Board of Visitors minutes :: June 2, 1979 :: University of Virginia Library

The following Policy Statement, approved by the Board of Visitors on June 2, 1979, has been prepared for the use and guidance of persons who are concerned with the solicitation and acceptance of gifts from private sources. This statement is in part a codification of previous understandings. Any earlier regulations in conflict with this Policy Statement have been rescinded and any exceptions or variations can be made only with the approval of the President and the Rector and Visitors.

For the purposes of this Policy Statement the term "gifts" refers exclusively to private gifts (even though such gifts are usually called "grants" by corporations and foundations). These gifts are outright contributions received from private sources in which no goods or services are expected, implied or forthcoming for the donor and in which no proprietary interests are to be retained by the donor.

The Office of University Development is responsible for maintaining and increasing strong private financial support for the University. It is staffed to advise and assist schools, departments, or University-related foundations in order to improve their success in securing greater amounts of private support through utilization of its services. The Vice President for Development and his staff are also available to consult with prospective donors or their representatives concerning gifts or bequests.

The Development Office is the general clearing house for all fund-raising activities throughout the University. It shall function as adviser to the President on matters relating to the solicitation and acceptance of private funds, and shall provide the President with information concerning prospects for major gifts from private sources. Since many alumni and friends, corporations and foundations, and other private charitable organizations have special relationships with the University, the Development Office has been given the responsibility of coordinating any fund-raising efforts which involve these sources of support.

In addition, the Development Office is charged with the responsibility of reporting regularly to the Rector and Visitors the total gifts and bequests from private sources made to the University either directly or through one of the University-related foundations.

Particular attention should be given by all concerned to the opening statement of policy with regard to the coordination of fund-raising solicitations and the procedures for the receipt and acknowledgement of gifts to the University and to University-related foundations.

Frank L. Hereford, Jr. President

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POLICY STATEMENT

The University is composed of the College of Arts and Sciences and the Schools of Architecture, Commerce, Education, Engineering and Applied Science, Graduate Arts and Sciences, Graduate Business, Law, Medicine, and Nursing. Private contributions to the University of Virginia may be for the general purposes of the University as a whole or for the specific use of the College, for one of the Schools, for an individual department, or for a particular facility, program, area of study, or organization.

The donor may direct that a contribution be expended in full during one or more years for current operating expenses or purchases, or it may be used to establish a special endowment fund or be added to general endowment funds. The uses of the funds may be specified for purposes such as professorships, scholarships, books, teaching, research, etc. almost without limit.

Gifts for either current use or endowment purposes contributed directly to the University should be made payable to "The Rector and Visitors of the University of Virginia" and shall be received and expended or invested by the Rector and Visitors under its authority. Gifts for current or capital purposes may also be accepted for the University by University-related foundations according to their corporate purposes.

Any proposals or plans for major fund raising from private sources should be discussed with the Vice President for Development before being undertaken. Any school, department, University-related foundation or other organization which seeks to initiate a new annual giving program or to conduct one or more special solicitations with a goal of $10,000 or more, therefore, must first consult with the Vice President for Development. Those which are conducting established annual giving programs need not clear these regular solicitations with the Development Office.

When a gift to the University is received, it must be reported promptly to the Treasurer for deposit to the proper account using the University's Deposit/Receipt Form. Copies of all Deposit/Receipt Forms relating to gifts to the University will be sent to the Development Office by the Treasurer's Office. All gifts to the University transmitted to members of either the Faculty or the Administration must be acknowledged to the donor by the appropriate Dean, Department Head or Administrative Officer. For gifts to the University in excess of $500, a copy of both the letter of transmittal from the donor and the acknowledgement to the donor must also be forwarded to the Development Office.

The President will send acknowledgement letters to those donors making gifts directly to the University, or to any University-related foundation, which he considers appropriate for such acknowledgement. Each University-related foundation, therefore, will consult with the Vice President for Development in order to establish an appropriate minimum size of gift for the President's acknowledgement to their donors.

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A. General Policies Pertaining to Restrictions in Gifts or Bequests

1. General Restrictions

Restrictions based on race, color, religion, creed, sex, or national origin are unacceptable in any gift to the University and should be unacceptable in any gift to a University-related foundation.

