University Foundations
Section I. PURPOSE.
Subd. 1. Purpose of Foundations. Private support for public higher
education is an accepted and firmly established practice throughout the
nation. Foundations are established to enhance this practice, to enable
institutions to accomplish more than public funding allows. Their private,
independent nature also provides the University with the added advantages
of dedicated donor services and management flexibility.
Subd. 2. Definition of Foundation. Charitable organizations of
various legal types and descriptions. These various entities are referred
to as "foundations" throughout this policy.
Subd. 3. Recognized Foundations. The University of Minnesota
benefits from the activities of many foundations. The relationship with
some foundations is very close and the foundations have, as their primary
mission, support of the University of Minnesota and its programs. These
foundations, including, as of the implementation of this policy, University
of Minnesota Foundation, Minnesota Medical Foundation, Minnesota Landscape
Arboretum Foundation and 4-H Foundation are accorded the status of "Recognized
Foundations" as defined in the policy.
Subd. 4. Other Foundations. Other foundations may provide substantial
support to the University and its programs while their main focus and mission
are of regional or national scope or centered upon specific research or
service goals. These foundations may provide support to several recipients
in addition to the University of Minnesota. Generally, the mutual expectations
of these foundations and the University are defined in the gift, grant
or award document. To the extent that such expectations or other reciprocal
arrangements, such as use of University space or services are not clearly
defined, a separate written agreement should be established in order to
clarify the obligations of the University and the foundation.
Subd. 5. Policy Objectives. Aware of the value of its own long-standing
foundations to the well-being of the University, yet conscious of its responsibility
to assure the proper relationships with them, the Board of Regents establishes
this policy with the following objectives:
(a) Preserve and enhance the operation of foundations appropriately
recognized by the University of Minnesota.
(b) Support the fund raising activities of such foundations, and promote
a positive relationship with their staff and volunteer members.
(c) Assure that the University and its foundations operate effectively
and responsibly, consistent with the reasonable expectations of both public
and private interests, on behalf of the University.
Section II. Policy Statement.
Subd. 1. Board Affirmation. To accomplish these objectives the
Board of Regents affirms the work and conduct of those University-related
foundations whose practices have consistently embodied a common set of
operational and financial standards for University recognition.
Subd. 2. Foundation Establishment. The president of the University
of Minnesota may afford recognition to a foundation that satisfies certain
basic criteria, specified below. However, because it is desirable to have
University-related gift solicitation and donor relations efforts concentrated
in a limited number of organizations, a prospective foundation will be
recognized only if it is determined that its proposed functions cannot
be adequately met by the University or existing recognized foundations.
Subd. 3. Board Control. In principle, the Board of Regents recognizes
that it cannot, and should not, have direct control over foundations that
enhance and support the University's mission. These foundations exist to
serve the University, but are governed separately.
However, this relationship also requires that the Board of Regents protect
the integrity and name of the University and its programs, and assure that
foundations acting on its behalf exemplify the standards it has come to
expect from its own recognized foundations.
Section III. STANDARDS OF UNIVERSITY RECOGNITION.
Subd. 1. Characteristics of Recognized Foundations. Recognized
foundations should satisfy the following characteristics:
(1) are created and operated primarily in support of the University's
interests, and their work is compatible with the institution's purposes;
(2) have as their primary purpose to secure, manage, and invest private
support for the benefit of the University;
(3) provide private support for a significant segment of the operations
or programs of the University.
(4) operate as private legal entities, separate from the University;
(5) use sound fiscal and auditing procedures; and
(6) obtain and maintain status as tax-exempt, charitable organizations
under state and federal income tax laws to ensure that gifts and bequests
received may qualify as deductible, charitable contributions for the donor.
Subd. 2. Privileges of Recognized Foundations. In return, foundations
acting on behalf of the University may be granted various privileges, which
may include:
(1) use of the name and seal of the University, provided that University
delegations of authority and policies are observed;
(2) use of University space, equipment, and staff in the performance
of the foundation's activities; and
(3) the University may urge, suggest or recommend contributions to the
recognized foundations in support of University activities.
Subd. 3. Unrecognized Foundations. Except as specifically provided
in written agreement with the University, prospective foundations or nonprofit,
tax-exempt organizations unable or unwilling to embody these standards
should not expect the recognition and privileges accorded those foundations
that satisfy University standards. Specifically, foundations not recognized
by the University may not:
(1) occupy University facilities or property reserved for non-public
uses;
(2) use any University asset, credit, goodwill, or the name of the University;
(3) be recommended for contributions; and
(4) use or assume benefit of the University's tax-exempt status under
state or federal laws.
Section IV. Guidelines for Establishing and Maintianing Relationships.
