University of California
Office of the President
April 1996
I. DEFINITION, PURPOSE AND PRIVILEGES
A. A support group is any group, organization, foundation, or association other than a Campus Alumni Association or Campus Foundation (1) whose primary purpose is to provide assistance through fund-raising, public outreach, and other support for the University's mission; or (2) whose representatives or activities make the entity indistinguishable from the University itself; or (3) that acts as an agent of or intermediary for the University. Support groups typically operate with some affiliation or collaboration with the University to raise gift funds and/or provide public support for the teaching, research, patient care, and public service programs of the University. Each support group shall be organized and operated so that contributions to it or through it to the University or a Campus Foundation shall be deemed tax deductible contributions under relevant provisions of State and Federal tax law.
B. A support group that has received official recognition from the University is authorized to use the name of the University, a campus, or any institutional unit thereof. Additionally, each campus may permit a support group to use space, equipment, and staff support in the performance of its recognized support activities. Without such recognition, no group may (1) represent itself as raising funds or otherwise providing support on behalf of, or for the benefit of, the University, a campus or any institutional unit thereof; (2) use the name of the University or any of its campuses, facilities, or programs either expressly or by implication in connection with such activities; or (3) use University facilities, equipment, or personnel in connection with such activities.
A. General
1. Each campus is responsible for approval of its support groups and is expected to maintain documentation to demonstrate compliance.
2. A support group must request and receive official recognition from the Chancellor (or designee), subject to the terms of the University of California Policy on Support Groups, Campus Foundations, and Alumni Associations (hereinafter referred to as the “Policy”) and these Administrative Guidelines (hereinafter referred to as the “Guidelines”).
3. A request for recognition will be denied when an organization does not meet the required terms of recognition or when the Chancellor (or designee) determines that an organization does not serve the best interest of the University.
B. Initial Recognition
Procedures for registration of support groups shall be developed by each campus. Potential support groups must submit the following to the Chancellor (or designee):
1. A current list of officers, Board of Directors (if any) and principal contact person for the organization.
2. A statement of the organization's purpose and goals and/or enabling documents (i.e., bylaws, constitution, articles of incorporation or other governing document).
3. A current roster of names and addresses of donors and members must be provided upon request by the Chancellor (or designee).
4. A statement signed by the officers/representatives of the organization stating that the Board of Directors (or the governing body) has read and formally voted that it will comply with the Policy and these Guidelines.
5. For a tax-exempt organization, a copy of the organization's most recent IRS Form 990 and annual financial statements.
6. A list of the types of activities, including fund-raising and membership drives, the organization intends to undertake and how the organization financially intends to support these activities.
7. Subject to the approval requirements set forth in IV.B.8.a. and b. below, for a tax-exempt organization with accounts at any financial institution, a list identifying all such accounts, including the institution's name and address, and the account numbers; and a statement signed by an appropriate officer or representative of the organization authorizing representatives of the University to receive from the financial institution any information, records, or photocopies of transactions relating to the account(s) as the University may at any time request from the financial institution.
C. Annual Renewal of Recognition
For continued recognition, the campus is responsible for annual approval of support groups and is expected to maintain files, records, and materials as needed. A support group must submit the following to the Chancellor (or designee) on an annual basis:
1. An updated list of officers, Board of Directors (if any) and the principal contact person for the organization.
2. Any changes to the organization's structure, purpose and goals, and/or enabling documents (i.e., bylaws, constitution, articles of incorporation or other governing document).
3. An updated roster of names and addresses of donors and members must be provided upon request by the Chancellor (or designee).
4. A statement signed by the officers/representatives of the organization stating that the Board of Directors (or the governing body) has read and formally voted that it will continue to comply with the Policy and these Guidelines.
5. For a tax-exempt organization, a statement of revenues, and expenses [and net income] for the last fiscal year and a copy of the organization's annual IRS Form 990 and financial statements.
6. An annual plan of fund-raising, membership drives and other activities for the ensuing fiscal year and how the organization will financially support these activities.
7. Subject to the approval requirements set forth in IV.B. 8.a. and b., below, for a tax-exempt organization with accounts at any financial institution, a list identifying all such accounts, including the institution's name and address, and the account numbers; and a statement signed by an appropriate officer or representative of the organization authorizing representatives of the University to receive from the financial institution any information, records, or photocopies of transactions relating to the account(s) as the University may at any time request from the financial institution.
D. Failure to Comply
If a support group does not comply with these Guidelines, the Chancellor (or designee) shall by written notice require the support group to comply within a reasonable time period or have its recognition as a support group withdrawn.
1. In the event the group fails to comply within the time period specified, the Chancellor (or designee) may withdraw the support group's official recognition and take all necessary actions in that regard.
