2206 Illiquid Gift Acceptance Policy

The University will accept gifts of illiquid assets (those that cannot be liquidated within one week), subject to a special review and approval process.

The Associate Treasurer will review all proposed gifts of illiquid assets, with input from the Office of Gift Planning, as appropriate. If the Associate Treasurer approves moving forward with the gift, the Office of Trust Administration will coordinate with the Office of Gift Planning, the donor and the donor’s legal counsel to gather information about the proposed gift.

For limited partnerships and most other illiquid gifts, the Associate Treasurer must seek a review by the Office of General Counsel or the Office of Investments to determine if there are any other potential liabilities associated with the investment.

If there are no potential liabilities or if the potential benefit to the University outweighs the potential liabilities, the Associate Treasurer, in consultation with the Office of Gift Planning, shall confirm that the purpose of the gift is one which is consistent with the University’s mission and that reporting or other requirements are not unduly cumbersome. The Associate Treasurer – Gift and Investment Services, in consultation with the Vice President for Finance and Treasurer as needed, will make the determination as to whether to accept the gift.

If unacceptable liabilities exist, the Office of Gift Planning will work with the donor to attempt to mitigate those liabilities so that further review can be made.

As part of the review process, the purpose of the gift will be considered, as follows:

• Endowment: An illiquid gift is generally acceptable.
• Building Fund: Acceptable only if the school/center and the Vice President for Finance and Treasurer determine it meets funding requirements for the building.
• Current Fund: An illiquid gift is generally acceptable.
• Scholarship Fund: An illiquid gift is acceptable only if the securities generate income or if awards are made following liquidation of the securities.

Realized sale proceeds are used as gift credit for illiquid gifts.

Receipts will have no dollar value stated for illiquid gifts. Donors should consult with their tax advisors to determine an appropriate deduction to take fo such gifts.

Donors of illiquid gifts may be required to file Form 8283, Noncash Charitable Contributions, with their federal income tax returns. The University will complete and sign the Donee Acknowledgement section of a Form 8283 provided to it by a donor, including supplying the date of receipt and an acknowledgement that the University does not intend to use the donated property for an unrelated use.

The University is required in many cases to file Form 8282, Donee Information Return, with the Internal Revenue Service if donated illiquid property is sold, consumed, exchanged, or otherwise disposed of within 3 years after the date the University received the property. The University will give a copy of Form 8282 to the original donor of the property.

The Treasurer’s Office may consider hedging strategies for gifts above $250,000 for the purpose of preserving the value of the gift. Following a review of hedging opportunities with outside brokers/advisors, the Treasurer’s Office may recommend hedging strategies the relevant School/Center. Any cost associated with hedging will be deducted from the proceeds of the gift and borne by the School/Center. The Treasurer’s Office may recommend against hedging strategies in light of cost, timing or liquidity issues.