Gift Acceptance and Disposition Procedure

Category 1 — Tangible Personal Property

A. Criteria for Acceptance

The University will consider gifts of tangible personal property, including but not limited to works of art, manuscripts, literary works, boats, motor vehicles, and computer hardware, only after a thorough review indicates that the property is:

1. readily marketable; or
2. needed by the University for use in a manner which is related to one of the purposes for which tax exempt status of the University was granted; that is, for education, health care, research, or a combination thereof.

B. Approval/Acceptance Process

1. The development officer or other appropriate departmental official will prepare a written summary of the gift proposal and submit that summary to the Advancement Services Gifts Processing unit. At a minimum the summary shall include the following information:
   1. description of asset;
   2. the purpose of the gift (e.g., to fund an endowed chair, a deferred gift, an unrestricted gift) and the department(s), programs(s), or endowment(s) to benefit from the gift;
   3. an estimate or appraisal of the gift’s fair market value and marketability;
   4. any potential University use and, if so, written review by the department to benefit from the asset; and
   5. any special arrangements requested by the donor concerning disposition (e.g., price considerations, time durations prior to disposition, potential buyers, etc.).
2. The Assistant Director, Donor Records will review the material presented by the development officer or other appropriate departmental official and make a determination as of whether to accept or reject the proposed gift (or, if necessary, to postpone a decision pending the receipt of additional information). If there is a question regarding the gift acceptance, the final determination will be made by the Vice President for Development. The development officer or other appropriate departmental official shall communicate the University’s decision to the donor in writing.
3. If a proposed gift of tangible personal property is approved, Advancement Services will produce an acknowledgment or receipt of the gift on behalf of the University. The University will not appraise or assign a value to the gift property. It is the donor’s responsibility to establish a value for the gift and to provide, at the donor’s expense, a qualified appraisal required by the IRS in the case of gifts of tangible personal property valued in excess of $5,000.
4. The gift will be completed by the execution and delivery of a deed of gift or other appropriate conveyance acceptable to the University, and the delivery of the property, as applicable. The costs associated with the conveyance and delivery of the gift will be paid by the donor. In addition, the filing of Form 8283 by the donor is required by the IRS for gifts of tangible personal property valued at more than $500. This form should be sent to the Office of Advancement Services for execution by the University.

Category 2 — Real Property

The Senior Vice President of University Relations and Development will consider gifts of real property, both improved and unimproved (e.g., detached single-family residences, condominiums, apartment buildings, rental property, commercial property, farms, acreage, etc.), including gifts subject to a retained life estate, only after a thorough review of the criteria for acceptance.

A. Criteria for Acceptance

1. Market Value and Marketability. The Senior Vice President of University Relations and Development must receive a reasonably current appraisal of the fair market value of the property and interest in the property the University would receive if the proposed gift is approved. Development officers will inform the donor that, if the gift is completed, the IRS will require an appraisal made within sixty days of the date of gift. Development Officers must understand and communicate to donors that it is the University’s policy to dispose of all gifts of real estate (other than property which the University wishes to retain) as expeditiously as possible. Thus, regardless of the value placed on the property by the donor’s appraisal, the University will attempt to sell at a reasonable price in light of current market conditions, and the donor needs to be informed that any sale occurring within three years of the date of gift will be reported to the IRS on Form 8282.
2. Potential Environmental Risks. All proposed gifts of real property, including gifts from estates, must be accompanied by a Phase I environmental audit performed at the donor’s expense. The only permitted exception to this requirement is for residential property which has been used solely for residential purposes for a significant (at least twenty-year) period of time. In cases where this exception applies and no environmental audit is undertaken, the donor/executor must have an outside party complete an Environmental Checklist prepared by the Office of Real Estate and may be required to execute an environmental indemnity agreement. Even in cases where a Phase I audit is submitted, the Director of Real Estate may require that the donor sign an environmental indemnity agreement.
3. Limitations and Encumbrances. The existence of any and all mortgages, deeds of trust, restrictions, reservations, easements, mechanic liens and other limitations of record must be disclosed. No gift of real estate will be accepted until all mortgages, deeds of trust, liens, and other encumbrances have been discharged, except in very unusual cases where the fair market value of the University’s interest in the property net of all encumbrances is substantial.
4. Carrying Costs. The existence and amount of any carrying costs, including but not limited to property owners’ association dues, country club membership dues and transfer charges, taxes and insurance, must be disclosed.
5. Title Information. A copy of any title information in the possession of the donor, such as the most recent survey of the property, a title insurance policy, and/or an attorney’s title opinion, must be furnished.

