A gift is an irrevocable contribution of money or property from a donor to the University, subject to the following conditions:
The donor must intend to make a transfer of money or property.
The money or property must actually be delivered to and accepted by the University.
The donor may place certain restrictions on the use of the gift.
Are Your Funds a Gift?
Start by reviewing IRS Publication 526, which covers which organizations are qualified to receive charitable contributions, the types of contributions that can be deducted, and reporting and record-keeping guidelines. For additional guidance, reach out to the Gift and Endowment Accounting Office.
|Scenario||Is it a gift?|
|A member of the community gives you a check for $50,000 and wants to establish a scholarship fund with this money. The donor wants to select the scholarship winner every year, as long as they are alive.||No. A donor can designate a department or area the gift will benefit, but they can have no further involvement once the University accepts the gift.|
|An alumnus mails a $20,000 check to you indicating that he wants to help one of your students pay her tuition.||No. Because the money would benefit one specific individual, it is not a gift to the University. A gift can be made to benefit a student in a specific department, but not a specific student.|
|A professor gives you a check for $10,000 to fund their research.||No. The professor can make a gift to support the research of the University, but not their own research.|
|The CEO of a New Jersey pharmaceutical company gives you a personal check for $45,000 to support genetic research.||Yes. The CEO specifies what the gift is to be used for, but states no other conditions.|
Many gifts come with donor restrictions. For example, a donor may specify that the gift must be used only for a specific research project, or for purchase of certain types of books for one of Princeton’s libraries.
Categories of Gifts
Gift Administration oversees two broad categories of gifts:
A true endowment gift establishes a permanently invested fund. While fund income may be spent, the principal must remain intact. In some cases, donor stipulations allow for principal expenditures. These funds are known as quasi-endowment gifts.
In the case of both true and quasi-endowment gifts, a donor will generally restrict the purposes for which the endowment income can be spent. Endowment gifts typically are received and processed through the Office of Alumni and Donor Records.
A term gift is one that is not invested and is intended to be expended in a timely manner.
Processing Term Gifts
Term gifts can only be formally accepted by authorized University individuals. However, they often are received by academic departments and need to be processed correctly to ensure that the gift funds are accounted for and spent in accordance with donor restrictions. Department and business managers need to:
Understand what constitutes a gift;
Understand how to process a gift; and
Carefully track the way the gift and/or any associated income is spent.
When term gifts are credited to the incorrect fund, corrections should be directed to the Office of Alumni and Donor Records.