Gift Acceptance Policy
West Point Association of Graduates (WPAOG) is the alumni association and fundraising organization of the United States Military Academy (USMA). Its mission is to serve West Point and its graduates. As a 501(c) (3) non-profit, tax-exempt corporation, its philanthropic pursuits maintain a margin of excellence for Cadets attending the Academy and a broad array of services and support for West Point’s graduates and other constituents.
I. General Statement of Policy
WPAOG shall be the sole private organization, other than the Army Athletic Association, authorized to raise private funds on behalf of USMA. It solicits funds for USMA and for itself (The alumni services segment of WPAOG does not receive any of the gift allocation percentage that accrues to the Development Office, nor does it collect dues from its members.) Funds will not be solicited for uses for which appropriated (government) funds are available or are likely to become available. Unrestricted gifts are always preferred, as they provide maximum flexibility to direct resources where they are most needed. If a donor chooses to restrict a gift for a specific purpose, the primary consideration for acceptance will be whether it supports a recognized USMA/WPAOG defined need. All other gift offers will be reviewed by the Gift Committee (GC) as described elsewhere in this document. All gifts intended for USMA must be proffered and accepted in accordance with applicable Army laws and regulations.
This policy supplies important information for donors and enables the Development Staff to inform, guide, or otherwise assist donors in fulfilling their philanthropic wishes. All donors shall rely on their own personal advisers for tax, legal, financial, and other advice concerning their gifts. Furthermore, WPAOG will not serve as agent under power of attorney, nor as estate executor, administrator or personal representative in any instance on behalf of a donor.
The Council for the Advancement and Support of Education (CASE) guidelines will be consulted and considered in assessing the value of all gifts toward an approved fundraising goal.
WPAOG complies with all Internal Revenue Service and New York State regulations and laws governing non-profit corporations. WPAOG sends gift acknowledgements for all gifts received on a current basis. On occasion, premiums are offered to the donor in return for a gift, e.g., memberships in the Army ‘A’ Club. A donor will have the option to decline or accept these premiums and the tax receipt will be sent in accordance with our related policy/procedure. See Appendix A.
II. Definitions and Characteristics of Gift Accounts Established
Endowment
An endowment is a gift fund (minimum of $100K, with limited exceptions as approved by the Gift Committee) whose initial donor, intending that the fund exist in perpetuity, stipulates that the original value of the gift (the principal or corpus) cannot be spent down. That is, the corpus must always stay intact. The gift is for a particular purpose as designated by the donor and agreed by USMA or WPAOG. After one full calendar year of investment and if market conditions allow for it, a portion of the earnings are disbursed for the specified purpose in accordance with the then- current spending policy. If the donor wishes to provide funding for the specified purpose in the first year of the endowment’s existence, he or she must provide an additional gift of cash, so specified as to its use. An endowment agreement--a document that stipulates the purpose and other features of the endowment and that is signed by both the donor and WPAOG--is required. Agreements are also required in the case of an endowment with multiple donors; such agreements are usually made with the initial donor. Gifts to existing endowments require documentation noting that the donor’s intent is in-line with the existing endowment agreement.
Investment / market returns (both positive and negative) will affect the endowment income balance, but will not affect the principal or the corpus balance. If the income balance is negative, generally created from negative market returns, no further spending will be made until the account is brought back to a positive balance.
Quasi-Endowment
A quasi-endowment is established at the discretion of WPAOG. Spending from a quasi-endowment must adhere to the purpose specified by the initial donor or the purpose associated with the source of the original funds, and disbursements will normally be in accordance with the then current spending policy approved by WPAOG’s Board of Directors. However, since there is no provision to maintain the corpus in perpetuity in the case of a quasi-endowment, the principal may be expended; but only for the intended purpose. Formal endowment agreements are necessary if the quasi-endowment is funded by a donor. In all cases, documentation of the source and purpose of the fund must be provided. Investment / market returns will affect quasi-endowment balances both positively and negatively.
Gift Fund
A gift fund comes into being with a contribution by an initial donor who restricts the use of the money to a specific purpose. The documentation associated with the gift makes clear the donor's restriction on its use. Subsequent contributions to the fund by other donors are bound by the restriction. Generally, these gift funds are proffered on a current basis, and therefore investment results have no effect on gift funds.
Class Gift Funds
These are funds placed into separate accounts by USMA classes for the eventual purpose of turning them over to USMA or WPAOG, or both, in various proportions. Generally, a class accumulates the funds during a fundraising campaign over a period of years, with the actual gift presented during a reunion. At that time, the gift takes on the characteristics of one of the gift account types described above (to include the appropriate documentation) and is transferred into such a gift account from the class gift fund. Investment results will affect class gift funds both positively and negatively.
A Summary of the Characteristics of Gift Funds:
| |
Endowment
|
Quasi
Endowment
|
Gift Fund
|
Class Gift Fund
|
| Invade/Use/Principal Corpus |
No
|
Yes
|
Yes
|
No
|
Receive Interest/
Market Changes |
Yes
|
Yes
|
No
|
Yes
|
Separate Principal
and Income Accounts |
Yes
|
No
|
No
|
No
|
| Documentation of Purpose |
Yes
|
Yes
|
Yes
|
No
|
III Responsibilities
Chief Executive Officer (CEO)
The CEO is WPAOG’s lead fundraiser, and is accountable to the Board of Directors for achieving fund-raising goals. The CEO will make final gift acceptance decisions when the GC cannot make a unanimous decision.
Vice President for Development
This person is the Association's senior Development officer, and works with the Superintendent, USMA to establish fund-raising policies and priorities. The VP is responsible to the CEO for executing the fund-raising program.
