San Francisco State University Foundation (“SF State Foundation” or “Foundation”) is a California nonprofit public benefit, tax-exempt corporation. It is also an auxiliary of The California State University (“CSU”) subject to the California Education Code and the policies of the CSU and of San Francisco State University (“University”). The specific purposes of the Foundation are to promote and assist San Francisco State University to receive gifts, property, and funds to be used exclusively for the benefit of San Francisco State University students, faculty and programs.
The Foundation encourages the solicitation and acceptance of gifts that will help the Foundation in the furtherance of its mission to foster private financial support for San Francisco State University. This Gift Acceptance Policy shall apply to all gifts received by the Foundation (and, where applicable, to San Francisco State University and the University Corporation, San Francisco State) for any of its programs or services.
The Board of Directors of the Foundation and University staff, in particular the Office of University Advancement, solicit current and deferred gifts from individuals, corporations, foundations and other private entities to secure the financial growth and fulfill the mission of the University. The purpose of these policies and guidelines is to define the practices and policies governing the acceptance of gifts by the Foundation and the University and to provide guidance to prospective donors and their advisors when making gifts to the Foundation and University, so as to facilitate the gift-giving process.
The Foundation will accept unrestricted gifts and gifts for specific programs and purposes, provided that such gifts are consistent with the University’s stated mission and do not violate the terms of its corporate charter or this policy. The Foundation is unable to accept gifts that are too restrictive in purpose or inconsistent with the University’s academic purposes and priorities. Gifts received by the Foundation must not inhibit it from seeking similar or different gifts from other donors. No gift can be received which limits, beyond a general definition of subject area, the research that a faculty member or student can perform.
The Foundation and University cannot accept gifts which involve unlawful discrimination based upon race, sex, gender, sexual orientation, age, national origin, color, handicap or any other basis prohibited by federal, state, and local laws and regulations. Nor can the Foundation and University accept gifts which obligate it to violate any other applicable law or regulation.
Gift Acceptance Committee
It is recognized that certain gifts, including but not limited to those involving unusual funding arrangements, should not be routinely processed, but should be reviewed by the Gift Acceptance Committee, which receives its authority from the Foundation Board of Directors, as described within this policy statement. All final decisions on the restrictive nature of a gift, and its acceptance or refusal, shall be made by the Gift Acceptance Committee of the Foundation.
The Gift Acceptance Committee shall consist of:
- The Foundation President
- The Chair of the Board of Directors
- The Chair of the Development Committee
- A member of the Finance and Investment Committee
- The Chief Financial Officer
The Foundation General Counsel
The Foundation President shall serve as the Chair of the Gift Acceptance Committee. The Chair shall consult with the University President prior to any meeting of the Gift Acceptance Committee. The Chair may also consult with any other officer, director or staff member of the Foundation whom the Chair believes appropriate.
The Gift Acceptance Committee shall typically meet by telephone conference or at the call of the Chair, as may be necessary. Four (4) members of the Gift Acceptance Committee, including at least three of the first four members listed above, constitute a quorum.
The types of gifts which will be referred to the Gift Acceptance Committee include, but are not limited to, the following:
- Gifts requiring unusual funding arrangements or other commitments.
- Gifts of intangible or unusual personal property, including vessels or boats.
- Gifts of tangible personal property such as paintings, sculpture, furniture, or other works of art, or collections of such, if made on the condition or expectation that the items will be permanently exhibited, or that the collections will be maintained and shown as such.
- Gifts of non-publicly traded securities.
- Gifts of partnership interests and other non-traditional investments.
- Gifts of real estate as defined further in this policy statement.
- Certain annuity contracts and charitable annuity trusts as defined further in this policy statement.
- Gifts with special restrictions that may be difficult or costly to administer.
- Gifts that, because of their unusual nature, present questions as to whether they are within the role and scope of San Francisco State University.
- Gifts that, because of their size or nature, present questions as to the impact on San Francisco State University, or a particular program or area.
- Gifts that might raise questions about San Francisco State University's integrity, independence, or academic freedom, or potentially expose the University to adverse publicity, financial risk, or litigation.
- Gifts that present the potential for an obligation on San Francisco State University or Foundation under local, state, or federal law that either may be unwilling or unable to assume.