B. Approval/Acceptance Process

1. The Development Officer will prepare a written summary of the gift proposal and submit that summary to the The Senior Vice President of University Relations and Development. At a minimum, the summary shall include the following information:
   1. description of real property;
   2. the purpose of the gift (e.g., to fund an endowed chair, a deferred gift, an unrestricted gift) and the department(s), programs(s), or endowment(s) to benefit from the gift;
   3. an appraisal of the property’s and, if different, the University’s interest in the property’s fair market value and marketability;
   4. any potential for income and expenses, encumbrances, and carry cost prior to disposition;
   5. any environmental risks or problems revealed by audit or survey;
   6. any potential University use; and
   7. any special arrangements requested by the donor concerning disposition (e.g., price considerations, time durations prior to disposition, potential buyers, realtors or brokers with whom the donor would like the University to list the property, etc.).
2. The Senior Vice President of University Relations and Development will review the material presented by the Development Officer and make a determination as of whether to accept or reject the proposed gift of real property (or, if necessary, to postpone a decision pending the receipt of additional information.) The final determination of the the Senior Vice President of University Relations and Development shall be communicated to the development officer, and the development officer shall communicate the University’s decision to the donor in writing, including any conditions imposed by the the Senior Vice President of University Relations and Development prior to acceptance.
3. If a proposed gift of real property is approved by the the Senior Vice President of University Relations and Development, Advancement Services will produce an acknowledgment receipt of the gift on behalf of the University upon notice by the Office of Real Estate that the property has been properly recorded in the local Registry of Deeds. The University will not appraise or assign a value to the gift property. It is the donor’s responsibility to establish a value for the gift and to provide, at the donor’s expense, a qualified appraisal required by the IRS.
4. The gift will be completed by the execution and delivery of a deed of gift or other appropriate conveyance. The costs associated with the conveyance and delivery of the gift, including but not limited to recording fees and, if deemed necessary by the Director of Real Estate, a current survey, title insurance and/or an attorney’s title opinion, will be either paid by the donor or charged to the fund code of the department(s), program(s), or endowment(s) to benefit by the donation. In addition, the filing of Form 8283 by the donor is required by the IRS for gifts of real property. This form should be sent to Advancement Services for execution by the University.

Category 3 — Life Insurance

A. Criteria for Acceptance

The University will automatically accept, without the necessity of review and approval by the the Senior Vice President of University Relations and Development, gifts of whole life insurance policies which meet the following three criteria:

1. The policy is a whole life insurance policy which is either paid-up or, if not paid-up as of the date of gift requires charitable contributions from the donor to the University in the amount of any premiums, including unscheduled premiums, which may become due.
2. CWRU is designated as the owner and the beneficiary of the policy.(While the policy will identify the University as the beneficiary, the development officer should work with the donor to clarify the purpose of the gift — whether it be for endowment (existing or new), specific program or department, or unrestricted use — by attachment of a memorandum, letter, or endowment agreement to the policy.)
3. If intended for endowment purposes, the face value of the policy meets the minimum funding standards for endowments established by the Board of Trustees.

B. Approval/Acceptance

1. The development officer will prepare a written summary of any proposed gift of a life insurance policy which fails to meet all of the criteria specified in Section A above and submit that summary through the planned giving staff. At a minimum, the summary shall include the following information:
   1. description of the type of life insurance policy, face value, premium payment schedule, interest rate, age of insured(s), and other relevant policy information; and
   2. the purpose of the gift (e.g., to fund an endowed chair, a deferred gift, an unrestricted gift) and the department(s), program(s), or endowment(s) to benefit from the gift.
2. The Senior Vice President of University Relations and Development will review the material presented by the development officer and make a determination as to whether to accept or reject the proposed gift or, if necessary, to impose any terms (e.g., the donor’s pledge to make contributions to cover premiums, a revision in the payment schedule) as a condition of approval. The final determination of the Senior Vice President of University Relations and Development shall be communicated to the development officer by the planned giving staff, and the development officer shall communicate the University’s decision to the donor in writing, including any conditions imposed by the Senior Vice President of University Relations and Development prior to acceptance.
3. If a proposed gift of a life insurance policy is approved by the Senior Vice President of University Relations and Development, Advancement Services will prepare an acknowledgment/receipt of the gift on behalf of the University.
4. The gift will be completed upon the execution and delivery of the life insurance policy to the University or an assignment of the policy in the event that the University is not the original owner of the policy.

