Revised by the Board of Trustees on October 18, 2013
The following policies and procedures are set forth: (a) to define the working rules for fundraising at Loyola University New Orleans; (b) to protect the university, its Board of Trustees, staff, and volunteers; and (c) to inform the university’s advisers, donors, and prospective donors.
It is the general policy of Loyola University and its Board of Trustees: (1) to offer diverse opportunities for gift support of the university; (2) to communicate such opportunities to constituents on a regular basis; and (3) to provide the resources for a full and effective development program for the benefit of both donors and the university.
The Office of Institutional Advancement is the clearinghouse for all fundraising activities of the university. It shall be the responsibility of the Office of Institutional Advancement and its staff, under the direction of the president of the university:
A. To maintain and increase philanthropic financial support for the university;
B. To develop and propose to the Board of Trustees plans for a comprehensive development program, including annual, capital, and planned gift efforts;
C. To advise the Board of Trustees, senior staff, and other volunteers on matters relating to the cultivation, solicitation, and acceptance of gifts in support of the university;
D. To inform, serve, guide, and assist the university’s constituents in fulfilling their family, financial, and philanthropic objectives;
E. To coordinate all fundraising efforts as may involve the several constituencies (Trustees, staff, friends, alumni, corporations, foundations, etc.) of the university by matching donor interests with specific funding opportunities so that prospects and donors are not solicited by multiple individuals on behalf of the university;
F. To undertake research on prospects and donors so as to identify donor interests and to maintain confidentiality with regard to research findings and donor records; and
G. To report regularly to the Board of Trustees regarding gifts, grants, pledges, and planned gift commitments received by Loyola University.
A. Loyola University welcomes expressions of interest and financial support, regardless of size or form, from any individual, family, business, corporation, foundation, or similar source. The development office staff and volunteers are available to meet with any prospective donor(s) and their financial advisers, without obligation, to discuss areas of interest, the plans of the university, types of gift commitments, options for payment, estate planning, and the tax planning consequences of a possible gift commitment so as to provide every possible assistance to a prospective donor.
Although representatives of Loyola University will provide all appropriate assistance, the ultimate responsibility regarding asset evaluations, tax deductibility, and/or similar federal, state, and/or local legal compliance issues rests with the donor(s) and/or with such financial advisers as the donor(s) shall secure.
All donors need competent financial advisers, and representatives of the university will always recommend potential donors obtain such assistance.
B. Gifts to the university should be made in the name of Loyola University New Orleans. All gifts to the university are to be directed in their entirety (including envelope, check, and written correspondence) to the Office of Institutional Advancement, where they will be accepted, acknowledged, and administered in accordance with the policies of the administration and the Board of Trustees.
C. No solicitation of donations or gifts of funds or real property for the benefit of the university shall be made by anyone without the approval of the president of the university, vice president for institutional advancement, or the vice president for institutional advancement’s designated representative.
D. Commitments to Loyola University and/or payment of same may take the form of one, or a combination, of the following:
Gifts of residence with or without a retained life interest,
Bequest intentions and other revocable deferred gifts.
E. Pledges of outright gifts should be written and should commit to a specific dollar amount that will be paid according to a preferred time schedule.
|Preferred Schedule For Pledges|
|Pledge Amount||Maximum Pledge Period|
|Less than $5,000||One (1) year|
|$5,000 to $24,999||Three (3) years|
|$25,000 and above||
Five (5) years*
*Exceptions can be made of $1 million and larger.
F. The president of the university, vice president for institutional advancement, or vice president for finance shall have authority to sign planned giving agreements on behalf of the university. Any agreement that does not meet the requirements of the current guidelines shall require the approval of the vice president for institutional advancement, the president, and, if appropriate, the Board of Trustees.
G. The Board of Trustees and/or appropriate university officers as authorized by the president of the university reserves the right to accept (or, in cases where absolutely necessary, to decline) any commitment that is offered. (See K for discussion of unacceptable gifts.) They also reserve the right to determine how any commitment will be credited and/or how such commitments will be recognized.
Requests by donors for anonymity will be honored.
H. The university will not knowingly seek, nor accept, any commitment regardless of size, designation, or other condition, which it believes is not in the potential donor’s best interest.
I. Conflicts of Interest. (See Loyola University’s Conflict of Interest Policy, approved by the president, June 7, 2011.) Note that acts or allegations of self-dealing are covered by, and should be addressed in accordance with, Loyola’s Conflict of Interest of Policy.