2. Upon withdrawal of recognition, the assets of the support group shall be transferred to The Regents of the University of California (“The Regents”) or the Campus Foundation, as designated by the Chancellor (or designee), for purposes consistent with the terms of individual gifts and purposes of the support group. In the event the support group fails within a reasonable time period to transfer its assets, the General Counsel shall take such legal action as may be necessary to compel transfer.
3. Once official recognition has been withdrawn, the support group may no longer use the University's name, facilities, equipment, or support staff. Should the support group fail to cease these activities, the General Counsel shall take such legal action as may be necessary.
A. Each support group's operations shall be conducted and managed by its governing body, as set forth in its statement of purpose, goals, and/or enabling documents. These documents shall include the following clauses:
1. The Chancellor (or designee) and the head of the sponsoring department(s) (or designee) are ex-officio voting members of the governing body; and
2. In the event of dissolution, or if a support group elects to become a non-recognized organization, its assets shall be transferred within three (3) months to The Regents or the Campus Foundation, as designated by the Chancellor, for purposes consistent with the terms of the individual gifts and purposes of the support group.
3. The Treasurer, the University Auditor and/or campus Internal Audit shall be authorized to receive, from any financial institution with which the organization maintains accounts, any information, records, or photocopies of transactions relating to the accounts as the University may at any time request from the financial institution.
B. A support group created after the effective date of these Guidelines shall operate as an unincorporated organization that instructs all donors to make charitable donations directly to The Regents or the Campus Foundation solely for the benefit of the University programs/departments for which the funds are donated.
C. A tax-exempt organization in existence prior to the effective date of these Guidelines may receive official recognition as a support group.
1. Any such support group must maintain its tax-exempt status under State and Federal income tax laws so that contributions will be deductible, charitable contributions. It is also responsible for properly issuing receipts to donors and acknowledging charitable gifts as stipulated by applicable tax laws and regulations, including disclosure to donors of the fair market value of any goods or services received in connection with a gift.
2. Any such support group is required to have liability insurance in amount(s) appropriate to the activities of the organization. Other insurance needs (e.g., Directors and Officers insurance) should be reviewed with an insurance representative as necessary.
D. A support group is prohibited from participating in any political campaign on behalf of any candidate for public office. However, advocacy on behalf of the University is permitted if it is consistent with legislative, budgetary, and electoral objectives of the University; done in conjunction with the University; and with formal written approval from the Chancellor (or designee) of the campus. Under those conditions, a support group may attempt to influence legislation on behalf of the University of California provided that it is not a substantial part of the group's activities.
A. Continuing Education Courses
Support groups may not offer continuing education courses. General interest lecture series or seminars, such as may be offered by a museum or arboretum support group, are allowable.
B. Financial Activities
1. The financial activities of a support group shall be administered in accordance with prudent business practices and generally accepted accounting principles.
2. A support group shall operate on a fiscal year basis commencing each July 1 and ending each June 30.
3. Contracts, grants, clinical trials, or specific research projects funded by external sponsors must be entered into directly by the University and the research sponsor, not through a support group. Gifts designated for a specific research project or a specific researcher, or otherwise intended to support research activities, may be made only to The Regents or the Campus Foundation, and must conform to applicable University policies and procedures. Among other things, this will enable the University to comply with the State of California Political Reform Act that requires disclosure by the faculty member of any financial interest in the donor. A support group may not be used as a vehicle to avoid these requirements.
4. Endowments may be held only by The Regents or the Campus Foundation. A support group may not hold and invest endowment funds for the benefit of the University. Tax-exempt support groups may, however, accept endowments on behalf of The Regents or the Campus Foundation. Support groups without tax-exempt status can accept endowments only in the name of The Regents or the Campus Foundation. The terms of the endowments must be reviewed with the Chancellor (or designee) prior to formal acceptance. In addition, nothing in this paragraph shall preclude the ability of support groups to have current expenditure funds invested in certificates of deposit and/or other interest- bearing instruments.
5. A support group may not (a) directly or indirectly employ; or (b) supplement the salary of; or (c) provide any consulting fees, loans, or perquisites to any University employee outside of the established University of California personnel policies and practices. Support groups may establish a gift fund with The Regents from which University employees may receive payments in accordance with University personnel policies and practices.
6. The financial transactions of a support group that is not a tax-exempt organization must be processed through:
a. a University department or program gift fund; and/or,
b. a fund in the Campus Foundation.
7. The financial transactions of a tax-exempt support group may be processed separately and transfers then made to either 6.a. or 6.b., above. They may also establish a University “Agency Account” in the name of the support group and administer it in accordance with each campus's policy regarding agency accounts.