Subd. 1. Enabling Documents. A recognized foundation's enabling
documents (e.g., articles of incorporation, bylaws, constitution) and any
amendments are to be filed with and reviewed by the University president
or a designee. These documents must include a clause requiring that in
the event of its dissolution, the foundation's assets and records will
be distributed to the regents of the University of Minnesota, provided
the regents remain a qualified charitable organization under relevant state
and federal income tax laws.
Subd. 2. Membership of President. The president or a designee
must be an ex officio voting or nonvoting member of a recognized foundation's
governing board and of any executive or similar committee empowered to
act for the governing board.
Subd. 3. Bonded Officers and Staff. Officers and staff members
of a recognized foundation should be bonded as appropriate in amounts to
be determined by the foundation's governing board. General liability and
directors' and officers' liability insurance should be obtained in amounts
determined by the governing board to be reasonable and appropriate.
Subd. 4. Accountability and Stewardship. The University and the
foundations want to maintain the highest levels of accountability and stewardship,
and each entity shall retain primary responsibility for funds under its
respective management. To accomplish those goals, they will share information,
develop reporting processes and institute compliance and auditing procedures
that ensure donated funds are accounted for, expenditures are made in accordance
with donors' wishes and reports are made to donors on the use of such funds.
Subd. 5. Unrecognized Foundations. No unrecognized foundation,
nonprofit or profit organization shall, unless as an exception, represent
itself to be involved directly or indirectly with the University or use
the name of the University in such things as research, fund raising, testing
or other activities related to the mission of the University. Exceptions
must be approved in writing by the President of the University.
Section V. General Operating Procedures.
Subd. 1. Intent. To protect and preserve their mutual integrity,
the University and its recognized foundations should follow sound and appropriate
operating procedures, to include the following.
Subd. 2. Assistance to University. From time to time, the University
may request the assistance of a recognized foundation in providing services
to other support groups such as cash management, stewardship, accounting,
gift and tax reporting or fund raising activities. Such assistance would
be provided at the option of the foundations.
Subd. 3. Payments to University Employees. In general, consulting
fees, loans, or perquisites may be paid to a University employee, director,
officer, or staff member only with the written approval of the appropriate
University official. Payments to the University president must be approved
by the regents and similar payments to a foundation trustee or director
approved by its board.
Subd. 4. Governing Board Approval. Transactions involving the
foundation and the personal or business affairs of a trustee, director,
officers, or staff member should be approved in advance by the foundation's
governing board. In addition, trustees, directors, officers, and staff
members of a recognized foundation disqualify themselves from making, participating
or influencing a decision in which they have or would have a financial
interest.
Subd. 5. Personal Acceptance of Gifts. No director, trustee,
officer, or staff member of a recognized foundation shall accept from any
source any gift or gratuity that is offered, or reasonably appears to be
offered, because of the position held with the foundation; nor should an
offer of a gift or gratuity be extended by such an individual on a similar
basis. This does not include informational material, such as books, reports,
calendars, or other unsolicited promotional material; nor modest entertainment,
such as a meal or refreshment in connection with meetings, conferences,
or public ceremonies, or home hospitality.
Subd. 6. Disallowed Activities. No substantial part of the activities
of a recognized foundation should consist of disseminating propaganda,
attempting to influence legislation, or participating or intervening in
any political campaign on behalf of a candidate for public office.
Section VI. Communication Procedures.
Subd. 1. Disclosure to Donors. Foundations recognized by the
University make it clear to prospective donors that:
(1) the foundation is a separate, legal and tax entity organized for
the purpose of encouraging voluntary, private gifts, trusts, and bequests
for the benefit of the University;
(2) responsibility for governance of the foundation, including investment
of gifts and endowments, resides in the foundation's board;
(3) checks for charitable gifts to any of the University's participating
academic and support programs should be made payable to the foundation;
and
(4) gifts made for a designated purpose will be dedicated in their entirety
to that purpose unless it is specifically stated that an administrative
charge will be applied.
Subd. 2. Conditions of Gift Acceptance. In accepting gifts of
all kinds, recognized foundations:
(1) advise donors that any restrictive terms and conditions they attach
to gifts for the University are subject to University approval;
(2) ensure that gifts are reported to and approved for acceptance by
the University president and/or Board of Regents in accordance with pertinent
University policies and delegations of authority;
(3) coordinate their funding goals programs, and campaigns with the
University; and
(4) gifts, grants, or contracts that include a financial or contractual
obligation binding upon the University must have prior concurrence in writing
from the provost and/or appropriate vice president or their designee.
Section VII. Financial Procedures.
