General Statement

All philanthropic giving for the University will be given through the Foundation. All Foundation programs and activity will be toward the exclusive benefit and advancement of the mission of the University.

Overview
The purpose of Guidelines for Gift Acceptance for the LSSU Foundation is to provide prospective givers, donors, foundation officers and board members, and related university staff a guide to accept charitable donations in many forms for the mission and work of Lake Superior State University.

A gift is generally something of value given by someone to another person, group or organization without any expectation of return.

Charitable giving in America represents gifts to a variety of people, groups, or organizations in the range of $150 billion last year.

Because the Government of the United States encourages this type of activity, it affords deductions, credits, carry-overs, and other reduction of tax burden to those people and organizations both public and private who give to government recognized charities.

These guidelines will take a common sense approach in accepting gifts to the Foundation for LSSU.

General Operating Parameters

These guidelines will not be in conflict with:

  • Bylaws of the Lake Superior State University Foundation, June 15, 2001, hereafter “Bylaws”.
  • Agreement between Lake Superior State University and Lake Superior State University Foundation, Inc., April 18, 1997, hereafter “Agreement”. Current titles and usage are quoted here and may be different than actual agreement. For example, the Board of Regents are now known as the Board of Trustees.
  • The laws and revised statues of the State of Michigan
  • The laws and regulations of the United States of American particularly the rules and regulations governed by the Internal Revenue Service, hereafter “IRS”
  • Policies of Lake Superior State University
  • Policies of Lake Superior State University Board of Trustees
  • Policies of Lake Superior State University Foundation

Lake Superior State University in this document will be referred to as the “University”.

Lake Superior State University Foundation in this document will be referred to as the “Foundation”.

“Parties” refers both to the Lake Superior State University Foundation and Lake Superior State University. Corporate Address & Phone Number
The corporate address of this Foundation is:

The LSSU Foundation
801 N. Campus Court
Sault Ste. Marie, MI 49783

906.635.2665
[email protected]

Processing Gifts & Transfer of Gifts

Agreement 2.3.11 – “The Foundation will develop written procedures for the processing of the acceptance of gifts to the Foundation and the Parties will mutually agree on the procedure for the transfer of such gifts to the University. The Foundation will make every effort to expedite the transfer of gifts to the University.”

DISCOURAGING UNDESIRABLE GIFTS

Agreement 2.3.12 – “The Foundation recognizing the public responsibility of the University shall not accept any gift which is “undesirable” or contrary to the law.”

Definitions
What is a gift or a contribution?

A gift is a voluntary charitable contribution. If the donor receives goods or services in exchange for the charitable contribution, the deduction is the amount of the contribution minus the value of the goods or services that the donor received. In circumstances where a gift is part gift and part purchase, only the gift portion is deductible.

“A contribution is an unconditional transfer of cash or other assets to an entity or a settlement or cancellation of its liabilities in a voluntary nonreciprocal transfer by another entity acting other than as an owner. Other assets include securities, land, buildings, use of facilities or utilities, materials and supplies, intangible assets, services, and the unconditional promise to give those items in the future.” – Financial Accounting Standards No. 116:Accounting for Contributions Received and Contributions Made, Financial Accounting Standards Board, p. 2 #5
What is a charitable organization?

“’Charitable organization’ means a benevolent, educational, philanthropic, humane, patriotic, or eleemosynary organization of persons which solicits or obtains contributions solicited from the public for charitable purposes. …”

– Michigan Compiled Laws Section 400.272. Section 2

There is a glossary of general definitions of types of planned gifts at the end of this policy.

Authorization for Establishing Gift Agreements

The Executive Director of the Foundation or his/her designees shall be authorized to negotiate with any potential donor charitable remainder trusts, charitable lead trusts, pooled income fund gifts, retained life estates, charitable gift annuities, deferred gift annuities, and other planned gifts or gift agreements that follow the basic guidelines approved herein.

