E.1. What Authority do Chancellors Have to Allocate Gift Funds Spring 1992 Development Policy and Administration Manual Chapter III. Gift Administration Policy Section E. Allocating and Reallocating Gift Funds ************************************************************* WHAT AUTHORITY DO CHANCELLORS HAVE TO ALLOCATE GIFT FUNDS? Allocation is defined as both the designation of campus, purpose, and type of fund, and the implementation of this designation. Sections 100.4(s), 100.4(t) and 100.4(u) of the Standing Orders of The Regents grant authority to the President to allocate and reallocate gift funds of $500,000 or less when the donor has not fully designated the campus, purpose, or type of fund. On April 16, 1991, the President delegated this authority, within the limitations specified below, to the Chancellors for funds that have been designated by the donor for a single campus. This authority may not be redelegated. Within their jurisdiction, for gifts within their acceptance authority, Chancellors are authorized: (a) to designate, in accordance with the terms specified by the donor* ( For example, if a donor's bequest states that a gift is to be used for "student aid", a chancellor may designate "undergraduate scholarships" as a purpose.), the purpose for which a gift shall be used and whether income and/or principal shall be used, and to make allocations and reallocations in accordance therewith; (b) to determine, to the extent not specified by the donor, the purpose for which a gift of not more than $250,000 shall be used and whether income and/or principal shall be used and to make allocations and reallocations in accordance therewith; and (c) for gifts above $250,000 to a limit of $500,000, to determine, to the extent not specified by the donor, the purpose for which a gift shall be used and to make allocations and reallocations in accordance therewith, when the gift is designated by the donor as a true endowment or when the gift is to be allocated or reallocated as a fund functioning as an endowment. The President retains the authority to allocate or reallocate any gift above $250,000 to a limit of $500,000 as a plant fund or as a current fund. It is understood that the delegation under (b) includes the authority to designate the type of fund. Any allocation made by a Chancellor shall conform to established University programs and policies and shall not constitute a commitment requiring expenditures in excess of budgeted items. Any reallocation of a true endowment shall be made only after consultation with General Counsel. For purposes of the delegation, the term "gifts" includes out- right gifts, pledges, and bequests, but excludes grants from private sources (See Section III: D, Is it a Gift or a Private Grant?). The dollar value of a gift is fixed at the amount of cash or, in the case of gifts of property, the equivalent to the fair market value of the assets.** Gifts that do not fall within the Chancellors' allocation authority are allocated by the President or The Regents. For further information see Section III: E.2, Allocating and Reallocating Gifts and Bequests, and Section III: E.3, Guidelines for Proposals to the Gifts and Bequests Review Committee. Reference: Presidential Delegation of Authority--Allocation and Reallocation of Gifts and Bequests, April 16, 1991 * For example, if a donor's bequest states that a gift is to be used for "student aid", a chancellor may designate "undergraduate scholarships" as a purpose. ** For purposes of allocation and reallocation, the dollar value of a gift is considered to be the full value of the original assets. Thus, if a campus wished to allocate a $500,000 gift as two funds--a $250,000 fund functioning as an endowment and a $250,000 current fund--both the initial allocation and any subsequent reallocation of the fund functioning as an endowment would be within the President's jurisdiction.