Acceptance Of Gifts Policy (Excluding Real Estate) - Northern Michigan University

Last reviewed: 2/26/2018

This procedure is for the acceptance of personal property. Other types of gifts may only be solicited or accepted through the NMU Foundation, including:  

• Cash, check, or credit card authorization
• Publicly traded securities
• Bequests of cash or publicly traded securities
• Life insurance beneficiary designation and or owner designation
• Qualified retirement plan or individual retirement account beneficiary designation
• Payable on death (POD) bank accounts, mutual funds, or certificates of deposit
• Government bonds assignment or transfers

For ease of reading, as of 10/11/17 this procedure has been updated to show 13 functional steps for vehicle donations and 12 functional steps for non-vehicle donations, followed by a more detailed description of dollar amounts, forms, and participant responsibilities.  

Titled vehicle donations are processed using these steps:    

1. Donor and university agree on a gift of a vehicle.  Print out the NMU vehicle donation form.  If the vehicle is valued by the donor at over $500, print a blank IRS form 8283.  For motor vehicles, boats, and airplanes (hereafter called vehicles) also print a blank IRS form form 1098 C.  If the vehicle’s estimated value is greater than $500, also print a W-9. 
2. Go over the donation forms with the potential donor, describing how the form has to be reviewed by the department head and possibly other university representatives before the vehicle is accepted.   
3. Explain how NMU is not allowed by IRS rules to set a value for the vehicle.  We can use a blue-book type value for vehicles, but condition is considered in this valuation.  If applicable, explain how once the vehicle is turned over, the donor loses access to it for valuation, so any appraisal should be done before the vehicle is turned over to the university.  If the donor wants tax deductibility information, point them toward IRS publication "Instructions for Form 8283 Noncash charitable contributions." 
4. If the donor is a company or has a form that they want NMU to sign, contact Risk Management and Purchasing.  These two departments have signing authority for the external form and can review it to ensure that it meets all NMU criteria.   Also, Purchasing or Risk Management may contract the controller if it appears that the donation is from company inventory; inventory donations are valued differently than other donations. 
5. Fill out the top portion of the donation form with the donor (info. can be collected over the phone).  
6. Route the NMU donation form to the department head (who will attest by their signature that the vehicle will be used in the department and retained for at least three years). 
7. Public safety must either review the donation and sign the form OR provide an email stating that there is no anticipated hazard based on a description of the item.  If an email is provided, attach a copy of the email to the form when you send it to Purchasing.   
8. Once department head and public safety signatures are collected, make arrangements to collect the donation.  
9. If the value is under $500, complete copy C of the 1098 C; if the value is $500 or greater, complete the W-9 and copy B and C of the 1098 C.   
10. If the donation may be valued over $500, but less than $5000, we can provide the donor with a blank IRS form 8283.  NMU does not use this form if the donation is less than $5000.  If the donation is a vehicle valued at over $5000, complete sections A and B of IRS 8283 including name of donor, taxpayer id, description of property, and physical condition of the item(s).  When section B is complete, the Controller’s department must sign the form, but DO NOT deliver the signed form before NMU accepts physical possession of the vehicle.   
11. Give copies of the forms to the donor.  Keep originals for NMU.  
12. Route the original forms to purchasing for review.  Send copies or scanned copies to the controller and risk management. Purchasing will review to ensure the forms are complete and provide the final signature on the donation form.  The controller’s office will prepare IRS submissions and will deliver the appropriate copy of the completed IRS 1098 C if applicable.  When a signature is required on IRS 8283 section IV, the controller must sign.  If it is not signed and delivered at transfer, the controller’s department will deliver it in a reasonable time and either retain a copy in date order or deliver it to purchasing to be merged with the rest of the donation record.  Risk management will complete title transfer and any asset record updates that are necessary.  
13. If the department disposes of the property in less than three years, notify the Controller’s Office; IRS form 8282 may have to be filed within 125 days of the disposal. 