8. Accounts with Financial Institutions
a. With the express, written permission of the Chancellor (or designee), and the specific written approval of its governing body, a tax-exempt support group may maintain accounts with a financial institution. Separate accounts must be maintained so that expenditures solely for the benefit of members of the support group can be made from a distinct account funded exclusively by membership dues. Only the following expenditures for support group activities may be made from funds other than membership dues:
1. payments for audit, tax preparation, or legal fees; payments for insurance or taxes; and payments or transfers of assets for cash management to and between banks and other financial institutions;
2. payments to donors to refund contributions as permitted by law, or to return overpayments pursuant to a donor's request;
3. payments to other organizations of donations or other remittances made in error to the support group;
4. payments of direct fund-raising expenses in accordance with the organization's annual plan and with the written approval of the Chancellor (or designee);
5. transfers to The Regents or the Campus Foundation; and
6. legally appropriate payments from its accounts to support ballot measures clearly beneficial to the University and endorsed by The Regents.
b. With the express, written permission of the Chancellor (or designee), a support group that is not a tax-exempt organization may maintain a bank account solely for non-gift income (i.e., membership dues, etc.) that is to be expended solely for the benefit of the members themselves (such as gatherings, social events, etc.).
c. Support groups are prohibited from usingthe University or the Campus Foundation, the Alumni Association or any other campus entity's tax identification number when opening an account with a financial institution. The Chancellor shall be given, in writing, the tax identification number used by the support group as soon as it is obtained from the IRS.
d. All checks in excess of $1,000 drawn on external bank accounts require two signatures by members of the support group's governing body.
9. Business transactions involving a support group and the personal or business affairs of any support group trustee, director, officer, staff member or volunteer shall be approved in advance by the governing body. In addition, trustees, directors, officers, staff members and volunteers of a support group shall disqualify themselves from making, participating in making, or in any way attempting to use their official positions to influence a decision in which they have or would have a financial interest.
10. Support groups shall not maintain non-gift income balances in excess of $50,000 without the prior written approval of the Chancellor (or designee).
C. Fund-Raising/Membership Dues Activities
1. A support group must be officially recognized in order to conduct fund-raising activities in support of the University's mission.
2. A support group shall submit proposed solicitations to the Chancellor, (or designee) for review and approval before sending to prospective donors, and shall instruct donors to make gifts directly to the University, payable to The Regents or the Campus Foundation. A support group that is a tax-exempt organization with its own tax identification number, however, may accept and acknowledge gifts in its own name. Under no circumstances may University funds or gifts made payable to The Regents or to any other University entity be deposited into a bank account maintained by a support group.
3. Funds received by a tax-exempt support group intended to benefit the University, a campus, a department or a program must be transferred at least quarterly, or at any time the balance exceeds $100,000, to The Regents or the Campus Foundation for allocation in fulfillment of the intentions of the donor(s). Transfers of gift funds shall be accompanied by a letter from the support group attesting to the original donor's explicit intentions, together with a copy of any original letter from a donor that establishes any gift term other than the name of the fund.
4. A support group may not attach additional terms, conditions or restrictions, reporting requirements, intellectual property rights, or other conditions to a gift without the prior written approval of the Chancellor (or designee). The University and/or the Campus Foundation retains the authority to accept or reject gifts and transfers of funds from support groups.
5. A support group may not solicit or accept deferred gifts (i.e., estates and bequests, trusts or life insurance, etc., or real or tangible personal property). All planned gifts must be given directly to The Regents or the Campus Foundation.
6. A support group may not hire fund-raising consultants or fund-raising personnel. If such consultants or fund-raising personnel are deemed necessary by the governing board of the support group and the Chancellor (or designee) to assist a support group with a particular activity, the support group can make arrangements with the Chancellor (or designee) for the University to hire such consultants or personnel in accordance with University policies and procedures, and shall reimburse the University for the full cost of such consultants or personnel.
7. All fund-raising campaigns in excess of an amount determined by the campus must be approved in writing by the Chancellor (or designee) and the Dean or Head of the unit that it will support to ensure that the proposed fund-raising activities are appropriate and do not conflict or interfere with the fund-raising activities of other campaigns.
8. A support group shall establish an accounting record for each fund-raising campaign listing revenues, expenses, [and net income], and submit it to the Chancellor (or designee).
9. A support group may not charge gift processing fees or other charges against its gifts except as documented and approved in writing in advance by the Chancellor (or designee) and the support group's governing body. If charges against restricted gifts or income therefrom are to be made for costs of administering a gift to the support group, the support group shall include in its literature a statement to that effect.
10. Non-gift membership dues assessed by a support group on its members are to be limited to a reasonable amount per individual per year.
