Luther Seminary Foundation
Luther Seminary Office of Seminary Relations
Manual of Funding Options and Gift Acceptance Policies and Procedures
May 2008 May 2008
This manual has been developed as a guide in detailing funding options and gift acceptance policies and procedures.
The manual is divided into seven sections:
Numerical Table of Contents
Alphabetical Table of Contents
Preface
Section A - Policies
Section B - Procedures
Section C - Definitions
Section D - Exhibits
Documents will be updated as policies, procedures, and definitions evolve.
Comments concerning the contents of the manual may be directed to the Vice President for Seminary Relations. Table of Contents by Document Number
SECTION A - POLICIES
Section Number Title A 001 Fundraising Administration and Authority A 002 Conflict with Board of Director or Trustee Policies A 003 Authorization of a New or Revised Policy or Procedure A 004 Authorization of a Variance from Policy or Procedure A 005 Donor List Management A 006 Donor Gift Restrictions A 007 Gift Support Documentation A 008 Receipting of Cash Gifts A 009 Gift Acknowledgments A 010 Matching Gift Account A 011 Tuition Support Monies A 012 Deferred Gift Monies in a Donor Gift History A 013 Insurance Death Benefits in a Gift History A 014 Reporting Donor Gifts A 015 Donor Recognition A 016 Criteria for the Acceptance of a Pledge or Promise to Provide Gifts A 017 Gifts Needing an Appraisal A 018 Qualified Appraisal A 019 Criteria for Accepting a Non-Cash (In-Kind) Gift A 020 Criteria for Accepting Gifts of Life Insurance Policies A 021 Criteria for Accepting Gifts of Real Estate A 022 Disposal of Gifts of Real Estate A 023 Gift Annuity Agreements A 024 Tax Report Preparation Involving Unitrusts and Annuity Trusts A 025 Authorized Signer of Deferred Gift Instruments A 026 Establishment of Named Endowed Positions A 027 Criteria for the Establishment of Named Endowed Positions A 028 Confidentiality/Release of Information A 029 Revocable and Irrevocable Deferred Arrangements A 030 Gifts of Securities A 031 Minimums for Planned Gifts Funded with Cash, Securities or Real Estate A 032 Charitable Lead Trusts A 033 Criteria for Naming Facilities
SECTION B - PROCEDURES
B 001 Gift Acknowledgments B 002 Partners Membership Qualifications and Recognition B 003 Gifts Needing an Appraisal B 004 Criteria for Receipting, Acknowledging and Reporting a Non-Cash (In-Kind) Gift B 005 Criteria for Accepting a Life Insurance Policy as a Gift B 006 Fully Paid Life Insurance as a Gift B 007 Insurance Premium Payments B 008 Criteria for Accepting Outright Gifts of Real Estate B 009 Criteria for Accepting Gifts of Real Estate with a Life Estate Reserved to the Donor B 010 Criteria for Accepting a Gift of Real Estate Involving a Charitable Gift Annuity B 011 Criteria for Accepting a Gift of Real Estate Involving a Charitable Remainder Trust B 012 Determining the Foundation’s or Seminary’s Valuation of Gifts of Real Estate B 013 Environmental Study Relating to Gifts of Real Estate B 014 Charitable Gift Annuity Minimum Age, Minimum Amount, and Schedule of Payments B 015 Deferred Gift Annuity Minimum Age, Minimum Amount, and Schedule of Payments B 016 Review of Endowed Fund Balances B 017 Gifts of Securities B 018 Gift Support Documentation B 019 Heritage Society Membership Qualifications and Recognition B 020 Leadership Circle Membership Qualifications and Recognition B 021 Gift Counting for Campaigns B 022 Society of Stewards Membership Qualifications and Recognition
SECTION C - DEFINITION OF TERMS C 001 Definition of Terms
SECTION D - EXHIBITS D 001 Exhibits Alpha Table of Contents
Section Number Title