Noncash gifts under $5000 are processed using these steps:   

2/26/18 update: 

Tangible personal property valued in excess of $5,000 may only be accepted by the NMU Foundation using the Personal Property Donation (in excess of $5,000) form.  Property intended to be transferred to the university must be:

• Deemed useful by the accepting department
• Intended to be held for a period greater than three years
• Assessed through a special review to identify any additional expenses related to the donation, such as cleaning, disinfecting, repairing, certifying, transporting, maintaining, changing electrical, or changing ventilation systems to accommodate the donation.  The accepting department will be responsible for these additional expenses.  The most recent form lists all the required reviews. 

It is the current policy of the DeVos Art Museum to advise, assist, and collaborate with faculty and staff responsible for the other NMU collections to the extent possible.  Art includes paintings, sculptures, watercolors, prints, drawings, ceramics, antiques, decorative arts, textiles, carpets, silver, rare manuscripts, historical memorabilia, and other similar objects.  Therefore, if art is expected to be valued greater than $5,000, review the art acquisition policy and contact the DeVos for assistance.   

Worksteps:

1. Donor and university agree on a gift.  Print out the NMU donation form.  If the gift is valued by the donor at over $500, print a blank IRS form 8283. 
2. Go over the donation forms with the potential donor, describing how the form has to be reviewed by the department head and possibly other university representatives before the gift is accepted; if it is a simple gift (non-vehicle with no possible hazard identified, such as a costume or quilt), a department head can fill out the forms when the donor brings the gift in to the department.    
3. Explain how we are not allowed to set a value for the gift.  If applicable, explain how once the gift is turned over, the donor loses access to it for valuation, so any appraisal should be done before the gift is turned over to the university.  If the donor wants tax deductibility information, point them toward IRS publication "Instructions for Form 8283 Noncash charitable contributions." 
4. Fill out the top portion of the donation form with the donor (info. can be collected over the phone).  
5. If the donor is a company or has a form that they want NMU to sign, contact Risk Management and Purchasing.  These two departments have signing authority for the external form and can review it to ensure that it meets all NMU criteria.   Also, Purchasing or Risk Management may contract the controller if it appears that the donation is from company inventory; inventory donations are valued differently than other donations. 
6. Route the NMU donation form to the department head (who will attest by their signature that the gift will be used in the department and retained for at least three years). 
7. Public safety must either review the donation and sign the form or provide an email stating that there is no anticipated hazard based on a description of the item.  If an email is provided, attach a copy of the email to the form when you send it to Purchasing.   
8. Once the department head and public safety signatures are collected, make arrangements to collect the donation.  
9. If the donation may be valued over $500, but less than $5000, we can provide the donor with a blank IRS form 8283.  NMU does not participate in filling out this form if the donation is less than $5000. Note that non-vehicle donations over $5000 MUST be accepted by the NMU Foundation. 
10. Give copies of the forms to the donor.  Keep originals for NMU.      
11. Route the original forms to purchasing for final review.  Purchasing will review to ensure the forms are complete and provide the final signature on the donation form if not already complete and send a copy to the donor.  
12. If the department disposes of the property in less than three years, notify the controller’s department; IRS form 8282 may have to be filed within 125 days of the disposal. 

Details in processing physical gifts through this policy:  

Licensed personal property of any value and non-licensed personal property gifts valued less than $5,000 may be accepted by the University through the Purchasing department. To ensure compliance with IRS requirements, do NOT accept the physical gift until the gift form is complete.

Acceptance by Department Head:

No property will be accepted under this procedure unless there is a purpose and use for the University.  Normally, gifts are offered directly to specific departments.  Purchasing will confirm that the department has a use and purpose for the gift. 

In the event that a gift is offered without previous communication with a specific department, the Purchasing department will contact applicable department heads to confirm that there is a use for the proposed gift. If no department will accept the gift, the University will not accept it. To ensure that there are no damaged relationships because of this, Purchasing will contact the NMU Foundation office prior to contacting the proposed donor.

Licensed Personal Property:

The University may accept donations of licensed personal property (cars, boats, and other licensed/titled vehicles) of any value when the property has an immediate value (use and purpose) for the University. 