“As appropriate, the terms of any designated or endowed fund should include language to permit the Foundation Board or the University when the gift is transferred, to modify a use of such funds if conditions warrant in the future. “Such actions may be authorized by the donor by including the following clause I the transfer of assets while living or by bequest:

“If, it is determined by the Lake Superior State University Foundation, Inc. Board of Directors or its successor, or the Board of Trustees of the Lake Superior State University upon transfer of the gift that all or part of the earnings of the fund (or the fund itself) cannot be usefully applied to the purpose designated (or in the manner requested), the Foundation Board or the Board of Trustees may use the same for any purpose within its corporate powers to decide or any other purpose which, in its opinion, will most nearly accomplish my purposes, wishes and intent.”

Agreement 2.3.11

Current Gifts Generally Accepted by the Foundation

  1. Cash by any means
  2. Securities
  3. Bonds
  4. Real Estate as noted by guidelines
  5. Undivided interest of real and personal property
  6. Charitable Remainder Unitrusts
  7. Charitable Remainder Annuity Trusts
  8. Retirement Benefit Plans by beneficiary designation
  9. Bequest by Wills
  10. Gifts of Life Insurance
  11. Charitable Gift Annuities
  12. Remainder Interest in Donor’s Personal Residence
  13. Charitable Lead Trusts
  14. Grantor Lead Trusts
  15. Gifts in Kind

Minimum Level Gift Acceptance

All amounts stated in United States dollars:

  • Cash by any means: Any amount
  • Securities: Any amount
  • Bonds: Any amount
  • Real Estate: $25,000
  • Undivided interest of real and personal property: $10,000
  • Charitable Remainder Unitrusts: $50,000
  • Charitable Remainder Annuity Trusts: $50,000
  • Retirement Benefit Plans by beneficiary designation: Any amount
  • Bequest by Wills: Any amount
  • Gifts of Life Insurance: $10,000 face value. Foundation prefers to own policy.
  • Charitable Gift Annuities: Either current or deferred, $10,000
  • Remainder Interest in Donor’s Personal Residence: 100%. No shared interest.
  • Charitable Lead Trusts: $50,000
  • Grantor Lead Trusts: $50,000
  • Gifts in Kind as noted by guidelines

As with any thing in life, these recommended minimum levels are a starting point for discussion of gifting by donors. Protection of Donor’s Interests
The task of all development/foundation personnel shall be to inform, serve, guide or otherwise assist the donor in fulfilling his/her philanthropic wishes.

All personnel employed by the University and/or Foundation to administer or promote planned gifts shall be paid a salary or hourly wage, and shall not receive commission which might give such personnel an undesired personal interest in any agreement.

With any gift agreement, all donors will be required to sign a statement of disclosure:

  • that the University or the Foundation have not used undue influence in developing of any gift,
  • that any information provided to the donor is educational in nature,
  • that the donor has consulted with their legal and financial advisors,
  • that any gift has taken the donors future financial needs into account,
  • that the donor is highly encouraged to notify family members and other interested parties as to the scope and intent of the gift,
  • that the Foundation and the University may use electronic, video, or other recording means to validate donor intent.It is entirely left to the donor to decide whether a gift or gift plan is to remain anonymous or the University and/or the Foundation may use the individual’s name and gift amount or plan in its media (whatever form) to promote other philanthropic giving to the University through the Foundation.
      CONFIDENTIAL INFORMATION

All information concerning donors or prospective donors, including their names, the names of their beneficiaries, the amounts of gifts, size of estate, etc., shall be kept strictly confidential by the Foundation and the University and its authorized personnel unless permission is obtained from the donor, and authorization obtained from the Executive Director of Development and Planned Giving or the Vice President of Advancement to release such information.

Employees of the University or the Foundation who violate this policy shall be subject to appropriate disciplinary action.

Educational Information

In order to fulfill its educational mission, the Foundation will provide to the public and the constituencies of the University and the Foundation educational information concerning philanthropy and estate giving. All such information will display a disclaimer noting that information provided is educational and people should seek professional counsel when dealing with legal and financial matters.The Use of Legal and Financial Counsel
The LSSU Foundation, Inc. shall seek the advice of its legal and other counsel in all matters pertaining to its planned giving program and shall execute no agreement, contract, trust or other legal document without the advice of its legal counsel.

