In order to comply with Internal Revenue Service (IRS) and State of Colorado regulations related to the accounting for donations and fundraising activities, UCAR has adopted the following procedure. This procedure explains the process to go through when seeking donations through fundraising and the process that should be used for all funds that are received through donations, whether they are unsolicited or sought through fundraising. All donations and charitable sponsorships are subject to this procedure.
Definitions
1 Binding Agreement
Binding Agreement means an agreement with specific terms and conditions between two or more persons or entities in which there is a promise to do something in return for consideration. The existence of a binding agreement requires the following factual elements: a) an offer; b) an acceptance of that offer; c) a promise to perform; d) a valuable consideration (may be a promise to pay or actual payment in some form); e) a time or event when performance must be made (meet commitments); f) terms and conditions for performance, including fulfilling promises; g) performance.
2 Charitable Sponsorship
A donation made to UCAR in return for receiving public recognition for the donation, usually in association with a particular event.
3 Direct Mailing
Solicitation by mail of targeted potential donors.
4 Donation
The making of a gift or charitable contribution payable to UCAR in the absence of a binding agreement.
5 Donor
One that contributes to UCAR without a binding agreement.
6 Fundraising
Fundraising is the act of soliciting donations to be used for the tax-exempt purpose of UCAR. These solicitations are distinguished from sponsored research or other sponsor contributions, i.e., the sponsor receives something of value in return.
7 Fundraising Materials
All written, verbal, and hypertext communications that will be viewed by a potential donor.
8 Goal
A stated amount of money UCAR intends to raise to meet a stated purpose.
9 Professional Fundraiser
A person/entity paid under contract to raise donations.
10 Purpose
The intended use of the donated funds.
11 Release of Donor Restriction
When the fulfillment of the restriction has been met, the restriction on the donation can be released and the donation may be treated as an unrestricted donation. See Donation Process 1.
12 Restricted Donation
A restriction placed on a donation by the donor regarding the use of the donation for a specified purpose such as a specific meeting, program or equipment.
13 Solicitation
To approach a potential donor with a request for a donation.
14 Sponsor
An individual or funding institution with a binding agreement.
15 Unrestricted Donation
A donation where the donor does not restrict the use of the donated funds.
Purpose
The purpose of Fundraising within UCAR is to raise funds to be used for a special purpose within the mission of UCAR. Examples of acceptable activities to fund raise or accept donations include but are not limited to meetings, equipment, cost share, property, fellowships, and education. All Donations and Charitable Sponsorships are subject to this Fundraising and Accepting Donations Procedure. Each individual fundraising campaign must be processed separately according to this procedure.
Fundraising Process
1
Types of Fundraising Activities
The following is a list of examples of appropriate types of Fundraising activities that laboratories and programs may choose to use.
A. Direct mailings
B. Social functions, such as dinners, receptions, etc.
C. Web pages to solicit donations. Web pages may not contain or link to endorsements on behalf of contributors. The Web site must be housed with a third-party hosting firm. A federally funded Web page may contain links to a Fundraising Web site.
D. Advertisements in publications or other trade journals.
2 Fundraising Request Form Process
When a laboratory/program decides to engage in a Fundraising activity or determines that a Fundraising activity has occurred, the Fundraising Request Form will be used by all laboratories/programs to identify and confirm funds to be used for fundraising commitments. Signatures on the form indicate that the Principal Investigator (PI), laboratory or program director, entity budget office (if a STORM funds request), and the UCAR Vice President for Finance and Administration (VP FA) (or her/his designee) have reviewed and concur or have ratified the Fundraising plan. Upon VP FA approval, the request will be submitted to the UCAR President's Council for final approval. Upon final approval by the President's Council, the VP FA will notify the following: laboratory/program, the Treasurer's Office, the Office of General Counsel, Sponsored Agreements, the applicable entity Budget Office, and the Budget and Finance Office.
3 Donor List
A complete list of the potential and/or real donors for the Fundraising activity must be given to the VP FA before beginning or upon ratification of any fundraising activity. Only donors listed on the Fundraising Approval Form can be contacted. VP FA must approve any additional potential donors in writing before contact is made.
4 Fundraising Materials Approval Process
Once a Fundraising activity is approved, a copy of all proposed Fundraising materials related to that activity must be submitted to the VP FA for approval.