Licensed vehicles that are donated for parts are treated differently than vehicles that will not be used for parts. However, the same property donation form is used for both. These licensed or titled vehicles require special review by Purchasing to determine the actual value. No outside assessment is required for fair market value; a copy of a blue-book type assessment may be used to evidence the value. The exception is when the vehicle is donated through a manufacturer; in these cases, the value is not the blue-book value, but is the inventory value as determined by the manufacturer. Risk Management will be notified by Purchasing the intent to gift. Risk Management will ensure proper title transfer, insurance coverage, and if applicable, licensing. The Personal Property Donation Form signature indicates that all required actions by Purchasing and Risk Management are complete. The gift is not considered accepted, and should not be physically accepted, until all signatures have been collected.

In addition, for vehicles sold within 30 days of donation the donor will be advised that the tax deduction value for the vehicle is limited to the gross proceeds for sale.

Non-Licensed Personal Property:

Non-Licensed Personal Property valued less than $5,000 may be accepted by the University.    Utilize the Non-vehicle Donation Form. 

A Note About IRS Forms: IRS forms are required for certain types of donations.  The donor fills some out and some are filled out by the University/donee.  The forms referenced in this procedure can be downloaded and printed from the IRS forms and publication website at https://www.irs.gov/forms-pubs  The forms referenced below are:

IRS Form 1098 C Contribution of Motor Vehicles, Boats, and Airplanes:

The University must file a 1098 C when accepting a donation of a qualified motor vehicle, boat, or airplane with a claimed value over $500.

IRS Form W-9 Request for Taxpayer Identification Number and Certification:

This form is collected when we need to report information to the IRS.  The donor provides a taxpayer identification number and attests that it is correct.  

IRS Form 8283 Non-cash Charitable Contributions: 

For donations valued over $500, the donor must attach Form 8283 to their tax return to support the non-cash charitable deduction. NMU is only required to sign this form if the value is over $5000. 

For donations valued over $5,000 NMU will complete Part IV of Section B, Form 8283. The Controller or a designate will sign the form (by regulation, the signer for NMU must be an official authorized to sign the NMU tax or information returns, or a person specifically authorized to sign by that official). The signature does not represent concurrence in the appraised value of the contributed property. A signed acknowledgement represents receipt of the property described on Form 8283 on the date specified on the form. The signature also indicates knowledge of the information reporting requirements on dispositions, as previously discussed. A copy of Form 8283 must be retained by NMU and will be retained in the Controller’s office in date order or attached to the original set of documents with the purchasing department. 

Intent to resell: 

Contributions are generally not accepted with the intent to resell.  When donations are accepted with the intent for resale, regardless of the sale date, the University Controller’s office must provide the initial 1098 C within 30 days of the donation (with certain dollar thresholds).  Therefore, the Controller’s office must be informed at the time of donation by the department head receiving the gift if it intends to resell the donated item.  In addition, if the property is sold within the first year that the property is held by the University, a subsequent corrected 1098 C must be provided within 30 days of the sale.  Again, it is critical that the department initiating the sale notify the Controller’s department.  The notice will include an attestation that sale was conducted as an arms-length transaction. 

Donations that may contain safety or environmental hazards:

All gifts and donations that may be potentially hazardous or contain hazardous material must be approved in advance by the Director of Public Safety and Police Services.  Items must be evaluated for safety and environmental considerations and must adhere to MIOSHA standards if applicable.

Reason for Required Appraisal Summary
When donated property is valued in excess of $500 and the donor wishes to receive tax credit for the donation, the donor must complete IRS Form 8283.  The onus for obtaining the appraisal is on the donor.  The donor can use Part III of Form 8283 to evidence the appraisal.

If a donor estimates the value of a household item or single item of clothing to be greater than $500 and less than $5,000, but does not want to obtain an appraisal, we can still accept the gift, but must not participate in the donor’s valuation.  Therefore, NMU should write “no appraisal received” in the column of the form titled “value estimated by donor” on the personal property donation form.

When the donation exceeds $5000, the University is required to sign a section of Form 8283.  Normally, gifts of this size flow through the NMU Foundation.  This procedure allows a single exception to the $5000 rule – gifts of vehicles that are traded frequently and valued through a blue-book type publication.  As stated above, the exception is when the vehicle is donated through a manufacturer; in these cases the value is not the blue-book value, but is the inventory value as determined by the manufacturer.  If a gift is valued over $5,000 but is not a vehicle valued through a blue-book type publication, the gift must be processed through the NMU Foundation.  NMU is never a qualified appraiser for the purpose of valuing the donated property.