Further, all prospective donors shall be advised, and in all cases urged, to seek the counsel of their attorney and financial advisors in any and all aspects of their proposed gift, whether by bequest, trust agreement, contract, or other. They shall particularly be advised to consult their attorney and financial advisors on all matters relating to the tax planning of a gift and matters relating to estate planning. Conflict of Interest
In all matters involving donors or prospective donors, the interest of the donor shall come before that of The LSSU Foundation, Inc. No program, trust, contract or commitment shall be urged upon any donor or prospective donor who would benefit the Foundation at the expense of the donor’s interest. No agreement shall be made between the Foundation and any agency, person, company or organization on any matter whether investments, management or otherwise which would knowingly jeopardize the donor’s interest.

Origination Fees and Maintenance Costs

Any origination fees and maintenance costs for any gift or trust will be assumed by the donor or trust. The cost of any appraisal, study, accounting or legal fees necessary to establish the value or acceptance or tax deductibility of the gift will be assumed by the donor.

The President of LSSU and/or the Executive Committee of the Foundation may absorb theses costs at their discretion.

Stock Gifts

Gifts of stocks to the Foundation are handled through our stockbroker.

Generally, stocks are not held and are immediately sold upon receipt regardless of the market.

Our current broker information:

William J. McLeod
Edward Jones & Company
939 E Portage Ave
Sault Ste. Marie, MI 49783
906-632-4985 or toll free 877-632-4985
877-222-4065 (fax)
The DTC number is: 0057
Our account number is: 498-03736-1-9

The Foundation will give to donors sample stock power transfer forms and letters of transfer with appropriate information. Donors will be encouraged to send copies of any forms and letters to the Foundation for proper acknowledgement.

Current IRS regulation states that the donor may declare the value of the stock based on the average of the high and the low value on the day the Foundation takes ownership of the stock. Donors need to be aware of this when transferring stock. Stock transfer is the responsibility of the donor and their broker and not the Foundation or the University.

Scholarships

The solicitation and recognition for scholarships will be coordinated by the Foundation.

Each scholarship must have a signed agreement between the Foundation and the donor. This agreement will include:

  • Name of the scholarship
  • Purpose of the scholarship
  • Donor
  • Amount of initial donation
  • Custody of funds
  • Eligibility
  • A statement stating that recipients will be chosen by the LSSU Financial Aid Committee based on scholarship selection criteria
  • A statement stating that every effort will be made to find students who meet the criteria of the scholarship and if this cannot be met then the LSSU Financial Aid Committee will be given the authority to award the scholarship based on need or merit as they determine.
  • Recognition
  • A statement encouraging the continual giving and enhancement of the scholarship.
  • Permission to use name or photo for publicity purposes.

It is the intent of the Foundation and the University to award every scholarship every year. The Foundation will develop scholarship agreements that promote inclusively and ease of execution of donor wishes.

All scholarship gift agreements must be consistent with stated Foundation policies:

“If, it is determined by the Lake Superior State University Foundation, Inc. Board of Directors or its successor, or the Board of Trustees of the Lake Superior State University upon transfer of the gift that all or part of the earnings of the fund (or the fund itself) cannot be usefully applied to the purpose designated (or in the manner requested), the Foundation Board or the Board of Trustees may use the same for any purpose within its corporate powers to decide or any other purpose which, in its opinion, will most nearly accomplish my purposes, wishes and intent.” – Agreement 2.3.11

All scholarship gift agreements will have a statement of disclosure.

Board Policy

This policy will delineate the roles of the LSSU Foundation and LSSU Financial Aid and Business Operations.

In general, the LSSU Foundation will:

  • secure, solicit, and negotiate scholarship agreements
  • seek to establish scholarships and awards criteria that streamline the stewardship and awarding of available funds
  • invest and oversee the funds
  • coordinate appropriate recognition for the gift and the benefactors according to established policies and procedures outlined in the Foundation’s Gift Acceptance Policy
  • provide continuing stewardship
  • track and file appropriate reports to the IRS and other entities as necessary.