A 025 Authorized Signer of Deferred Gift Instruments A 004 Authorization of a Variance from Policy or Procedure A 003 Authorization of a New or Revised Policy or Procedure B 014 Charitable Gift Annuity Minimum Age, Minimum Amount, and Schedule of Payments A 032 Charitable Lead Trusts A 028 Confidentiality/Release of Information A 002 Conflict with Board of Director or Trustee Policies B 010 Criteria for Accepting a Gift of Real Estate Involving a Charitable Gift Annuity B 011 Criteria for Accepting a Gift of Real Estate Involving a Charitable Remainder Trust B 009 Criteria for Accepting Gifts of Real Estate with a Life Estate Reserved to the Donor A 019 Criteria for Accepting a Non-Cash (In-Kind) Gift B 004 Criteria for Receipting, Acknowledging and Reporting a Non- Cash (In-Kind) Gift B 005 Criteria for Accepting a Life Insurance Policy as a Gift A 020 Criteria for Accepting Gifts of Life Insurance Policies A 021 Criteria for Accepting Gifts of Real Estate B 008 Criteria for Accepting Outright Gifts of Real Estate A 016 Criteria for the Acceptance of a Promise or Pledge to Provide Gifts A 027 Criteria for the Establishment of Named Endowed Positions A 033 Criteria for Naming of Facilities B 015 Deferred Gift Annuity Minimum Age, Minimum Amount, and Schedule of Payments A 012 Deferred Gift Monies in a Donor Gift History C 001 Definition of Terms B 012 Determining the Foundation’s or Seminary’s Valuation of Gifts of Real Estate A 022 Disposal of Gifts of Real Estate A 006 Donor Gift Restrictions A 005 Donor List Management A 015 Donor Recognition B 013 Environmental Study Relating to Gifts of Real Estate A 026 Establishment of a List of Named Endowed Positions and Accounts D 001 Exhibits B 006 Fully Paid Life Insurance as a Gift A 001 Fundraising Administration and Authority A 009 Gift Acknowledgments B 001 Gift Acknowledgments A 023 Gift Annuity Agreements B 021 Gift Counting for Campaigns A 007 Gift Support Documentation B 018 Gift Support Documentation A 017 Gifts Needing an Appraisal B 003 Gifts Needing an Appraisal A 030 Gifts of Securities B 017 Gifts of Securities B 019 Heritage Society Membership Qualifications and Recognition A 013 Insurance Death Benefits in a Gift History B 007 Insurance Premium Payments B 020 Leadership Circle Membership Qualifications and Recognition A 010 Matching Gift Account A 031 Minimums for Planned Gifts Funded with Cash, Securities or Real Estate B 002 Partners Membership Qualifications and Recognition A 018 Qualified Appraisal A 008 Receipting of Cash Gifts A 014 Reporting Donor Gifts B 016 Review of Endowed Position Fund Balances A 029 Revocable and Irrevocable Deferred Arrangements A 024 Tax Report Preparation Involving Unitrusts and Annuity Trusts A 011 Tuition Support Monies B 022 Society of Stewards Membership Qualifications and Recognition Preface
Section: Preface Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Preface
Luther Seminary 2481 Como Avenue St. Paul, Minnesota is a not-for-profit corporation, established in 1869, associated with the Evangelical Lutheran Church in America, and accredited by the Association of Theological Schools and the North Central Association of Colleges and Schools.
Luther Seminary Foundation 2481 Como Avenue St. Paul, Minnesota is a Minnesota not-for-profit corporation established in 1991 to further the religious, educational and charitable purposes of Luther Seminary.
Luther Seminary educates leaders for Christian communities called and sent by the Holy Spirit to witness to salvation through Jesus Christ and to serve in God’s world.
To further this mission, the Luther Seminary Foundation and the Office of Seminary Relations of Luther Seminary strive to increase financial support, insure financial integrity, and enhance relationships with constituents, undergirding the mission of the Seminary. A strong Seminary, responsive to the needs and challenges of the communities who depend on Luther Seminary for leaders, will help the church be a vital source of renewal in the 21st century.
This “Manual of Funding Options and Gift Acceptance Policies and Procedures” is presented to insure good order in the work of Luther Seminary Foundation and Luther Seminary Office of Seminary Relations, to provide continuity and clarity for all persons involved in fund development and management for the Foundation or Seminary, and to honor the charitable intent of the stakeholder constituents while protecting the interests and strategic objectives of Luther Seminary Foundation and Luther Seminary. Section A - Policies Section: A Document Number: 001 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Fundraising Administration and Authority
All fundraising on behalf of the Seminary or Foundation or specific programs of the Seminary or Foundation will be administered under the authority of the Luther Seminary Foundation and the Office of Seminary Relations of Luther Seminary.
