Section 800: Financial Affairs

Effective: September 2015
Revised: April 2016; August 2023
Last Review: August 2023
Next Review: August 2025
Responsible Party: Controller

These guidelines are intended to clarify responsibilities of Montana State University-Northern and the affiliated organization, the MSU-Northern Alumni Foundation, with regard to gifts; in an effort to avoid confusion on the part of those seeking and providing support, and to assure compliance with relevant state and federal documentation requirements.

Definitions:

For the purpose of this policy, the following definitions apply:

"Affiliated Foundation” and “Affiliated Organization" means any organization which has been recognized by the University to provide assistance in fundraising, public outreach and other support for the University's mission. Affiliated organizations include the MSU-Northern Alumni Foundation or any other organization approved under the university policy governing affiliated organizations.

Quid pro quo — A quid pro quo contribution is a payment made to a charity by a donor partly as a contribution and partly for goods or services provided to the donor by the charity. For example, if a donor gives a charity $100 and receives a concert ticket valued at $40, the donor has made a quid pro quo contribution. In this example, the charitable contribution portion of the payment is $60.

Gift

Gifts which are accepted by the MSU-Northern Alumni Foundation are accepted and monitored in accordance with Foundation policies. Gifts which are accepted by MSUN are accepted and monitored in accordance with University guidelines and Board of Regents Policy 901.7 Donations. Department and division heads must collaborate with the MSU-Northern Alumni Foundation to ensure that funds are expended in accordance with donor wishes.

Acceptance of Gifts

While gifts are generally directed toward the MSU-Northern Alumni Foundation, unique circumstances may result in gifts directed to MSU-Northern. Acceptance of any gift by MSUN signifies Montana State University-Northern's willingness to administer gift funds in compliance with donor directions. In these cases, the donation will be processed in compliance with Board of Regents Policy 901.7 Donations. As such, care must be taken not to accept gifts which obligate the University beyond its ability and willingness to comply with donor directions.

Gifts shall not be accepted by the University if any of the following circumstances exist:

  • The gift is in contravention of applicable Federal or State laws, or Board of Regents or University policies.
  • The gift would obligate the University to undertake duties, financial or otherwise which it may not be fully capable of meeting for a period required by the terms and conditions of the gifts.
  • The gift involves life income trusts, income-retained or other deferred gifts.
  • The gift constitutes a request to the University to operate a commercial endeavor for the sole benefit of the donor or a related person or entity.
  • The gift cannot be properly administered within the intended recipient's normal budget or resources (for example, in the case of the requirement for matching funds or resources).
  • The gift presents an unreasonable or unacceptable degree of risk due to environmental or health/safety issues.
  • The Chancellor (or designee) determines that acceptance of the gift would not be in the best interest of the University.

Accepting a Gift

Donors must be directed to make gifts payable to the MSU-Northern Alumni Foundation, which evaluates and accepts gifts on behalf of the University in accordance with their established policies and procedures.

In unique circumstances the University may receive funds directly from donors, which are to be handled as follows:

Funds directed to the University in error may be deposited through the normal course of business, and subsequently remitted to the Foundation upon approval by the Controller (or designee). For example, an annual fund solicitation that is clearly marked to make checks payable to the Foundation but arrives payable to the University may be so remitted.

Funds directed to the University due to stipulations in a will or otherwise stipulated by the donor noting that funds be paid to the University may be accepted upon approval by the Controller (or designee).

Converted-to-Cash Gifts

Converted-to-Cash Gifts are non-monetary assets or property, which will be converted to cash for the benefit of the University. They include: stocks and securities; livestock; real estate; and other items requiring more than nominal effort to convert into cash. Converted-to-Cash gifts also must be directed to the MSU-Northern Alumni Foundation.  Exceptions to this general rule must be agreed to by both the MSU-Northern Controller or designee and the MSU-Northern Alumni Foundation.

