Saint Louis University

Saint Louis University

Advancement Division

Gift Valuation Policy

This Gift Valuation Policy serves as an extension of Saint Louis University’s Gift Acceptance, Valuation, and Disposition Policies and Procedures, which supersede in all instances of conflict. All references to recording, counting, and reporting relate to Advancement Division databases and reports; accounting and finance treatment may differ.

For gift processing and reporting purposes, gifts should be valued at fair market value on the date the gift is legally transferred to the University. This value should be assessed without regard to the worth and date of the gift as reported by the donor to the IRS.

Gifts of Cash (including checks and credit cards)

Cash, checks and credit card payments are reported at full value as of the date received. Foreign denominated checks or currency will not be accepted for immediate credit, but may be entered for collection and credited as of the date domestic funds are received. Gold coins or other collectable currency will be considered as tangible personal property for purposes of this policy.

Payment Processing Fees

On occasion, third-party payment processors (e.g., those that facilitate online transactions) may deduct transaction fees from donor contributions. In these cases, the donor is credited for the full gift amount and the University’s Controller is notified of said fees for any necessary accounting entries.

Gifts of Securities

1)  Marketable (Publicly Traded) Securities – These securities are recorded, counted, and reported at the average of the high and low quoted sales prices on the date the donor transfers ownership and control of the assets to the University. If there are no sales of the listed security on the transfer date, but there were sales within a reasonable period before or after this date, the gift is valued at the average of the highest and the lowest sales on the nearest dates before and the after the transfer date. The date of legal transfer depends upon the method of delivery of the securities to the University (see Legal Donor and Gift Date Determination policy for details).

2)  Mutual Funds – Mutual funds are recorded, counted, and reported at the closing Net Asset Value (NAV) on the date the donor transfers ownership and control of the assets to the University. Ownership and control may shift when the mutual fund shares are transferred from the account of the donor at a broker to a new account established at the same broker in the University’s name.

3)  Partnership Interests, Non-Publicly Traded Stock, Restricted Securities, and Other Business Interests

a)  Restricted securities (also known as unregistered securities, investment letter stock, control stock or private placement stock) are infrequently given or accepted as gifts because of the difficulty in transferring ownership and determining fair market value.

b)  Gifts of partnership interests, closely held stock, restricted securities, or other business interests, exceeding $10,000 in value, are recorded, counted, and reported at the fair market value placed on them by a qualified independent appraiser as required by the IRS for valuing gifts of non-publicly traded stock.

c)  Gifts of $10,000 or less may be recorded, counted, and reported at the value determined by a qualified independent appraiser (including an independent CPA who maintains the books for a closely held corporation or partnership) or at the per-share cash purchase price of the most recent bona fide transaction involving such stock or partnership interest (which must have occurred within the 12 months preceding such gift) or at the price such stock is redeemed during the campaign period.

Gifts of Personal Property, Real Estate, and Gifts-in-Kind (GIKs)

The University’s Gift Acceptance, Valuation, and Disposition policy stipulates that gifts-in-kind valued at less than $100 need not be legally receipted or processed through the Development Department. However, under the Pension Protection Act of 2006, donors’ substantiation requirements for tax deductions were raised. It is consequently more important than ever to issue legal receipts for all charitable contributions.

The University’s Gift Acceptance, Valuation, and Disposition policy also requires that any GIK valued at less than $5,000 be recorded in the University’s gift database at $1 absent “independent verification” of the fair market value of the gift. However, “independent verification” was not defined in the policy. It is therefore assumed that the pertinent valuation options detailed herein serve as said verification.

1)  Real property (a.k.a. real estate or realty) is defined by the Council for the Advancement and Support of Education (CASE) as land, its natural resources, and any permanent buildings thereon. Personal property is defined as anything other than real property that is subject to personal ownership. The term “gift-in-kind” serves as a catch-all for ALL non-cash gifts, including real and personal property. All three gift types are valued in the same basic manner.

1. In-kind gifts are generally recorded, counted, and reported at their educational discount value (the value the University would have paid for the same items) or, if not available, their fair market value. Educational discount value can be determined through consultation with internal experts and/or the purchasing department.
2. In-kind gifts valued at less than $5,000 are evaluated for recording, counting, and reporting purposes by an independent appraisal; the donor (preferably with a receipt or other printed backup); a qualified, objective faculty/staff member; or (in the case of auction items) a winning auction bid.
3. In-kind gifts valued at $5,000 or more are recorded, counted, and reported at values provided by qualified independent appraisers, who are generally compensated by the donor.