Gifts normally shall be understood as being gifts given to Luther Seminary. Gifts may also be given to Luther Seminary Foundation upon approval of the Executive Director and the Treasurer of the Foundation or by the direction of the donor.
Section: A Document Number: 002 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Conflict with Board of Director or Trustee Policies
Policies issued by the Board of Directors or Board of Trustees prior to or subsequent to the adoption of this manual take precedence over policies stated in this manual.
Related Documents: A003 A004
Section: A Document Number: 003 Document Page Number: 1 of 1 Original Date of Issue: 21JAN92 Last Revision Date: 1 May 2008
Authorization of a New or Revised Policy or Procedure
The writing of a new policy or the revision of an existing policy may be authorized by the Vice President for Seminary Relations, in consultation with the President, subject to approval of the Luther Seminary Foundation Board of Trustees and ratification by the Luther Seminary Board of Directors.
Related Documents: A002 A004 A028
Section: A Document Number: 004 Document Page Number: 1 of 1 Original Date of Issue: 21 JAN92 Last Revision Date: 1 May 2008
Authorization of a Variance from Policy or Procedure
Any variance from any policy included in this manual must be authorized by the Vice President for Seminary Relations in consultation with the President of Luther Seminary.
Related Documents: A002 A003 A028
Section: A Document Number: 005 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Donor List Management
Donor, prospect and alumni/ae lists, as well as related information, will be managed under the auspices of the Office of Seminary Relations.
Related Documents: A014 A016 A028
Section: A Document Number: 006 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Donor Gift Restrictions
All restricted gifts will be reviewed on an individual basis before being accepted by the Seminary or the Foundation. Any gift with a restriction which cannot be followed from the outset of the gift will be declined or, alternatively, a restriction will be negotiated with the donor which is mutually acceptable.
Related Documents: A007 A009 A010
Section: A Document Number: 007 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Gift Support Documentation
Written documentation indicating the purpose of the gift is required by auditors on all gifts of $5,000 or more.
Qualifying documentation may take the form of:
1. A written notice from the donor which accompanies the gift; notation on the memo line of a check is adequate documentation.
2. A deferred gift contract.
3. A life insurance policy when owned by the Seminary.
4. Documentation drawn up by staff of the Office of Seminary Relations for donor(s) signature(s) if the donor(s) did not supply written documentation with a gift.
5. For publicly traded securities, a copy of the gift letter (including the purpose of the gift) sent to the brokerage authorizing the gift transfer.
Gifts of $5,000 or more may be processed before the documentation is obtained, unless the gift is subject to a donor-imposed restriction. In such a case, the documentation must be in place before the gift is accepted; where this is not possible, documentation must be obtained within a reasonable time following the acceptance of the gift.
Related Documents: A006 B018
Section: A Document Number: 008 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Receipting of Cash and Non Cash Gifts
All cash and non-cash gifts must be receipted as required by law.
The amount of the assets contributed to charitable trusts are recorded in the donor’s gift history at face value at the time the annuity and/or trust is funded. A receipt will be issued to the donor for the charitable gift portion.
Insurance premiums paid to the issuing firm by the donor of a Seminary-owned policy will be considered cash gifts and will be entered into the donor’s network computer record.
A receipt will be issued for marketable securities; the receipt will indicate the specific nature of this non cash gift (e.g. 100 shares of 3M). Donors will also be informed of the dollar value of this gift.
Related Documents: A012 A019 A029 B004
Section: A Document Number: 009 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Gift Acknowledgments
All gifts will be acknowledged in a timely and appropriate manner as defined by the Vice President for Seminary Relations.
Related Documents: A006 B021 A007 B022 A009 B001
Section: A Document Number: 010 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Matching Gift Account
All matching gifts received from corporations will be recorded as unrestricted current funds gifts unless restricted by the matching corporation or the donor or by a deceased donor’s family for some institutional purpose. Matching gifts will not be counted for donor club membership, except when qualifying them for Leadership Circle membership.
Related Document: A006
Section: A Document Number: 011 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Tuition Support Monies
Tuition support monies from congregations applied directly to a student account will be included in the congregation’s gift history.
Because tuition support gifts are not considered tax deductible charitable gifts as defined by Federal tax law, tuition support monies from individuals applied directly to a student account will not be included in the donor’s gift history. However, gifts to Seminary scholarship and grant programs for Seminary-selected recipients do qualify as charitable gifts, will be receipted as such and will be included in the donor’s gift history.
