E.2. Allocating and Reallocating Gifts and Bequests
Spring 1992
Development Policy and Administration Manual
Chapter III. Gift Administration Policy
Section E. Allocating and Reallocating Gift Funds
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ALLOCATING AND REALLOCATING GIFTS AND BEQUESTS
Allocation is the designation of campus, purpose, and type of
fund, and the implementation of such designation. If donors
designate all three components required for allocation, it is
necessary only to ensure that their wishes are implemented.
If donors fail to designate any one of the three components
required for allocation, it is necessary to follow the procedures
set out below to ensure proper allocation. The appropriate
authorities for allocation and reallocation are the following:
1. The Chancellor, when the gift is designated for a single
campus and is either
a. $250,000 or less and the donor has not designated
purpose or type of fund, or
b. more than $250,000 but not more than $500,000 and is
designated as an endowment or is to be allocated or
reallocated as a fund functioning as an endowment;
2. The Vice President--Agriculture and Natural Resources
(ANR), when the gift is designated for ANR and is either
a. $250,000 or less and the donor has not designated
purpose or type of fund, or
b. more than $250,000 but not more than $500,000 and is
designated as an endowment or is to be allocated or
reallocated as a fund functioning as an endowment;
3. The President, when the gift is
a. more than $250,000 but not more than $500,000, is
designated for a single campus, and is to be
allocated or reallocated as a plant fund or a
current fund, or
b. $500,000 or less and the donor has not designated a
campus or has designated more than one campus; and
4. The Regents, when the gift exceeds $500,000.
Because living donors usually can be contacted if they fail to
make the required designations, the following procedures are used
primarily for bequests.
ALLOCATION BY THE CHANCELLORS AND THE VICE PRESIDENT--ANR
The President has delegated to the Chancellors and the Vice
President--Agriculture and Natural Resources (ANR) a bifurcated
authority, within their respective jurisdictions, to allocate
gifts for which the donor has not designated purpose or type of
fund. For gifts that are $250,000 or less, they may allocate
purpose and type of fund. For gifts that are more than $250,000
but $500,000 or less, they may allocate (1) purpose when the
donor has failed to designate a purpose but has specified a true
endowment or (2) a fund functioning as an endowment when the
donor has not specified a type of fund.
This authority may not be redelegated. Therefore, any gift for
which the donor has not designated purpose or type of fund must
be submitted to the Chancellor for allocation.
Gift of $250,000 or Less not Designated as an Endowment. A gift
of $250,000 or less received at Corporate Accounting and
designated for a specific campus but not designated by the donor
as an endowment is transferred to the campus by journal and may
be credited to a current donation account or to a holding account
pending allocation by the Chancellor. Simultaneously,
information on the gift is sent to the campus Private Support
Management Office, where the gift form is initiated.
The Chancellor should notify the campus Accounting Officer of the
allocation in writing. If the Chancellor allocates a gift as a
fund functioning as an endowment (see Section III: F.1), copies
of the allocation letter also should be sent to the Director--
Corporate Accounting (for establishment of the fund), and to the
Director--Development Policy and Administration, Office of the
President (for preparation of the Endowment Record Sheet). The
campus Accounting Officer will prepare a Treasurer's Financial
Journal (UTRS 156) to return the funds to the Office of the
President for investment. If the fund number is not available,
the Journal will be completed by Corporate Accounting.
Gifts designated for Agriculture and Natural Resources are
retained at the Office of the President. In general, the
procedures for gifts within the jurisdiction of the Vice
President--ANR are the same as those for gifts designated for a
campus. Instead of writing to a campus Accounting Officer,
however, the Vice President--ANR should write to the Senior Vice
President--Administration, with a copy to the Director--
Development Policy and Administration.
Gift of $500,000 or Less Designated by the Donor as an Endowment.
When a gift is $500,000 or less and the donor has specified an
endowment fund, funds are retained at the Office of the President
for investment in the General Endowment Pool (unless another
investment vehicle is specified by the donor). The fund number
should be obtained from the campus Accounting Office.