In general, Financial Aid Office will:

  • determine need, through the Financial Aid Committee and select the recipients based on criteria
  • the Financial Aid Office with authority of the Financial Aid Committee also is responsible for the amount of award and assuring that there are sufficient funds to cover any offered awards
  • notify the recipient(s) of award
  • monitor acceptance of the award
  • maintain compliance with state and federal regulations as it pertains with financial aid
  • will meet the criteria as established by the donor

Additional notes:

The University strives to award all scholarships every year. Scholarship agreements, whenever possible, will provide flexibility and alternatives in award criteria, with the written permission of the donor.

The Financial Aid Committee will follow donor criteria to find a student for a scholarship award. If the Committee can not find a candidate to meet the criteria, the Committee will seek to make a scholarship award as close to scholarship criteria and/or donor intent as possible. The Financial Aid Office will notify the LSSU Foundation of the award selection. The LSSU Foundation will notify the donor as to the determination of the award.

The LSSU Foundation in consultation with the LSSU Financial Aid Office and the LSSU Business Operations will establish a deadline for receipt of all donations for annual scholarships. Generally, all donations for annual scholarships will be received by April 1st of each year. These scholarships will be eligible to be awarded in the fall of the following academic year. This deadline includes all scholarships to be awarded during the spring semester of the academic year. (For example, annual scholarships to be awarded during the 2004/2005 academic year must have donations at the Foundation no later than April 1, 2004.) The LSSU Foundation will notify donors of annual scholarships in writing the level of the award and the date of awarding.

The LSSU Business Operations in consultation with the LSSU Foundation will determine the amount to be awarded from endowed scholarships interest and earnings no later than April 1st for the following academic year.

The LSSU Foundation will notify living donors of their endowed scholarship level to be awarded in writing. Donors will reserve the right of supplementing their endowed scholarship awards levels with new donations within 14 days of the writing of the notice of scholarship level.

The LSSU Foundation will solicit both annual and endowed scholarships. The LSSU Foundation will solicit scholarships at the following levels:

    1. Minimum award near twenty-five percent (25%) of the cost of tuition.
    2. Second level award near fifty percent (50%) of the cost of tuition
    3. Third level award near one hundred percent (100%) of the cost of tuition.
    4. Fourth level award near the full cost of tuition, and room and board costs.
    5. Endowed scholarships will be determined at each of the four levels.

2002 – 2003 levels adopted by Foundation Board:

Size of Scholarships Annual Endowed
Level 1: 25% of tuition $1,200 $25,000
Level 2: 50% of tuition $2,500 $50,000
Level 3: 100% of tuition $5,000 $100,000
Level 4: Tuition, Room & Board $10,000 $250,000

The amount of scholarship awards will be reviewed every three years following the adoption of this policy. (Next Review: 2005/2006)

The donor will determine ultimate levels of scholarships. As with any gift, the LSSU Foundation or the University reserves the right to decline a gift for any reason.

Donors will be encouraged to give an initial gift to fund the scholarship and through continued regular gifts and planned gifts seek to endow the scholarship. Scholarships must endeavor to keep pace with inflation and the rising costs of higher education.

2/08/2003, approved by LSSU Foundation Board
5/18/2004, revision by Foundation staff to be consistent with University practice

Noncash Charitable Contributions

A gift-in-kind is a voluntary contribution of property other than cash and marketable securities. Gifts-in-kind may include items such as supplies, equipment, books or artwork. A gift-in-kind contribution will be accepted by the LSSU Foundation only if it can be used to advance the mission of Lake Superior State University.

For Faculty and Staff:

Your first step is to contact the director of Risk Management to evaluate if LSSU can accept the gift for educational purposes.

Secondly, if the donor wants to take a Charitable Contribution for their gift-in-kind, contact the LSSU Foundation to verify that the donor has the proper documentation and is eligible to receive a tax deduction as allowed by IRS guidelines.

Procedure

In order to process the gift-in-kind donation, a Gift-in-Kind Form must be completed.  A University representative and a Foundation representative must sign the paperwork or it is not officially accepted by the University. If not formally signed, the donor will not receive the proper gift receipt and acknowledgment for tax purposes.

The LSSU Foundation requires a donor correspondence or description of the gift-in-kind with an estimated fair market value determined by the donor on all gifts-in-kind. An appraisal is required for gifts valued at $5,000 or more and a completed IRS Form 8283.

