FundSvcs Community

Expand all | Collapse all

Countable Gift from Alumni Association?

  • 1.  Countable Gift from Alumni Association?

    Posted 30 days ago
    Hello,

    We have a case where our alumni association is dissolving and transferring funds to a related foundation. I've been asked to look into if we can count the dues portion of funds as a gift to the foundation. My initial response was no, not countable because we can't make a gift to ourselves. 

    The question then came up if the aspect of the dues revenue from the AA being transferred to create a new endowment to fund alumni relations makes a difference? I should note that we never counted dues as gifts, I believe the benefits would have fallen under the safe harbor rules for memberships under $75. Does this make a difference? I would love to hear reasoning so I can head of any additional questions.

    ------------------------------
    Mandy Smith
    Director of Gifts and Records Management
    Virginia Commonwealth University
    mlsmith4@vcu.edu
    ------------------------------


  • 2.  RE: Countable Gift from Alumni Association?

    Posted 30 days ago
    Assuming that any true gifts made to the Alumni Association have been included in your fundraising totals - as they should have per CASE - then there isn't anything to count here.  The alumni association is an extension of "you."  Its closure and asset transfer to another one of your "subsidiaries" are little more than moving "your" money around.

    So, no.  There is no gift here that you can count.

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987






  • 3.  RE: Countable Gift from Alumni Association?

    Posted 29 days ago
    Hi Mandy,

    I'm not too sure what the CASE perspective ought to be here. If you haven't counted those dollars in the past, and your association is a truly separate 501c3 organization, and this is a true dissolution, then certainly from the perspective of the IRS there is a charitable grant from the association to the foundation. I would guess CASE would see it similarly, so long as the money wasn't counted before - but it is a grant from another organization, not alumni giving. 

    The issue is that whether this is a true dissolution or not is something the lawyers are surely involved in figuring out, and factors such as what happens to employees and board members weigh on that determination. I'm not even sure if CASE has articulated a position on counting assets from a merger. 

    I think I find myself believing that 
    • if it's a true dissolution, you would be able to count all the money that the university hasn't previously counted, and it would all be a donation from another organization. It would not matter how the money was raised or earned, since the donor is the organization, not the original donors, and it would all be considered charitable

    • if it's a merger, either actual or constructive, you would only be able to count charitable dollars the Association raised. In a merger, there is no break in the association's existence, and its history is subsumed into the successor. Thus, whatever gifts were raised in the relevant time period would presumably be counted, and whatever non-gift money was earned would be excluded

    • if you're not truly separate now you can't count anything



    Thank you,
    Isaac Shalev
    CRM Expert
    Sage70, Inc.
    (917) 859-0151
    isaac@sage70.com

    Schedule a 30-minute consultation now:






  • 4.  RE: Countable Gift from Alumni Association?

    Posted 29 days ago
    I believe VCU's AA is part of the University and was established as an affiliated alumni association - treated as a supporting organization by the IRS.  Therefore, gifts TO the alumni association are counting in university fundraising totals.  But any transfer FROM the AA is treated as an internal transfer.

    Paragraph 5.1.2 of the CASE Standards (Supporting Organizations) is the source for this treatment.

    But you are correct, Issac.  If this was a stand-alone and completely independent AA and not a supporting organization, then you would treat this as new money but then you would never have counted gifts to it.

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987







  • 5.  RE: Countable Gift from Alumni Association?

    Posted 29 days ago
    Correct, the associations are affiliated and fundraising to the associations has always counted in our fundraising totals along with the foundations. 
        Best,

        Mandy


        Mandy L. L. Smith
      Director of Gifts and Records Management
      Development & Alumni Relations
      Virginia Commonwealth University
      PO Box 842026
      111 N. Fourth St.
      Richmond, VA 23219
      (804) 828-0348
      mlsmith4@vcu.edu


      The information contained in this message may be privileged and confidential and protected from disclosure. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to this message and deleting it from your computer.