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CWUP 2-10-070 Gifts, Devises, Bequests and Trusts

(1) General Statement - A part of Central Washington University's support consists of gifts and bequests received from individuals, business and industrial concerns, associations and foundations. Since contributions to the university are deductible under the Internal Revenue Code, it is important that such gifts be recorded accurately and that all transactions so recorded be bona fide gifts, that is, given not for the benefit of a specific individual, but for the use of the university in furthering its educational purposes. It is equally important that restrictions placed upon funds or property contributed by donors be carefully observed and followed so as not to jeopardize future support.

The constitution of the board of trustees of Central Washington University names the vice president for business and financial affairs as the treasurer of the board of trustees. This is the only position therein named as authorized to receive, "on behalf of the board of trustees, any funds, securities, properties, or other assets distributed to the board of trustees of the Central Washington University or departments or divisions from any estate, or received as gifts, or from any trusts, and to issue appropriate receipts and releases in connection therewith."

The intent of the policy and administrative practice is to set forth the terms and conditions under which the university will receive gifts, devises, bequests, and trusts, and the manner in which they will be placed into beneficial use, including issuance of appropriate receipts to the donors, recording, and inventory control.

(2) Definitions - All definitions as set forth in this section shall be deemed to prevail for purposes of this policy and administrative practice.

(A) Gift (unrestricted): Something that is conveyed or bestowed voluntarily and with out compensation; may include money, securities, stocks, bonds, negotiable instruments, and real or personal property. No conditions are specified by the donor as to ownership or use of the gift.

(B) Gift (restricted): The same as an unrestricted gift, but subject to donor imposed conditions of ownership, retention, disposition, or use of the thing given.

Notation: All of the following definitions identify things which can be offered and received as "unrestricted" or "restricted" as the case may be:

(C) Bequest: The same as for gifts except transmitted by will; does not include real property.

(D) Real Property (real estate): landed property, including all inherent natural resources and any man-made improvements established thereon.

(E) Devise (noun): Real property transmitted by will.

(F) Trust: Property, real or personal, or money held by some person, firm or corporation for the benefit of the university.

(G) Equipment: All personal property except furnishings, consumable supplies and materials, objects of art, library and archival materials, clothing, animals, plants, ores and minerals, and "other personal property" as separately defined.

(H) Consumable Supplies and Materials: Any thing fully or partially consumed, changed, or altered in use. Examples are lumber, iron, steel and aluminum stock; sand and gravel; chemicals; fabrics; electrical and electronic components; paint; glass and plastics.

(I) Objects of Art: Objects valued for their artistry.

(J) Library and Archival Materials:

1. Library Materials. Books, pamphlets, periodicals, films, video or audio recordings, and other printed or published materials.
2. Archival Materials. Private papers, letters, manuscripts, and photographs important for their historical or research value.

(K) Furnishings: Movable articles in a room or establishment that render it fit for living or working.

(L) Other Personal Property: Any personal property not defined above; includes such items as clothing, animals, plants, mined ores and minerals, novelties and curiosities.

Grant: For purposes of this policy and administrative practice, a grant is deemed to mean compensation to the university in return for certain specified work effort. Compensation for such work effort may or may not be shared by the university and the granting entity. Within this context, "grants" are excluded from coverage by this policy and administrative practice.

(3) Involvement of the CWU Foundation - Central Washington University has entered into a separate agreement with the Central Washington University Foundation (a Washington nonprofit corporation). Article I.B. of that agreement reads in its entirety as follows:

The Foundation agrees to tender to the university immediately all donations it may receive wherein the donor names the university as recipient, and to be responsible for and account for in its own records all donations wherein the donor names the Foundation as recipient.

Accordingly, any gifts, devises, bequests and trusts which the university receives from the Foundation, whether tendered in the name of the original donor or in the name of the Foundation itself, shall, if accepted, be received and administered in the same manner as if received from any other source.

(4) Monetary Gifts, Bequests and Trusts - All "monetary" gifts may be classified in three different ways:

(A) By form at time of receipt. Gifts of money, securities, insurance, royalty, copyright, or trademark rights contemplated for conversion into money for use as designated by the donor or specifically invested as endowment assets.

