Gift Acceptance Procedure

Associated policy, standard(s), and/or regulation(s): Gift Acceptance Policy, NWCCU 2.E.1, 2.E.2, 2.E.3
Responsible Unit: Development| Executive Lead: Executive Director of Development 
Created: 2008 | Reviewed/Revised: 12/2017, 6/2019, 1/27/2023 | Effective: 1/27/2023 

Procedure:  
I. Use of Legal Counsel 
PNWU shall seek the advice of legal counsel in matters relating to acceptance of gifts when appropriate. Review by counsel is recommended for: 

  • Closely held stock transfers that are subject to restrictions or buy-sell agreements. 
  • Documents naming PNWU as Trustee. 
  • Gifts involving contracts, such as bargain sales or other documents requiring the PNWU to assume an obligation. 
  • Transactions with potential conflict of interest that may invoke IRS sanctions. 
  • Other instances in which use of counsel is deemed appropriate by the GAC.​​​​​ 

II. Conflict of Interest 
PNWU will urge all prospective donors to seek the assistance of personal legal and financial advisors in matters relating to their gifts and the resulting tax and estate planning consequences. PNWU will comply with the Model Standards of Practice for the Charitable Gift Planner promulgated by the National Association of Charitable Gift Planners. 

III.          Restrictions on Gifts 
Subject to direction of the Board of Trustees, PNWU may accept unrestricted gifts, and gifts for specific programs and purposes, provided that such gifts are consistent with its stated mission, purposes, and priorities. 

The GAC will review potential gifts which would fall outside of standard procedures and practices and/or may be deemed too restrictive. Gifts that are too restrictive are those that violate the terms of the corporate charter, gifts that are too difficult to administer, or gifts that are for purposes outside the mission of PNWU. 

Gifts that are not designated or restricted by a donor will be recorded as unrestricted contributions, except when the donor has an active pledge. Donations without written designations or restrictions will be applied as payments toward the pledge and the funds will be credited to the pledge account. If the donor has more than one pledge and there is no written designation on a donation, the donor will be contacted to request a designation. A confirming letter or email will be sent. 

An additional exception can be made if the donor communicates a written designation or restriction to a university representative. The acknowledgement letter or a separate special letter or email must inform the donor of the designation or restriction and request that the donor inform the university if his/her intentions are misinterpreted. The acknowledgement letter or separate special letter will serve as evidence of the donor’s restriction and the funds will be utilized for the purpose of the restriction or designation. 

IV. Types of Gifts 
The following are examples of gifts that may be acceptable: 

  • Cash 
  • Tangible Personal Property 
  • Securities 
  • Real Estate 
  • Remainder Interests in Property 
  • Oil, Gas, and Mineral Interests 
  • Bargain Sales 
  • Life Insurance 
  • Charitable Remainder Trusts 
  • Charitable Lead Trusts 
  • Retirement Plan Beneficiary Designations 
  • Bequests 
  • Life Insurance Beneficiary Designations 
  • In-Kind Gifts, subject to the gift acceptance committee and/or Presidential approval 

The following criteria govern the acceptance of each gift form: 

