generate enough yearly income to substantially support a program or a faculty/staff/administrative position at Southeastern Illinois College.
A quasi-endowment fund is a board designated (versus donor designated) permanent or donor directed fund that functions as an endowed fund but which is not subject to any legal prohibitions against spending. A quasi-endowment is subject to the same spending policy as an endowment fund. However, the Board of Directors can authorize the spending of principal and can also authorize a change in the nature of the fund.
TYPES OF FUNDS
The Foundation offers a broad range of funds designed to be responsive to donor needs. While all philanthropy adds value to the institution, each type of Foundation fund can provide added value to philanthropy. A Fund Agreement is required to establish a fund with the Southeastern Illinois College Foundation. The minimum fund balance for each fund type is outlined in detail later in this policy.
Unrestricted funds allow the Foundation the flexibility in meeting the challenges of the institution. These funds are directed to emerging needs of Southeastern Illinois College as identified by the Foundation’s Board of Directors and the College's Board of Trustees. It is through the judicious use of these funds over the years that the real strength of the Foundation is demonstrated.
Field of Interest Funds
Donors may give Field of Interest Funds to support specific areas such as the humanities, arts, sciences, athletics, children and youth, general education, community services, health and human services, technology, and vocational-technical education. Within these broad fields, the Board of Directors has the flexibility to make grants that address the current and changing needs of the College.
Income from a designated fund is given regularly to a specific program at the College. Unless otherwise specified, if the named program is no longer active or providing a needed service or if the purpose of the fund becomes impractical or impossible to fulfill, the Board of Directors of the Foundation shall ask the College to select another program with a similar purpose and shall redirect income accordingly. The Foundation has a variety of designated fund categories for specific purpose(s) and programs.
Scholarship funds give area students the opportunity to complete their education at Southeastern Illinois College. Through such funds, donors can provide scholarships based on specific criteria, or they can designate the College to create the criteria and select the scholarship recipients.
Administrative funds as a result of donations provide financial support for day-to-day programs and operations of the Foundation. These funds, in part, enable the Foundation to reduce management costs, thus preserving more dollars for grant making.
Donor Advised Funds
A donor advised fund allows a donor to maintain the ability to offer recommendations regarding the recipients and amounts of grants from the funds, subject to Board approval.
Donor Advised Pass-Through Fund
This donor advised fund is time specific in that the fund has a life of one year.
The Foundation shall adhere to the Naming Policy adopted by the Board of Trustees of Southeastern Illinois College (Appendix B).
Donors shall receive an expression of sincere thanks and gratitude from the Foundation and an acknowledgment of the gift in accordance with federal regulations.
No public media exposure with respect to a donor’s gift shall be generated without the consent of the donor.
Gifts to the Foundation may not be directly or indirectly subjected by a donor to any material restriction or condition that prevents the Foundation from freely and effectively employing the transferred assets or the income derived therefrom in furtherance of its exempt purpose.
INVESTMENT OF GIFTS
It is the general policy of the Foundation to convert all gifts to cash as soon as possible and/or appropriate. The Foundation reserves the right to make any or all investment decisions regarding gifts in accordance with its Investment Policy.
In making a gift to the Foundation, donors give up all right, title, and interest to the assets contributed. In particular, donors give up the right to choose investments and investment managers, brokers, or to veto investment choices for their gifts.
However, when the size of a fund warrants separate investment consideration, the Foundation will endeavor to accommodate requests from donors for separate investment of fund assets, or use of a particular investment manager, broker or agent in accordance with the Investment Policy, and may consult with donors on investment options for such funds. Any recommendations for investment advisors which are not currently employed for the general assets of the Foundation shall require prior review and approval by the Finance Committee.
COSTS OF ACCEPTING AND ADMINISTERING GIFTS
Except as may be approved by the Committee in unusual circumstances, the costs associated with the acceptance of a gift such as attorney fees, accounting fees, other professional fees as well as other costs to establish a gift such as appraisal, escrow, evaluation, and environmental assessment fees will be borne by the donor.
The direct costs of administering planned gifts of the Foundation shall be borne from the assets of the individual funds, except for those special circumstances as determined by the Committee. Custodial, investment, and administrative fees shall be paid from the respective funds in accordance with the Foundation’s guidelines and fee schedules as approved by the Board from time to time.
Foundation staff shall maintain strict control over files and information received from or about donors or prospective donors so as to maintain confidentiality of such information. No public media exposure shall be made with respect to a donor’s gift without the consent of the donor.
PUBLIC FUND RAISING
Fundraising undertaken by donors in connection with restricted funds of the Foundation require special consideration. See Appendix C.
AUTHORITY TO NEGOTIATE
The Foundation management and administrative officers authorized to accept letters of direction and amendments thereto and to negotiate and sign charitable giving agreements with prospective donors are
Chairman of the Board of Directors
Secretary of the Board of Directors
Treasurer of the Board of Directors
Assistant Treasurer of the Board of Directors
The Southeastern Illinois College Foundation adheres to all applicable local, state, and federal laws governing the acceptance of gifts and the rights of donors.
Gift Acceptance Policy as adopted by the Board of Directors on July 27, 2005.
Amended August 23, 2018
(Gift Acceptance Policy)
Public Fundraising for Restricted Funds of the Foundation
The Foundation is staffed to develop endowment and other funds through the acquisition of major and planned gifts and to cultivate new and existing relationships with donors. It also will sponsor from time to time special fund raising events to raised unrestricted funds. The Foundation is not equipped to operate public fundraising events for its restricted funds. In general, the Foundation will administer a public fundraising event in association with a restricted fund only when deemed appropriate by the Board of Directors.
Special or public fundraising events refer to those special events that are intended to raise dollars for funds. For example, a golf outing, fundraising dinner, raffle, fantasy auction, bass tournaments, or other similar events would be considered special or public fundraising events. The term is not intended to encompass the annual giving of funds through the Foundation’s year-end letter and other solicitations.
Foundation Approval of Events
In the event the Foundation approves a fundraising event for a restricted fund, the following requirements must be met:
Before undertaking public fundraising events, the fundraising event coordinator shall define to the Foundation each program, event, or other effort to raise money for the fund.
The fundraising event coordinator shall then obtain Foundation approval to proceed according to Foundation policies.
All uses of the Foundation’s name in advertising and promotion must be approved in advance by the Foundation.
Responsibilities of the Foundation
The Foundation is held accountable for all special or public fundraising events related to funds of the Foundation. It may not delegate this responsibility to any other parties. In considering whether to approve the event, staff shall take into account the following responsibilities:
• Budget and payment of expenses
Who will prepare a budget?
Who will be responsible for authorization for and payment of expenses?
Who will oversee the budget and ensure that the budget is adhered to?
Will the Foundation assess a special administrative fee for this service?
• Compliance with laws
Is the event included under the scope of the applicable solicitation laws (federal and state)?
Is there a need for a special raffle, liquor, or gambling license?
Are the appropriate sales taxes being collected on items sold and who will file the sales tax return?
Is there a clear understanding that the expenses of fundraising events are not exempt from sales tax?
• Liability covering the Foundation
Is there a need for additional general liability or other insurance for the event?
Should a letter of credit or a written personal guarantee be provided?
If the contributors receive goods or services in return for their payment, who will determine the appropriate charitable portion of the payment so that correct tax acknowledgements will be prepared?
• Management of money and property received from the event
Will all checks be made payable to the fund at the Foundation?
Where should checks and other forms of payment be sent?
If someone else is collecting cash, what safeguards need to be in place?
• Application of income and principal to charitable uses
Can the fund be administered in the manner in which it is advertised?