Tennessee Board of Regents Policy 4:01:04:00 mandates written fundraising policies and procedures for universities. Fundraising policies and procedures established for Tennessee Technological University and the TTU Foundation are outlined herein. Tennessee Technological University and its Foundation endorse the management and financial reporting standards developed by CASE (The Council for the Advancement and Support of Education).
When utilizing Foundation accounts all administrative/purchasing policies of the University are to be honored--requests for exceptions must be routed through the Vice President, University Advancement and the Vice President, Business and Fiscal Affairs.
To maximize success, avoid duplication of efforts and assure adherence to TBR and University priorities and policies, University Advancement serves as the coordinating agent for all fundraising in support of the University. Gift solicitation, proposals for gift solicitation, or fundraising events to be conducted by anyone (including faculty, staff, students, alumni, friends, etc.) for the benefit of Tennessee Technological University, any University foundation or part of the University, shall require the prior approval of the President of the University through the office of the Vice President for University Advancement. Approval of the Tennessee Board of Regents is required prior to the acceptance of certain gifts (see TBR Policy 4:01:04:00).
In the broadest sense, the purpose of the Office of University Advancement of Tennessee Technological University is to create an awareness within the private sector of the financial needs of the University that are not met by state or federal support and to implement a plan to generate financial support through private development. To fulfill these purposes, University Advancement will coordinate an organized program for obtaining gift support from alumni, friends, faculty, staff, corporations, organizations and private foundations for both annual and capital purposes.
The following policies and procedures apply to solicitation of funds or gifts, proposals for the solicitation of funds or gifts, and/or fundraising events. This policy does not apply for payments for services, activities, or products.
A gift is defined here as any funds or property that has value for the University's mission and is voluntarily bestowed upon the TTU Foundation or the University without expectation of return or compensation on the part of the donor. A gift must either be usable by one of the University's programs or marketable and profitable for generating funds for a University program. The University or the TTU Foundation cannot accept gifts which involve unlawful discrimination based upon race, religion, sex, age, national origin, color, handicap, or any other basis prohibited by federal, state, and local laws and regulations. Neither the university nor the TTU Foundation can accept gifts which obligate them to violate any other applicable law or regulation or which violate the University's mission. A gift is never an exchange transaction. However a grant may be an exchange transaction. Grants that are exchange transactions must be coordinated with the University's Office of Institutional Research.
A proposal is defined as a written submission to a potential donor or funding source that requests specific support in the form of a gift or grant or that seeks to determine the interest of the source in providing such support. A fundraising event is any activity sponsored by Tennessee Technological University or the TTU Foundation or support groups for the purpose of obtaining gifts to benefit the Foundation and/or the University.
Coordinating Appeals for Funds and Approaches to Donors
University Advancement will coordinate all appeals for funds or approaches to donors for the University, all parts of the University or its Foundation.
Clearances. Prior to any solicitation of gifts or contributions, University Development must be contacted and as appropriate a "Fundraising Project Request Form" must be processed. This form is to be reviewed and signed by all appropriate administrators before submission to University Advancement. No fundraising activity is to begin until approved by the Associate Vice President, University Development and/or the Fundraising Project Request form has been signed by the Vice President for University Advancement.
Examples of activities to be coordinated through University Advancement include, but are not limited to, the following:
- Annual fundraising campaigns, e.g., phonathons, direct mail solicitations, etc.
- Establishment of any program designed to solicit or acknowledge and recognize financial support and donors.
- All fundraising efforts, including newsletters, memos, letters, etc., appealing to various University constituencies regarding scholarships, memorial funds, fellowships, aid programs, professorships, endowed chairs, loan funds, etc.
- Fundraising for the construction, expansion or renovation of a University building, regardless of other sources of funding.
- Requests to private sources for the funding of new or existing academic programs.
- Requests for gifts from foundations, corporations and individuals to support individual faculty, scholarships, students, staff or projects. (Research proposals are managed by the University's Office of Research.)
- All other programs or activities to solicit gifts.
Gift levels required to name buildings, endow professorships and chairs, establish named scholarship funds, etc. will be established and maintained through University Advancement in coordination with affected college/University unit leaders.
Donor clubs and societies (such as the President's Club) have been established to recognize individuals who understand the importance and impact of private giving to support the University. These organizations have been established to honor those who have made significant gifts to support Tennessee Technological University. Detailed information is available through University Advancement.
