Franklin & Marshall College Franklin & Marshall College

Gift Acceptance Policy

Throughout the year, Franklin & Marshall College seeks and welcomes contributions that support its mission. The following Gift Acceptance Policy (Policy) strives to provide equitable protection for the interests of F&M and the interests of those who support the College through charitable contributions. Charitable contributions are donations (or gifts) of various types of property in the present and future for the charitable purposes of F&M. Gifts to the College must be accepted by the Board of Trustees (Board). The Trustee Advancement Committee (TAC) recommends gift acceptance policies to the Board for approval and then acts for the Board in implementing the Policy. As a general rule, non- cash gifts to the College are sold upon receipt unless determined to have a strategic value to the College or intended for the Museum Collection.

To ensure that gifts are received and administered properly, the TAC has established an administrative committee, the Gift Acceptance Committee (GAC), comprising the Vice President for Finance and Treasurer, Vice President for College Advancement, and the Provost and Dean of the Faculty. The Associate Vice President of Development shall be an ex officio, non-voting member of the GAC, fielding questions from the F&M community regarding gift acceptance and calling meetings of the GAC as required. The Director of Gift Planning shall also be an ex officio, non-voting member of the GAC and serve as recording secretary.

The TAC has recommended and the Board has approved this Policy for the acceptance of gifts to F&M. All gifts to the College approved in accordance with this Policy are considered accepted by the Board, including gifts accepted as exceptions pursuant to Section 2.6. The GAC shall report its activities to the President, the Chair of the TAC and the Chair of the Board on a monthly basis.

All proposed gifts shall be directed to College Advancement. Gift acceptance procedures (GAP) are established by the administrative department responsible for management and/or sale of the particular gift type. Such procedures must be approved by the GAC and shall be in compliance with this Policy.

The Policy is intended to serve the best interests of both the donor and F&M. The Policy has been established to ensure that each gift to, or for the use by, F&M is structured to provide appropriate benefit to both the College and the donor. Except where stated otherwise, particular policies may be modified to respond to complex gift plans. Deviations from this Policy will require approval of the then acting President, Chair of the Board of Trustees and the Chair of the Trustee Advancement Committee (see Section 2.6).

Table of Contents

  1. Policy
  2. General Guidelines
  3. Types of Property
  4. Current Gifts
  5. Future Gifts
  6. Corporate and Foundation Gifts
  7. Gift Planning Services
  8. Donor Relations
  9. Authorization for Negotiation
  10. Use of Legal Counsel
  11. Franklin & Marshall Employee as Fiduciary
  12. Review and Responsibilities

Approved by TAC 02.25.11


1. Policy

1.1 Scope

These policies address both present and future gifts, with emphasis on contributions by individuals and specific types of future gifts and gifts of non-cash property. A present gift is one made outright and immediately available for use by F&M while future gifts, for example, bequests, charitable remainder trusts and charitable gift annuities mature to benefit F&M at a later date.

1.2 Objective

To encourage financial support for F&M in its mission and to avoid gifts the administration of which may be inconsistent with F&M’s mission or which are likely to generate a disproportionate cost or obligation for the College relative to the benefit received by F&M.

1.3 Application

Each mention of F&M in these policies includes each charitable component, division, program, team and department within the organization of F&M.

2. General Guidelines

2.1 Objectives

To earn the support and confidence of individuals and entities that are planning to make gifts, F&M must be capable of responding quickly, and in the affirmative where possible, to gifts that support College priorities offered by prospective donors. Some gift arrangements and techniques can be complex, and decisions to accept gifts will be made consistent with this Policy following an expeditious and careful consideration of the circumstances for these proposed gifts.

2.2 Ethical Considerations

All individuals involved in fundraising for F&M will adhere to the College’s Conflict of Interest policies and to the Model Standards of Practice for the Charitable Gift Planner as adopted by the Partnership for Philanthropic Planning (PPP), Council for Advancement and Support of Education (CASE), and Association of Fundraising Professionals (AFP).

The College shall determine conclusively that the acceptance of the gift is in accordance with College interests, ethics, image, and practices and that the mission of the College (or the College Museum when gifts are designated for the Museum) is enhanced by the donation.

The College will not release publically the terms or status of any donor gift or pledge without the consent of the donor.

2.3 Legal Considerations

F&M shall comply with all local, state, and federal laws and regulations concerning every charitable gift it encourages, solicits, or accepts. All disclosures, registrations, and procedures required by authorities (such as those required for gift annuities, pooled income funds, and other arrangements, or for donations to museums) shall be made and/or followed in a thorough and timely manner.

2.4 Gift Planning Assistance

F&M’s Office of Gift Planning assists donors with the completion of present and future charitable gifts, in coordination with donors’ personal financial and estate plans. In the interest of maintaining good donor relations, the Office of College Advancement shall strive to acquaint donors and their advisers with gift arrangements that provide maximum benefit to both donor and the College. The College shall not prepare legal documents for execution by donors, except forms to create charitable gift annuities or express a commitment. Because F&M does not give legal or financial advice, staff shall recommend that donors seek the advice of their own legal, financial, and/or tax counsel prior to completing a gift or executing any legal documents.

