FIN-015: Endowment and Capital Gift Agreements
Academic Division, the Medical Center, the College at Wise, and University-Associated Organizations.
The University uses standardized gift agreements for (a) commitments of $100,000.00 or more, (b) named endowment gifts at any level, and (c) capital gifts at levels that include naming rights so that gift terms, conditions, obligations, and restrictions are fully and consistently identified, described, evaluated, and appropriately authorized.
- Capital Construction Gifts:Fully expendable funds intended by a donor to finance building construction and/or renovation of capital facilities.
- Endowment:A gift of money or income-producing property given for a specific purpose, such as research or scholarships; it can also be unrestricted for discretionary use. Generally, the endowed asset is kept intact and only the income generated by it is spent. Endowment assets may be nonexpendable, expendable for donor-specified purposes, or unrestricted with regards to spending.
All gift commitments of $100,000 or more, all named endowment gifts at any level, and all capital gifts that include naming rights must be memorialized in signed agreements, closely modeled after the template gift agreements noted below, and authorized by designated University and University-Associated Organization (UAO) officers. Gift terms may not be negotiated by any person on behalf of the University or a UAO if that person has a conflict of interest. These requirements are dealt with more specifically in the sections below.
Signed Agreements:
All gift commitments of $100,000 or more, all named endowment gifts at any level, and all capital gifts that include naming rights must be memorialized in written, signed gift agreements setting forth all terms, conditions and obligations as noted in the template below. Gifts (including pledges) contingent upon a future event or undertaking (such as challenge grants or matching gifts) or upon the University’s performance or satisfaction of a condition or objective desired by a donor must also be memorialized in a written and signed agreement. This policy requires that gift terms, conditions, obligations, and restrictions are fully identified, described, evaluated, and appropriately authorized. Agreements may be customized to reflect specific understandings and gift objectives. The Office of the Vice President for Advancement should be consulted on material changes in the agreement's terms early in the discussions with the donor.For endowment gifts, there are there are minimum funding levels required by University policy EXT-009: Establishment of Funds from Gifts which development officers should consult. Where state-matching is a component of the gift agreement, the gift must be administered by the University, unless an exception is approved by the University’s Executive Vice-President and Chief Operating Officer authorizing a UAO to administer a gift with a state-matching component.
For capital construction gifts, all University capital projects must be approved by its Board of Visitors (and the State where applicable) before commencing construction. Because the University will be seeking approvals and executing contracts in reliance on the gift, the pledge must be binding or fully performed to the University’s satisfaction. As a general rule, pledge periods should not exceed five years. Any naming rights desired by a donor with respect to University facilities or programs must also be duly approved by the University. Development officers should be familiar with University policy EXT-004: Naming Policies for the University of Virginia and project authorizations.
NOTE: A multi-year pledge will receive gift recognition based on the face value of the pledge. However, for financing purposes, the capital budget for a construction project will include only the present value of the multi-year pledge, discounted to the date when costs are incurred. Bridge financing may be required, depending on the timing of cash receipts and disbursements.
Authorization Required:
Only designated University and UAO officers authorized to sign gift agreements may do so on behalf of their organizations. No person purporting to act for the University or a UAO may commit either organization to any gift agreement, term, or condition without proper authorization. When in doubt, development officers must consult with their superiors and make no commitment to a donor or prospect without proper authorization.The following signatures are required in accordance with the nature of such party’s relationship to the agreement:
- Donor(s)
- Executive Vice President and Chief Operating Officer for endowment gifts and capital gifts; Designated Associate Vice Presidents for Development for other types of gifts
- Dean of the School (or Director of the program) to which the gift is designated
- Where a Foundation is also accepting the gift, the Foundation's Executive Director or equivalent position
Conflict of Interests:
Gift terms may not be negotiated by anyone on behalf of the University or a UAO if that person (or anyone in his or her family) has any existing or foreseeable financial dealing or personal business with the prospective donor. Such circumstances or any other situation that may reasonably be perceived as conflicting must be promptly reported to appropriate supervisors/managers, who are responsible for overseeing the integrity of negotiations and transactions. Under no circumstances may any gift agreement provide any employee of the University with any personal benefit unless approved in writing by the University’s President or Vice-President in charge of the affected department or activity.Gift Agreements should identify or clarify the following matters:
- Identification of the donor(s) and amount of the gift (note: the estimated amount of expectancies is generally not included in gift agreements); including payment schedule if the gift will not be paid in full at the time of executing the gift agreement; and description of any condition or contingency to payment.