J. Due to the potential conflict of interest and scope of duties required, Loyola and its representatives shall be prohibited from serving as an executor of any estate in which Loyola University is named as a beneficiary.
K. Unacceptable Gifts. Loyola reserves the right to refuse any gift that is not consistent with its mission. In addition to and without limiting the generality of, the following are examples of gifts that will not be accepted by Loyola:
L. Gifts are invested according to policies established by the Board of Trustees.
M. Loyola expresses its gratitude for certain gifts by naming buildings, rooms, programs, scholarships, or other endowments in honor of donors. This practice is governed by the Naming Policy of Loyola University New Orleans, which was approved by the Board of Trustees on May 18, 2012.
Gifts shall be valued on the date the donor(s) relinquished control of the assets in favor of the university. In cases where gifts are made with assets other than cash, the following guidelines will be observed:
A. Gifts of publicly traded securities will be recorded at the average of the high- and low-market value on the date the donor relinquished control of the assets in favor of the university or other valuation techniques approved by the IRS; such securities will be conveyed to the university’s brokerage account or business office for immediate sale, consistent with the established policies of the university.
B. Gifts of closely held stock will be recorded at the per-share cash purchase price of the most recent transaction. Normally, this will be the buyback transaction of the donor. If no buyback is consummated, a gift of closely held stock may be recorded at the value determined by a qualified independent appraiser. All such gifts of closely held stock will be held until liquidated, at which time the funds will be used consistent with the gift intentions of the donor and the established policies of the university.
C. Outright gifts of real estate, bargain sales, and/or partnerships will be recorded at fair market value at the time such gifts are transferred to Loyola University, less any encumbrances. The fair market value of the property shall be determined by an independent, qualified appraiser paid for by the donor. Appropriate environmental hazard appraisals are also required and are to be paid for by the donor.
Gifts of real estate must be accepted by Loyola University in accordance with federal, state, and local laws governing the university’s acquisition of real property. The Board of Trustees will consider gifts of real property, both improved and unimproved, including gifts subject to a retained life estate, only after a thorough review of the criteria for acceptance set forth in (1) below under the direction and supervision of the assistant vice president for administration, physical plant.
Loyola University shall use extreme caution in accepting gifts of real property that are not in the immediate vicinity of the university since management and oversight of remote properties could impose unacceptable risks and liabilities on the university.
Outright gifts of hard-to-value assets such as mineral rights or limited partnerships will be recorded at $1, and additional credit will be given as the proceeds are received.
(a) Market Value and Marketability. The assistant vice president for administration, physical plant, must receive a reasonably current appraisal of the fair market value of the property and interest in the property the university would receive if the proposed gift were approved. Development officers will inform the donor that, if the gift is completed, the IRS will require an appraisal made within 60 days of the date of gift. Development officers will communicate to donors that it is the university’s policy to dispose of all gifts of real estate (other than property which the university wishes to retain) as expeditiously as possible. Thus, regardless of the value placed on the property by the donor’s appraisal, the university will attempt to sell at a reasonable price in light of current market conditions, and the development officer will inform the donor of any such sale occurring within two years of the date of gift and that such sale will be reported to the IRS on Form 8282.
(b) Potential Environmental Risks. All proposed gifts of real property, including gifts from estates, must be accompanied by a Phase I environmental audit performed at the donor’s expense. The only permitted exception to this requirement is for residential property which has been used solely for residential purposes for a significant (at least 20 years) period of time. In cases where this exception applies and no environmental audit is undertaken, the donor/executor must have outside parties complete an Environmental Checklist prepared by the assistant vice president for administration, physical plant, and may be required to execute an environmental indemnity agreement. Even in cases where a Phase I audit is submitted, the general counsel may require that the donor sign a letter indemnifying and holding the university harmless from any and all liability arising from acts occurring prior to the university’s ownership of the property.
(c) Limitations and Encumbrances. The existence of any and all mortgages, deeds of trust, restrictions, reservations, easements, mechanic liens, and other limitations of record must be disclosed. No gift of real estate will be accepted until all mortgages, deeds of trust, liens, and other encumbrances have been discharged, except in very unusual cases where the fair market value of the university’s interest in the property net of all encumbrances is substantial.