Literature for fundraising. To help insure the dissemination of the most appropriate information for a particular fundraising effort, any/all literature (including letters, brochures, newsletters, and booklets) used to attract private funds to support the University shall be coordinated through University Advancement.
Reports of private philanthropy. University Advancement is responsible for compiling official donor records on all private gifts. Therefore, all subsections or parts of the University shall report all gifts to University Advancement, including bequests, deferred gifts, gifts-in-kind, gifts of land, stock gifts and insurance policies, as well as checks and cash. These reports must be made in a timely fashion in accordance with University fiscal policies.
Advancement Services staff is authorized to enter new information and/or change donor financial and/or non-financial information in Raiser's Edge. Duplicate systems or multiple databases should not be established and/or maintained.
Prospect files. University Advancement will establish and maintain prospect and resource files for the purpose of providing relevant information about prospective individual donors, private foundations and corporations. Access to these files shall be coordinated through the Associate Vice President for University Advancement or Vice President for University Advancement.
Volunteers in fundraising. When volunteers are to be involved in fundraising efforts, University Advancement should assist with the selection and recruiting of these individuals and see that they are given the appropriate training and information required for effectiveness. A Volunteer Agreement Form (see Volunteer Form at HR website) must be completed for each volunteer.
Appeals to corporations and foundations. University Advancement will coordinate the cultivation and solicitation of gifts from corporations and private foundations. This coordination will prevent multiple solicitations to any single source of private, corporate or foundation funds. In case of contract proposals to corporations, University Advancement should be notified in advance--so that the corporation's involvement will be reflected in University Advancement's files. Contact with government agencies such as the National Science Foundation, the National Endowment for the Humanities, etc.,should be coordinated through the Office of Research.
Public statements on gifts to the University/Foundation shall be the responsibility of the Office of Public Affairs, which will coordinate the initiation and preparation of all public statements about gifts to the TTU Foundation and/or University or any parts thereof. Coordination shall include the unit designated to receive any gift(s).
Establishing scholarships. Named scholarships may be established under the TTU Foundation. There are two broad categories of scholarships: those funded with annual gifts and those funded with earnings from an endowment. Multiple restrictions on the use of gifts should be avoided. Experience has shown that restrictions drawn too finely in many cases prevent the money's use for deserving students or projects.
All endowments and some annual scholarships require a letter of agreement to be coordinated with the Office of University Advancement. Each letter of agreement is tailored to match the desires of the donor with the needs and requirements of the University and the program being funded. If an annual scholarship does not originate with a Letter of Agreement, an Annual Scholarship Worksheet should be completed.
The IRS has imposed certain restrictions on charitable giving that affect scholarship funding. In order to be tax deductible:
- a gift may not be designated for a relative or descendant of the donor.
- the donor may not reserve the right to select the recipient of a gift or the recipient of endowment funds.
- the donor may not restrict the use for future employment of any designated person.
Annually funded scholarships may range from a few hundred dollars per year to full scholarships that fund tuition, fees, books, room and board, and miscellaneous expenses. Donors may make a one-time gift or pledge over a period of years. Pledges should be for a specific period so that the recipient program may plan on the availability of the scholarship.
Donors do not have to pay for scholarships in a lump sum. For example, many university employees pay for scholarships via monthly payroll deduction. Other donors may also use multiple payments.
Annual scholarships may be named by the donor for him/herself or in honor or memory of someone else. Annual scholarships should be at least $1,000 to be named. However, smaller amounts pledged over a period of time may also qualify for naming. Each case will be evaluated separately.
The major advantage of an annually funded scholarship is that the donor's entire gift is used immediately. The major disadvantage is that it has a finite ending.
Endowed scholarships may be established with a minimum gift and/or pledge of $10,000 which may be paid over a period not to exceed 5 years. A minimum initial contribution of $2,000 to the endowment is required and pledge documentation is to be completed before a separate account is established. The money is invested and managed as part of a large pool of endowment funds. A newly established endowment will earn interest immediately, but no money will be disbursed for scholarships until the $10,000 minimum in gifts is reached and maintained for one full year as of September 30th. Expenditures, thereafter, must be in accordance with the Letter of Agreement.
The major advantage of the endowed scholarship is that it is perpetual and, once established, requires little maintenance or attention by the donor. One disadvantage may be that scholarship awards will be delayed if the $10,000 is paid over a period of time.