Related Documents: A006 A027 A007 B001 A008 B002 A009
Section: A Document Number: 012 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Deferred Gift Monies in a Donor Gift History
Money or property received from a donor to fund a deferred gift contract will be included in the donor’s gift history in the amount of the cash, market or appraised value at the time the gift is received. The donor will also be informed of the tax deductible portion of their gifts. Donors will be encouraged to consult with their advisers regarding deductibility.
Related Documents: A008 A029 A019 B004 A023 B014 A024 B015
Section: A Document Number: 013 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Insurance Death Benefits in a Gift History
Donor-owned policies: The amount received by the Seminary or Foundation will be entered in the donor’s gift history.
Seminary-owned policies: Since the face value of the policy was entered at the time the Seminary or Foundation learned of the gift, only an amount received in excess of the original amount recorded shall be counted as a matured deferred gift.
Related Documents: A006 A020 A007 B005 A008 B006 A009 B007
Section: A Document Number: 014 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Reporting Donor Gifts
The Office of Seminary Relations of Luther Seminary and Luther Seminary Foundation will issue regular and timely reports of donor gift activity.
Related Documents: A005 A016 A028
Section: A Document Number: 015 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Donor Recognition
Methods of appropriate donor recognition will be approved by the Vice President for Seminary Relations prior to implementation.
Related Documents: A009 B002 B019 B020 B022
Section: A Document Number: 016 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Criteria for the Acceptance of a Promise or a Pledge to Provide Gifts
A promise is a commitment to provide a future gift(s) to the Seminary. A promise to provide a future gift(s) should normally be in the form of a written commitment signed by the donor(s) and for which a promise reminder may be issued. Exceptions must be approved by the Vice President for Seminary Relations. Non-tax deductible gifts from donor advised funds to the Seminary and donor directed gifts from outside foundations to the Seminary will receive an acknowledgement from the Seminary.
An exception to this policy may be made for promises received via the Seminary’s phonathon. These are verbal commitments that are acknowledged in writing to the donor.
A pledge is a commitment to provide a future gift to the Seminary that is formally documented, counted as an asset of the Seminary, and may be legally enforceable. In the case where the Seminary incurs financial risk by accepting a pledge, the donor will sign a pledge agreement which will be reported to the Seminary’s Business Office and reported as an asset of the institution as required by Financial Accounting Standards Board (FASB).
Related Documents: A004 A005 B021
Section: A Document Number: 017 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Gifts Needing an Appraisal
The donor is responsible for obtaining a qualified appraisal as required by law for all non-cash gifts (except marketable securities) valued at $5,000 or more and for closely-held stocks valued at $10,000 or more.
In the case of all non-cash gifts, it is normally the donor’s responsibility to pay for the appraisal.
Related Documents: A018 B008 A019 B009 A021 B011 B003 B012 B004 B021
Section: A Document Number: 018 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Qualified Appraisal
An appraisal will be considered qualified if it is done consistent with IRS appraisal guidelines as set forth in Form 8283 and in the Instructions for Form 8283.
Related Documents: A017 B008 A019 B009 A021 B011 B003 B012 B004 B021
Section: A Document Number: 019 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Criteria for Accepting a Non-Cash (In-Kind) Gift
A non-cash gift must fall under at least one of these categories:
1. The gift, if it is to be used in its existing form and is not to be sold or traded, must be consistent with the purposes of the Seminary or Foundation. Consistency of purpose is determined by Seminary Relations staff in consultation with the Vice President for Seminary Relations.
2. The gift must be marketable to be sold or traded to create a benefit to the Seminary. Marketability is determined by Seminary Relations staff in consultation with the Vice President for Seminary Relations and the Vice President for Administration and Finance.
Decisions on consistency between the donor(s) intentions and Seminary or Foundation purposes and on the marketability of gift property must be made prior to the acceptance of the gift.
Related Documents: A008 A029 A012 A030 A017 A031 A018 B003 A021 B004
Section: A Document Number: 020 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Criteria for Accepting Gifts of Life Insurance Policies
Gifts of life insurance will be governed by procedures found in this manual.
Related Documents: A007 B005 A008 B006 A012 B007 A013 B019 A029 B021 B004 B022
Section: A Document Number: 021 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Criteria for Accepting Gifts of Real Estate
All gifts of real estate for any purpose must meet all of the applicable procedure(s) in this manual.