2. Restrictions Involving Student Financial Aid

The following restrictions are unacceptable in gifts to the University for scholarships, fellowships, or other financial aid funds and should be unacceptable in contributions to a University-related foundation for such purposes:
(a) Restrictions based on race, color, religion, creed, sex, or national origin;
(b) Restrictions permitting designation of an individual recipient by the donor;
(c) Restrictions to relatives or descendants of the donor as recipients;
(d) Restrictions upon the future employment of the recipient;
(e) Restrictions by the donor on interest rates and conditions for repayment of loans. (Rates of interest or repayment requirements should be determined by University policy and practice at the time of the loan.)

B. General Policies Pertaining to Solicitation and Acceptance of Certain Types of Gifts

1. Gifts of Tangible Personal Property

An offer of a gift to the University of tangible personal property may be accepted initially and conditionally on behalf of the President and the Rector and Visitors by deans, directors of libraries and museums, and other authorized officers. The receipt and acceptance of such tangible gifts with estimated value of $500 or more shall be reported to the Vice President for Development for confirmation and formal acceptance by the Rector and Visitors.

Gifts to the University of tangible personal property such as paintings and other works of art, or furniture, or collections should not be accepted if made on the condition or expectation that the items will be permanently exhibited, or that the collections will be maintained and shown as such. Any gift offered with such a restriction or condition shall be reported to the Vice President for Development and may be accepted only by vote of the Board of Visitors.

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The following are unacceptable restrictions or considerations in connection with gifts-in-kind:
(a) The acceptance of such gifts shall not involve significant additional expense for their present or future use, display, maintenance or administration.
(b) No financial or other burdensome obligation or expense is or will be directly or indirectly incurred by the University as a result thereof.
(c) University officers or faculty members should not furnish valuations or appraisals to donors in connection with gifts-in-kind to the University of Virginia.
(d) Gifts of tangible personal property (such as books and paintings) will not be accepted if made on the condition, or understanding, or expectation that the items will be loaned back to the donor or persons designated by the donor for life or extended periods of time to be determined by the donor.

2. Gifts of Real Property

(a) An offer of a gift of real estate shall be reported to the Vice President for Development and may be accepted only by vote of the Board of Visitors.
(b) No financial or other burdensome obligation or expense shall be incurred directly or indirectly by the University as a result of a gift of real property, particularly where the donor wishes to retain a life estate for himself or others in the property. Expenses for maintenance and real estate taxes shall be borne by the donor where a life estate is retained in such property.
(c) Restrictions as to the ultimate sale of real property received as a gift will not be accepted by the University. Where final sale is not restricted, designating a purpose within the University for a fund created by the assets received from a sale of such property is permissible.

3. Gifts of Securities

Gifts of securities often involve complicated technical considerations and may have very special tax consequences to the donor. All gifts of securities to the University must be handled by the Treasurer's Office. The Treasurer of the University will then notify the Office of University Development of all such gifts.

C. General Policies Pertaining to the Establishment of Funds for Certain Purposes

It is the policy of the Rector and Visitors to approve the establishment of funds for certain purposes upon the receipt

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of gifts or commitments which meet the prescribed requirements. Only the most popular types of funds and their funding requirements are described below. There are many other purposes for funds which offer a variety of gift opportunities. Each school or department may suggest special activities, programs, research, lectures, etc. which can be supported by varying amounts of funding.

If it is desired to restrict a gift or bequest to a specified purpose, it is advisable to provide an "escape" clause so that those who administer the University's affairs in the future will be left free to make use of the funds in the best interests of the University under changed conditions. This can be accomplished by providing the statement:
"If, in the opinion of The Rector and Visitors of the University of Virginia, all or part of (this fund) (the income of this fund) cannot be usefully applied to the above purpose (or in the above manner), it may be used for any related purpose which in the opinion of The Rector and Visitors will most nearly accomplish my wishes."

It is recommended that purposes be described as broadly as possible, and that detailed limitations and restrictions be avoided. The Vice President for Development must be consulted before a detailed plan for a specified purpose is approved.

Named endowment funds are usually pooled for investment with the University's general endowment funds and the individual funds are credited with their pro rata share of the earnings at the annual rate as determined by the Finance Committee of the Board of Visitors. A named endowment fund may be established by the University with a principal amount of not less than $10,000.

A named endowment fund may be established, however, even though the principal amount may not have reached the required minimum, if the donor will undertake a binding obligation to supplement the income of the fund with annual gifts sufficient to provide a total income which is equal to at least 5 percent of the principal required for the establishment of the endowment fund. The donor must also agree to complete the endowment within a reasonable period of time.

Any gift or bequest to the University of Virginia should be made payable to "The Rector and Visitors of the University of Virginia, a Virginia public corporation," located at Charlottesville. This is the legal name of the corporate body.