(d) Carrying Costs. The existence and amount of any carrying costs, including but not limited to property owners’ association dues, country club membership dues, and transfer charges, taxes, and insurance, must be disclosed.
(e) Title Information. A copy of any title information in the possession of the donor, such as the most recent survey of the property, a title insurance policy, and/or an attorney’s title opinion, must be furnished.
(f) The information required in (a) through (e) above should not be considered as all inclusive. The offices of the general counsel, institutional advancement, the assistant vice president for administration, and the vice president for finance and administration, may request additional information be submitted to ensure that due diligence is executed prior to the acceptance of any gift of real estate.
(a) The assistant vice president for administration, physical plant, with the assistance of the development officer will prepare a written summary of the gift proposal and submit that summary to the general counsel through the director of planned giving. At a minimum, the summary shall include the following information:
(i) description of real property;
(ii) the purpose of the gift (e.g., an unrestricted gift, a gift to fund an endowed chair, a deferred gift) and the department(s), program(s), or endowment(s) to benefit from the gift;
(iii) an appraisal of the property’s and, if different, the university’s interest in the property’s fair market value and marketability;
(iv) any potential for income and expenses, encumbrances, and carry costs prior to disposition;
(v) any environmental risks or problems revealed by audit or survey;
(vi) any potential university use; and
(vii) any special arrangements requested by the donor concerning disposition (e.g., price considerations, time duration prior to disposition, potential buyers, realtors, or brokers with whom the donor would like the university to list the property, etc.).
(b) The general counsel will provide legal advice to the president regarding the proposed property. The president shall communicate the final determination to the vice president for institutional advancement. The vice president for institutional advancement shall communicate the university’s decision to the donor in writing, including any conditions imposed by the president and/or general counsel prior to acceptance.
(c) If a proposed gift of real property is approved by the president, the director of advancement records will record the gift on behalf of the university upon notice by the general counsel that the property has been properly recorded in the local Conveyance Office or Registry of Deeds. The university will not appraise or assign a value to the gift property. It is the donor’s responsibility to establish a value for the gift and to provide, at the donor’s expense, a qualified appraisal required by the IRS.
(d) The execution and delivery of a deed of gift or other appropriate conveyance will complete the gift. The costs associated with the conveyance and delivery of the gift, including but not limited to recording fees and, if deemed necessary by the general counsel, a current survey, title insurance and/or an attorney’s title opinion, will be either paid by the donor or charged to the fund code of the department(s), program(s), or endowment(s) to benefit by the donation. In addition, the IRS for gifts of real property requires the filing of Form 8283 by the donor. This form should be sent to the director of planned gifts for execution by the university.
D. Outright gifts of tangible personal property for which donors qualify for a charitable gift deduction under current IRS rules will be recorded at the appraised value of the property at the time it is transferred to Loyola University, less any encumbrances. Unless otherwise authorized by the president, and where appropriate, the Board of Trustees, the university will seek to liquidate such assets in order to secure the cash needed to fund its programmatic and/or facility priorities and/or to invest such assets in ways consistent with the currently authorized investment strategies of the university. The preceding sentence shall not apply to gifts of tangible personal property intended by both the donor and Loyola University New Orleans to be retained for the use of the university.
The following are general guidelines or considerations in connection with gifts of tangible personal property:
E. Fully paid up, or otherwise vested, insurance policies for which Loyola University is owner and sole beneficiary will be recorded as “future” expectancies of the university at the unrealized death benefit (face value) of the policy in cases when the insured is age 65 or older, and at the replacement value for donors younger than 65. See Section III, D below for administrative procedures related to gifts of life insurance.
F. Bequest intentions, commitments of unpaid insurance policies, and other revocable deferred gifts will be recorded as “future” expectancies of the university at the value established in writing by the donor through a bequest intention form, a deferred pledge agreement, a contract to make a will, a letter, or a copy of appropriate sections of the will or of the insurance or trust document, etc.
G. Bequests and other deferred gifts will be recorded as received, if not reported in a previous campaign. Such gifts will be recorded at the value established at the time of probate and/or at the fair market value on the date of the transfer of the asset(s).
H. All gifts that will, or may, require expenditure of funds either at the time of the gift or at some future date (e.g., non-performing assets gifted to fund a charitable trust or charitable gift annuity, bargain sales, outright gifts such as real estate that may impose present obligations on the university) shall require the approval of the Endowment or Institutional Advancement Committees of the Board of Trustees.