(B) By use:

1. Current or expendable may be expended in their entirety immediately or in the near future for current purposes.

2. Endowment are given to be held permanently invested with only the income therefrom being expendable.

a. Merged investment - Assets given are pooled with the general endowment investment assets of the university. Income from this investment pool is allocated to the individual funds annually on a proportionate basis.
b. Specific investment - Assets given are held specifically invested, and only the income earned thereon is expendable for the purpose of the gift. The principal of the fund then sustains all gains and losses on sale of its assets.

(C) By purpose:

1. Unrestricted - Given for current use or to provide unrestricted endowment income, but with no other stipulation as to its use.

2. Restricted - Gifts may be designated by donors as being for:

a. student aid funds such as scholarships, fellowships, grants-in-aid, or loans;
b. school and departmental use such as research programs, salaries, equipment, exhibits, books and publications, professorships and lectures, etc.;
c. additions to plant such as laboratories, dormitories, libraries, etc.

Restricted gifts may not be expendable. For example, "student aid" gifts may be spent directly for scholarships or may be used to establish an endowment fund, the income from which will provide students with scholarships. All student aid and scholarship gifts shall be administered by the university department of financial counseling and financial aid after appropriate receipt by the vice president for business and financial affairs.

A monetary gift may be given as a perpetual and useful memorial to the donor or to someone designated by him/her. Either may be made as a living gift or by will (bequest).

From time to time gifts may be received from donors who wish to designate a specific use after consultation with university officials to determine which of the pending projects best suit their interests. Also, memorial gifts may be received from various donors, the use of which is to be designated according to the total amount contributed and after the family of the deceased has been consulted, so that a suitable and useful memorial may be established. Such gifts as these shall be processed when received, but held until the ultimate purpose has been determined. Gifts also may be received from individuals who have reserved unto themselves, or some designated beneficiary, the income of the fund until their death, and only after the death of the surviving life tenant may the income and/or principal then be used for an approved purpose in support of the objective and welfare of the university. All offers of monetary gifts, bequests and trusts shall be considered for acceptance by the university vice president for business and financial affairs. All restricted non-monetary gifts and bequests shall be considered for acceptance by the committee on gifts, bequests, trusts and objects of art.

(5) Devises (real property gifts and bequests) - The vice president for business and financial affairs has been delegated authority by the university board of trustees to receive "properties" as cited in Section 2-2.14.1 of this policy and administrative practice. In addition, the vice president for business and financial affairs administers the university's land management program under separate authority. Accordingly, devises of real property unrestricted or restricted, offered to the university shall be considered by said vice president on the merits of the offer, without necessarily referring the offer to the committee on gifts, bequests, trusts, and objects of art. Reference: Section 2-2.14 of this policy and administrative practice for a description of the powers and duties of the committee on gifts, bequests, trusts and objects of art.

(6) Gifts and Bequests of Equipment and Furnishings

(A) Unrestricted: If the gift or bequest is tendered to a particular school or department of the university and no acknowledgement of monetary value is requested by the donor, the appropriate principal budget administrator or dean shall receive the gift in the name of the university, provided:

1. The gift will benefit the university in its educational or public service mission.

2. Use of the gift will not cause the university to incur costs for which funds have not been allocated (unless such use can be postponed until funds are allocated).

3. Use of the gift will not adversely affect the university's energy resources (including electrical power, natural gas, water, steam, or other forms of energy). If such adverse use of the gift could be so construed, a waiver statement in writing from the university director of physical plant shall be obtained before acceptance.

4. Use of the gift will not compromise the integrity of building structures or landscaping features. If use of the gift could be construed as adverse in such circumstances, a waiver statement in writing from the university director of facilities planning and construction shall be obtained before acceptance.

5. Use of the gift will not place the university in violation of the Federal Occupational Safety and Health Act (OSHA) or the Washington Industrial Safety and Health Act (WISHA). If use of the gift could portend such a violation, a waiver statement in writing from the university Safety committee shall be obtained before acceptance.

In some cases donors (vendors) may offer gifts of certain specialized equipment items which require purchase of their own brand of consumable parts. An example would be the free gift of a name brand drill which will only accept bits of the vendor's manufacture. In these situations, the foregoing rules apply as for any other gift. In addition, the principal budget administrator or Dean shall transmit the offer to the committee on gifts, bequests, trusts and objects of art (Reference: Section 2-2.14). The transmittal shall include a letter certifying (if true) that both the basic gift and the consumable parts to be purchased later are of first line quality and are competitive in price with other brands of similar merchandise. This letter should conclude with a statement (if true) that the transaction results in an overall cost saving to the state compared to alternative methods of procurement.