Any gifts that are exceptions to existing guidelines or which fall outside the definition of acceptable gifts as defined by this policy statement.
It is the responsibility of any Foundation board member, development director, departmental or other University administrator when presented with a gift or while working with an estate to bring all gifts that meet the above guidelines to the attention of the Foundation President prior to accepting such gifts.
Types of Acceptable Gifts
The following types of gifts are acceptable:
- Tangible personal property
- Real Estate
- Remainder interests in property
- Oil, gas and mineral interests
- Bargain sales
- Life insurance policies
- Charitable gift annuities
- Charitable remainder trusts
- Charitable lead trusts
- Retirement plan beneficiary designations
Life insurance beneficiary designations
Criteria Governing the Acceptance of Gift Types
The following criteria govern the acceptance of the gift types listed above.
Cash - Cash is acceptable in the form of currency, money orders, checks or electronic transfer (either through a wire transfer to the Foundation’s bank account or by a verified credit card transaction). The postmark date is the gift date for gifts of cash mailed to the Foundation. Checks should be made payable to “SF State Foundation.”
Tangible personal property - Tangible personal property is property (corporeal movable property) other than real property (immovable property), which is often defined as property that can be touched. If the Foundation intends to sell a gift immediately rather than use it, the donor will be informed that IRS rules may limit the amount of the charitable deduction to the donor’s cost basis, and the donor will be advised to seek professional financial counsel on the tax consequences of such a donation. Only the Gift Acceptance Committee can approve an agreement to hold property for a specified period of time. Appraisals, at the donor’s expense, are required for all gifts for which the donor estimates the fair market value to be $5,000 or more. Extraordinary gifts of tangible personal property will be referred to the Gift Acceptance Committee, which will consider the following factors in reviewing such gifts for acceptance:
- Does the property further the mission and purposes of San Francisco State University?
- Is the property marketable, or can it be used by the University in furtherance of the University’s purposes and mission?
- Are there any restrictions on the use, display or sale of the property?
Are there any carrying costs, possible adverse legal consequences, or potential liabilities associated with ownership of the property?
Securities - The Foundation accepts both publicly-traded securities and closely-held securities under the conditions described below:
Publicly-traded securities - These are securities regularly traded on a public stock exchange. It is preferred that donors electronically transfer marketable securities directly to one of the Foundation’s local brokerage accounts. Transfers made directly to the brokerage account can be liquidated almost immediately and with little additional paperwork required from donors. Alternatively, marketable securities may be delivered physically to the Foundation office with the donor’s/transferor’s stock power attached. It is the Foundation’s policy to sell all marketable securities on receipt. Those securities which are determined to be restricted by applicable securities laws will be reviewed by the CFO and General Counsel of the Foundation. If the restrictions are deemed to be unreasonable or excessive, acceptance will be referred to the Gift Acceptance Committee. The value of the gift will be calculated using the mean share price between the high and low selling prices quoted on the day the stock is transferred to the Foundation.
Closely-held securities - Acceptance of closely-held securities, which include not only debt and equity positions in non-publicly traded companies but also interests in limited partnerships and limited liability companies, or other ownership funds, must be approved by the Gift Acceptance Committee, with the following factors to be considered: any restrictions on the security that would prevent its conversion to cash, the marketability of the security, and the potential for other undesirable consequences for the Foundation.
Real estate - Gifts of real estate (immovable property) include developed property and undeveloped property, as well as gifts subject to a prior life interest or usufruct. Prior to acceptance of real estate, the Foundation shall require, at the donor’s expense, an independent appraisal of the property’s fair market value, as well as a Phase I environmental study to ensure that the property has no environmental damage or other environmental issues that would expose the Foundation to liability. The Foundation General Counsel shall issue a written opinion regarding acceptance of the proposed real estate donation for final review and an acceptance decision by the Gift Acceptance Committee. Factors to be considered in acceptance of the property shall include: usefulness of the property for the purposes of the Foundation; marketability of the property, relative to its condition; any restrictions, reservations, easements, or other limitations associated with the property; carrying costs, such as insurance, property taxes (taking into account that the Foundation is not eligible for any homestead exemption), mortgages, or notes , associated with the property; the results of the environmental study report, and any potential liability for cleanup or restoration of the property that may be imposed under current law to a transferee.