2.5 Promises and Pledges

Present gifts may be promised or pledged to be paid over a period of up to five years, or longer with specific approval pursuant to Section 2.6, and such gifts may be completed using any of the types of property indicated in Section 4. A promise or pledge may be fulfilled with a series of present gifts or through any type of future gift vehicle (see Section 5 “Future Gifts”). All commitments payable during two or more fiscal years or subject to restrictions as to their use require that the donor sign a non-binding letter of intent unless the College requires otherwise. All such commitments over $500,000 require a binding gift agreement. All endowed gifts require an endowment agreement, which is signed by the donor, the Vice President for College Advancement, the Vice President for Finance and Treasurer, and other applicable persons. In the absence of the Vice President for Finance and Treasurer, the Associate Vice President for Finance can sign in her/his stead. The minimum required to establish a permanent endowment fund is $50,000. The required amounts to endow specific funds (e.g. a named academic department chair) are provided in a separate policy statement.

2.6 Exceptions

Exceptions to the Gift Acceptance Policy must be approved by the then acting President, Chair of the Board of Trustees and the Chair of the Trustee Advancement Committee at the written recommendation of the Gift Acceptance Committee.

2.7 Gift Purpose

If the purpose of a gift is not specified by the donor, the College will consider it to be unrestricted.

3. Types of Property

3.1 Tangible Property
Generally defined as those forms of property that may be touched.

3.1.1 Real Property
Defined as land and generally whatever is affixed to land and those rights which issue out of land.

3.1.1.1 Authorization for Real Estate Gift Transactions
The GAC designates the Vice President for Advancement, the Vice President for Finance and Treasurer and the Vice President for Administrative Services and Business, Government, and Community Relations to evaluate gifts of real property in accordance with the Gift Acceptance Procedures (GAP).

3.1.1.2 Authorization for Real Estate Transactions Other than Gifts
The Board or the Executive Committee of the Board must authorize real estate transactions over $500,000. Real estate transactions with values of $250,000 to $500,000 may be authorized upon written approval of the Chair of the Trustee Finance Committee; Vice President for Finance and Treasurer; Vice President for Administrative Services and Business, Government, and Community Relations; and President of the College. Real estate transactions for less than $250,000 may be authorized upon written approval of the President of the College, Vice President for Finance and Treasurer; and Vice President for Administrative Services and Business, Government, and Community Relations.

Any one signature of the individuals holding the titles of Vice President for Finance and Treasurer, Investment Officer and Assistant Treasurer and/or Associate Vice President for Finance is/are authorized and empowered to execute all legal instruments to acquire real estate, and to sell real estate owned by the College and registered in its name when specific action has been authorized as set forth herein.

3.1.1.3 Real property shall not be accepted to fund an immediate payment gift annuity. Exceptions may be made upon review of applicable state regulations and approval per Section 2.6. Real property otherwise acceptable to the College may be used to fund deferred gift annuities, flexible payment gift annuities and commuted payment gift annuities; the rate offered on such gift annuities shall be lower than the College’s stated rate for gift annuities funded with other assets to account for carrying and sales costs, including transfer taxes, real estate taxes and maintenance expenses. The College may also ask the donor to consider a supplemental gift to cover these costs.

3.1.1.4 Gifts of real estate to fund a charitable remainder trust for which the College will serve as trustee are approved only for net-income and flip charitable remainder unitrusts. The College shall require a donor to contribute additional funds to the unitrust to pay for carrying and sales costs, including transfer taxes, real estate taxes, insurance, and various maintenance expenses.

3.1.1.5 Gifts of real property subject to a retained life estate, defined as a gift to F&M of a house, farm, or ranch where the donor retains the right to the use and enjoyment of the real property for life, shall be accepted subject to the terms of Section 3.1.1. The donor or other occupants may continue to occupy the real property for the duration of the stated life. At the death of the stated life, the College may use the property or reduce it to cash. For all such gifts, the donor or the primary life beneficiary shall be responsible for all expenses attributable to the property during the life- tenancy, including but not limited to maintenance, real estate taxes, assessments, capital improvements, insurance and any property indebtedness.

3.1.1.6 Real property shall not be accepted when encumbered by a mortgage, as the ownership of such property may give rise to unrelated business income for F&M, and disqualification of certain split interest gifts unless handled in a proper manner.

3.1.1.7 Environmental concerns must be reviewed before accepting any gift of real estate. This may involve conducting an environmental audit or Phase I environmental survey of the property as required by the GAP that shall be paid for by the donor. In addition, other due diligence should be completed before accepting real estate. Questions to be answered include: Can the property be sold? What is the fair market value of the property? Are there any liens or on-going disputes related to the property? Are other types of liabilities present?

3.1.2 Personal Property

Defined as that which may be touched, including but not limited to jewelry, books, works of art, collections and equipment.

3.1.2.1. No gift of personal property shall be accepted without prior approval of either the GAC or its designees. The GAC designates the following to evaluate and accept gifts of personal property in accordance with the College’s GAP:

 

Type of Gift

 
 

Designees

 
 

Art for the Collection of the Phillips Museum

 
 

Director of the Phillips Museum; Curator of the Phillips Museum; and Director of Gift Planning

 
 

Material Art, Decorative Art, Ephemera (Materials for College Collection but not Museum Collection)

 
 

Associate Vice President of Development; when Appropriate: Associate Dean of the Faculty or Associate Vice President of Facilities and Operations

 

Athletics Equipment, Uniforms and Athletics Related Materials

 
 
 

Director of Athletics and Recreation; and Associate Vice President of Development

 
 

Books, Manuscripts, Archival Materials and Library- Collection-Related Materials

 
 

College Librarian; Archivist and Special Collections Librarian; Collection Development and Associate Librarian; and Associate Vice President of Development

 

Other (Materials for College Houses, Facilities, Academic Departments, Food or Other Items for Hosting Dinners, etc.)

