Campaign Counting Policy - in the process of being updated

Governing Principles for Campaign Counting

The Campaign for UMass Amherst will be governed by these basic principles for counting campaign gifts:

• Only those gifts and pledges actually received or committed during the specific period of time identified for the campaign will be counted in campaign totals;
• Specific leadership gifts and pledges of $1,000,000 and above from the pre-campaign phase will be included; and
• The value of canceled or unfulfilled pledges will be subtracted from campaign totals when it is determined that they will not be realized.

Acceptable Gifts

The University will make every effort to accommodate and accept all charitable contributions from donors. However, it will not accept gifts that:

• Violate the terms of this policy;
• Are for purposes that do not further the University’s mission;
• Could damage the reputation of the University;
• Are too difficult or expensive to administer;
• Could create unacceptable liability or cause the University to incur future unanticipated expenses or
• Provide a donor with goods or services of equivalent financial value in exchange for said donor’s gift.

If there is any dispute that a gift falls into one of the above categories, the Vice Chancellor for Advancement, in consultation with the Chancellor and the President of the UMAF will make the final decision as to whether the gift will be counted in campaign totals.

Gift Receipts

The Advancement Records & Gift Processing Office will provide a gift receipt to all donors that is prepared in accordance with applicable government requirements.

Gift Designations and Restrictions

The University will accept gifts with specific designations to a particular school, college, unit, or program.

The University will not accept gifts with restrictions requiring that beneficiaries or scholarship recipients be chosen based on race, color, national origin, ancestry, religion, gender, sexual orientation, age, physical or mental disability, or any other characteristic which may, from time to time, be specified in the University’s Equal Opportunity, Affirmative Action, and Non-Discrimination policy. Any potential gifts that include consideration of these factors must be reviewed and approved by the Vice Chancellor for Advancement in consultation with the Office of the General Counsel.

The donor will not be permitted to choose any individual recipient(s) or beneficiary(ies) of their gift. For example, donors cannot choose the holder of an academic chair or professorship, or the individual recipients of a scholarship award.

Whenever possible, any restrictions related to the use or purpose of a gift should be written as “preferences” to allow the University the greatest latitude in ensuring that use.

Unless waived by the Vice Chancellor for Advancement, gift agreements concerning gifts of endowment must include the standard clause regarding frustration of purpose/changed circumstances: If in the judgment of the University and the UMAF, it becomes impossible or impracticable to fulfill the stated purposes of the Fund due to changed circumstances or operation of the law, then the Fund will be used to support the mission of UMass Amherst so as to fulfill as nearly as possible the original purposes of the Fund.

Types of Outright Gifts and Pledges

Cash/Checks/Credit Cards

Gifts made with cash, checks, and credit cards are counted at full value as of the date received by the University.

Virtual Currency

Virtual currency or cryptocurrency is a digital representation of value that functions as a medium of exchange. The UMass Treasury department currently has no policy to accept cryptocurrency directly. It will, however, accept cryptocurrency indirectly through PayPal and other mediums. Therefore, cryptocurrency must be converted to cash prior to being accepted as a gift to the University.

Pledges

Pledges are counted upon receipt of the written pledge, provided that the pledge is in accordance with these guidelines:

• Pledges must be written, must commit to a specific dollar amount and designation, and must be paid according to a fixed time schedule.
• The pledge payment period, regardless of when the pledge is made, may not exceed five years. Therefore, a pledge received even on the last day of the campaign is counted in campaign totals and can be paid over a five-year period. Any request for a pledge to be paid over more than five years must be approved by the Vice Chancellor for Advancement in consultation with the Chancellor and the President of the UMAF.
• Only oral pledges made through an authorized telethon or phone-a-thon, confirmed in writing to the donor immediately following the solicitation period, will be counted in campaign totals.
• Conditional pledges will be counted at face value, provided there is a reasonable expectation that the conditions under which the pledge is made will be met by the University. Any conditional pledge must be preapproved by the Vice Chancellor for Advancement.

Marketable Securities

Marketable securities are counted at the average of the high and low quoted selling prices on the date (called the gift date) the donor relinquished dominion and control of the assets in favor of the University. If there were not any actual trades on the gift date, the fair market value will be computed using the weighted average of the mean of the high and low trading prices on dates in reasonable proximity before and after the gift date. If there were no actual trades in a reasonable number of days before and after the gift date, then the fair market value is computed based on the average of the bid and the ask price on the gift date. Exactly when dominion and control has been relinquished by a donor depends upon the method of delivery of the securities to the University.

Closely Held Stock

Gifts of closely held stock exceeding $10,000 in value are counted at the fair-market value placed on them by a qualified independent appraiser as required by the IRS for valuing gifts of non-publicly traded stock. Gifts of $10,000 or less will be valued at the per-share cash purchase price of the closest transaction. Normally, this transaction will be the redemption of the stock by the corporation.

