E-22-4 Fundraising Events

I. Purpose 

To establish responsibilities, policies, and procedures for the appropriate accounting, processing and expenditures related to a fundraising event.

II. Definitions 

• Crowdfunding: Fundraising many small gifts from a large number of people.
• Quid pro quo: a payment made partly as a contribution and partly for goods or services provided to the donor by the University.
• Sponsorship: Funds or resources given to the University for an event or program can be treated as either a qualified sponsorship (gift) or a non-qualified sponsorship.
  •  Qualified Sponsorship (Gift): Per Internal Revenue Service (IRS) Publication 598, a qualified sponsorship is any payment (monetary or non-monetary) made by an entity engaged in a trade or business for which the entity will receive no substantial benefit other than the use or acknowledgment of the business name or logo in connection with the entity’s activities. “Use or acknowledgment” does not include advertising the sponsor’s products or services. Qualified sponsorships are treated as gifts by the University.  
  • Non-qualified Sponsorship: Funds that are provided in exchange for marketing, visibility or other promotional opportunity at a specific UK event. An example includes a table or booth used for promotion where there is no advertising (pricing or comparative demonstrations of products or services).
• Additional definitions can be found in E-22-1 Soliciting, Receiving, Recording and Acknowledging Gifts.

III. Responsibilities

1. The Vice President for Philanthropy and Alumni Engagement is responsible for the management, planning, stewardship, and coordination of all University philanthropy efforts and for fundraising services to the University. The Vice President for Philanthropy and Alumni Engagement works closely with the President and the administration in identifying and achieving fundraising priorities of the University. 
2. UK Philanthropy and Alumni Engagement (UKPAE) shall: 
   1. Process and acknowledge all gifts from private sources in compliance with Internal Revenue Service (IRS) regulations.
   2. Determine, in consultation with Accounting and Financial Reporting Services (AFRS), if funds received are gifts rather than payments for goods or services and ensure that gifts are credited to the correct cost objects.
   3. Maintain documentation for fundraising events and gifts received including letters and copies of checks.
3. Accounting and Financial Reporting Services (AFRS) shall:
   1. Coordinate gift and endowment accounting.
   2. Provide financial reporting in accordance with University policies, GASB, GAAP and federal and state regulations. 
   3. Review and approve journal vouchers for gifts and fundraising transfers and corrections.
   4. Assist with acceptance of credit card payments. 
4. The college, department, program or affiliate conducting the fundraising event shall: 
   1. Contact UKPAE when in the planning stages of the fundraising event.
   2. Establish appropriate fundraising event gift cost/funds center(s).
   3. Manage expenditures for the fundraising event in the appropriate cost centers in accordance with the limits imposed by the donors and other external agencies. 
   4. Reconcile gifts received to the University’s accounting system in accordance with BPM E-17-6 Reconciliation and Review of Financial Transactions.  
   5. Coordinate fundraising activities with UKPAE.
   6. Provide the following documentation (e.g., formal invitation, whether printed or electronic/web) with any transmittal or journal voucher:
      1. purpose of fundraising event
      2. define whether endowed or not, and
      3. fair market value for the quid pro quo benefits (if applicable).
   7. Accept payment for registration by credit card (contact Merchant Card Services for assistance at treasury.services@uky.edu).

IV. Policy

1. The University will utilize gifts only for the purpose stated in compliance with regulations, restrictions, or limitations imposed by donors providing such funds. 
2. The University assesses a one-time advancement fee on non-endowed gifts to support its advancement initiatives and those of the college(s) or program(s) to which the contribution is directed. 
3. The minimum level for endowment funds and categories of endowment funds are established by Administrative Regulation 8:4.
4. All gifts for deposit to the University must be made payable to the University and managed in accordance with BPM E-2-1 Treasury Operations Manual. 
5. No member of the administration, faculty or staff shall form, or assist in forming, any entity, corporate or otherwise, for the purpose of soliciting or receiving any gift, without prior written approval of UKPAE.
6. No unauthorized member of the administration, faculty or staff shall establish any account on behalf of the University in a banking institution into which gift funds are, or may be, deposited.
7. Due to specific IRS regulations and case law regarding private inurement, University employees cannot donate to funds over which they have expenditure authority and receive a charitable gift tax acknowledgment. 
8. Crowdfunding should not be hosted by external platforms (e.g., GoFundMe or Facebook Fundraiser). If interested in raising funds, contact UKPAE Gift Receiving at philanthropygiftreceiving@uky.edu.