For tax deductions, or other purposes, donors sometimes ask the university to concur in writing with the donor's statement of value applicable to a proffered gift. Moreover, a donor may ask the university to appraise the gift or to otherwise establish a valuation. If any such condition is specified by the donor even though the gift is otherwise unrestricted, the offer shall be transmitted to the vice president for business and financial affairs for consideration who may, at his or her discretion, refer the question to the committee on gifts, bequests, trusts and objects of art for consideration.

If the gift or bequest is acceptable within the framework of the foregoing terms and conditions, the principal budget administrator or Dean should send the donor an appropriate letter of appreciation. Copies of the letter should be sent to the president, the vice presidents, and to the committee on gifts, bequests, trusts and objects of art.

In all situations where consideration of acceptance of a gift or bequest has been forwarded under terms of this policy and administrative practice to the committee on gifts, bequests, trusts and objects of art, that committee shall prepare and send the appropriate letter of acknowledgement.

(B) Restricted: If any conditions affecting ownership or use of the gift or bequest are proposed or imposed by the donor, or by terms of his/her will, the conditional offer shall be transmitted to the committee on gifts, bequests, trusts and objects of art for consideration and disposition.

(7) Gifts and Bequests of Consumable Supplies and Materials - All provisions of Section 2-2.14 herein applying to equipment and furnishings shall also apply to acceptance of consumable supplies and materials, except that the principal budget administrator or Dean shall have the option to delegate to the appropriate department head sufficient authority to receive and acknowledge gifts of supplies and materials not exceeding one thousand dollars in value per shipment.

(8) Gifts and Bequests of Objects of Art - All proffered gifts and bequests of objects of art shall be transmitted to the committee on gifts, bequests, trusts and objects of art. Consideration of such offers by the committee shall be as described in Section 2-2.14 herein.

(9) Gifts and Bequests of Library and Archival Materials - All provisions of Section 2-2.14 which can be properly read within the definition herein of library and archival materials shall be subject to consideration and action under this policy and administrative practice by the university dean of library services.

(10) Gifts and Bequests of Other Personal Property - Because of the unusual nature or characteristics of any thing subject to this definition, consideration of all proffered gifts and bequests so defined shall be under taken by the committee on gifts, bequests, trusts and objects of art though the value thereof may be less than one thousand dollars.

(11) Committee on Gifts, Bequests, Trusts and Objects of Art

(A) This committee reports to the vice president for business and financial affairs.

(B) Committee structure (variation may be approved by the vice president for business and financial affairs):

1. Director of University Relations and Development (ex officio);
2. One Dean; 
3. Two faculty members;
4. One business office representative of purchasing or property control; and
5. One Physical Plant or Facilities Planning representative.

The committee shall select its own chair.

(C) Meeting Frequency:

Intermittent; meetings to be called by the chair as necessary to provide reasonably prompt response to agendas of business matters.

(D) Authorities:

Within its capacity as advisory to the vice president for business and financial affairs, the committee shall have the authority to act as described below unless said vice president shall specify otherwise.

1. To rule upon application of definitions (Section 2-2.14). In case of dispute as to the meaning of any word or term, the committee's decision shall be final, subject to the committee's general authority.

2. To rule upon acceptance of all non-monetary restricted gifts and bequests. If the committee finds the restriction(s) set forth by the donor to be acceptable, the committee shall issue appropriate administrative letters or memoranda to the operating department(s) involved in prospective use of the gift or bequests. Such advice shall include a basis for certification and follow-up to make certain the restriction is observed.

3. To rule upon acceptance of gifts requiring the use of special or "name brand" components (Section 2-2.14). The committee may consult with operating departments to aid in its evaluation of such offers.

If acceptance is approved, the committee shall thereby issue its written authorization to the appropriate operating departments.

4. To rule upon the willingness of the university to concur in the donor's declaration of value applicable to a particular gift.

The committee may consult with people inside or outside the university in order to provide a defensible basis for its ruling. The results of such inquiries should be noted in writing.

If the donor's value statement is unacceptable, the committee may discuss with the donor the possibility of a revision. If terms cannot be agreed upon, the gift must be rejected. In connection therewith the committee may quote the university as having no authority under law to be a party to any action which could result in unsubstantiated or improper tax treatment.