If no redemption is consummated during the campaign, a gift of closely held stock will be credited to campaign totals at the value determined by a qualified independent appraiser. For a gift of $10,000 or less, when no redemption has occurred during the campaign period, an independent CPA who maintains the books for a closely held corporation is deemed to be qualified to value the stock of the corporation.

Gifts of Property

Gifts of real and personal property that are convertible to cash, or that are of actual value to the University, will be included in campaign totals. All gifts of real estate require prior approval of the Vice Chancellor for Administration & Finance and the Vice Chancellor for Advancement. Gifts of real estate that are subject to mortgages are rarely acceptable, as they can result in financial liability for the University and can cause adverse tax consequences for the donor(s).

All gifts of personal property and gifts in kind require prior approval of the Vice Chancellor for Advancement and the chief executive of the unit receiving the property (e.g., the dean of a college or school).

Gifts of real and personal property that qualify for a charitable deduction are counted at their full fair market value. Gifts of property with fair market values exceeding $5,000 are counted at the values placed on them by qualified independent appraisers as required by the IRS for valuing non-cash charitable contributions. Gifts of $5,000 and under will be counted at the value declared by the donor or the value placed on them by a qualified expert on the faculty or staff of the University. Gifts in kind, such as equipment, shall be counted at their educational discount value, which, for purposes of these standards of counting, shall be deemed to be fair market value. Gifts of software are rarely counted in campaign totals.

Intellectual Property (IP)

A donor’s deduction for a donation of a patent or other intellectual property is its fair market value, minus any gain they would have realized if they had sold the property at its fair market value on the date of the gift. Generally, this means the donor’s deduction is the lesser of the property’s fair market value or its basis. The University will not rely on donors’ valuations. If the University can independently determine a fair market value of the IP at the time of receipt, they will count that value. Gifts of IP for which the University cannot determine a fair market value will be excluded from campaign totals.

Nongovernmental Grants and Contracts

Grant income from private, nongovernmental sources is counted in campaign totals. Contract revenue is excluded (see exception below). The difference between a private grant and contract will be judged on the basis of the intention of the awarding agency and the legal obligation incurred by the University in accepting the award. A grant, like a gift, is bestowed voluntarily and without expectation of any tangible compensation. It is donative in nature. A contract carries an explicit “quid pro quo” relationship between the source and the University. Exception: Activity from private philanthropic foundations may be counted in campaign totals at full face value. The philanthropic nature and mission of these organizations supersede any campus designation of a grant or a contract.

Quid Pro Quo Contributions

For quid pro quo contributions, count only the amount of the contribution that exceeds the value of benefits the donor receives from the University in return for the gift. For example, if a donor gives the University $100 in exchange for an event ticket with a fair market value of $40, the maximum amount to be counted in the campaign is $60. For such contributions, these standards follow the IRS tax rules regarding tax-deductibility of quid pro quo contributions.

Types of Planned Gifts

Charitable Remainder Trusts, Charitable Gift Annuities, Pooled-Income Funds, and Remainder Interest in Property (Deferred Gifts)

Deferred gifts to the University must be irrevocable and verified. Gifts made to establish charitable remainder trusts (including charitable remainder trusts administered outside the University) where the remainder is not subject to change or revocation, charitable gift annuities and contributions to pooled-income funds are credited to campaign totals at face value on the date of the gift. A gift of a remainder interest in a personal residence or farm (also called a Life Estate or Retained Life Estate) is counted at the face (fair market) value of the property on the date of the transfer. Totals are also counted at discounted present value for the CASE Voluntary Support of Education (VSE) survey and internal reporting purposes.

Charitable Lead Trusts

Charitable lead trusts are immediate gifts in trust that pay an income to the organization over a period of time. At the end of the term, the assets of the trust return to the donor or designee. These payments will be counted in campaign totals at face value as received during the campaign period, or as a pledge if the commitment is over multiple years and the amount is known and documented. If the trust is verified as irrevocable, count the face value of all pledge payments regardless of the length of the trust.

Both Charitable Remainder Trusts and Charitable Lead Trusts are also known as Split Interest Trusts.

Life Insurance

Count the insurance company’s settlement amount for an insurance policy whose death benefit is realized during the campaign (whether or not the policy is owned by the University) if no gift amount was counted previously.

Count gifts of whole life insurance policies as a gift only if the donor names the University both owner and irrevocable beneficiary of the policy. (Do not count revocable policies.) The University will adhere to the following standards in counting this gift:

• Count partially or fully paid-up life insurance policies as outright gifts at the cash surrender value as identified in writing by the insurance provider.
• If the policy is new or not fully paid up at the time of gift, count premium payments the donor makes to the insurer or the University (which in turn pays the premium to the insurer) as outright gifts at the full value of the premiums paid. If a donor fails to make a scheduled premium payment and the University pays the premium with no offsetting payment from the individual, that payment becomes an operating expenditure. Do not count that expenditure as a gift. Furthermore, do not count any other increases in cash surrender value as gifts.
• Count realized death benefits as gift income for fundraising purposes only if the University has never previously recorded the policy value or any donor-paid premiums as gift income and if the University has not been paying the premiums. If the values have already been counted, do not count as a gift the difference between the previously counted values and the amount of the insurance company’s settlement upon the death of the donor. This is a gain on the disposition of the University’s assets.
• If the University receives the proceeds of an insurance policy in which it is the beneficiary, but not the owner, count the full amount of the insurance company’s settlement upon the death of the donor as a gift from the deceased individual or policy owner on the date the University receives the proceeds.

