1118 Restricted and Unrestricted Gifts

Document purpose

Appropriate stewardship of donor-restricted funds requires that the costs of programs and positions supported by such gifts be covered first from relevant donor-restricted funds before using the University’s unrestricted funds.

effective

June, 2012

revised

April, 2023

Reviewed

May, 2023

Responsible Office

Treasurer

Approval

Treasurer

Policy

Gift cash (for gift funds) and gift investment income (for endowment funds) must be spent for the purpose specified in the gift agreement or other document(s) establishing the gift.

  1. Unrestricted Gifts.

      • Gifts received which are entirely unrestricted to a School/Center will be deposited as unrestricted to 63xxxx gift funds. Expenses should be charged directly to gift funds as incurred in the same year as the gifts are received.
      • All endowment income which is entirely unrestricted to a School/Center will be transferred to the School/Center’s designated operating fund (00000 or 01xx0x) using 4709 as the object code. No direct expenses will be charged to these endowment funds.
  2. Restricted Gifts

      • A restricted endowed fund should show accumulated unspent income only when the supported program or position has not yet incurred enough cost in the given year to absorb all of the income.  Generally Accepted Accounting Principles also require that the University’s financial records and statements properly reflect the qualifying expenditures as reductions in gift balances at the time they are expended.
      • The Treasurer’s Office and School/Centers should audit restricted fund balances periodically. If unrestricted funds were used in lieu of the available restricted funds, an appropriate adjustment should be made to the restricted funds’ balances to reimburse the School/Center for the unrestricted funds spent earlier. Proper documentation of expenditures will be required. All old dormant gift funds should be closed.
      • Any new restricted gift funds opened will be classified as temporarily restricted and will only reclass cash as the funds are expended. Expenditures related to the purpose of these new restricted gift funds should be charged directly to the gift fund as incurred.