Associate Vice President of Development; When Appropriate: Associate Dean of the Faculty, Associate Vice President of Facilities and Operations or Director of Alumni Relations

Such property shall be accepted by F&M if there is reason to believe that it may be used in accordance with the mission of F&M or if it may be readily sold.

3.1.2.2 Unless an exception is approved, F&M retains the ultimate right to sell or deaccession all donated personal property, including items accessioned into the College Collection.

3.1.2.3 The College Museum generally adheres to the deaccessioning standards of the Association of Art Museum Directors (AAMD) which state:

Deaccessioning is practiced to refine and enhance the quality, use and character of an institution’s holdings. There are two fundamental principles that are always observed whenever an AAMD member art museum deaccessions an object:

The decision to deaccession is made solely to improve the quality, scope, and appropriateness of the collection, and to support the mission and long term goals of the museum; Proceeds from a deaccessioned work are used only to acquire other works of art—the proceeds are never used as operating funds, to build a general endowment or for any other expenses.

Funds from deaccessioning can be invested in an acquisitions endowment earmarked to support the long-term growth of a museum’s collection. The decision to deaccession a work of art must always reflect this collections management policy and should not be made in reaction to the exigencies of a particular moment. These AAMD guidelines for the use of the proceeds from the sale of deaccessioned art will apply to all accessioned art owned by the College as of the date of adoption of this policy, regardless of whether the art was accessioned prior to, at the time of, or after the adoption of this policy.

3.2 Intangible Property

Generally defined as those forms of property that may not be touched and are representative of a type of ownership in an underlying asset.

3.2.1 Publicly Traded Securities

F&M will accept gifts of securities, defined as stocks, bonds and mutual funds that are traded on an exchange or other publicly reported market. The GAC designates the Investment Officer to accept gifts of publicly traded securities in accordance with the College’s GAP.

3.2.2 Closely-Held Securities and Business Interests

F&M can accept gifts of closely-held securities, which are defined as debt and equity positions in non-publicly traded businesses, hedge funds, and interests in limited liability companies (LLCs) and limited liability partnerships (LLPs), among others, with the intent of selling them immediately to a ready buyer. The GAC designates the Investment Officer to accept gifts of closely-held securities in accordance with the College’s GAP. No gift of closely-held securities shall be accepted without prior approval of either the GAC or its designee.

3.2.3 Cash

Gifts in the form of currency and checks may be accepted in any amount. All checks must be made payable to Franklin & Marshall College and shall in no event be made payable to an employee, agent, or volunteer for credit to F&M. Checks should be accompanied by a letter indicating the purpose of the gift and can be sent to Franklin & Marshall College, Office of College Advancement, P.O. Box 3003, Lancaster, PA 17604-3003.

3.3 Other Property

Property not otherwise described in this section, whether real or personal, of any description (including mortgages, notes, copyrights, patents, trademarks, mineral and gas rights, and royalties) may be accepted upon the review and approval of the GAC. The GAC will seek out advice from appropriate College departments or an outside vendor.

3.4 Suitability

Appropriate inquiry shall be made by the Office of College Advancement and special considerations shall be given to the nature of any intangible property offered and whether it is in keeping with the mission of F&M prior to the acceptance of any gift by the College.

4. Current Gifts

4.1 Absolute Gifts

Defined as those gifts which are not future gifts, an absolute gift is transmitted at the time of or during the same accounting period following a donor’s commitment to make the gift.

4.1.1 Completion

Such absolute gifts may involve any of the types of property described in Section 4 and may be complete or in a structured manner as outlined in this section.

4.1.2 Matching Gifts

Often the value of a gift of cash or securities may be increased through a corporate matching gift.

4.2 Bargain Sales

A form of current gift, a bargain sale is part sale and part gift, in which F&M pays a donor for an asset at less than its current fair market value.

4.2.1 Acceptance

Such gift arrangements may be accepted in accordance with Section 3.1.1, if the proposed gift falls under a description in Section 4. In accepting such gift, F&M requests that the donor provide a bill of sale clearly indicating the retail (or educational/nonprofit discount) price, less the charitable contribution of the discounted amount, and a net cost. In cases where the gift requires the College to sign IRS Form 8283 “Non Cash Charitable Contribution”, the donor shall also provide a copy of the qualified appraisal for the donated asset. The discounted amount can be recorded as a gift-in-kind.

4.2.2 Exceptions

If the discounted amount applies to purchases made by F&M on a regular basis and are not uniquely identified as a special reduction to be considered as a donation, no gift should be counted.

4.3 Charitable Lead Trusts

Defined as an irrevocable trust that pays defined amounts to F&M currently, based on the value of the property held in trust, for a term of years or for the life of an individual, with the remainder passing to a non-charitable beneficiary. A charitable lead unitrust provides a variable payment amount based on a fixed percentage of the annual value of the trust, while a charitable lead annuity trust pays a fixed payment amount based on the initial value of the trust.

4.3.1 Trustee

In general, F&M will consider serving as the sole trustee of a charitable lead trust when F&M is the only charitable beneficiary and F&M has an interest in the trust with an estimated value of at least $500,000. However, the College would prefer that the donor select an outside, independent trustee as the remainder ultimately passes to a person or entity other than F&M. The decision to serve as sole trustee rests with the GAC. F&M will not endorse any particular corporate fiduciaries to serve as trustees of charitable lead trusts.