I. Gift annuities, irrevocable charitable remainder trusts, and similar life income agreement commitments (whether administered by the university or by others on behalf of the university) will be recorded as follows:
For purposes of current income tax deductions, such gifts will be receipted at the charitable deduction value as established by law.
Generally speaking, the university does not encourage donors to place encumbered assets into a trust.
When a trust is to be funded with hard-to-value or non-income-producing property, a net income unitrust will generally be used. Such a trust obligates the trustee to pay only the lower of a specified percent of fair market value or actual income. When such a net income unitrust is used, a separate letter of agreement should be signed by the president of the university and the donor, indicating that the donor understands the income concept of the net income trust. A “catch-up” provision as allowed by a unitrust may also be acceptable.
A. For Life Income Agreements
a. For charitable gift annuities, no higher than the rate recommended by the American Council on Gift Annuities.
b. For unitrusts and annuity trusts, a rate of at least five percent. Higher rates may be approved by the Endowment Committee of the Board, based on:
(1) The ages of the donor and any beneficiaries; and
(2) income needs vs. tax relief.
However, the director of planned giving will be given authority to negotiate rates on charitable gift annuities, charitable remainder unitrust, and charitable remainder annuity trusts, provided that such rates be within one percentage point of the maximum rates recommended by the American Council on Gift Annuities effective at the time of the gift or the establishment of the trust. Charitable remainder trusts will be marketed with a rate slightly lower than charitable gift annuities because of the higher administrative costs. In the event that the rate does not fall within the limitations above, the director of planned giving will obtain the approval of the vice president for institutional advancement. Any such deviation from this policy will be reported to the Endowment Committee at its next regularly scheduled meeting.
(3) Funds received for annuities and trust agreements are administered by the director of planned giving. Separate accounting is provided to the donor on each life income agreement. Annuity or trust payments shall be made at the donor’s choice: monthly, quarterly, semi-annually, or annually. In order to control the cost of trust and annuity administration, Loyola University prefers to make payments quarterly or semi-annually.
B. For Charitable Remainder Trusts
C. For Retained Life Estates
The gift of a primary residence, a vacation home, or a farm with retained life interest on the part of the donor shall be arranged without a trust agreement. The donor deeds the property to Loyola University immediately. Calculation of the remainder interest, which is allowed for federal income tax deduction, is based on an IRS formula.
D. For Life Insurance
Gifts of life insurance may be accepted by the university after ownership is transferred to the university, the university is named beneficiary, and cost and/or replacement value has been established by the insurance company. All gifts of life insurance must comply with applicable state insurance regulations, including insurable interest clauses.
A. Unrestricted gifts shall be encouraged unless the donor indicates that he or she is only willing to make a restricted gift.
In drafting instruments for the gift of restricted funds to Loyola, donors and their advisers shall be encouraged to use language that would permit application of the gift to a more general purpose if, in the determination of the Board, the designated purpose is no longer feasible or practicable.
B. For the purposes of this policy statement, “endowment fund” shall refer to any fund, or any part thereof, not wholly expendable by the university on a current basis under the terms of the applicable gift instrument.
Endowment funds are invested according to policies established by the Board of Trustees.
C. Endowment gifts may be used to establish a special endowment fund or may be added to an existing endowment fund.
D. Persons interested in establishing an endowment fund are encouraged to consult with the vice president for institutional advancement or his/her designated representative prior to making the gift so that the donor’s intentions are appropriately established in writing through a gift agreement. Negotiation of any endowment agreement on behalf of the university shall be done over the signature, and with the full knowledge, of the president of the university and in compliance with university policy.
In designating an endowment gift for a specific purpose, the donor is encouraged: (a) to describe that purpose as broadly as possible; (b) to avoid detailed limitations and restrictions; and (c) to provide a clause granting the university maximum flexibility to make use of designated funds in a manner most consistent with the intent of the donor and with the interests of the university should programmatic or other developments make it impossible or impracticable to apply the endowment proceeds to the purpose for which it was originally designated.
E. Gifts to establish endowment funds for specific purposes must meet the minimum dollar requirements set by the Board of Trustees. The principal amount of the original gift need not meet the minimum dollar requirement if the donor agrees to fully fund the endowment at the minimum dollar requirement within a specified and reasonable period of time. Minimum dollar requirements may be changed from time to time at the sole discretion of the Board.