With the exception of stocks and securities, and in accordance with IRS regulations, the donor is responsible for determining the value of non-cash gifts. Donors should establish the fair market value of the gift with a recognized independent appraiser. All costs associated with such appraisals are the responsibility of the donor. University staff may not provide valuations, appraisals or estimates of value to donors.

In-Kind Gifts

In-Kind Gifts include assets that are used as presented. Gifts might include computer hardware and software, analytical equipment, agricultural equipment, livestock, vehicles, library archive collections, musical instruments, and any material that the University would otherwise need to purchase.  Appropriate campus departments will be consulted as appropriate before acceptance.  The donor of an in-kind gift must also obtain an independent appraisal as for non-cash gifts to document deductibility. All costs associated with such appraisals are the responsibility of the donor. Donors should consult their own tax advisors when considering in-kind gifts.

If solicited by the MSU-Northern Alumni Foundation, an in-kind gift should be reported to the MSU-Northern Alumni Foundation so that donor records remain up to date and proper acknowledgement can be arranged. If solicited by the University, then in-kind gifts must be acknowledged by the University department receiving the gift but need only be reported to the MSU-Northern Alumni Foundation if in excess of $5,000.

Real Property may be accepted by the MSU-Northern Alumni Foundation in accordance with its established policies and procedures.

Restricted Gifts

Restricted gifts are often received with the stipulation that the contribution be used for a specific purpose such as faculty recruitment, equipment purchases, student financial assistance or research (other than for sponsored research programs). Gifts may also be restricted to support specific research. All restricted funds may only be expended in accordance with University and Foundation policies, as applicable.

Reporting Monetary Gifts Received Directly by the University

If funds are received directly by the University, then the receiving college, department, or faculty member must notify the Controller (or designee), and must also inform the MSU-Northern Alumni Foundation.

Upon receipt of the notification, the MSU-Northern Alumni Foundation will ensure that donor history records are updated. The Foundation will also document the nature of the reason for a direct gift rather than a gift to the Foundation to better coordinate future contacts with the donor.

Because the gift is received directly by the University, it is the responsibility of the receiving college, department, or faculty member to properly receipt all gifts exceeding $75.00, in accordance with Internal Revenue Service requirements.

Acknowledgment

Specific requirements exist for documentation of gifts over $75. The department has an obligation to send the donor a receipt for these gifts. The donor must receive the receipt prior to filing his or her tax return. If cash, the amount of the gift must be stated on the receipt. If an in-kind gift, the receipt must describe the property but should not state a value. Normally, the receipt indicates that the university provided no goods or services to the donor. If there is a "Quid Pro Quo," that must be stated on the letter.

Gifts made by University employees to the University

While MSU-Northern appreciates charitable financial support of its faculty members and staff, care must be taken to ensure that such support follows all restrictions and requirements of the University, the Montana Board of Regents, the State of Montana and the Internal Revenue Service. Permitting a donor to manage funds to which he or she has contributed increases the possibility of expenditures for personal gain, which might invalidate an otherwise qualified tax deduction of a charitable gift.

A faculty or staff member who wishes to contribute to a gift, and who will be involved with the expenditure of the proceeds, must comply with the following:

  1. Such gift must be made to the MSUN Alumni Foundation in accordance with its policies and procedures;
  2. Expenditures of the donated funds must be approved in accordance with MSU-Northern Alumni Foundation disbursement policy.

Honoraria as Gifts

Honoraria are defined under IRS policy as payments for services rendered by the speaker and/or consultant, and are reportable as income to that speaker or consultant for personal income tax purposes. Faculty or staff members who receive honoraria are welcome to subsequently donate these funds to the MSU-Northern Alumni Foundation.

If the organization making the payment issues a check directly to MSUN, the check may be accepted by the University rather than the MSU-Northern Alumni Foundation. Someone other than the faculty or staff member generating the income should approve expenses from the fund.