4.3.2 Co-Trustee

F&M will consider serving as a co-trustee of a charitable lead trust that is to benefit the College provided that the College is the majority charitable beneficiary and F&M has an interest in the trust with an estimated value of at least $500,000. However, the College would prefer that the donor select an outside, independent trustee as the remainder ultimately passes to a person or entity other than F&M. The decision to serve as co-trustee rests with the GAC. F&M will not endorse any particular corporate fiduciaries to serve as trustees of charitable lead trusts.

4.3.3 Statutory Limits

The College shall not serve as trustee if the trust does not qualify as a charitable lead trust under federal and Commonwealth law. No exception shall be made to this requirement. In all cases, the donor shall be provided with proper disclosures.

4.3.4 Fees When F&M Serves as Trustee

For any new charitable lead trusts for which F&M serves as trustee, costs incurred while carrying out the College’s fiduciary responsibilities, such as investment management, administration, legal counsel and tax return preparation, shall be charged to the charitable lead trusts. While the College does not presently charge a separate trustee fee, charitable lead trust agreements should contain language giving F&M the right to do so.

4.3.5 Acceptance and Revocability

College employees and volunteers acting on behalf of the College should become familiar with the types of property generally accepted by the College as suitable contributions to charitable lead trusts for which the College is serving as trustee. Employees or others acting on behalf of the College shall not encourage donors to make gifts of any property to charitable lead trusts that are not in keeping with such guidelines.

Any employee or other persons acting on behalf of the College shall make no representation as to the manner in which charitable lead trust assets will be managed or invested by the College when the College is serving as the trustee. The Investment Officer, with the approval of the Trustee Committee on Investments, oversees the investment of trust assets, balancing the needs of the non-charitable beneficiaries with the needs of the College.

5. Future Gifts

Future gifts shall be encouraged as a method of making gifts to F&M while retaining income which may be needed by the donor or other persons chosen by the donor for any number of personal purposes. In accord with federal and/or state security regulations, such gifts shall not be marketed as tax avoidance devices or as investment vehicles.

5.1 Estate Gifts

5.1.1 Gifts by Will or Living Trust

A will and a living trust are instruments by which a person may make a disposition of property to take effect upon death and which may be altered or revoked at any time during life. Gifts by will or living trust shall be actively encouraged by F&M. The legal name for recording such bequests is “Franklin & Marshall College” and the College’s Federal EIN is 23-1352635.

5.1.2 Expectancies

Attempts may be made to discover expected gifts by will or living trust in order to recognize the donor appropriately and to find opportunities for good donor relations. Where possible, intended bequests of property other than cash or marketable securities should be brought to the attention of the GAC and every attempt be made to encourage the donor to conform his or her plans to F&M policy.

5.1.3 Inquiries

From time to time an inquiry may be received as to the acceptability of property proposed to be contributed by a person who is suggesting a gift by will or revocable trust to F&M. The prospective donor shall be encouraged to make the gift in accordance with the terms and provisions of this Policy. Such inquiries shall be promptly referred to the Director of Gift Planning.

5.1.4 Receipt of Gift(s) from Estates and Living Trusts

Gifts from the estates of deceased donors or their Living Trusts shall generally be accepted in accordance with this policy. The GAC must approve any disclaimer of estate gifts.

5.2 Charitable Gift Annuities

Defined as a contractual arrangement between F&M and donor(s), F&M accepts gifts (in accordance with this Policy and the College’s GAP) in exchange for fixed annuity payments to one or more annuitants for life under terms specified in the contract. Gift annuities may provide for immediate annuity payments, deferred payments, commuted payments or flexible payments. Immediate payment gift annuities begin making payments to named annuitants immediately. Deferred gift annuities begin making payments to named annuitants at a date certain set at the time of the contract. Commuted payment gift annuities pay the entire amount of annuity payments owed during a set time frame. For example, an individual may ask that all of the payments from the annuity be consolidated and paid during the period between when the donor retires and when the donor is eligible for Social Security. Flexible payment gift annuities are deferred gift annuities, but the donor retains the right to select the start date for annuity payments until a later date.

5.2.1 Charity Limits

F&M shall issue charitable gift annuities for gift amounts of $10,000 or more.

Annuitants may be any age. For proposals to annuitants who are less than 60 years old for immediate annuity payments, or for deferred/flexible annuity payments which start before the annuitant is 60 years old, the Office of Gift Planning shall provide information about the impact of inflation on the purchasing power of annuity payments and suggest at least one other gift planning alternative.

A charitable gift annuity agreement shall be for one or two lives, and no exception shall be made to this requirement.

5.2.2 Statutory Limits

No gift annuity agreement shall be issued unless the charitable gift, as computed using government tables, exceeds 10% of the amount transferred for the annuity. No exception shall be made to this requirement. In all cases, the donor(s) shall be provided with a disclosure statement in accordance with and as required under the Philanthropy Protection Act of 1995, and as amended from time to time.