- Clarification on how the gift will be invested and distributed, including whether the funds are restricted to a specific purpose(s).
- For naming rights with respect to University facilities, programs, or other operations, the gift should be made subject to University policy EXT-004 and the specific name desired by a donor identified, if known.
- Clarification on whether additions to an endowment fund can be made by others and if the gift will be predicated on any challenge or matching requirement.
- Detail relative to the percentage of the gift (if any) to be designated to the appropriate dean's/director's discretionary fund.
- Whether a pledged sum is intended to be binding on the donor and enforceable against the donor’s estate.
- How unexpended income will be handled.
- How the agreement may be amended; Options in the event of inadequate funding to support the stated purpose.
- Options in the event of inadequate funding to support the stated purpose.
- In the case of long-term endowment gifts with a donor deceased or unavailable, clarification on authority of the Board of Visitors or other applicable authority to approve a closely-related purpose if the original purpose becomes obsolete or precluded because of changes in the law or other good cause (often outlined in the “Future Changed Circumstances” paragraph).
- Authorized signatures of all parties. Where someone signs on behalf of the donor or is making a corporate gift, verification that the person signing is authorized to commit the donor or corporation. Legal counsel should be consulted when in doubt or when a limited partnership or other legal entity may be making the gift.
Compliance with Policy:
Failure to comply with the requirements of this policy may compromise the University’s fundraising effort and donor relations and may result in disciplinary action up to and including termination or expulsion in accordance with relevant University policies.Direct questions about this policy to the Office of University Advancement.
- School/department/unit officers will draft a gift agreement using the template gift agreement noted below.
- Draft gift agreements are then sent to the office of the Vice President for Advancement (the VP). The VP’s office will review the draft agreement to verify that all relevant information is included and suggest changes if needed. As necessary, the VP’s office will work with the University and with the school/department/unit officer to properly reconcile and document specific needs of the University and the wishes of the donor. If changes are required, the VP’s office will send the agreement draft back to the school/department/unit officer for revision.
- Once University internal reviews are completed, a draft agreement will be shared with the donor. If changes are requested, the school/department/unit officer will share with the VP’s office, where all suggested changes will be reviewed for accuracy.
- Once finalized, the VP’s office will initiate the signature process.
- DocuSign (preferred):
DocuSign is the preferred option for gathering signatures. The school/department/unit or UAO officer will provide the appropriate email address for the Donor and the coordinator from the Office of the VP for Advancement will upload the final document in DocuSign. The school/department/unit or UAO officer should alert the Donor and provide instructions before the signature request arrives in the Donor’s inbox. - “Wet Ink” Signatures:
- The coordinator from the Office of the VP for Advancement communicates University approvals and sends the final agreement document to the school/department/unit or UAO.
- The school/department/unit or UAO officer prints originals on bond (two for Rector & Visitor held agreements three for funds to be held at a UAO), secures the dean’s or director’s signature on all copies, and informs the coordinator from the office of the VP for Advancement that the agreement is ready for the Executive Vice President and Chief Operating Officer’s (EVP/COO) signature.
- The coordinator from the Office of the VP for Advancement submits the agreement to the EVP/COO’s office for signature, along with University approvals.
- The signed originals will be returned to the Office of the VP for Advancement, which will notify the school/department/unit or UAO officer for pick-up.
- The school/department/unit or UAO officer will then obtain the remaining signatures.
- The school/department/unit or UAO officer will deliver one signed original to the donor once all signatures are obtained.
- One signed original for the University should be returned by the school/department/unit or UAO officer to the Office of the Vice President for Advancement (do NOT use messenger mail) for storage in the fireproof safe. Scanned copies of the signed original will be scanned and distributed to: University Advancement Services, Gift Accounting; Central files, to be included in the donor’s file; and Donor Relations for stewardship (for Rector & Visitor held agreements). The UAO will keep one signed original of UAO-held agreements.
- DocuSign (preferred):
The standard gift agreement template for gifts covered by this policy can be found at: Gift Agreements.
These templates include mandatory language and elements but can be customized as appropriate when special circumstances warrant. Consult the Vice President for Advancement for any complex or unusual term(s) or condition(s).
Added references to EXT-004 & EXT-009, updated offices and titles, added signature process in Procedures 5/19/25; University-Related Foundation changed to UAO 5/10/22; Added Compliance section 7/19/21; Updated 3/18/09; 10/20/2008.