IRS Publication 561 is designed to help donors and appraisers determine the value of property that is given to qualified organizations. It also explains what kind of information you must have to support the charitable contribution the donor claims in his or her return.

IRS Publication 561: Determining the Value of Donated Property

The donor must have the required paperwork completed within 120 days of the University’s receipt of the gift in order to receive proper credit regardless when they file their taxes.

Gifts of $1 to $4,999: The donor provides a written description and a fair market value of the gift. The value may be based on documentation (i.e sales receipt or valuation based on similar items listed on reputable sites – i.e. Ebay, Amazon) to verify value.

Gifts of more than $5,000: The donor must provide the LSSU Foundation with an appraisal from an independent and qualified source. It is the donor’s responsibility to complete the required forms and provide any related appraisal documentation or costs in order to receive the proper deduction.

The LSSU Foundation will submit Form 8282 to report information to the IRS and donors about dispositions of certain charitable deduction property made within three years after the donor contributed the property. IRS Form 8282 and Instructions

When considering a gift-in-kind donation, please contact the LSSU Foundation and tax advisor before donating the in-kind item.

For additional information contact:

LSSU Foundation Director of Constituent Relations at (906) 635-2665 OR LSSU Director of Risk Management at (906) 635-2626

Procedure for Receipt of Gifts of Real Property

Upon notification of a gift of real property, the Foundation will process and steward the potential gift to the point where the Foundation Board votes to recommend acceptance of the gift of real property to the LSSU Board of Trustees.

Upon acceptance of a gift of real property by the LSSU Board of Trustees, the LSSU Foundation will receipt and immediately transfer the gift of real property to LSSU.

Bylaws 2.3.2a

GUIDELINES FOR ACCEPTING GIFTS OF LAND

When a parcel of land is offered to the University, a donor will be asked to complete the Trade Property Inquiry Form. (Sample in Appendix A) Upon receipt of the form, the Executive Director of Development will notify the Director of Purchasing and Risk Management about the gift. Then the Executive Director will assemble a site inspection team. The site inspection team consists of appropriate University personnel or their professional representatives. The team goes to the site and inspects and reviews it for all potential known uses and constraints: Timber, Educational, Recreational, Mineral, Scenic, Wildlife, Habitat, Development, Agricultural, Public Open Space, Archeological, Historical, Wet Lands, Research, Aquaculture, Attitudes (use) of Community and Abutters.

Once the site visit has been completed the evaluation team submits a report to the president. This process takes about two weeks, depending upon the location of the property.

The site inspectors will evaluate the property for the following considerations:

  1. Lands within a 30-minute driving distance will be reviewed for:
    • “White goods,” evidence of environmental hazards and toxic materials;
    • Structures requiring extensive maintenance associated with the gift;
    • For its ability to be managed in the short and the long term;
    • Allowable management costs;
    • Access for “outdoor laboratory work”;
    • Ability to provide real cash for University use through forest management;
    • Tangible benefits for research, education and public service, e.g., animal habitat, rare or unusual flora and fauna;
    • Varied forest and land types – a “microcosm” of forest and land types of the region – to meet varied educational and research needs;
    • Allowable transfer of data and information to the public and students through field trips and laboratories;
    • The ability to conduct and maintain “long-term” research; and
    • Sufficient size to be practical.
  2. Lands greater than 30-minutes drive will be evaluated for the above plus:
    • Ability to provide stumpage sales that provide a reasonable opportunity for return after cost of consultant’s management fee
  3. Lands with serious reservations, restrictions or unusual circumstances will be evaluated for their ability to:
    • Be managed for the value that the land can produce which includes unique opportunities for teaching, scientific research and public services.

All donors will be asked to provide the following before a gift of property is accepted:

  1. The conveyance preferable should be in fee simple absolute; however, in certain instances restrictions and conditions or other encumbrances may be considered but should be kept as flexible as possible. Special attention and consideration should be given to the impact on property value of any restrictions or conditions.
  2. The federal, state, and local taxes must be paid and current.
  3. An existing survey by a registered land surveyor with boundary lines established on the ground. If one does not exist, the donor will be asked to provide one before the property can be accepted.
  4. There should be a qualified professional appraisal available to the University.
  5. Permanent legal vehicle access to the property should be provided. Other access may be acceptable in unusual situations.