5.2.3 Suggested Rates

F&M shall issue immediate payment gift annuities at the rates suggested by the American Council on Gift Annuities at the time the gift annuity is issued; however, F&M also caps the payout rate for immediate payment gift annuities at 9.5%. Deferred, flexible and commuted payment gift annuity rates shall be determined using the same immediate payment gift annuities rates, then adjusted for the appropriate deferral, flexible start date or commuted payment option. F&M does not compete with other charities to offer the most attractive gift annuity rates. The rates have been determined in order to ensure that the residuum from each annuity is sufficient to meet donor expectations at the time of the gift. Any exceptions to the suggested rates need to be approved per Section 2.6 and must comply with all applicable federal and/or state regulations.

5.3 Charitable Remainder Trusts

Defined by the Internal Revenue Service as irrevocable trusts that pay defined amounts based on several factors including the value of property in trust, to a non-charitable beneficiary(ies) for life or a term of years, with the remainder going to charity at the termination of the trust. A standard charitable remainder unitrust provides a variable payment based on a fixed percentage of the annual value of the trust. A net income charitable remainder unitrust provides a variable income of the lesser of the net income earned by the trust investments in a given year or a fixed percentage of the annual value of the trust. A net income with makeup charitable remainder unitrust is a net income charitable remainder unitrust that allows the trustee to pay more than the maximum fixed percentage in the years in which net income exceeds the maximum percentage, to the extent the trust has paid less than the maximum percentage in prior years. A flip charitable remainder trust pays as a net income charitable remainder trust from its formation until the occurrence of a “triggering event”, at which time it changes its payment method or “flips” and starts making payments as a standard charitable remainder unitrust. A charitable remainder annuity trust pays a fixed annuity amount each year.

5.3.1 Limits When the College Serves as Trustee

F&M may serve as the sole trustee of a charitable remainder trust when the College is the sole irrevocable remainder beneficiary of the trust’s proceeds, and F&M’s remainder interest in the trust has a current fair market value of at least $100,000. In other cases, the Director of Gift Planning may suggest three or more corporate fiduciaries that the donor can contact. F&M will not endorse any particular corporate fiduciaries to serve as trustees of charitable remainder trusts.

Non-charitable beneficiaries of a charitable remainder trust may be any age and the payout percentage may be any amount that is in keeping with Internal Revenue Code and U.S. Treasury regulations. However, the College will not serve as trustee unless the charitable gift, as computed using government tables (the income tax charitable deduction), exceeds 25% of the amount transferred to fund the trust. In order to meet this requirement, in most cases the payout percentage will be 5% to 6%, there will only be one or two non-charitable beneficiaries that have attained the age of at least 60. However, the 25% rule allows the College great flexibility to help donors meet a wide range of financial planning needs while also supporting F&M.

For proposals for non-charitable beneficiaries of charitable remainder annuity trusts who are less than 60 years old, the Office of Gift Planning shall provide information about the impact of inflation on the purchasing power of payments and suggest at least one other gift planning alternative.

5.3.2 Statutory Limits

The College shall not serve as trustee if the trust does not qualify as a charitable remainder trust under federal and Commonwealth law, including but not limited to: the minimum 5% payout rule, the minimum charitable gift of 10% rule and the 5% likelihood of exhaustion test. No exception shall be made to this requirement. In all cases, the donor(s) shall be provided with proper disclosures.

5.3.3 Fees When F&M Serves as Trustee

For any new charitable remainder trusts for which F&M serves as trustee, costs incurred while carrying out the College’s fiduciary responsibilities, such as investment management, administration, legal counsel and tax return preparation, shall be charged to the charitable remainder trusts. While the College does not presently charge a separate trustee fee, charitable remainder trust agreements should contain language giving F&M the right to do so.

5.3.4 Acceptance and Revocability

College employees and volunteers acting on behalf of the College should become familiar with the types of property generally accepted by the College as suitable contributions to charitable remainder trusts for which the College is serving as sole trustee. Employees or others acting on behalf of the College shall not encourage donors to make gifts of any property to charitable remainder trusts that are not in keeping with such guidelines. Cash, publicly traded stock, bonds, and highly marketable properties are the preferred funding assets for charitable trusts.

Any employee or other persons acting on behalf of the College shall make no representation as to the manner in which charitable remainder trust assets will be managed or invested by the College when the College is serving as the sole trustee. The Investment Officer, with the approval of the Trustee Committee on Investments, oversees the investment of trust assets, balancing the needs of the non-charitable beneficiaries with the needs of the College as the ultimate charitable beneficiary.

5.4 Pooled Income Funds

F&M does not currently operate a pooled income fund and does not accept gifts to fund pooled income funds.

5.5 Retirement Plans

Defined as Individual Retirement Accounts (IRAs), 401(k)s, 403(b)s and other qualified pension and profit sharing plans, these plans may make up a significant portion of an individual’s net worth.

5.5.1 Beneficiary Designations

Gifts from these plans may be established by naming Franklin & Marshall College as a beneficiary and formally notifying the plan administrator. F&M encourages retirement plan participants to name the College for a specified percentage of the assets remaining or as the residual beneficiary of the entire balance following the death of the retiree. Married retirees may need to obtain a waiver from a spouse to allow for this designation under some state laws.

5.5.2 IRA Charitable Rollover

Under the Pension Protection Act of 2006, individuals age 70.5 and older were given the ability to transfer up to $100,000 per year directly from an IRA to charity as an outright gift, without having to recognize the distribution as income. The individual does not receive an income tax charitable deduction for this gift and the College issues a special acknowledgement rather than a standard receipt.