C. Administration

The planned giving staff shall administer all gifts of life insurance policies and shall maintain records of all donor policies, contribution schedules, donor designations of death benefits, and the like. This office also shall be responsible for pledge reminders and monitoring payments of premiums.

The planned giving staff shall be responsible for confirming the existence and cash value of all policies in force at least annually and for collecting and distributing death benefits. Upon receipt of death benefits, the planned giving staff shall provide notice to the department(s), program(s), or endowment(s) to benefit from the gift.

Category 4 — Other Assets

A. Criteria for Acceptance

The Senior Vice President of University Relations and Development will consider gifts of other assets, including but not limited to promissory notes, assignment of promissory notes, partnership interests, and restricted or non-publicly traded securities, only after a thorough review of the criteria set forth below.

1. Market Value and Marketability. The Senior Vice President of University Relations and Development must receive reasonably current appraisal of the fair market value of the property and interest in the property the University would receive if the proposed gift is approved. Development officers will inform the donor that, if the gift is completed, the IRS will require an appraisal made within sixty days of the date of gift. The appraisal and other information must indicate clearly and convincingly that there is in fact a market for the asset under consideration and that the asset can be sold within a reasonable period of time.
2. Limitations and Encumbrances. The existence of any and all mortgages, deeds of trust, restrictions, reservations, easements, mechanic liens and other limitations of record must be disclosed. No gift of an interest in real estate will be accepted until all mortgages, deeds of trust, liens and other encumbrances have been discharged, except in very unusual cases where the fair market value of the University’s interest in the property net of all encumbrances is substantial or where a separate agreement to pay any such encumbrances which might be charged to the University has been executed by a financially responsible party.
3. Carrying Costs. The existence and amount of any carrying costs, including but not limited to property owners’ association dues, country club membership dues and transfer charges, taxes and insurance, must be disclosed.
4. Title Information. A copy of any title information in the possession of the donor, such as the most recent survey of the property, a title insurance policy, and/or an attorney’s title opinion, must be furnished.

B. Approval/Acceptance Process

1. The development officer will prepare a written summary of the gift proposal and submit that summary to theSenior Vice President of University Relations and Development. At a minimum, the summary shall include the following information:
   1. description of the asset;
   2. the purpose of the gift (e.g., to fund an endowed chair, a deferred gift, an unrestricted gift) and the department(s), programs(s), or endowment(s) to benefit from the gift;
   3. an estimate or appraisal of the asset’s fair market value and marketability;
   4. potential for income and expenses, encumbrances, and carry costs prior to disposition;
   5. any environmental risks or problems revealed by audit or survey;
   6. credit history or financial statement of financially responsible party, if applicable;
   7. any special arrangements requested by the donor concerning disposition (e.g., price considerations, time durations prior to disposition, potential buyers, realtors or brokers with whom the donor would like the University to list the property, etc.).
2. The Senior Vice President of University Relations and Development will review the material presented by the development officer and make a determination as of whether to accept or reject the proposed gift (or, if necessary, to postpone a decision pending the receipt of additional information). The final determination of the Vice President for Development shall be communicated to the development officer. The development officer shall communicate the University’s decision to the donor in writing, including any conditions imposed by the Senior Vice President of University Relations and Development prior to acceptance.
3. If a proposed gift of an asset in this Category 4 is approved by the Senior Vice President of University Relations and Development, Advancement Services will prepare an acknowledgment/ receipt of the gift on behalf of the University. The University will not appraise or assign a value to the gift property. It is the donor’s responsibility to establish a value for the gift and to provide, at the donor’s expense, a qualified appraisal required by the IRS in the case of assets valued in excess of $5,000 ($10,000 for non-publicly traded stock).
4. The gift will be completed by the execution and delivery of a deed of gift or other appropriate conveyance, and the delivery of the property, as applicable. The costs associated with the conveyance and delivery of the gift will be paid by the donor. In addition, the filing of Form 8283 by the donor is required by the IRS for gifts of assets valued at more than $500. This form should be sent to the Office of Advancement Services for execution by the University.