A gift or bequest may specify that the funds are either unrestricted or restricted as to the purposes for which they may be used. Also the donor may designate that the funds either are to be added to endowment or are to be expendable, either currently or over a specified period of time.

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If a gift or bequest for endowment is relatively small, it will be added to a general endowment fund. If, however, the fund meets the stated minimum dollar requirement to establish a named endowment fund for a specific purpose, the principal and the income earned on that principal will be separately determined for each named endowment fund.

1. Professorships

A named endowed professorship may be established to supplement the available State support for an existing professorship in a school or a field of study. Such an endowment fund may be established with gifts to total $100,000 where such a fund is submitted for matching under the Eminent Scholars program or under an equivalent matching program. Gifts should total $200,000 if terms of the gift fail to qualify for matching or if matching funds are not available.

2. Lectureships

A named endowment fund to provide a lecture program (i.e., one which may be used for the honorarium and expenses of a special guest lecturer) may be established with a fund of not less than $10,000.

3. Scholarships

A named endowed scholarship may be established with a fund of not less than $25,000 to furnish awards for one or more recipients with awards totaling at least $1,200 but with no award being made which is less than $300 to a recipient. (A fund of $75,000 would be required to have four concurrent recipients each receiving $1,000 annually.)

4. Fellowships

A named endowed fellowship may be established with a fund of not less than $50,000 to furnish awards for one or more recipients with awards totaling at least $2,500 but with no award being made which is less than $1,000 to a recipient.

5. Prize Funds

A named financial award for outstanding accomplishment may be provided through the establishment of a prize fund with an endowment of not less than $10,000 to furnish awards for one or more recipients with awards totaling at least $500 but with no award being made which is less than $100 to a recipient.

6. Book Funds

The earnings from a named endowed book fund may be used for the purchase of books or other materials in a particular field or library and also may be used as specified by the donor for other expenses of the library. Such a fund may be established with an endowment of not less than $10,000.

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7. Funds for Student Activities

Gifts and funds shall be accepted for the support of recognized student activities only if such activities have the approval of the Vice President for Student Affairs and meet requirements stated above as to minimum endowment or annual awards to recipients.

8. Funds for Buildings and Grounds

Whenever a donor, in making a gift to the University for a building, wishes to have the building named for one whom he designates, it is the policy of the Rector and Visitors to require that at least fifty-one percent of the announced cost of the building be given by the donor. When gift opportunities are offered for parts of a building or for landscape features, a donor may name such designated portions of buildings and grounds by contributing the entire announced cost. In no case shall any agreement or understanding in this regard be reached without first obtaining approval of the Rector and Visitors.

D. General Policies Pertaining to Bequests

The general policies described in Section C above pertain to both inter vivos gifts and bequests. Unrestricted bequests inherently permit flexibility in the use of the funds, but other bequests should be established with the provision of the "escape" clause suggested above so as to permit the use of the funds in a manner which will most nearly accomplish the wishes of the donor in the event that the original purpose can no longer be accomplished.

1. Unrestricted Bequests

An unrestricted bequest is of special value because of the freedom to use it wherever and however needed. An unrestricted bequest intended for the general purposes of the University, one which the Rector and Visitors are free to use either to establish an endowment fund or to expend in whole or in part as they deem best, might read simply:
"I hereby (give, devise and bequeath) to The Rector and Visitors of the University of Virginia, a Virginia public corporation, located at Charlottesville (the sum of $. . . .) (all the rest, residue and remainder of my estate) (. . . . percent of my residuary estate) for the general purposes of the University as The Rector and Visitors may determine."

If the testator wishes to assure that the principal will be used to establish an endowment fund and remain as such permanently with the earnings only to be expended, the will might read as follows:

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"I hereby (give, devise and bequeath) to The Rector and Visitors of the University of Virginia, a Virginia public corporation, located at Charlottesville (the sum of $. . . .) (all the rest, residue and remainder of my estate) (. . . . percent of my residuary estate) to establish the . . . . Fund, the earnings only to be used for the general purposes of the University as The Rector and Visitors may determine."

2. Restricted Bequests

Many donors understandably have special interests which they may desire to promote or support. Bequests for these restricted purposes may be expressed as follows:
"I hereby (give, devise and bequeath) to The Rector and Visitors of the University of Virginia, a Virginia public corporation, located at Charlottesville (the sum of $. . . .) (all the rest, residue and remainder of my estate) (. . . . percent of my residuary estate) for the benefit of the (College) (School) to be used for (the library) (for publications) (for research) (for scholarships) etc."