Under PPA, these transfers cannot be used to fund any type of life income gift. This provision was passed for a two-year window, and then renewed through 2009. At the time of this policy, there is legislation pending that would make the IRA Charitable Rollover permanent and allow donors age 59.5 to use the provision to fund life-income gifts such as charitable remainder trusts and charitable gift annuities. F&M will accept qualifying IRA Charitable Rollover gifts under the PPA of 2006 and any extensions or expansions of this Act.

5.6 Life Insurance and Commercial Annuities

Life insurance is defined as a contract between the owner of a policy and an insurance company whereby the company agrees, in return for specified premium payment(s), to pay a specified sum to the beneficiary (ies) upon the death of the insured. A commercial annuity is defined as a contract between the owner of the annuity and an insurance company whereby the company agrees, in return for specified payment(s), to pay a specified sum to the annuitant(s) under the contract. Life insurance and commercial annuity contracts may contain other provisions related to investment, conversion, and other options in addition to their primary purposes.

5.6.1 Planning

F&M encourages donors to name the College as a primary, secondary, or last beneficiary under life insurance policies or annuity contracts that they have previously purchased during their lives. F&M does not encourage the purchase of a new policy of life insurance or annuity contract designating the College as beneficiary. No insurance products and no insurance companies are endorsed by the College for use in funding gifts to F&M.

5.6.2 Marketing Practices

Under no circumstances will F&M or its employees become involved in furnishing names of its constituents to other persons for the purpose of marketing life insurance products to those constituents. This practice represents a potential conflict of interest, raises issues concerning donor relations and privacy, and may subject F&M to regulation under state insurance law if the activity is construed as involvement in the marketing of life insurance. No insurance products and no insurance companies are endorsed by the College for use in funding gifts to F&M.

6. Corporate and Foundation Gifts

Corporate and Foundation gifts might take the form of: cash, equipment, software licenses, art and decorative art, patents, securities, and other intellectual property. In every instance it is necessary to determine that the conditions of the gift do not pose a threat to academic freedom and are not in conflict with any College policy. The President and the Provost and Dean of Faculty or their designees shall be responsible for the determination of these issues.

6.1 Conditions

With regard to equipment, software licenses, patents, and other intellectual property, the College needs to be certain that several conditions exist, including that there is a current or projected need that the donation will meet and there are no undue risks associated with the donation -- financial, legal, or environmental.

Any gift or grant that requires a match on the part of the College or its programs of $5,000 or more requires the approval of the President, the Provost and Dean of Faculty, and the Vice President for Finance and Treasurer.

6.2 Acceptance

All donations need to be considered carefully prior to acceptance. A thorough benefits-to- risks analysis that encompasses the above points should be conducted in every case, keeping in mind the finer details of the College-wide policies and procedures in specific categories.

7. Gift Planning Services

7.1 Finder’s Fees and Commissions

F&M will pay no fee to any person as consideration for directing a gift by a donor to the College. Payments of this nature raise legal and ethical issues and, in the case of irrevocable future gifts that involve the management of assets, the payment of such fee may subject F&M and its management and trustees to regulation under federal and state securities laws.

7.2 Professional Services

F&M does not endorse any professional services offered or provided to prospective donors concerning their gift, tax consequences, or financial and estate plans. During the course of gift planning, prospective donors may ask for, and F&M employees and volunteers may provide, names of several advisers who provide counsel regarding charitable gifts to the College. In all cases F&M shall urge a prospective donor to seek the advice of qualified independent professional counsel prior to the completion of any gift to the College.

7.3 Professional Fees

The College shall pay only fees for professional services rendered to F&M in connection with a donor’s establishment of a gift arrangement that will benefit the College. Such fees will be paid only upon approval of the Vice President for College Advancement and the Vice President for Finance and Treasurer.

7.3.1 Reasonable Fees

Professional fees shall be reasonable and directly related to the gift arrangement benefiting F&M. Examples include legal fees for the preparation of documents and accounting fees incident to the transaction.

7.3.2 Review

The Vice President for College Advancement and the Vice President for Finance and Treasurer will review itemized statements of fees prior to payment, and in cases where they determine fees are not reasonable, will negotiate appropriate fees.

7.3.3 Exclusions

The College shall not pay any fees for professional services rendered to donors. Examples include charges for “fee for service” financial planners, commissions paid related to donor product transactions, and appraisals prepared for the purposes of substantiating a donor’s charitable gift.

8. Donor Relations

Consistent with the College’s Gift Publicity Policy, the College produces materials that educate and inform prospective donors and their advisers about various plans and opportunities for giving to F&M. To illustrate the benefits that these techniques offer, specific examples using F&M donors and their gifts may be explained or promoted in a public forum, provided that the individuals identified have given their written permission to be named and serve as examples presented in that manner. Donors who make future gifts may be recognized in publications, at events, on the College’s website and through other vehicles in accordance with the Gift Publicity Policy as a method of honoring and celebrating their commitment to an important gift unless they have requested otherwise.

8.1 Counting, Reporting and Valuation

Gift counting, reporting and valuation standards determine the values that will be counted in College fundraising totals and the way these gifts will be reported. These values may be different from the values used for gift recognition and naming for crediting purposes, or recorded in the College’s financial records for accounting purposes.

8.1.1 Gift Counting and Reporting

Gift counting provides a way in which F&M can record the gifts it receives so that it can report its activity and results clearly to the public, compare results with other similar institutions and measure against clearly articulated and unambiguous goals. Gift counting also provides a way to measure the intent of the donor, because most donors focus on the dollar amount of their commitment at the time they decide to make it, and not on the net value to the charity in an ultimate sense. All gifts, revocable and irrevocable, present and future, should therefore be counted.