2)  As of 1-1-85, the IRS requires charitable institutions to maintain the following information on all gifts of property valued at $500 or more: property location, purpose of donation (e.g., fund), and information on any subsequent sale. Should the University decide to sell or dispose of a gift valued at over $5,000 and reported by a donor on IRS form 8283 within three years of the date of receipt, the University is required to complete and submit a corresponding Form 8282 with the IRS stating date of disposition and value received. The University’s Finance office issues all Form 8282s and tracks all pertinent property information.

1. The IRS requires that an individual making a property gift in excess of $500 file a copy of form 8283 with the IRS for deduction purposes. For gifts in excess of $5,000, the donor must include a written appraisal verifying the value of the gift and a receipt of the gift from the University. It is the responsibility of the donor – not the University – to obtain the appraisal. IRS policy does not allow the receipting charity to become involved in the appraisal process.

3)  Gifts-in-kind should generally be coded to the same Designation/Fund to which restricted cash gifts would be credited for the purchase of a similar item for a similar purpose. The Controller’s office may make alternate provisions in cases where such gift funds do not currently exist and where their creation is considered impractical.

4)  The dollar value of a gift-in-kind should not be detailed in the receipt letter.

Planned Gifts

Beginning with “Campaign G,” deferred gifts should be recorded, counted, and reported at discounted present value in accordance with existing Internal Revenue Service methodologies. There is no longer a CASE-based face/market value reporting requirement.

1)  Irrevocable Life Income Gifts – Charitable Remainder Trusts, Gift Annuities, and Pooled Income Funds

a)  Gift credit will be recorded and receipted for charitable remainder trusts only if the University’s interest in such trusts is irrevocable and verifiable. With respect to all life income arrangements, whether or not administered by the University, gift credit shall be recorded, counted, reported and receipted only to the extent the University’s remainder interest is irrevocable and approved by the Controller’s Office.

b)  Charitable remainder trusts, gift annuities, and pooled income funds are recorded, counted, and reported at present value (PV) – typically equivalent to the amount the IRS allows as a charitable deduction – on all fundraising reports.

2)  Irrevocable Charitable Lead Trusts – Gift credit is recorded, counted, reported and receipted to the extent that a charitable lead trust is verifiable and the University’s interest therein is irrevocable.

a)  Generally, although the University’s financial statements typically count lead trusts at present value, fundraising reports should treat each income payment as an outright gift.

3)  Life Insurance – To record, count, report and receipt a gift of life insurance, the University must be the owner and irrevocable beneficiary of the policy. If the University is the beneficiary but not the owner, only the actual value of realized death benefits is recorded, counted, reported and receipted. If the University is the beneficiary and the owner, the value of realized death benefits constitutes a gain on asset disposition rather than a gift.

a)  Paid-Up Life Insurance Policies: Paid-up life insurance policies are recorded, counted, and reported at the cash surrender value (as identified in writing by the insurance provider) and reported as outright gifts.

b)  Partially Paid-Up Life Insurance Policies: Life insurance policies that are not fully paid-up on the date of contribution are recorded, counted, and reported at the cash surrender value (as identified in writing by the insurance provider) and reported as outright gifts. Subsequent premiums to be paid by the donor may be booked as pledges (at full aggregate payment value for a maximum of five years) or outright gifts. If premium payments are not passed through the University, proof of payment (with the payer name) must be forwarded to the University for receipting purposes.

c)  New and Term Policies: Premiums to be paid by the donor may be booked as pledges (at full aggregate payment value for a maximum of five years) or outright gifts. If premium payments are not passed through the University, proof of payment (with the payer name) must be forwarded to the University for receipting purposes. No value of any kind is given to estimated cash value growth.

4)  Bequests and Trusts – All amounts received by the University through bequests or pursuant to other testamentary plans are recorded, counted, and reported at the value received, provided that if such amount was previously credited for campaign purposes as an irrevocable expectancy, only such amount received in excess of the previously credited expectancy amount shall be counted as a new outright contribution.

Gifts of Service

Contributions of services are not tax deductible and, per CASE standards, never counted in official gift totals – regardless of whether the donor assists as a volunteer or as a professional providing a specialized service. However, Financial Accounting Standards Board guidelines permit these contributions to be booked on the University’s general ledger as gift income in situations where:

1)  They would need to be purchased if not contributed;

2)  They require specialized skills (e.g., accounting, legal work, consulting, or printing); and

3)  They are provided by persons or organizations possessing those skills.

Donors may be encouraged to bill the University for such services and donate the payment back to the University – though the net tax benefits of such an arrangement would be negligible for most donors.

Sponsorships

Only the portion (if any) of a sponsorship payment that exceeds the fair market value of “substantial return benefits” may be recorded and receipted as gift revenue. See the University’s Sponsorship Processing Policy for more information.

Last Updated: 9.28.07 1