Development Staff
The staff secures appropriate gifts to USMA/WPAOG from private sources. The sections are organized into a headquarters (Senior Director of Development, Campaign Director, and Director of Development Communications) and four operating directorates: Class and Annual Giving, Corporate and Foundation Relations, Major Giving, and Planned Giving. Gift Processing (reporting through Finance), Research and Donor Relations are other areas supporting Development efforts.
Gift Committee (GC)
The GC is comprised of WPAOG’s CEO, Senior Vice President, Vice President for Development, Chief Financial Officer and the USMA Director of Academy Advancement (ex-officio). The VP for Development will serve as the secretary of this Committee and will document all related actions and decisions. The GC reviews and responds to unusual gift offers, offers that may be an exception to this policy and offers that do not support recognized USMA or WPAOG defined needs. If necessary, the GC will seek the advice of WPAOG’s retained counsel (an outside, independent source) on accepting an offer. The GC, at its discretion, shall solicit input from other BOD Committees, any concerned Development Executives or USMA representatives. The GC will make every effort to ensure that:
· Gifts impose no undue financial burdens on WPAOG.
· Gifts do not expose USMA/WPAOG to any present or future, real or contingent liabilities, material or personal.
· Gifts place no undue burden on any USMA/WPAOG resources.
· Gifts do not subject USMA/WPAOG to adverse publicity.
· Gifts do not involve any conflicts of interest.
The GC will ensure that endowment gifts include language to provide the CEO, WPAOG, and the Superintendent, USMA, with the greatest flexibility to redirect gift monies appropriately in the event that the original restriction becomes obsolete, inappropriate, or impracticable. This supports donor rights under Section 522 of New York State Not-for-Profit Corporation Law requirements concerning release of restrictions on use or investment.
Gifts of Real Estate will be referred to the LGL Real Estate, LLC. Such organization is a wholly-owned, single member subsidiary of WPAOG.
V. Specific Gift Acceptance Information
A. Current Gifts
· Cash - WPAOG accepts all cash gifts in the form of currency, check, electronic funds transfer, government allotment or credit card payment. For security purposes, WPAOG will only accept currency in person at the Herbert Alumni Center, Gift Operations Office. If, during the processing of the gift, it appears that the gift is derived from an illegal or immoral source, it will not be accepted.
· Pledge - WPAOG accepts all pledges for donations supporting recognized USMA/WPAOG needs. Pledge periods are normally for a period of three to five years. Longer periods require GC review and approval.
· Securities - WPAOG accepts publicly-traded securities as outright gifts or as payment toward pledges. Such gifts are valued at the mean market value on the date of the gift, in accordance with IRS regulations. Closely-held securities, those not traded on an exchange or over-the-counter, will require GC review.
· Gifts in Kind - Gifts-in-kind are generally defined as non-cash donations of materials or long-lived assets other than real and personal property. Gifts of materials or long-lived assets that are directly related to the mission of the institution should be reported at the face (or fair market) value. Gifts-in-kind might include items such as equipment, software, printed materials, food or other items used for hosting dinners, events, etc. These gifts, including the valuation determination may be subject to review of the GC. Approved gift values are counted toward lifetime gift credit but are not receipted for tax purposes.
o For Tangible Property (art, collections, horses, etc), WPAOG requires an appraisal from the donor
o For Equipment, Software and Printed Materials, WPAOG will report the educational discount value, that is, the value the institution would have paid had it purchased the item outright from the vendor. Regardless of what estimated value a vendor may place on a gift-in-kind, WPAOG will only count as a gift the amount it would have paid for the item or items were they not donated.
o For Meals and Events, and Plane Ticket donations, WPAOG will require a dated receipt indicating the amount paid.
o For Construction Related donations, WPAOG will refer all gifts to the Gift Committee for approval.
Gifts of Service – The US Government does not accept gifts of service but may accept gratuitous service agreements. Therefore, WPAOG accepts and thanks the providers for services such as legal, consulting, etc. WPAOG will acknowledge the service provider appropriately. These services are not counted toward fund-raising goals.
Real Estate - WPAOG will refer all offers of real estate to LGL Real Estate, LLC. WPAOG does not accept ownership of timeshare property.
Construction – Gifts of construction are referred to the GC.
Buildings and Monuments at West Point - In rare instances, WPAOG will accept gifts of permanent structures at West Point such as buildings and monuments, but only after extensive coordination with USMA.
Sponsorships – see related WPAOG policy
B. Deferred Gifts
Life Insurance – WPAOG will not be owners of any life insurance policies and only accepts beneficial distributions, at face value, from life insurance policies. This is considered a revocable gift and will be treated in the same manner as other revocable gift instruments.
Retirement Plan - WPAOG accepts beneficial distributions from retirement accounts where WPAOG is a named beneficiary. A donor can also name his or her spouse the beneficiary of the retirement plan, who in turn can name WPAOG the eventual recipient. Additionally, WPAOG can also be named a contingent beneficiary.
Bequests and Trusts. WPAOG accepts testamentary bequests from wills and trusts where WPAOG or West Point Fund is a named beneficiary. Trusts referenced include revocable trusts and irrevocable charitable remainder and lead trusts. Bequests of tangible property and real estate will be evaluated as stated in paragraphs above. WPAOG will agree to serve as trustee for irrevocable trusts, at the donor’s request, subject to GC approval. WPAOG is not authorized to accept bequests payable to West Point or the United States Military Academy. Such bequests are referred to DAA.
Charitable Gift Annuities and Pooled Income Funds. WPAOG accepts donations to its charitable gift annuity fund and pooled life income fund.
VI. Changes to Gift Acceptance Policy
The GC will receive and review any proposed amendments to or deviations from this policy. Exceptions will be reported to the Chair and Vice Chair of the BOD on an ongoing basis and reported to the full BOD annually. The GC will also conduct an annual review of this policy at the beginning of each calendar year.