Gift counting complements gift valuation, which is an institution-specific calculation and measures the value to F&M of the total gift transaction over time. Counting commitments and reporting them are external processes, intended for public information and comparison among institutions, while valuation is an internal process, based on the factors peculiar to F&M’s investment and financial experience. Likewise, gift recognition and naming is an internal process dependent on F&M’s history, mission and separate policies on gift recognition and naming.

For gift counting and reporting purposes, F&M shall generally follow the Council for Advancement and Support of Education (CASE) Reporting Standards and Management Guidelines for Educational Institutions, Fourth Edition, 2009. During a campaign, the College’s Campaign Steering Committee may follow CASE Reporting Standards and Management Guidelines for Educational Institutions, Fourth Edition, 2009 or Partnership for Philanthropic Planning (PPP) Guidelines for Reporting and Counting Charitable Gifts, Second Edition, 2008 http://www.pppnet.org/pdf/NCPG-counting-guidelines-(rev-2008).pdf. All exceptions to these standards shall be made by the GAC.

8.1.2 Gift Valuation

Gift valuation is an institution-specific, internal calculation and measures the value to F&M of the total gift transaction over time, based upon F&M’s investment and financial experience. For gift valuation purposes, F&M shall generally follow the Partnership for Philanthropic Planning Valuation Standards for Charitable Planned Gifts, which can be found at http://www.pppnet.org/pdf/2- 07_Online-PDF.pdf.

8.2 Naming of Campus Buildings, Facilities, and Spaces and the Recognition of Donors Within

Franklin & Marshall College welcomes the opportunity to honor those who have rendered extraordinary service or financial support to the College. Facilities, buildings, and spaces may be named for individuals or entities whose accomplishments or generosity advances the mission of the College. The College will follow the guidelines listed in this policy as it makes decisions with regard to naming facilities, buildings, and spaces on campus, including interior spaces, landscapes, and roads.

This policy extends a legacy of philanthropy at Franklin & Marshall by honoring our donors in appropriately visible, consistent, and attractive ways. Recognition of the highest caliber demonstrates institutional appreciation of our donors while also educating the campus community about the importance of philanthropy to the strength of the College.

8.2.1 Criteria for Selection of Honorees

Naming a facility or space for an individual, organization or corporation is one of the highest honors that the College can bestow. This recognition is a lasting and powerful affirmation of the honoree's connection to the College. As such, honorees shall have exemplary character, a deserved reputation for honesty, personal integrity and the highest standards of personal and professional ethics.

8.2.1.1 Extraordinary College Service
Honorees may be considered for recognition for service to the College in teaching, research, service or an administrative field with such exceptional distinction that their contributions are widely recognized by their peers, both at the College and elsewhere. Honorees may not be in active service at the College or hold elected office at the time of the naming.

8.2.1.2 Private Financial Support
Individuals may be considered for recognition if they have made significant financial contributions to the College. Decisions regarding such recognition are made case by case in accordance with the approval process contained in this policy and any other applicable College policies.

8.2.2 Gift Levels Required for Consideration of Donor Recognition

8.2.2.1 New Buildings
Fifty percent (50%) of total project costs for new buildings and facilities will be required to receive the naming opportunity for the entire building or facility. 20% of the total gift amount must be received prior to the name being announced.

8.2.2.2 Renovations to Existing Buildings
Fifty percent (50%) of the total project costs for substantially renovated buildings and facilities will be required to receive the naming opportunity for the entire building or facility. Twenty percent (20%) of the total gift amount must be received prior the name being announced.

If a building slated for renovation is already named, the new name of the building may, in some cases, be hyphenated in order to preserve the history of the building. The most recent donor’s name would be placed first (e.g. The Rogers Laboratory would become the Smith-Rogers Laboratory honoring a gift from Sarah Smith). In general, the College will retain the existing name as part of the new name if the person originally honored has played a significant role in the history of the College.

8.2.2.3 Naming of Specific Spaces
Gifts of $500,000 or more may be recognized through the naming of specific spaces as designated by the donor with College approval.

8.2.2.4 Future Gifts
In general, irrevocable future gifts will be considered for donor recognition at net present value (the amount of the income tax charitable deduction for life-income gifts). Revocable future gifts are not considered as part of a fundraising goal for a capital project and thus will not be considered for naming opportunities.

8.2.2.5 Matching Gifts
Matching gifts attributable to a donor will be added to the donor’s recognition totals when determining the amount of the gift for naming or recognition purposes, provided the matching gift is received during the pledge period outlined in the gift agreement.

8.2.2.6 Policy Review
Gift values identified in Section 8.2.2 of this policy will be evaluated by the Trustee Advancement Committee as part of the biannual review of this GAP to adjust for inflation and other considerations.

8.2.2.7 Plaquing and Signage
Spaces within a building or facility eligible for naming (gifts of $500,000 or more) or plaquing (gifts of $25,000 or more) will be identified by Development staff in conjunction with Facilities staff and project architects. These spaces will be selected on the basis of their visibility, attractiveness, and utility to the campus community.

8.2.3 Duration of Naming Rights and Other Forms of Donor Recognition in Buildings, Facilities, and Campus Spaces

8.2.3.1 Naming In Honor of Individuals
Naming of buildings, facilities, and spaces in honor of individuals is generally expected to last for the useful lifetime of the building, facility, or space. When a named building or facility is replaced by a new building or facility, every effort will be made to perpetuate the history of the lead donor’s contribution to the original building through recognition in the new building.

