Topics covered in this section are:
- Consultation with CUDAR re solicitation of donors
- Authority to accept donations up to (and including) £100,000
- Decision to accept restricted donations
- Receipt of donations
- Availability of funds
- Classification of donations
Consultation with CUDAR re solicitation of donors
CUDAR's 'Procedures for Handling Donations' document explains the detailed University procedures for accepting donations. Departments should use these procedures before approaching any potential donors.
All members of the University involved in fundraising should consult CUDAR at an early stage in their discussions with a potential benefactor. An early consultation can:
- reduce the risk of uncoordinated approaches to a single potential donor;
- spread familiarity with the process for accepting benefactions;
- include advice on the application of the ethical guidelines and of the Proceeds of Crime Act;
- ensure donations are only accepted from sources and for purposes, acceptable to the University;
- allow an early warning to anyone unknowingly approaching a potential benefactor whose donation is not likely to be acceptable.
Authority to accept donations up to (and including) £100,000
Donations are received and donation accounts are set up on the understanding that the monies are charitable funds which belong to the University, not to an individual . While the Head of Institution may place funds at the disposal of an individual, the funds remain the property of the University..
Heads of Institutions may accept single gifts of up to (and including) £100,000 under authority delegated by the Vice-Chancellor, unless they have a personal interest in the potential donation e.g. it is to support their own post or research programmes. In these instances they must notify the Director of Development and Alumni of this potential conflict of interest at the earliest possible stage.
Heads of Institutions are therefore responsible for ensuring that all the procedures and ethical guidelines (as detailed in the Procedures for Handling Donations) are implemented. Where donations are accepted it is important that CUDAR be notified so that it can be recorded centrally so that donors' aggregate giving is monitored and to ensure that donors receive the correct level of recognition for their support.
Gifts above £100,000 must be formally accepted by the Vice-Chancellor.
Decision to accept restricted donations
The University will seek to avoid the situation where it becomes committed to expenditure for which it has insufficient funds. Accordingly, the terms of any specific donations and endowments must be carefully considered before a gift is accepted..
Until a full assessment is made, restricted donations should not be accepted (see section Specific Donations - Source of Funds H*** for more guidance on what is a restricted donation).
CUDAR can advise on provisional figures required to endow various types of posts and studentships in perpetuity or for limited periods. Their advice should be sought before any costings are put to a potential donor.
The conditions in relation to specific endowments are summarised in Chapter 13 - Trust Funds; they should be referred to for guidance in respect of discussions with potential benefactors. It provides guidance on:
- ensuring a sufficient capital value for the intended purposes
- allowing for related departmental and central costs
- the terms of the gift and subsequent wording of regulations.
Receipt of donations
Where possible, donors should be encouraged to make their donation by way of a single lump-sum in GBP sterling.
Cash donations
Specialist advice should be sought from the University's Legal Services Office in respect of any offers of substantial donations in cash from parties based in countries associated with organised crime or terrorism or when, for any reason, there are any concerns in relation to the origin of the funds.
Foreign currency donations
Where a Department is expecting a donation in a foreign currency CUDAR's Head of Gift and Data Management Team (giftregistryenquiries@admin.cam.ac.uk) must be consulted in advance to establish appropriate mechanisms for accepting the donation. Please note the failure to do so can result in financial or legal implications for the University.
Non-monetary donations
It is the University's general practice to realise any non-monetary gifts e.g. stocks and shares or other specific financial instruments and to use the proceeds to create a trust fund, a specific endowment or a general or specific donation as appropriate. Occasionally a donor's specific direction will be that the original asset be retained, in these cases the Development Office will consult with the central bodies for approval.
Proposed gifts of property or shares in private companies need to be carefully considered, because they may not be easily realisable. Again the Development Office should be informed if such a gift is contemplated and they will consult with the Director of Finance, Head of Department/School and other relevant stakeholders as dictated by the gift.
Careful consideration should be given before accepting gifts of works of arts or books as there are often hidden costs to a department associated such as:
- fine art insurance
- additional security
- maintenance (correct temperature and humidity, lighting, protection from sunlight, moths etc).
Where they are accepted they are often retained by the University and added to its collections and the Fixed Asset Helpdeask is notified.
For more information on Fine Art Insurance please see the Insurance chapter of the FPM or contact the Insurance Section.
Grants from charitable trusts
Grants from charitable trusts may be received directly by the institution or CUDAR. It is important that the responsibility and format for reporting to the Trust be set out and agreed at this point (See Ongoing Management of Donation Accounts).
The procedures set out in sections Types of Donation for Accounting Purposes and Procedures for Receiving Donations via the Development Office should be followed with the exception of any references to Gift Aid which is only applicable to UK individuals. It is important that CUDAR is notified of such grants because they need to ensure that the trusts receive the appropriate level of recognition for their support. It is common for the trusts to support numerous activities across the University and whose total value should be aggregated.
Once credited to the appropriate cost centres these funds may be invested in accordance with the principles summarised in Reporting to Donors.
Grants from government departments and agencies
Grants from Government bodies and agencies are normally received by the Finance Division, who will credit the appropriate cost centre in the relevant institutions by means of journal. The Development Office does not get involved with any grants received from such bodies.
Overseas donors
Gifts from US Taxpayers may, in the first instance be given by the donor to CAm (Cambridge in America) who will then allocate them to the University taking into account the donor’s wishes. This enables the US donors to claim full tax benefits from the United States Internal Revenue Service. Consult CUDAR regarding all overseas donations, especially from Canada, Hong Kong, India, Australia, and European countries.
Availability of funds
Donations are not available for investment or spending until they have been received and credited to an income account in the relevant department. Heads of Department must ensure that donation accounts and trust funds are maintained in credit.1
Departments are not entitled to commit expenditure based on a pledge of a gift to be received in the future. Although the University does not account for pledges on UFS, CUDAR tracks pledges made in favour of the University and its departments. Departments should contact CUDAR (giftregistryenquiries@admin.cam.ac.uk) to discuss donation UFS coding prior to their arrival. This will ensure that the correct codes are identified so the donation can be processed in a timely manner.
1 Regulation 14.2, Financial Regulations 2012
Classification of donations
Our coding and classification of donations supports the proper management of the relevant funds in accordance with the donors' wishes. The University is also required to comply with applicable United Kingdom accounting standards and with the Statement of Recommended Practice Accounting for Further and Higher Education (the SORP).
In order to meet these requirements, the accounting records must distinguish between distinct types of donation income:
- Specific endowments
- General donations
- Specific donations - for revenue purposes
- Specific donations - for capital purposes
Each of these is considered in more detail in Types of Donation for Accounting Purposes.