Remainder interests in property, or Retained Life Estate Gift (RLE) - The Foundation will accept a remainder interest in a personal residence, farm, or vacation property subject to the provisions regarding the acceptance of real estate outlined previously in this policy document. The donor or other named beneficiary may continue to occupy the real property for the duration of the stated life or the term of the usufruct. Expenses for maintenance, real estate taxes, and any property indebtedness are to be paid by the donor or life beneficiary. At the death of the donor or life beneficiary, as applicable, the Foundation may use the property or reduce it to cash. All procedures for evaluating proposed gifts of real property, outlined elsewhere in this document, apply to proposed RLEs as well. Donors are strongly encouraged to have all documents related to a proposed RLE reviewed by their own attorneys.
Oil, gas and mineral interests - The Foundation may accept such interests upon review and recommendation of the General Counsel of the Foundation. Factors to be considered in review of the proposed donation include: any extended liabilities or other considerations that make receipt of the gift inappropriate, whether the proposed gift is a working interest (an expense bearing interest, for which acceptance would require approval of the Gift Acceptance Committee), and any current or potential exposure to environmental liability or cleanup or restoration obligations under relevant law.
Bargain sales - The Foundation will enter into a bargain sale arrangement only when the bargain sale furthers the mission and purposes of San Francisco State University. A bargain sale is a sale of property for less than its fair market value. Some donors are willing to sell their property for an amount equal to their cost basis. The donor then recovers the donor’s investment and receives a charitable deduction for the appreciated portion. All bargain sales must be reviewed by the Gift Acceptance Committee and approved by the Board of Directors. Factors used in determining the appropriateness of the transaction include: the results of an independent appraisal, obtained at the donor’s expense, substantiating the value of the property, whether the Foundation will assume any debt with the property, the marketability of the property for sale within 12 months of receipt, and carrying costs associated with the property during the holding period prior to sale.
Life insurance policies - The “SF State Foundation” must be named both beneficiary and irrevocable owner of an insurance policy before a life insurance policy can be recorded as a gift. The gift shall be valued at its interpolated terminal reserve value (cash surrender value) on the date of receipt. Should the donor contribute future premium payments, the Foundation will include the entire amount of the additional premium payment as a gift in the year the payment is made. If the donor elects not to continue to make gifts to cover premium payments on the life insurance policy, the Gift Acceptance Committee shall decide whether to continue to pay the premiums, convert the policy to paid-up insurance, or surrender the policy for its current cash value. No insurance products and no insurance companies or agents are endorsed by the Foundation for use in funding gifts to the Foundation. The Foundation does not furnish donor’s names to third parties for the purpose of marketing life insurance to donors or for any other purpose.
Charitable Gift Annuities - A charitable gift annuity (CGA) is a contractual arrangement between a donor and the CSU Foundation, which manages the CSU systemwide charitable gift annuity program. The University’s Planned Giving Officer works directly with the CSU Foundation to coordinate all CGAs donated to the University. The CSU Foundation accepts an irrevocable transfer of cash, cash equivalents, or publicly-traded securities from the donor in return for periodic payments to the donor and/or one other named beneficiary for life. Upon the death of the donor (or, if applicable, the other named beneficiary), the balance of the principal is retained by the CSU Foundation and distributed to the University. A portion of the annual payment is tax-free income to the donor, being considered return of principal. Since the gift annuity is part gift, in addition to the purchase of the annuity, the donor is allowed an income tax deduction. Donors will be advised to seek legal and financial counsel regarding tax deductibility and similar matters.
The annuity is secured by all of the CSU Foundation’s assets, and the rate of return used by the CSU Foundation and stated in the annuity contract is determined from tables provided by the American Council on Gift Annuities. The rates in these tables take into account the age of the donor and/or beneficiary at the time of the gift and are actuarially calculated to provide that approximately fifty percent (50%) of the market value of each gift will remain at the death of the last annuitant. The CSU Foundation may enter into CGA contracts with minimum funding of $5,000 and minimum age for life income beneficiaries of 55. Exceptions to minimum requirements require approval of the CSU Foundation President.
