EXT-010: Employee Charitable Contributions to the UniversityDate: 11/20/2015 Status: Final
The University encourages its faculty and staff to contribute tax deductible gifts to the institution in support of its mission. This policy sets forth the general guidelines for faculty and staff to make tax deductible donations to the University.
Pledges or outright contributions received from private sources for which no goods or services are expected, implied or forthcoming to the donor, and in which no proprietary interests are to be retained by the donor. (Refers exclusively to private gifts, even though such gifts may be termed “grants” by corporations and foundations. For more information, see FIN-001, Determining if an Award is a Gift or Sponsored Project.)
The University allows faculty and staff flexibility in designating their gifts for schools, departments, programs and projects of their choice. However, to preserve the tax deductibility of their charitable contribution to the University, the Internal Revenue Service (IRS) requires that certain guidelines be met. Consequently, the University has adopted the following to preserve the tax deductibility of faculty and staff contributions to the University.
The University can accept designated gifts from faculty and staff only in circumstances in which there is no direct or indirect personal benefit to them from the University’s disbursement of these funds. In circumstances where faculty and staff designate gifts for use in their departments or for projects over which they have control, such funds can only be spent for purposes consistent with the University’s mission of teaching, research, public service, and healthcare. Faculty and staff who make contributions cannot approve expenditures from the accounts that are credited with their personal gifts. The University will retain ultimate discretion over the use of the funds contributed, and its fiscal policies will govern disbursement of these funds.
- Prior to making a donation, that may benefit the employee donor, the employee must complete an Employee Donor Agreement Statement detailing the clear connection of these expenditures to the faculty or staff member’s services to the University. The dean or department head must also affirm that such expenditures are to be used to support the University’s mission. This agreement should be retained by the department business manager, and a copy sent with the donation.
For those funds that are maintained by a University-Related Foundation on behalf of a University faculty or staff member, the Foundation should verify that the owner of the funds and those contributing to it are not controlling the disposition of the funds.
A subsequent IRS examination could result in disallowance of the employee’s charitable contribution deduction for the gift if funds are not used in a manner consistent with the above. The employee/donor should consult with a personal tax advisor as to whether his or her gift is considered a tax-deductible contribution.