5
Regulatory Reporting
Both the Federal Government and all states, including the State of Colorado, require reporting of any Fundraising activities. All Professional Fundraisers or consultants for Fundraising must be registered with the State of Colorado pursuant to the Charitable Solicitations Act. It is the responsibility of the laboratory/program engaging the Professional Fundraiser to confirm they are registered. It is the responsibility of the Budget and Finance Office to file all required regulatory financial reporting. UCAR is currently registered in the State of Colorado to solicit funds. Solicitations in states other than Colorado may require registrations in those states. States where Solicitations are being requested must be disclosed via the Fundraising Approval Form to the VP FA. The Office of General Counsel will review regulations in states where UCAR is not already registered.
6 Accounting for Costs Associated with Fundraising
All costs associated with Fundraising must be paid from either a discretionary, STORM, residual, or other General Fund account key. Per OMB Circular A-122, fundraising costs are unallowable to either direct programs or indirect cost pools. The account key where Fundraising will be charged must be determined before the beginning of the fundraising activity or at the time the activity is ratified. Types of costs associated with Fundraising may include, but are not limited to, employee salary and benefits, office supplies, long distance phone charges, and postage. Professional Fundraiser consultant fees, travel, meals, local mileage, etc. must be reported separately. All costs charged to the fundraising account key will bear indirect costs. A UCAR employee cannot donate their time to UCAR for the purposes of Fundraising including non-worked time and off hours. All employee time spent Fundraising must be charged to the designated Fundraising account key.
Donation Process for restricted and unrestricted funds (applies to funds received through fundraising, unsolicited donations, and charitable sponsorships)
1 Accounting for
Donations and Related Expenses
A new laboratory/program account key and contract ID are set up in the accounting system for each fundraising campaign or donation activity. The donations are recorded as donation revenue in the account key (object code 4701); therefore, no budget is entered. All expenses supported by the donated funds should be charged to the newly established account key and will bear indirect costs. Once the purpose of the Fundraising campaign has been fulfilled and all encumbrances are zero, donated funds available, unless otherwise restricted, may be moved to a residual fund account key and be used following the Residual Funds Guideline.
2 Written Acknowledgements
All Donors must receive a written acknowledgement from the VP FA (see IRS regulations 1.170A-1, 1.170A-13, and 1.6115.1). It is the responsibility of the laboratory/program to prepare the letter for the VP FA or, in his/her absence, another UCAR officer's signature. An example of the acknowledgement letter can be found at: https://www.fin.ucar.edu/forms/internal/FINANCE/fundraising_form/acknowledgement_ltr.shtml.
3 Missed Goals for Donated Funds and/or a Need to Change Use of Funds
In the event there is a change in the stated goal or purpose or UCAR is unable to meet the stated goal or purpose, the laboratory/program receiving the funds must notify the VP FA for further instruction. UCAR has an obligation to contact each donor and request donor permission to change the purpose or goal. If the Donor does not grant permission for the change, the donation must be returned to the donor.
4 Contractual/Legal Review
Prior to beginning a fundraising campaign other than in the State of Colorado, the Office of General Counsel will review the requirements in any State where UCAR will be soliciting donations, as applicable. Upon receipt of said donation, Sponsored Agreements reviews all documents received from donors, including correspondence received via letter or e-mail, to determine whether the correspondence contains any contractual obligations.
Responsibilities
1 The VP FA is responsible for reviewing all Fundraising materials, coordinating the requests by laboratories or programs to potential donors, ensuring that all Fundraising is done in accordance with UCAR policy and procedures, submitting Fundraising requests to the UCAR President's Council for approval, and signing donor acknowledgement letters.
2 The UCAR President's Council is responsible for approving or ratifying any Fundraising activity.
3 Sponsored Agreements is responsible for the review of all documents received from the donors including letters and e-mail correspondence to identify any contractual obligations.
4 The laboratory/program is responsible for completing the Fundraising Request Form, developing the potential donor list and fundraising materials, verifying professional fundraiser is registered with the state regulatory agency, preparing acknowledgement letter for VP FA to sign, and verifying that revenue and expenses are recorded in the correct account keys.
5 Subsequent to consulting with the VP FA in the event that a stated goal or purpose will not be met, the laboratory/program is responsible for contacting each donor requesting permission to change the originally stated goal or purpose.
6 The Budget and Finance Office is responsible for filing the required regulatory financial reporting.
7 The Office of General Counsel is responsible for reviewing any State requirements where UCAR will be soliciting donations, as applicable.
8 Employees who are engaged in Fundraising activities are responsible for accurately charging their time and associated costs to the appropriate discretionary, STORM, or general fund account key.
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