Contracts involving a deferred gift annuity require approval of the Gift Acceptance Committee. No more than two life income beneficiaries will be permitted for any gift annuity. The CSU Foundation will not accept real estate, personal property or any other illiquid asset in exchange for any charitable gift annuity.
The tables published by the American Council on Gift Annuities will be used for contractual rates unless an exception is granted by the CSU Foundation President. Upon the death of the donor and/or other named beneficiary, the funds representing the remaining principal contributed in exchange for the gift annuity will revert to an account for the purpose specified by the donor; or, if no such purpose is specified, the fund shall revert to the unrestricted use of the University.
Gift annuity contracts are governed by the laws of the state in which the donor resides. Certain of these states have stringent registration requirements. For gift annuities to be established in states other than California, the specific annuity regulations and requirements for that state will first be reviewed by the Director of Planned Giving and General Counsel of the Foundation. The Foundation reserves the right to reject any annuity contract proposals from states where the regulations are deemed overly burdensome or when excessive compliance costs would be required.
Charitable Remainder Trusts - The Foundation accepts designation as remainder beneficiary of charitable remainder trusts. A charitable remainder trust (CRT) is an irrevocable trust created during the life of the donor or through the donor’s will or trust (a testamentary CRT). The CRT must provide that a specified amount (not less than 5%) of the trust’s value is paid to one or more beneficiaries on an annual or more frequent basis. At least one beneficiary must be non-charitable. The Foundation may serve as trustee for CRTs for which at least 50% of the remainder is irrevocably designated to the Foundation.
There are two alternatives for CRTs. One is a unitrust (CRUT), which pays a fixed percentage of trust assets (not less than 5%) determined annually. The other is an annuity trust (CRAT), which pays a fixed annuity and requires that an amount not less than 5% of the initial fair market value of trust assets be paid at least annually to the named income beneficiary or beneficiaries.
Charitable Remainder Unitrust (CRUT)—The primary feature of a CRUT is that it can be for life or a specified term of years, after which the trust assets pass to the Foundation. Only assets of the trust may be used to satisfy the commitment to the donor; assets of the Foundation are not involved. Under current tax law, the charitable remainder of a unitrust must equal more than 10% of the unitrust’s fair market value when it is funded in order to qualify as a CRUT. Donors may make subsequent additions to the unitrust during their lifetime or by bequest upon their death. The CRUTs acceptable to the Foundation are the basic form of a unitrust, termed a “straight unitrust.” A straight unitrust provides for payment to the donor and/or beneficiary quarterly an amount equal to a set percentage of the fair market value of the assets of the trust, valued annually. The percentage is determined by the donor at the time the trust is created, is stated in the trust, and is irrevocable. If annual income and capital gain do not equal the committed percentage, principal is used to make up the difference. If there is an excess, it is added to the principal.
Charitable Remainder Annuity Trust (CRAT)—This type of trust shares many common features with the unitrust, the primary difference being the manner used to calculate the payment to the income beneficiary. The unitrust provides for a payout that varies with each annual valuation; however, the annuity trust provides for fixed payments based upon the fair market value on the date the trust is established. Another difference is that additional contributions can not be made to an annuity trust. With a CRAT, the donor irrevocably transfers assets to the trust, and the trustee pays the donor, or the specified beneficiaries, a fixed dollar amount annually for life or for a predetermined term not to exceed twenty (20) years. This payout must equal at least five percent (5%) of the fair market value of the assets placed in the trust when it is created. Income in excess of the annual payment is added to the principal. If the income in any one year is less than the annual payment, the difference comes from principal.
Charitable Lead Trusts - The Foundation may accept designation as the income beneficiary of a charitable lead trust. A charitable lead trust is a form of split-interest gift. A lead trust is similar to a charitable remainder trust, although the qualified charity receives the income interest with the remainder interest passing to the donor or some other designated beneficiary. Because of the complexity of split-interest deduction rules, the Foundation will advise prospective donors in writing to rely upon the donor’s legal, financial and tax advisors in determining whether to pursue the gift of a charitable lead trust to the Foundation. In general, the Foundation will not accept appointment as trustee of a charitable lead trust. Exceptions can only be granted by the Gift Acceptance Committee, after a thorough review of the circumstances.