A. A support group shall permit the President (or designee, including the University Auditor) and the Chancellor (or designee, including the campus Internal Audit Office) to inspect and audit its books and records, as well as those of its financial institution(s) as relates to the support group's account(s) on request. In addition, a support group shall permit, if applicable, the University Auditor and the campus Internal Audit Office to review directly all bank account records.
B. The governing body of a tax-exempt support group that had gross annual revenues less than $500,000, shall provide a copy of the organization's annual IRS Form 990 and financial statements to the Chancellor (or designee) within 90 days of the end of the fiscal year.
C. The governing body of a tax-exempt support group that had gross annual revenues between $500,000 and $1 million shall contract and pay for an annual review of its financial statements prepared by a reputable, independent accounting firm acceptable to the University. Such review shall be completed within 90 days of the end of the fiscal year.
D. The governing body of a tax-exempt support group that had gross annual revenues in excess of $1 million shall contract and pay for an annual audit for such fiscal year. Such annual audit shall:
1.
a. be conducted by the University's external auditors, or
b. be conducted by a reputable, independent accounting firm with written approval by the Chancellor (or designee) and the University Auditor of the engagement letter between the support group and the firm;
2. include an opinion on the financial statements of the support group prepared in accordance with generally accepted accounting principles as applicable to the nature of the support group;
3. include a supplementary statement that nothing came to the attention of the auditors that causes them to believe that the support group was not in compliance with the Policy and these Guidelines, noncompliance with which could have a material effect on the support group's financial statements for the fiscal year;
4. include a management letter addressed to the appropriate members of the support group's governing body conveying audit findings and recommendations, including management's response to the findings and recommendations;
5. include written communications with the support group's governing body pursuant to auditing standards; and
6. be completed within 90 days of the end of the fiscal year.
VI. CHANCELLOR'S RESPONSIBILITIES
A. The Chancellor is responsible for ensuring that adequate controls and processes are in place to determine that support groups are in compliance with the Policy and these Guidelines. Each recognized support group shall be notified in writing that compliance with these guidelines and any University policies and campus regulations previously referenced herein are a condition of continued recognition.
B. The Chancellor shall designate an official of the campus unit that benefits from the support group to ensure that the support group is in compliance with the Policy and these Guidelines, unless the Chancellor designates another campus entity as having those responsibilities.
C. Each campus shall determine the procedures necessary for a support group to be officially recognized, consistent with the Policy and these Guidelines. The Chancellor may require additional and more stringent rules than those found in these Guidelines, but at no time may a campus adopt rules that effectively void or liberalize the Policy and these Guidelines.
D. Each campus shall publish annually a list of all officially recognized support groups. The list shall be maintained in the campus office responsible for support group compliance.
E. Each campus shall maintain a control record of all accounts with financial institutions approved pursuant to IV.B.8.a. and b. above, and shall forward a copy of such control record to the Treasurer of The Regents on a quarterly basis.
A. The President may make an exception for a support group which normally would fall under these Guidelines because of a unique situation. However, no such exception shall void or liberalize the requirements for accounts with financial institutions to be approved pursuant to IV.B.8.a. and b., above. The Chancellor may recommend such an exception in a letter that identifies the specific exception being requested and explains why the exception is necessary.
B. In addition to VII.A., the Chancellor (or designee) at each campus may provide an exception to all or part of these Guidelines. For those support groups with minimal levels of activity, i.e., those whose activities result in gross revenues of less than $10,000 per year. Notwithstanding the foregoing, no such exception shall void or liberalize the requirements for accounts with financial institutions to be approved pursuant to IV.B.8.a. and b., above. Such an exception or exceptions must be documented in a writing that identifies the specific exception(s) and explains why the exception(s) is (are) necessary.
C. The President or Chancellor may establish additional operational conditions as may be appropriate, consistent with the Policy and these Guidelines.
VIII. UNIVERSITY POLICIES AFFECTING SUPPORT GROUPS
Among University policies, the following documents specifically relate to support groups and shall be observed as applicable:
1. Presidential Delegation of Authority -- To Approve and Conduct Fund-raising Campaigns; May 26, 1994 (DA 2018)
2. Presidential Delegation of Authority -- Policy to Permit Use of the University's Name; May 3, 1985 (DA 0864)
3. Presidential Delegation of Authority -- Policy to Permit Use of the Unofficial Seal; May 3, 1985 (DA 0865)
4. Presidential Delegation of Authority -- To Solicit and Accept Gifts; March 23, 1994 (DA 2011)
5. Presidential Policy -- Policy on the Requirements to Submit Proposals and to Receive Awards for Grants and Contracts through the University; December 15, 1994.
4/18/96