3. Suggested Language for Specific Purposes

(a) Professorships
To establish a named professorship at the University of Virginia, either by an inter vivos gift or through a bequest, the following statement is suggested:
"I hereby (give, devise and bequeath) to The Rector and Visitors of the University of Virginia, a Virginia public corporation, located at Charlottesville (the sum of $. . . .) (all the rest, residue and remainder of my estate) (. . . . percent of my residuary estate) to establish the . . . . Fund. This Fund shall be added to the University's Eminent Scholars Endowment Fund and the income therefrom shall be used to attract and retain eminent scholars in the field of . . . . at the University through the establishment of the . . . . Professorship in the (College, School) of . . . . Such income is to be matched by State appropriation when and if such funds are provided by the Commonwealth of Virginia for such purposes."

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(b) Scholarships or Fellowships
The following form will create by bequest a named scholarship or fellowship endowment fund which will be efficient to administer:
"I hereby (give, devise and bequeath) to The Rector and Visitors of the University of Virginia, a Virginia public corporation, located at Charlottesville (the sum of $. . . .) (all the rest, residue and remainder of my estate) (. . . . percent of my residuary estate) to establish the . . . . Fund, the earnings only from which shall be used for (scholarship) (fellowship) to students in the University of Virginia (College of Arts and Sciences) or (other school within the University). Awards from this fund are to be designated (. . . . Scholarships) (. . . . Fellowships). The earnings of this fund may be used each year, or if not so used, may be used in a subsequent year or years, or added to the principal of the fund as The Rector and Visitors may determine."
(c) Teaching, Research or Lectureship Funds
Named endowment funds may be given for teaching, for research or for lectureships in specific areas. While it may be desired to refer to the academic area of the teaching or lectureship, or to the subject matter or field of research, provision should be made to permit discretionary use in a different academic area, subject or field:
"I hereby (give, devise and bequeath) to The Rector and Visitors of the University of Virginia, a Virginia public corporation, located at Charlottesville (the sum of $. . . .) (all the rest, residue and remainder of my estate) (. . . . percent of my residuary estate) to establish the . . . . (Fellowship) (Research Fund) (Lectureship). The earnings only from the fund may be used for the stipend and support of (a teaching fellow) (a research fellow) (for a research program in . . . .) (for the support of a member of the teaching staff with the rank of lecturer or a visiting professor in . . . .)."
(d) Book Funds
"I hereby (give, devise and bequeath) to The Rector and Visitors of the University of Virginia, a Virginia public corporation, located at Charlottesville (the sum of
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$. . . .) (all the rest, residue and remainder of my estate) (. . . . percent of my residuary estate) to establish the . . . . Fund. The earnings only may be used for the purchase of books or other materials (in the field of . . . .) and for other purposes of the (University of Virginia Library) (the Law School Library) etc."
If the fund is restricted to a particular library or a particular field it would be desirable to permit alternative use in other fields at the discretion of the University Librarian.

E. General Policies Pertaining to Deferred and Other Estate-Related Gifts

The terms and conditions of gifts to create charitable remainder unitrusts, charitable remainder annuity trusts, charitable income ("lead") trusts, or charitable gift annuities, and the terms and conditions of gifts which are acceptable for a pooled income fund trust shall be submitted by the Vice President for Development to the Vice President for Business and Finance before the acceptance of such gifts by the University.

A pooled income fund gift or a charitable gift annuity provides the means whereby a donor, who does not wish to make a separately invested trust, can support the University and receive the benefits offered by a life income gift. The Board of Visitors has authorized the establishment of the University of Virginia Pooled Income Fund. A gift to this Fund will be commingled with the gifts of others as in a mutual fund, and will be managed by a Trustee. The gift may be unrestricted or may be designated for a purpose specified by the donor.

The income from a gift to the Pooled Income Fund will be paid quarterly to the first beneficiary, and may also be paid either concurrently or successively to a second beneficiary, for his or her lifetime. The University may be named as a concurrent beneficiary, if the donor so designates. At the termination of the life income contract the share of the trust fund attributable to the donor's contribution is transferred to the University. If the donor so designates in writing at the time of the gift, either a concurrent income interest or the remainder interest may be transferred, in turn, to a tax-exempt University-related foundation.

University of Virginia Library

ATTACHMENT

POLICIES RELATING TO THE SOLICITATION AND ACCEPTANCE OF GIFTS AND BEQUESTS 1979 The Rector and Visitors The University of Virginia

CONTENTS

FOREWORD