The minimum dollar requirements established by the Board of Trustees for an endowment fund shall not apply to any endowment fund(s) already established at the time these policies are adopted.
Loyola University reserves the right to review the minimum amounts required for endowments periodically and to amend the minimum amount required so as to ensure that endowment proceeds are sufficient to fund the intended purpose(s) of the endowment. If and when the university acts to increase the minimum amount required establishing a particular endowment fund, such action shall not be retroactive to funds already established.
See Naming Policy of Loyola University New Orleans, which was approved by the Board of Trustees on May 18, 2012.
F. Endowment Levels:
Endowed funds will be held in a holding account until they reach the minimum level.
A. Introduction: The purpose of this section is to summarize the guidelines that will be used to count gifts to comprehensive fundraising campaigns for Loyola University New Orleans. These guidelines comply with standard practices for reports on campaign fundraising progress in institutions of higher education. Furthermore, it is intended that these guidelines be consistent with existing Loyola University New Orleans gifts and pledge policies and procedures.
B. Certain planned gifts, like charitable remainder trusts or gift annuities, will be recognized toward the achievement of the campaign goal in a separate category of “future commitments” using either of two values: the face value of the gift and the discounted present value of the gift. While the face value indicates the importance of planned gifts in reaching the goal, the discounted present value distinguishes them from outright gifts available for immediate use. Note that these gifts will not be included in the calculation of the achievement of the campaign’s goal until they are realized.
C. Louisiana Board of Regents matching funds to support the establishment of endowed funds, the income of which shall be used to establish scholarships for 1st generation students, distinguished professorships, and chairs for eminent scholars while not counted in the totals of philanthropic contributions in support of a private campaign may be counted in the overall campaign attainment figures, if the campaign’s priorities include scholarship support for 1st generation students and the establishment of endowed professorships and chairs.
D. All other philanthropic gifts to Loyola University during the campaign period will be counted toward the achievement of the campaign goal, in accordance with the following guidelines:
For promises to give greater than $1M, and on a case-by-case basis, the pledge payment period may be extended to longer than five years.
a) Marketable Securities: Such gifts will be valued at the mean market value on the date the donor relinquishes control to the institution, consistent with existing Loyola University New Orleans gifts and pledge policies and procedures.
b) Closely Held Securities: Gifts of closely held stock exceeding $10,000 in value will be reported at the fair market value placed on them by a qualified independent appraiser as required by Loyola University New Orleans gifts and pledge policies and procedures for valuing gifts of non-publicly traded stock. Gifts of $10,000 or less may be valued at the per-share cash purchase price of the most recent transaction.
c) S-Corporation Stock: Because of significant tax and legal implications for Loyola, proposed gifts of stock in S-Corporations must be authorized in advance by the university’s Board of Trustees and/or appropriate university officers as authorized by the president of the university. For income tax purposes (including substantiation), the donor will need to follow the guidelines for valuation of closely-held stock outlined in paragraph 3b above. For campaign counting and naming opportunity purposes, the donor will be apprised that the gift will be credited at its after-tax value to Loyola.
a) The donor must be age 60 or older. On a limited case-by-case basis, properly verified bequest intentions may be recognized and counted in the campaign future commitments totals for donors who are not yet 60 but will attain the actuarial age of 60 on or before the end of the campaign.
b) The commitment is for a single life only or all other beneficiaries are also over 60.
c) There is a specified amount or percentage specified in the will based on a credible estimate of the future value of the estate at the time the commitment is made.
d) The gift amount will be reported at face value in the deferred/future commitment portion of campaign reports.
e) Verification should be provided in one of the following forms:
1) A letter from the donor or the donor’s attorney; or
2) A bequest intention form, a deferred pledge agreement, a contract to make a will, a letter, or a copy of appropriate sections of the will or of the insurance or trust document, etc.
a) Life insurance policies will be counted in one of two ways:
1) If the donor is less than 60 years of age, the policy will be counted at the interpolated terminal reserve (approximately the cash surrender value), in the future commitments section;
2) If the donor is 60 years of age or older, the policy will be counted at the death benefit value, counted at the face value in the future commitment totals.
b) Realized Death Benefits: The insurance company’s settlement amount for an insurance policy whose death benefit is realized during the campaign period, regardless of whether the policy is owned by Loyola, will be counted in campaign totals, to the extent that no gift amount was counted in a previous campaign.