  1. Cash or cash equivalent is acceptable in any form. Checks shall be made payable to PNWU and shall be delivered to 111 University Parkway, Suite. 202, Yakima, WA 98901. 
  2. Tangible Personal Property. All other gifts of tangible personal property shall be examined in light of the following criteria: 
    • The property fulfills the mission and vision of PNWU. 
    • The property is marketable. 
    • There are no undue restrictions on the use, display, or sale of the property. 
    • There are no carrying costs for the property. 
    • There is sufficient space to hold or store the property. 
  3. Securities. PNWU can accept both publicly traded securities and closely held securities. 
    • Publicly Traded Securities. Marketable securities may be transferred to an account maintained at one or more brokerage firms or delivered physically with the transferor’s signature or stock power attached. As a general rule, all marketable securities shall be sold upon receipt unless otherwise directed by the finance committee of the PNWU Board of Trustees. In some cases marketable securities may be restricted by applicable securities laws; in such instance, a recommendation on the acceptance of the restricted securities shall be made by the GAC to the Board Development Committee, with final approval by the PNWU Board of Trustees. 
    • Closely Held Securities. Closely held securities that include not only debt and equity positions in non-publicly traded companies but also interests in limited partnerships and limited liability companies, or other ownership forms, can be accepted subject to the recommendation of the GAC to the Board Development Committee with final approval from the PNWU Board of Trustees. Gifts must be reviewed prior to acceptance to determine: 
      • there are no restrictions on the security that would prevent PNWU from ultimately converting those assets to cash; 
      • the security is marketable; and 
      • the security will not generate any undesirable tax consequences for PNWU. 
    • If potential problems arise on initial review of the security, further review and recommendation by an outside professional may be sought before making a final decision on acceptance of the gift. The PNWU Board of Trustees and legal counsel shall make the final determination on the acceptance of closely held securities when necessary. Every effort will be made to sell securities with limited marketability as quickly as possible. 
  4. Real Estate. 
    • Gifts of real estate may include developed property, undeveloped property, or gifts subject to a prior life interest. Prior to acceptance of real estate, PNWU will generally require an initial environmental review and/or inspection by a licensed professional of the property to ensure that the property has no environmental damage. Environmental inspection forms are attached as an appendix to this document. In the event that the initial inspection reveals a potential problem, PNWU shall retain a qualified inspection firm to conduct an environmental audit. The cost of the environmental audit shall generally be an expense of the donor. 
    • When appropriate, a title binder shall be obtained by PNWU prior to the acceptance of the real property gift. The cost of this title binder shall generally be an expense of the donor. 
    • Prior to acceptance of the real property, the gift shall be reviewed and recommended by the GAC to the Board Development Committee with final approval by the PNWU board of trustees in consultation with PNWU’s legal counsel. Criteria for acceptance of the property shall include:
      • The property is useful for the purposes of PNWU. 
      • The property is marketable. 
      • There are no restrictions, reservations, easements, liens, liabilities or other limitations associated with the property. 
      • There are no carrying costs, which may include insurance, property taxes, mortgages, or notes, etc., associated with the property. 
      • The environmental audit reflects that the property is not damaged.​​​​​​​ 
  5. Remainder Interests in Property. PNWU will accept a remainder interest in a personal residence, farm, or vacation property subject to the provisions of paragraph 4 above. The donor or other occupants may continue to occupy the real property for the duration of the stated life. At the death of the donor, PNWU may use the property or reduce it to cash. Where PNWU receives a gift of a remainder interest, expenses for maintenance, real estate taxes, and any property indebtedness are to be paid by the donor or primary beneficiary. 
  6. Oil, Gas, and Mineral Interests. PNWU may accept oil and gas property interests, when appropriate. Prior to acceptance of an oil and gas interest the gift shall be reviewed and recommended by the GAC to the Development Committee with final approval by the PNWU board of trustees in consultation with PNWU’s legal counsel. Criteria for acceptance of the property shall include: 
    • Gifts of surface rights should have a value of $20,000 or greater. 
    • Gifts of oil, gas, and mineral interests should generate at least $3,000 per year in royalties or other income (as determined by the average of the three years prior to the gift). 
    • The property should not have extended liabilities or other considerations that make receipt of the gift inappropriate 
    • A working interest is rarely accepted. A working interest may only be accepted where when there is a plan to minimize potential liability and tax consequences. 
    • The property should undergo an environmental review to ensure that PNWU has no current or potential exposure to environmental liability.​​​​​​​ 
  7. Bargain Sales. PNWU may enter into a bargain sale arrangement in instances in which the bargain sale furthers the mission and purposes of PNWU. All bargain sales must be reviewed by the GAC and recommended to the Board Development Committee with final approval by the board of trustees. Factors used in determining the appropriateness of the transaction include: 
    • PNWU must obtain an independent appraisal substantiating the value of the property. 
    • If PNWU assumes debt with the property, the debt ratio must be less than 50% of the appraised market value. 
    • PNWU must determine that it will use the property, or that there is a market for sale of the property, projecting sale within 12 months of receipt. 
    • PNWU must calculate the costs to safeguard, insure, and maintain the property. 
  8. Life Insurance. PNWU must be named as both beneficiary and irrevocable owner of an insurance policy before a life insurance policy can be recorded as a gift. The gift is valued at its interpolated terminal reserve value, or cash surrender value, upon receipt. If the donor contributes future premium payments, PNWU will include the entire amount of the additional premium payment as a gift in the year that it is made. 