8.2.3.2 Naming In Honor of Corporations or Other Organizations 22 Approved by TAC 02.25.11

Naming of facilities, spaces, endowments, scholarships and programs in honor of corporations or other organizations will have a set number of years attached to the naming to be determined case by case and listed in the signed gift agreement.

8.2.3.3 Naming Within a Named Facility, Space, Endowment or Program Naming associated with a particular facility, space, endowment or program will not preclude further naming within the facility, space, endowment or program.

8.2.3.4 Existing Plaques on Trees and Benches
Existing plaques associated with trees will be maintained for the useful life of the tree. Existing plaqued benches on campus will be maintained until the useful life of the bench is over or if it is removed for building projects or other campus initiatives.

8.2.3.5 Removal of Naming or Recognition
Should a donor, corporation or foundation be deemed to no longer possess exemplary character, an unqualified reputation for honesty, personal integrity and the highest standards of personal and professional ethics, naming recognition may be withdrawn from the facilities, spaces, endowments, scholarships, and programs at any point by the Trustee Advancement Committee.

Naming and other forms of donor recognition may also be recalled by the Trustee Advancement Committee if a donor does not fulfill a pledge of support within five years of the conclusion of construction of the project he or she supported.

8.2.4 Style Parameters for Naming and Other Forms of Donor Recognition within Buildings, Facilities, and Other Spaces on Campus

8.2.4.1 Size and Shape of Plaques and Signage
The size and shape of plaques, as well as the format for inscriptions, will be consistent across buildings, facilities and spaces on campus.

Plaques and other donor signage will conform to the graphic standards of the College. The metal selected for plaques and signage will match the type of metal selected by the project architects for use in all project hardware. Donor recognition design will be integrated into the design of each capital project from the initial stages to ensure cohesion of style and tone.

8.2.4.1.1 Gifts of $1,000,000 and Above

The full name of the space will be placed in a prominent location, such as above a doorway. The letters will measure a minimum of 2 1⁄2 inches (2 1⁄2”). Example: “SMITH PLANETARIUM.”

A supplemental metallic plaque with additional information will be placed in the room. The plaque will measure 15 inches (15”) in width and 10 inches (10”) in height. Example: “SMITH PLANETARIUM. Gift of Sarah M. Smith ’80. In honor of her parents, Michael and Mary Smith.”

8.2.4.1.2 Gifts of $500,000 to $999,999
The full name of the space will be placed in a prominent location, such as above a doorway. The letters will measure 2 3/8 inches (2 3/8”). Example: “SMITH PLANETARIUM.”

A supplemental metallic plaque with additional information will be placed in the room. The plaque will measure 12 inches (12”) in width and eight inches (8”) in height. Example: “SMITH PLANETARIUM. Gift of Sarah M. Smith ’80. In honor of her parents, Michael and Mary Smith.”

8.2.4.1.3 Gifts of $100,000 to $499,999
A plaque will be hung in the room. The plaque will measure nine inches (9”) in width and six inches (6”) in height. Example: “RESEARCH LABORATORY. Gift of Sarah M. Smith ‘80.”

8.2.4.1.4 Gifts of $25,000 to $99,999
A plaque that notes the gift will hang below the sign identifying the room. The plaque will measure seven inches (7”) in width and four and three- quarters inches (4-3/4”) in height. Example: “FACULTY OFFICE. Gift of Sarah M. Smith ‘80.”

8.2.4.2 Gifts Below $25,000
Gifts below $25,000 will not be recognized with individual plaques. Instead, a list of all donors to a specific facilities project will be displayed in some way within the facility.

8.2.4.3 Policy Review
Gift values identified in 8.2.4 of this policy will be evaluated by the Trustee Advancement Committee as part of the biannual review of this GAP to adjust for inflation and other considerations.

9. Authorization for Negotiation

9.1 Staff

The Vice President for College Advancement or his/her designee is authorized to negotiate gift agreements and arrangements with prospective donors following this gift acceptance policy and the GAP, in the format of individual gift specimen agreements approved by the College’s General Counsel. It is understood that corporate and foundation gift agreements will each have a unique format.

9.2 Other Approval

All individual gift arrangements that do not substantively follow the format and content of the specimen individual gift agreements or otherwise meet the requirements of this Policy shall require prior approval of the President, Chair of the Board of Trustees and the Chair of the Trustee Advancement Committee at the written recommendation of the Gift Acceptance Committee before execution by or creating an obligation for F&M.

10. Use of Legal Counsel

10.1 Advice Sought

F&M may seek the advice of legal counsel in any matters pertaining to gift agreements and arrangements.

10.2 Format

All individual gift agreements shall follow the format of the specimen agreements approved by the College’s General Counsel.

11. Franklin & Marshall Employee as Fiduciary

Except for family members, College employees may not serve as the executor or trustee under a will or in any other way act as a fiduciary in any matter in which the College is a beneficiary under that instrument. The GAC may approve exceptions to this policy.

12. Review and Responsibilities

12.1 Review

This policy shall be reviewed in even numbered years by the TAC. TAC members may elect to review this policy more frequently as they deem appropriate.

12.2 Responsibilities

The Vice President for College Advancement shall initiate the TAC’s review of this policy.


Last update: 9 May 2013