SOURCES OF REVENUES The FIU Foundation was established as a 501(C)(3) tax exempt organization to encourage, solicit, receive and administer gifts for scientific, educational and charitable purposes for the advancement of Florida International University and its objective. It is not a substitute for University operations. Revenue from contracts and grants, sales or other sources of operational revenue that are not clearly donations, should be deposited in the University. Examples of funds that should not be brought to the Foundation for deposit include (but not limited to): Fees from short courses, conferences, training programs – process these through University Auxiliary or Agency accounts Grants pursuant to signed agreements with University – process through Office of Sponsored Research Administration (OSRA) Scholarships received indicating immediate disbursement to a named recipient – process though the University in conjunction with the Financial Aid Office Monetary Contributions: A contribution is a voluntary, unconditional transfer of cash or other asset to a qualified organization and is made without getting, or expecting to get, anything of equal value. The FIU Foundation accepts contributions in cash, checks or credit cards. Conditional contributions, one in which a future and uncertain event must occur or the contribution must be returned to the donor, is recorded as a refundable advance (liability) until the conditions have been substantially met. Sponsorships: Sponsorships are payments made by a person engaged in a trade or business with respect to which there is no arrangement or expectation that such person will receive any substantial return benefit other than the use or acknowledgment of the name or logo (or product lines) of the person’s trade or business in connection with the exempt organization’s activities. That use or acknowledgement does not include advertising (including messages containing qualitative or comparative language, price information or other indications of savings or value, or an endorsement or other inducement to purchase, sell, or use a sponsor’s products or services.) Sponsorship agreements that provide “substantial return benefits” such as advertising, complimentary tickets or other benefits whose fair market value exceeds 2% of the payment may generate Unrelated Business Income Tax. Sponsorship agreements with “substantial return benefits” are contracted with the University for both tax and liability purposes. Sponsorship agreements must be reviewed by the University’s Legal office and the Tax Compliance section of the Controller’s office to determine the appropriate party to the contract and recipient of the funds (FIU vs. Foundation). SOURCES OF REVENUES Grants: Grants are additional resources awarded to the University to support instruction, research or public service. Some organizations refer to contributions as grants. The terms of the grant agreement will determine whether the awarded grant funds are contributions to be accepted by the FIU Foundation or if they should be administered by the University’s Office of Sponsored Research Administration (OSRA). Grants that award funds without expectation of any tangible compensation may be forwarded to the FIU Foundation for deposit. Grants that contain specific terms and conditions, imposed by the grantor, with respect to budget, timetable for research activities and reporting results, or the possibility that those activities represent a direct benefit to the grantor should be administered by OSRA. Sales/Ticket Revenue: Pursuant to Florida Statute Section 212.05, each sale, admission charge, storage fee or rental fee is taxable unless the transaction is specifically exempt by the Florida Department of Revenue (FDOR). Florida law requires organizations to collect and remit sales tax for activities/sales identified by the FDOR as taxable. The mission of the Foundation is to receive and administer gifts, not for the collection of revenue generated from sales. Proceeds from sales, including admission tickets, must be deposited in the University. If a department is unsure whether an activity gives rise to sales tax, they should contact the Tax Compliance section of the Controller’s office for further guidance. When sales of merchandise, admission tickets, or charges to attend a fundraising event are intended to include a donation as well as the fair value of the benefit received, the donation value must be separately disclosed and must significantly exceed a normal profit margin. If there is a donation component, the revenue should first be deposited in the University to allow the sales tax portion to be reported and remitted to the FDOR. The donation component can then be transferred from the University to the FIU Foundation. Documentation supporting the source of transferred revenues and the basis for the calculation of the donation component must be provided to allow the transferred funds to be deposited in the Foundation. SOURCES OF REVENUES In-Kind Gifts/Real Estate: Acceptance of gifts-in-kind requires approval from the Foundation’s Executive Director. Gifts-in-kind are defined as any material/tangible goods donated to the University. Every gift must be accompanied by documentation by the donor indicating its value and purpose in order to be appropriately credited. For further information or guidance contact the Office of University Advancement. For further guidance refer to Non Cash Gift Policy. Acceptance of gifts of real estate to the Foundation, require approval from the Finance Committee and Board of Directors. It is the Foundation’s