ADDITIONAL CONSIDERATIONS

The Foundation will not accept a gift of forested or undeveloped land that imposes restrictions that the property be:

  1. Maintained in an “as is” condition;
  2. Retained for preservation purposes only;
  3. Co-owned with another non-profit institution.

The Foundation will not accept property if its distribution to the University will have a negative affect upon the tax base where the property is located.

In establishing these guidelines, the Foundation recognizes that there will be unusual circumstances or situations that may require the consideration of property that does not fit within the framework contained in this report. In such cases, the property in question will be evaluated on its own merits.

Recognition

It is the Foundation sole responsibility to recognize and acknowledge all philanthropic giving to the Foundation and the University.

“Major Gifts to honor, memorialize, or otherwise recognize individuals shall be subject to the board of Trustees approval in advance of receipt:

  1. Naming of a building for a donor requires the prior approval of the Board of Trustees. The naming of a building having major renovations should follow the same policy as new construction. If a building is named already, the use of a hyphenated name may be considered.
  2. The naming of academic programs requires prior approval of the Board of Trustees.” Agreement 2.3.13

As a matter of course, any recognition program will be guided by:

  • the donor needing to be recognized appropriately for their giving
  • levels of giving are measured and consistent throughout the University
  • current United States Internal Revenue Service levels of quid pro quo or “the 2% rule”
  • a planned approach which integrates current, scholarship, capital, major, estate, and cumulative life time gifts and encourages every increasing giving.
  • A planned approach in the recognition of in-kind gifts and services.
  • Any recognition plans will have the approval of the Foundation Executive Committee prior to implementation. These plans will be reviewed annually and as needed. This recognition also includes any capital campaigns.

Recognition Societies and Program Levels

Lifetime Giving Societies:
Recognition of total lifetime giving

  • Great Lake Society: $1,000,000 or more
  • Lake Superior Society: $500,000 to next level
  • Lake Huron Society: $250,000 to next level
  • Lake Michigan Society: $100,000 to next level
  • Lake Erie Society: $50,000 to next level
  • Lake Ontario Society: $10,000 to next level

Names Scholarships:
Under a new foundation policy dated February 8, 2003, annual and endowed scholarships will be based on a portion of tuition, fees and other costs. These levels will be reviewed every 3 years.

Size of Scholarships Annual Endowed
Level 1: 25% of tuition $1,200 $25,000
Level 2: 50% of tuition $2,400 $50,000
Level 3: 100% of tuition $4,800 $100,000
Level 4: Tuition, Room & Board $10,500 $225,000

Memorials:
Any level until amount reaches Named Endowment

Scholarship may also be named when donor uses the Endowment Builder ™ in order to create endowed scholarships.

Athletic Booster:

Laker Club:

  • Laker Gold – $1,200
  • Laker Blue – $1,000
  • Coach Level – $500
  • Varsity Level – $100

Other recognition levels for athletic giving are currently under review.

Gift in Kind:
Gift in Kind gifts are recognized on a case-by-case bases as determined by the director of constituent relations.

LSSU Legacy Society:
The Lake Superior State University Legacy Society is established to honor and recognize those persons and entities that make a planned or estate gift to The Lake Superior State University Foundation, Inc. of Lake Superior State University. Membership is obtained upon completion of the LSSU Legacy Society membership application notifying LSSU of the contribution, bequest or other planned gift.

Professorships:

  • Endowed University Chair – $1.5 million
  • Endowed Academic Program – $3.0 million (inc. endowed chair and program funding)

All naming opportunities are at the discretion of the director of constituent relations and may be approved by the Foundation Executive Committee.
Any questions concerning recognition should be directed to Sharon Dorrity ’87, LSSU Foundation director of constituent relations, 906-635-2665 or [email protected].

Appendix A: Trade Property Inquiry Form

Appendix B: Sample Disclosure Statement

Appendix C: Sample Scholarship Agreement

Appendix D: LSSU Legacy Society Membership Form

Appendix E: Sample Stock Power Transfer Letter