5. To rule upon "appraisal situations" involving proffered gifts or bequests.

This circumstance is similar to Section 2- above. The donor may not have stated a value applicable to his/her gift, but may ask the university to "appraise it" or to "place a value upon it."

In this situation, the committee incurs an increased obligation if it elects to comply with the donor's request. That is, the entire responsibility for assuring defensible tax deduction treatment will channel directly to the university through the valuation it has declared. Accordingly, the committee should consider the magnitude of the offered gift and determine whether or not the expected value to the university warrants the issuance of an appraisal. If so, the committee may wish to ask a member of the university faculty or staff knowledgeable in the field to which the gift orients to provide a written appraisal; or the committee may commission an outside appraisal. In either case the objective should be to obtain an accurate, fair market value appraisal.

6. To write appropriate letters of receipt and appreciation to donors following acceptance of gifts or bequests.

7. To acknowledge by letter, to the referring school or department of the university, all matters transmitted to the committee for action by such school or department.

8. To recommend in writing to the vice president for business and financial affairs the proposed disposition and use of gifts and bequests accepted through action of the committee. Such letters should include the recommended recipient department or school and any pertinent suggestions as to appropriate use of proper display of the gift.

9. To refer any acceptance contracts for gifts and bequests to the director of business services and contracts for evaluation and arrangement for execution as appropriate.

10. To rule upon the conditions under which objects of art will be considered for acceptance.

By definition herein, objects of art are "objects valued for their artistry." Differences of opinion may arise as to the true artistic worth of gifts offered as art. Not only may the matter of monetary value be difficult to ascertain should it become necessary to establish a value, but the very suitability of the proffered gift and its compatibility with the university's mission and environment may be questionable. In such situations the committee assumes the responsibility of determining whether the gift should be accepted or rejected, bearing in mind that acceptance commits the university to what may be at least a moral obligation to retain and display the gift in virtual perpetuity.

In addition to the foregoing considerations, all of the committee's actions applicable to receipt of other gifts are applicable to acceptance of objects of art.

11. To rule upon acceptance of "other personal property." The unusual characteristics of such items, as defined, mandate maximum flexibility on the part of the committee. Should such property ever be offered as a gift, the committee should consider the offer in whatever context is most closely applicable to other classes of gifts.

12. To provide general surveillance in matters related to inventory control of gifts, bequests and objects of art as described in section 2-2.14 herein. Whereas the university's inventory control officer will administer the mechanics of such inventory control, and whereas the "department of custody" will have line responsibility for safeguarding gifts and objects of art assigned to such department, the committee should serve as a coordinating council to assure that gifts and objects of art, whether long in custody of the university or newly acquired, are properly assigned and featured in the most appropriate manner.

(12) Inventory Control of Gifts, Bequests and Objects of Art

(A) Upon acceptance of any gift or bequest, the committee on gifts, bequests, trusts and objects of art shall notify the inventory control officer in writing, setting forth the following details:

1. Date of acquisition;
2. Name of the donor or estate;
3. Brief description of the item(s);
4. Serial number (if any);
5. Value. Note: If the gift was appraised or if the committee concurred in the donor's stated value, this amount should be related. If no value was shown, the committee should estimate a value and transmit it in this format: "No value stated. Estimated value for inventory control purposes: $_____."
6. Name of the department to which the object has been assigned by the committee for custody. The committee should then enter the estimated value.

(B) The inventory control officer shall establish a data processing control for gifts, bequests and objects of art. Items so designated will be included within the regular equipment inventories of the appropriate departments.

However, items in these categories will be separately coded for access so that differentiation may be derived when making comparisons with purchased equipment and furnishings.

(C) The inventory control officer will affix university asset tags according to standards required by the state of Washington. However, no tags will be affixed to objects of art or other items when such would compromise the quality or decor of the item. In lieu thereof, a photograph will be taken by the inventory control officer. Photographs will be tag-indexed and maintained in the business office inventory files.

(D) Certain gifts, especially certain objects of art, may be grouped by class before photo graphing when this is expeditious in the judgment of the committee. In such situations, i.e., cased collections of small items, a single asset tag number will be assigned. It shall be the responsibility of the committee to furnish the inventory control officer a detailed listing of individual items included within each such consolidated recording.

[PAC: 1/94]

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