intent to only accept property that is anticipated to be transferred to the State (University) or sold within a reasonable time period. Auctions: Florida Administrative Code Rule 12A-1.037, exempts occasional or isolated sales. Such sales must not occur more than two times during any 12 month period. Auctions conducted by Florida International University will not qualify for exemption because more than two auctions are typically conducted by various University departments. In addition, the isolated sales exemption does not apply if sales are conducted by an auctioneer, agent, broker, or other person registered or requiring to be registered as a dealer to engage in, conduct, or hold themselves out to be engaged in business, regardless of whether the sale would have qualified as an isolated sale. Proceeds from auctions (even if items auctioned have been donated) must be reported to the Tax section of the Controller’s office to determine whether sales tax must be reported and remitted to the Florida Department of Revenue. If the purpose of the auction was to support the mission of the Foundation, then the net proceeds, after tax, may be transferred from the University to the Foundation, provided that the transfer is accompanied by appropriate supporting documentation. Stocks: The Foundation’s Board of Directors approved the Non-Cash Gifts Policy on November 28, 2007. The policy delegated the responsibility for the handling of publicly traded securities received by the Foundation as gifts, to the Executive Director of the Foundation. It is the general policy of the Foundation to sell all gifts of publicly traded securities as soon as possible. Refer to stated policy for further guidance. SOURCES OF REVENUES Matching Gift Program : Major gifts to Florida International University can be leveraged dramatically through FIU's participation in the nation's most innovative higher education matching gift program. In some cases, a donor's gift can be doubled by qualifying for a state match. The State of Florida has two matching gift programs in support of major donations to FIU and other state universities in Florida: • the Major Gifts Matching Program matches gifts for endowment of $100,000 or more at a rate of 50% or more, depending on the size of the gift. • the Capital Facilities Matching Program matches all gifts to qualifying construction or renovation projects on a dollar-for-dollar basis, regardless of the size of each individual gift. For more information regarding the Matching Gift Programs visit http://advancement.fiu.edu/state_matching.htm or contact the Office of University Advancement. Pledges: A pledge is an unconditional promise to give that the Foundation has received from a donor. Before the pledge can be recognized by the Foundation, sufficient verifiable evidence must exist documenting that a promise was made by the donor and received by the Foundation. Such evidence may be included in written or verifiable oral communications such as written gift agreements, pledge cards or oral promises documented by tape recordings. Communications indicating that the Foundation has been included in a donor’s will as a beneficiary is not considered an unconditional promise and would therefore not be reported as such. It is considered only an intention to give because the donor retains the ability to modify his will during his lifetime. A promise to give which depends on the occurrence of a specified future and uncertain event to bind the promisor is considered a conditional promise which is recognized as a contribution when the conditions on which the promise is dependent on are substantially met. A conditional promise to give is considered unconditional if the possibility that the condition will not be met is remote. A conditional promise is accounted for as a refundable advance (liability) until the conditions have been substantially met. Pledges are received and maintained by the Office of University Advancement. At fiscal year end, the Foundation Business office values those receivables, for financial statement purposes, at the present value of the estimated future cash flows using a discount rate commensurate with the risks involved. SOURCES OF REVENUES Planned Giving: Planned giving offers friends and alumni the opportunity to support Florida International University through a variety of tax-beneficial options and opportunities as they consider their estate planning. Planned gifts are generally commitments made in the present with the benefit to FIU deferred until a future date. Such gift arrangements often provide the donor with significant income or estate tax deductions. Planned gifts can either be outright gifts of cash, securities, real estate or other assets made during one's lifetime or deferred gifts made in conjunction with an individual or couple's estate plans. Some deferred gift arrangements provide donors with income during their lifetimes. Some Types of Planned Gifts: Bequests Charitable Gift Annuities Charitable Remainder Trusts Charitable Lead Trusts Securities and Real Estate For additional information on any of these options visit http://advancement.fiu.edu/planned_giving.htm , or contact the Director of Planned Giving in the Office of University Advancement. Annuity funds received by the Foundation are separately managed and invested. The Foundation as contracted with an external investment custodian to manage the investments, including making the required annuity payments and to provide annuitants with year-end 1099’s. For further information refer to the Foundation Policy Establishing and Investing Gift Annuities.