Testamentary Pledge Commitments

Testamentary pledges will be counted in the campaign provided they satisfy the following three requirements:

1. Age:
   • A revocable testamentary pledge will be counted in campaign totals at face value when the donor (or donors for a joint gift) will be at least 65 years of age by the end of the campaign (June 30, 2027).
   • Revocable testamentary pledges from donors less than 65 years of age during the term of the campaign will be entered into the database but not counted in campaign totals.
   • Irrevocable bequests will be counted at full face value regardless of the age of the donor or donors.
2. Valuation:
   • The gift commitment must have a specified amount as the stated value.
   • In the case of a split bequest, the percentage of the estate stated in the will or trust will be counted based on a credible estimate of the value of the estate at the time the commitment is made.
3. Documentation:
   • Verification of the gift commitment must be secured in a letter of intent from the donor or
   • a deferred pledge agreement or
   • a copy of the fully executed will or the portion of the will that references the University.

UMass Amherst gift planning officers will investigate the actual circumstances underlying the estate and be conservative in counting such commitments toward campaign totals. If any circumstances make it unlikely that the amount pledged by bequest will be realized by the University, then the commitment will be further adjusted according to specific circumstances or not counted at all.

Any naming recognition offered in consideration of a testamentary pledge must be preapproved by the Vice Chancellor for Advancement in consultation with the Chancellor and President of the UMass Amherst Foundation. For naming recognition to be considered, a testamentary pledge must be irrevocable and legally binding.

Retirement Plan Assets

The University may be named as the beneficiary of Retirement Plan Assets. Testamentary pledges of retirement plan assets will be included in campaign totals provided they satisfy the following three requirements:

1. Age: A revocable testamentary pledge of retirement plan assets will be counted in campaign totals at face value when the donor (or donors for a joint gift) will be at least 65 years of age by the end of the campaign (June 30, 2027). An irrevocable testamentary pledge of retirement plan assets will be counted at full face value regardless of the age of the donor or donors.
2. Valuation:  A credible estimate to the value of the retirement plan account must be furnished at the time the commitment is made.

2. Documentation: Verification of the commitment in the form of a letter must be provided by the donor or the donors’ financial adviser.

Realized Retirement Plan Assets

All gifts of retirement plan assets realized during the defined duration of the campaign will be counted at full face value in campaign totals, so long as no gift amount was counted previously. If an initial pledge was recorded for the gift and the realized value is different from the original pledge value, the University may adjust the pledge to the amount realized.

Exclusions

The following types of funds are excluded from campaign counting totals:

• Gifts or pledges, outright and deferred, that have already been counted in previous campaigns, even if realized during the campaign reporting period;
• Investment earnings on gifts, even if accrued during the campaign-reporting period and even if required within the terms specified by a donor (the only exceptions permitted to this exclusion would be charitable lead trusts and interest accumulations counted in guaranteed investment instruments that mature within the time frame of the campaign, such as zero-coupon bonds);
• Earned income;
• Surplus income transfers from ticket-based operations, except for any amount equal to that permitted as a charitable deduction by the IRS/Revenue Canada;
• Gifts from Donor Advised Funds used to satisfy a personal pledge;
• Contract revenues;
• Student financial aid or tuition payments when the gift is in support of a specific student identified by name;
• Gifts from affiliated foundations and organizations if already counted when received by the foundation or organization;
• Advertising revenue; and
• Government funds.

Exceptions

The Vice Chancellor for Advancement along with the Chancellor and President of the UMass Amherst Foundation will have the authority to make exceptions to the foregoing campaign counting policy for good cause on a case-by-case basis.

General Disclaimer

These guidelines are intended for use in counting gifts in the University’s capital campaign and provide general information and guidance. They should not be interpreted as legal, tax, or financial advice. Further, the guidelines are intended for use by volunteer committees in capital campaigns and development staff in counting campaign gift totals. Amounts may differ from the values of the charitable deduction taken by benefactors.

Providing legal or financial advice

No employee of the University or the UMass Amherst Foundation shall provide any legal advice or financial planning services for any donor. Prospective donors are encouraged to seek the assistance of their own legal and financial advisers in matters relating to their gifts and the resulting tax and estate planning consequences. Further, to avoid conflicts of interest or the appearance of improper influence, the University shall not pay legal or other fees for the preparation of a donor’s will or living trust that names UMass Amherst as a beneficiary.