Retirement plan beneficiary designation - Donors and supporters of the Foundation will be encouraged to name the “SF State Foundation” as beneficiary of their retirement plans, including Individual Retirement Accounts (IRAs) and qualified pension and profitsharing plans. Donors may wish to make their spouse the primary beneficiary, in which case the Foundation may be designated as secondary or contingent beneficiary. Such designations will be recorded as gifts to the Foundation at such time that they become irrevocable. When the receipt of funds is not due until a future date, the present value of the expected cash inflow of beneficiary funds is recorded as a gift at the time the designation becomes irrevocable. Gifts from retirement plans may be established by sending a new beneficiary designation to the donor’s plan administrator.
Bequests - A bequest is a gift of cash, property, or other asset made in a donor’s will or living trust. Bequests may provide for a specific dollar amount in cash, specific securities, specific articles of tangible property, or a percentage of the residual of the estate. Donors and supporters of the Foundation will be encouraged to make bequests to the Foundation in their wills and trusts. The donors and supporters will be advised to include the statement, “To the SF State Foundation for the benefit of San Francisco State University” in their wills and trusts in order to clearly indicate the intent of their bequest for the Foundation. Bequests may be given as unrestricted gifts or gifts restricted to a purpose or program designated by the donor. Donors may also establish, by bequest, a testamentary charitable remainder trust or unitrust. The bequest can be arranged so as to provide a life income for a designated beneficiary or beneficiaries. If such a gift is made by will, the principal will pass to the Foundation only after the death of the life income beneficiary or beneficiaries.
Life insurance beneficiary designations - Donors and supporters of the Foundation will be encouraged to name the Foundation as beneficiary or contingent beneficiary of their life insurance policies. Such designations will be recorded as gifts at the time the designation becomes irrevocable. The value of the gift to be recorded shall be the present value of the beneficiary amount expected to be received.
Other property - Property not otherwise described above, whether real or personal, of any type (including copyrights, trademarks, royalties, servitudes, easements or other incorporeal rights) may be accepted only after review and approval by the Gift Acceptance Committee.
Use of Legal Counsel
The Foundation shall seek the advice of legal counsel in matters relating to acceptance of gifts when appropriate. Such matters include, but are not limited to, the following:
- Closely held stock transfers that are subject to restrictions, buy-sell agreements or other arrangements that limit the marketability of the securities.
- Arrangements and documents pertaining to such arrangements where the Foundation is named as Trustee.
- Gifts involving bargain sales or documents requiring the Foundation to take or refrain from taking some action or assume an obligation.
Transactions with potential conflicts of interest that may invoke IRS or other legal sanctions.
It will be the responsibility of the donor to secure an appraisal when appropriate and engage the advice of independent legal and financial counsel for all gifts made to the Foundation. In situations where advisors retained by the Foundation prepare documents or render advice in any form to the Foundation and a donor, it shall be disclosed in writing to the donor that the professional involved is in the employ of the Foundation and is not acting on behalf of the donor. Any documents or other advice rendered in the course of the relationship between the Foundation and the donor should be reviewed by counsel of the donor prior to completion of the gift.
The Office of University Development produces materials which educate and inform prospective donors and their advisors about the various forms of giving. The Foundation and University pays no fees or commissions of any kind to any party as consideration for directing a gift to the Foundation, nor does the Foundation endorse any professional or fiduciary services.
The General Counsel of the Foundation will be responsible for filing the required IRS Form 8282 upon the sale or disposition of any property sold or otherwise disposed of within two years of receipt by the Foundation when the charitable deduction value of the item is greater than $5,000. It is understood that the Foundation must file this form within 125 days of the date of sale or disposition of the asset.
Foundation management, working in conjunction with the University’s Office of Development, is authorized to develop and adopt written guidelines and procedures to implement this policy statement. Except as otherwise stated within these written policies, the Gift Acceptance Committee must approve any exceptions to policy provisions. The Gift Acceptance Committee will periodically review these policies and make recommendations for revisions to the Board of Directors. Any changes to this policy statement shall be approved by the Foundation’s Board of Directors.