EXT-010: Employee Charitable Contributions to the University
Academic Division, the Medical Center, the College at Wise, and University-Associated Organizations.
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, outright contributions received from private sources, or activities supported by an external party (i.e., donor) in exchange 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.
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. Further, the University can accept designated gifts from organizations or entities where a faculty or staff member is an officer, primary contributor, or other insider, in circumstances in which there is no direct or indirect personal benefit to such faculty or staff member from the University’s disbursement of these funds. In circumstances where there is a direct or indirect personal benefit from such a gift, acceptance of the gift shall be evaluated on a case-by-case basis. 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 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 statement should be retained by the department business manager and a copy sent with the donation.
For those funds that are maintained by a University-Associated Organization (UAO) on behalf of a University faculty or staff member, the UAO 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 their gift is considered a tax-deductible contribution.
Questions about this policy should be directed to the Office of Gift Accounting.