Gift between $250,000 and $500,000 not Designated as an
Endowment. When a gift is more than $250,000 but $500,000 or
less and the donor has not specified type of fund, funds are
retained at the Office of the President pending allocation. If
the Chancellor or the Vice President--ANR allocates the gift as a
fund functioning as an endowment, the procedures noted above for
gifts that are $250,000 or less should be followed. If the
Chancellor or the Vice President--ANR proposes allocation of a
gift in this category as a plant fund or a current fund, the gift
is allocated by the President in accordance with the procedures
noted below.
ALLOCATION BY THE REGENTS OR THE PRESIDENT
Gift in Excess of $500,000 Requiring Allocation of Purpose or
Type of Fund. Gifts in excess of $500,000 for which donors have
not designated purpose or type of fund are allocated by The
Regents. The Chancellor's recommendation will be solicited by
and should be addressed to the Senior Vice President--Academic
Affairs, in care of the Director--Development Policy and
Administration, for consideration by the Gifts and Bequests
Review Committee (see Section III: E.3). The Committee's recom-
mendations are forwarded to the President, who in turn makes a
recommendation to The Regents for final approval.
Funds will be held at the Office of the President pending alloca-
tion. Once the allocation is made, Development Policy and
Administration, Office of the President, will prepare the gift
form and forward it to the campus Private Support Management
Office for acceptance.
Allocation of a Gift Not Designated by the Donor for a Specific
Campus. When a donor fails to designate a campus (or designates
more than one campus), a gift in excess of $50,000 is added to
the agenda for the next Gifts and Bequests Review Committee
meeting (see Section III: E.3). Non-campus designated gifts of
less than $50,000 are allocated, after internal review, by the
Senior Vice President--Academic Affairs. The Committee's recom-
mendations for allocation of gifts of $500,000 or less are for-
warded to the Senior Vice President--Academic Affairs, to whom
the President has delegated authority to allocate such gifts.
Recommendations for allocation of gifts in excess of $500,000 are
forwarded to the President, who in turn makes a recommendation to
The Regents for final approval. After the allocation is made,
Development Policy and Administration, Office of the President,
will prepare the gift form and forward it to the campus Private
Support Management Office for acceptance.
Allocation of a Gift above $250,000 but Less than $500,000 as a
Plant Fund or a Current Fund. When a gift is within the
Chancellor's jurisdiction but type of fund is not designated, and
the Chancellor proposes allocation as a plant fund or current
fund, the gift is added to the agenda for the Gifts and Bequests
Review Committee. The Committee's recommendations for allocation
of gifts between $250,000 and $500,000 as plant funds and as
current funds are forwarded to the Senior vice President--
Academic Affairs, to whom the President has delegated authority
to allocate such gifts.
REALLOCATING FUNDS
Questions regarding reallocation of true endowments are to be
addressed to the General Counsel, because reallocation of such
funds often requires court approval. In order to seek court
approval, General Counsel will need documentation that a reason-
able effort has been made to administer the fund under the ori-
ginal terms, and that the effort has been unsuccessful. In
addition, the campus should propose an alternative use as close
as possible to the original terms.
Except as noted above, authority to reallocate is based on the
same limits as for allocation. The Chancellors and the Vice
President--ANR may reallocate funds with a current market value
of $250,000 or less, consistent with any terms specified by the
donor, by writing to the Senior Vice President--Administration,
with a copy to the Director--Development Policy and Administra-
tion.
The President retains authority to reallocate funds with a cur-
rent market value in excess of $250,000 but $500,000 or less as a
plant fund or a current fund. The Regents must reallocate funds
with a current market value in excess of $500,000. To request
reallocation of funds in these instances, the Chancellor or the
Vice President--ANR should address a recommendation to the Senior
Vice President--Academic Affairs, in care of the Director -
Development Policy and Administration. The recommendation will
be placed on the agenda of the next Gifts and Bequests Review
Committee meeting. If the recommendation is approved, it will be
forwarded to the President, who will either approve reallocation
or make a recommendation to The Regents, as appropriate (see
Section III: E.3).