GIFT SUBSTANTIATION

7.a. USU Policy 524 - Receipting of Charitable Gifts

7.b. Determining the Legal Gift Date

The IRS does not require, nor does the University include, "legal gift dates" on charitable gift receipts. Responsibility for tax-related gift date determination lies entirely with the donor. Exceptions include gifts of securities, for which gift values are date-contingent, and date determination varies with the mode of delivery. Were the University to formally assert a gift date, it could be required to produce evidence supporting that date during an IRS audit.

IRS Publication 1771, however, does suggest providing a "date received" (or processing date) on receipts. This approach has been adopted by many institutions, including the Office of Advancement Services. Therefore, currently used language is:

For more information relating to the date of gift, see IRS publication 1771.

To facilitate year-end substantiations, any envelope that is postmarked with a December date from the previous year will have a statement added to the charitable receipt "Received in December yyyy."

7.c. Determining the Legal Donor

The legal donor is whoever made the contribution, i.e., whoever transferred their money or other property to the University. If a contribution passes through several entities, the last entity before being received by the University must be cited as the donor.

1. Gifts from Individuals and Organizations

   The legal donor is normally the entity that last had legal possession of the donated assets. In the case of checks, the person or organization whose name appears on the face of a check is generally considered the legal donor. The following guidelines clarify common areas of confusion:

   • When a check is received from a business, the corporation or partnership is the legal donor – even when the entity's employee, partner, or owner is responsible for securing the gift. The responsible partner or owner will also receive soft-credit for the gift.
   • When a check is received from a family foundation, the legal donor is the foundation – not the individuals who formed or operate the foundation.
   • When a check is received from a trust, the legal donor is the one that "owns" the money. If the trust is a separate legal entity for tax purposes, then the trust is the legal donor. If the trust is revocable, it would likely be the person who established the trust. If the legal donor of a trust contribution is not clear, the Office of Advancement Services will contact the sender for clarification.
   • When a check is received from a community foundation, the legal donor is the community foundation – not the person or company who originally made a gift to the community foundation and requested payment be made to the University.
   • If a gift is made by a husband and wife from a joint checking account, and neither can reasonably be assumed the true donor (e.g., by prospect status, alumni status, giving history), "legal credit" goes to the check signatory. The spouse is typically soft-credited. In some cases, the writer of a check or transmitter of a gift is acting as an agent of the true legal donor. Common scenarios include:
   • Cashier's checks – When a bank acts as an agent of the actual payor, the latter is considered the legal donor.
   • Securities and real property – The person or organization in whose name the property is registered is considered the legal donor, even if the property is transmitted through a third party.

2. Gifts from Donor-Advised and Donor-Directed Funds

   To determine the legal donor, the University must discover whether the gift was made through a donor-advised fund or (more rarely) a donor-directed fund.
   
   Gifts from Donor-Directed Funds: The legal donor is the individual making the direction.

   • The donor sends an asset to a financial institution for investment and safekeeping.
   • The assets remain in the name – and under the control – of the donor.
   • The donor contacts the financial institution and directs it to issue a check in the name of the qualified nonprofit.

   Gifts from Donor-Advised Funds: The legal donor is considered the Donor-Advised Fund.

   • The donor makes a gift to a third-party tax-exempt organization (often affiliated with a financial institution or community foundation).
   • The asset is in the name, and under the control, of the Donor-Advised Fund.
   • The original donor receives a charitable receipt from the Donor-Advised Fund at the time of original gift.
   • The donor contacts the Donor-Advised Fund and advises it to make a grant to the University. The Donor-Advised Fund is not legally obligated to follow this advice, but normally does.

7.d. Gift Dates for Booking Purposes

The gift date is the date the donor irrevocably relinquishes control of the property. Check dates have no bearing on this determination. The following guidelines are used by the University to determine "official" gift dates:

• U.S. Postal Service – For gifts of cash or check delivered via USPS, the postmark is the gift date.
• Other Delivery Services – For gifts sent by means other than the U.S. Postal Service (e.g., UPS or Federal Express), the gift date is the date on which the cash or property arrives at (or is accepted by) the University – essentially the date of legal transfer.
• Physical Delivery – If cash or property is delivered to the University in person, the delivery date is the gift date.
• Credit Cards – The gift date is the date the credit card is processed.
• Titled Property – Gifts of registered or titled personal property, no matter when delivered, are deemed complete upon official transfer to the University.
• Real Estate – A gift of real estate is completed at the time a properly executed deed to the property is delivered by the donor to the University or the date the deed is recorded by the County Recorder – whichever is first.
• Securities – The various methods by which securities gifts may be transacted directly impact the effective date of ownership transfer. There are two possible ways of determining the gift date:
  
  
  1. The date the stock certificate is postmarked by the USPS.
  2. The date the stock is transferred to the University by the donor's agent or cooperating corporation. This is NOT necessarily the date the donor directed his/her, broker, to transfer the securities.
     
     Stock certificates without endorsements are not considered "completed" gifts. If the certificate (unsigned), and a properly executed stock power form are delivered separately, the date on which the last of these documents is postmarked defines the date of the gift.

7.e. Value of Gifts-in-Kind and Securities

1. Gift-in-kind

   The gift receipt issued to the donor for a gift of personal property will not show a value for the property. The receipt will describe the property received and the donor's giving record will be hard credited with the estimated fair market value of the item. It is the responsibility of the donor to determine the value of a gift of personal property for their tax purposes. If no value is listed on the gift-in-kind form, a value of $1 will be recorded in the database.

2. Securities

   The gift receipt for securities will not include a value, just a description of the number of shares donated.