Subd. 1. Standards. Foundations hold and invest endowments and
funds functioning as endowments on a long-term basis. For this purpose,
they should ensure that appropriate standards such as the following are
applied:
(a) Prudent Practices. In general, foundation investment procedures
should be conducted in accordance with prudent, sound practices to ensure
that gift assets are protected and enhanced, that a reasonable return is
achieved, and with due regard for the fiduciary responsibilities of the
foundation's governing board. The investments must be consistent with the
terms of the gift instrument.
(b) Administration of Income. Income from investments, net of
administrative fees, should be administered in accordance with pertinent
foundation board policies, and, where appropriate, transferred to the University
and expended from the designated University department or program accounts.
(c) Expenditures. Except as provided in this paragraph, the foundations
shall expend their funds through University-designated program accounts.
Foundations may maintain and use accounts for the payment of expenses incurred
for foundation purposes and programs in accordance with procedures approved
by the University. Payments for specific authorized expenses incurred by
University senior administrative officials, scholarships, honoraria, awards,
appropriately documented reimbursements and other authorized Universityand
foundation-relatedprojects may be paid directly from foundation accounts.
The foundation shall summarize these direct expenditures in an annual report
to the University.
(d) The foundation shall also prepare an annual report to the University
that summarizes the funds transferred to each University department. The
report shall summarize these amounts by each account and the total for
each department. The University and foundation shall provide each other
with other reports necessary to assure proper financial oversight.
Subd. 2. Accountability of Funds. Consistent with good stewardship,
University principals into whose department or program the foundation funds
are transferred, are responsible both to account for them in accordance
with University policies and procedures, and to notify the foundation on
a timely basis regarding the use of such funds. The foundation in consultation
with the University shall determine who shall be responsible for reporting
to the donor regarding the use of such funds.
Subd. 3. Consistent with University Mission. Foundations should
carry out financial commitments and expenditures consistent with pertinent
policies, plans, and budget approved by the foundation's governing board
and consistent with the University's mission.
Subd. 4. Donation Designation. While the University will accept
gifts made directly to the University or the Board of Regents, absent unique
circumstances making a direct gift to the University more appropriate,
donors shall be requested to make gifts to one of the recognized foundations.
Where possible, without violating the terms of the gift or applicable law,
and where the donor's ability to deduct the gift for tax purposes would
not be impaired, donations to the University or the Board of Regents shall
be deposited to the recognized foundation best suited to administer the
gift.
Subd. 5. Recording of Gifts. The University of Minnesota Foundation
is designated as the central development office of the University. All
gifts received by the University or one of its recognized foundations shall
be reported to the University of Minnesota Foundation to ensure the proper
receipting and recording of all gifts to the University in accordance with
federal tax law.
Subd. 6. Financial Statement. Foundations should maintain books
in accordance with generally accepted accounting principles, and should
be audited annually by a firm of certified public accountants. Copies of
the audited financial statement and a current list of foundation officers,
directors or trustees, should be made available to the University president.
Subd. 7. Review by University Officials. Because private funds
are raised to support public projects, there are occasions when it is appropriate
for foundations to permit authorized University officials or their designees
to inspect the pertinent foundation books and records that do not violate
rights to privacy and confidential donor information.
Subd. 8. Compliance Reviews. The University will conduct periodic
compliance reviews of the use of donated funds. These reviews will be conducted
by the University on an annual basis. Their purpose will be to ensure that
dispositions of donated funds have complied with the purposes and restrictions
set forth by the donors and/or the foundation. The scope of the review
and extent of testing will be mutually agreed upon in advance by the University
and the foundation. This agreement shall take place through the Board of
Regents Audit Committee as a part of the annual audit plan approved in
April of each year. A written report of the results of such review shall
be provided to the foundation.
Subd. 9. Designation as a Gift. Funds received by the University
shall only be accounted for as gifts where the appropriate donative intent
is present. Amounts received solely in exchange for services or property
shall not be accounted for as gifts.
Section VIII. Affirming Relationships.
The University of Minnesota, its president and Board of Regents, affirm
and encourage the work and conduct of its foundations and their volunteer
boards. When members of the University community learn that concerned citizens
are contemplating the creation of organizations or foundations in support
of University of Minnesota programs, the prospective organizers should
be urged to seek the assistance of the University, or University of Minnesota
Foundation to ensure the appropriateness of their relationship with the
University of Minnesota and the potential for utilizing existing foundations
to achieve their objectives. In the event existing foundations cannot provide
the necessary services, the new organization should seek University recognition
and its related privileges by exemplifying the standards and guidelines
set forth above.
Supersedes: Fund Raising - Policy Statement dated October 8,
1965.
|