Endowment accounts. An endowment consists of funds that are kept intact and invested. A portion (currently defined at 5 percent annually) of the endowment may be applied to purposes designated at the outset by the donor(s). Endowment accounts are to be housed in the Foundation structure to provide greater investment flexibility. An annual fee of one percent (1%) of the endowment balance as of June 30th will be assessed. The funds thus derived will be placed in a special account to help support unfunded or under-funded University priorities. This account will be administered by the President and used to support the mission of the University. Prior to the initiation of any endowment the appropriate development officer must complete appropriate pledge documenation, if not fully funded at origination, and complete a "Letter of Agreement," (i.e. a set of guidelines). University Advancement will develop the Letter of Agreement in coordination with the donor(s) and the affected campus unit. The Letter of Agreement shall be approved by both the donor(s) and the Vice President of University Advancement. The development officer/benefiting unit will obtain all signatures and return the original document to the Vice President for University Advancement. After the Vice President for University Advancement signs the "Letter of Agreement," the Director or Associate Director of Advancement Services will request appropriate accounting numbers and copy for appropriate parties, and insure that information is input into the endowments data base, as appropriate, for donor recognition.
When a new account number has been obtained, interest can begin to accrue for the specific endowment. Along with the request for a new account number, a copy of the "Letter of Agreement" will be sent to the Business Office and to the benefiting campus entity. Copies of the "Letter of Agreement" for all scholarship endowments/agreements will also be sent to the Financial Aid Office and the Scholarship Coordinator's Office. The original Letter of Agreement will be filed in Advancement Services.
Multiple restrictions on the use of gifts should be avoided. Experience has shown that restrictions drawn too finely in many cases prevent the money's use for deserving students or projects.
A minimum of $10,000 is required to establish an endowment. An endowment may be considered fully funded after the minimum required gift balance is attained. Unless otherwise specified in the Letter of Agreement, a percentage of the endowment may be utilized for the designated purpose(s)--to be calculated as of September 30th following the year after full funding and annually thereafter. After an endowment is funded at the University's minimum, disbursement of funds--as agreed upon in the "Letter of Agreement"--for awards can begin. Questions relative to account balances and interest accrued should be directed to the administering unit and/or the appropriate accountant in the Business Office. Administrative management will be the responsibility of the academic unit or activity which will be responsible for account reconciliation with Business Office reports
To allow efficient and effective use of the endowments for designated beneficiaries as well as allowing the endowments to continue to grow, 5 percent of the endowment as of September 30th, each year has been defined as the maximum amount for the following fiscal year's expenditures. Expenditure accounts will be set up for each endowment account. Unless mandated by the Letter of Agreement, 5 percent of each endowment account may be transferred each year by the Business Office to the expenditure account. Funds must not be obligated/utilized in excess of the amount in the account after fall and spring awards are paid. As of December 31st each year, funds in the operations account will be the maximum available for the next academic year's expenses.
The University/the campus unit administering the endowment, should report, at least annually, the use of endowment funds to the donor or the donor's family. Student recipients should be strongly encouraged to write a personal thank-you note directly to the donor.
Information should be compiled and distributed annually by University Advancement for donor sponsored endowments. Financial status reports may be generated for major donors for endowment accounts.
Undesirable gifts. Some gifts are undesirable due to legal or ethical considerations. For example, gifts that:
- restrict the beneficiary to relatives or descendants of the donor. (Such a gift is not tax deductible.)
- reserve the right to pick the recipient of a gift or choose the recipient of endowment funds. No tax deduction is allowed for such gifts since the Foundation/University is viewed by the Internal Revenue Service as the conduit for the gift rather than the recipient.
- restrict the use for future employment of any designated person.
- are encumbered by debt.
- cost to maintain and/or clean outweighs any benefit to TTU
Naming buildings, parts of buildings, parts of the campus or programs. Any request involving the planning, construction or expansion of a building; parts of buildings, the campus or programs--funded in whole or in part by private-sector gifts--shall be submitted through the appropriate administrative channels to the Vice President for University Advancement and the Vice President for Business and Fiscal Affairs. University Advancement shall review any proposal regarding naming of parts of the campus, in consideration of financial contributions, prior to submission to the appropriate campus committee. (TBR Policy 4:02:05:01 mandates establishment of a University committee to name any part of the campus.)
Recognition societies. Donor clubs and societies (such as the President's Club) have been established to recognize individuals who understand the importance and impact of private giving to benefit the Foundation/University. These organizations have been established to honor those who have made significant gifts to benefit Tennessee Technological University. Detailed information is available through University Development.