    If the donor does not elect to continue to make gifts to cover premium payments on the life insurance policy, PNWU may: 
    • Continue to pay the premiums; 
    • Convert the policy to paid up insurance; or 
    • Surrender the policy for its current cash value.​​​​​​​ 
  9. Charitable Gift Annuities. PNWU does not offer charitable gift annuities. PNWU does, however, accept annuity payments as a beneficiary. 
  10. Charitable Remainder Trusts. PNWU may accept designation as remainder beneficiary of a charitable remainder trust with review and recommendation by the GAC to the Board Development Committee and approved by the PNWU Board of Trustees. PNWU will not accept appointment as trustee of a charitable remainder trust. 
  11. Charitable Lead Trusts. PNWU may accept a designation as income beneficiary of a charitable lead trust. The board of PNWU will not accept an appointment as Trustee of a charitable lead trust. 
  12. Retirement Plan Beneficiary Designations. Donors and supporters of PNWU will be encouraged to name PNWU as beneficiary of their retirement plans. Such designations will not be recorded as gifts to PNWU until such time as the gift is irrevocable, however, it may be counted and recognized in the campaign and/or fundraising reports of PNWU. When the gift is irrevocable, but is not due until a future date, the present value of that gift may be recorded at the time the gift becomes irrevocable. 
  13. Bequests. Donors and supporters of PNWU will be encouraged to make bequests to PNWU under their wills and trusts. Such bequests will not be recorded as gifts to PNWU until such time as the gift is irrevocable, however, it may be counted and recognized in the campaign and/or fundraising reports of PNWU. When the gift is irrevocable, but is not due until a future date, the present value of that gift may be recorded at the time the gift becomes irrevocable. 
  14. Life Insurance Beneficiary Designations. Donors and supporters of PNWU will be encouraged to name PNWU as beneficiary or contingent beneficiary of their life insurance policies. Such designations shall not be recorded as gifts to PNWU until such time as the gift is irrevocable, however, it may be counted and recognized in the campaign and/or fundraising reports of PNWU. When the gift is irrevocable, but is not due until a future date, the present value of that gift may be recorded at the time the gift becomes irrevocable. 
  15. In-Kind Gifts. It is the policy of PNWU to review all In-Kind Gifts for appropriate use prior to acceptance. Gifts in the form of equipment, instructional materials, automobiles, furniture, and other tangible items may be accepted by PNWU, subject to the review and discretion of PNWU. Within 30 days, the Executive Director of Development shall review the proposed gift and make recommendation to the President and/or gift acceptance committee with final approval by the PNWU board of trustees and subject to a review of capability for use by PNWU. The donor of said property shall be responsible for determining any charitable contribution for tax purposes, as recommended by the Federal Accounting Standards Board (FASB). PNWU will internally document receipt of item according to university accounting standards. 

V.  Miscellaneous Provisions 

  1. Securing appraisals and legal fees for gifts to PNWU. It will be the responsibility of the donor to secure an appraisal (where required) and independent legal counsel for all gifts made to PNWU. 
  2. Valuation of gifts for development purposes. PNWU will record a gift received by PNWU at its valuation for gift purposes on the date of gift. 
  3. Responsibility for IRS Filings upon sale of gift items. The finance committee of PNWU board of trustees is responsible for assuring IRS form 8282 is filed upon the sale or disposition of any asset sold within two years of receipt by PNWU when the charitable deduction value of the item is more than $5,000. PNWU must file this form within 125 days of the date of sale or disposition of the asset. 
  4. All reports on Development activities tie to PNWU financial statements prepared using Generally Accepted Accounting Principles (GAAP). The element tied to the GAAP financial statements must be delineated clearly before adding the other elements countable for development purposes. 

Acknowledgement of all gifts made to PNWU and compliance with the current IRS requirements in acknowledgement of such gifts shall be the responsibility of the Development Office of PNWU. 

VI. Changes to Gift Acceptance Policies 
These procedures and guidelines have been reviewed and accepted by the PNWU Development Committee, the GAC and the board of trustees. The Board of Trustees of PNWU must approve any changes to, or deviations from, these policies. 

Appendices: 
N/A 

Policy Resources

For assistance with policies and procedures contact:

Lori Fulton
lfulton@pnwu.edu