 V. Procedures

1. Prior to public dissemination of material for a fundraising event, the following procedures must be adhered to.
   1. The purpose of the fundraising event and the program, endowment, research or scholarship to receive the proceeds from the event must be clearly defined.
   2. Establish appropriate fundraising event gift cost/funds center(s). A restricted gift cost center must be established for each fundraising event prior to receiving any gifts or contributions. 
   3. A budget must be established to include anticipated revenues and expenses.   
   4. If the fundraising event includes receipt of goods or services by a donor attendee, the fair market value of donated goods or services to be received in return for purchase of a ticket to the event must be identified.  
2. Formal invitations, whether printed or electronic/web, to a fundraising event shall state the fair market value of the benefit to be received by the attendee donor (i.e., the quid pro quo amount) and shall indicate the amount paid by the donor that exceeds the value of the benefit received. 
3. Sponsorships are unique. Prior to soliciting sponsorships, contact UKPAE Gift Receiving at philanthropygiftreceiving@uky.edu to determine eligibility as gifts.
4. All gifts received will be processed in accordance with the procedures outlined in BPM E-2-1 Treasury Operations Manual. Acceptance of credit cards for fundraising events must be coordinated with the appropriate unit business officer and Merchant Card Services.
   1. The gift portion and quid pro quo amount from each ticket should be separately recorded in the fundraising cost/funds center using the appropriate general ledger accounting codes.
   2. Funds received from internal University sponsors should be separately recorded in the fundraising cost center using the appropriate transfer general ledger transfer codes. Internal funds will not be recorded as a gift by UKPAE or in the University financial system.
   3. If planning a silent auction, contact UKPAE Gift Receiving prior to the event for guidance.
   4. Neither qualified nor non-qualified sponsorship payments should be routed through the UKPAE Giving website.
5. Silent Auctions
   1. Items donated for the purpose of a silent auction at a fundraising event will be acknowledged as a non-cash gift only if the item is sold. Documentation on the gift and the amount for which the item was sold shall be submitted to UKPAE Gift Receiving. 
   2. Services offered by an individual or business shall not be acknowledged as a gift.
   3. If planning a silent auction at an event for which the primary purpose of the event is not to raise funds, contact UKPAE Gift Receiving prior to the event for guidance.
6. UKPAE will issue the official gift acknowledgement on behalf of the University per the procedures outlined in BPM E-22-1 Soliciting, Receiving, Recording and Acknowledging Gifts.
7. Discretionary expenditures related to a fundraising event must follow the procedures outlined in BPM E-7-10 Discretionary Policy. 
8. After all the fundraising event expenses have been paid, funds remaining in the fundraising event cost center from quid pro quo funds should be transferred, when applicable, to the beneficiary account. Documentation for the gift revenues, expenses and quid pro quo amounts should be submitted to AFRS with the journal voucher. 
   1. Documentation should include a copy of the formal invitation, whether printed or electronic/web, purpose of fundraising event and define whether endowed or not, and the fair market value benefit the donor will receive has to be stated on the invitation.
   2. Any corrections on JVs with sponsorships should include documented communication with UKPAE Gift Receiving.   
9. Funds received from internal University  sponsors cannot be transferred to a gift cost/funds center or endowment fund but can be used to pay fundraising event expenses in the fundraising cost center.
10. If the purpose of the event is not fundraising for a gift cost/funds center or endowment fund that supports the University’s mission (e.g., a workshop, seminar, etc.), ticket sales for the event should not be treated as gift revenue.