Related Documents: A015 B003 B012 A017 B004 B013 A018 B008 B019 A019 B009 B021 A022 B010 A031 B011
Section: A Document Number: 022 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Disposal of Gifts of Real Estate
The Foundation or Seminary will seek to sell within a reasonable amount of time all real property contributed to it except under unusual circumstances.
Related Documents: A015 B003 B012 A017 B004 B013 A018 B008 B019 A019 B009 B021 A021 B010 A031 B011
Section: A Document Number: 023 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Gift Annuity Agreements
Gift annuity agreements will be governed by procedures outlined in this manual.
Related Documents: A008 B010 A012 B014 A019 B015 A025 B019 A029 B021 A031
Section: A Document Number: 024 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Tax Report Preparation Involving Life Income Gifts
The Foundation, the Seminary or its designated agent will prepare and send to donors timely and appropriate tax reports and schedules for charitable gift annuities and trusts where the Seminary or Foundation serves as trustee.
Related Documents: A008 A031 A012 B014 A025 B015 A029
Section: A Document Number: 025 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Authorized Signer of Deferred Gift Instruments
The Seminary President, Vice President for Administration and Finance and the Vice President for Seminary Relations are authorized signers of deferred gift instruments for Luther Seminary. The Seminary President, Executive Director of Luther Seminary Foundation and the Treasurer of the Foundation are authorized signers of deferred gift instruments for Luther Seminary Foundation.
Related Documents: A009 B006 A012 B014 A025 B015 A027 B018 A029 B019 A030 B020 A031 B021 B005
Section: A Document Number: 026 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Establishment of Named Endowed Positions
Endowed Chairs, and Lectureships All proposals for endowed chairs or other endowed academic funds will be reviewed by the Academic Dean in consultation with the President and the Vice President for Seminary Relations.
Endowed Presidential Scholarship An Endowed Presidential Scholarship will be authorized by the staff of Seminary Relations in consultation with the donor(s). Appropriateness of any designations will be determined by Seminary Relations staff in consultation with the Director of Financial Aid.
Endowed Scholarship An endowed scholarship will be authorized by the staff of Seminary Relations in consultation with the donor(s). Appropriateness of any designations will be determined by Seminary Relations staff in consultation with the Director of Financial Aid.
Related Documents: A027 A030 B016
Section: A Document Number: 027 Document Page Number: 1 of 3 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Criteria for the Establishment of Named Endowed Positions
Endowed Chair A minimum of $2,000,000 is required to establish an Endowed Chair which is designed to provide support for salary and benefits for a faculty member. The donor(s) may choose the area of focus of the Chair in consonance with the strategic plan of the Seminary. The Chair will be announced after a signed commitment has been made by the donor(s) and when funding has been completed. Faculty members will be appointed to the chair only when full funding has been received by the Seminary.
If, after consultation with the donor(s), it is determined by the Vice President for Seminary Relations in consultation with the President that the minimum will not be achieved within five calendar years from the time of commitment to establish the Chair, the fund may cease to exist and the fund balance may be added to the general endowment fund or used to partially support faculty in the designated area. Exceptions to this time line will be when written assurance has been given by the donor that funding for this Chair will be completed through the donor(s) estate plan.
Endowed Professorship A minimum of $1,000,000 is required to establish an Endowed Professorship which is designed to provide support for a portion of the salary and benefits for a faculty member. The donor(s) may choose the area of focus of the Professorship in consonance with the strategic plan of the Seminary. The Professorship will be announced after a signed commitment has been made by the donor(s) and when funding has been completed. A faculty member will be appointed to the Professorship only when full funding has been received by the Seminary.
If, after consultation with the donor(s), it is determined by the Vice President for Seminary Relations that the minimum will not be achieved within five calendar years from the time of commitment to establish the Professorship, the fund may cease to exist and the fund balance may be added to the general endowment fund or used to partially support faculty in the designated area. Exceptions to this time line will be when written assurance has been given by the donor that funding for this Professorship will be completed through the donor(s) estate plan.
Section: A Document Number 027 Document Page Number: 2 of 3 Original Date of Issue 11DEC91 Last Revision Date: 1 May 2008
Endowed Fund for Faculty Development A minimum of $500,000 is required to establish an Endowed Fund for Faculty Development to provide partial support for faculty sabbaticals for professional and personal growth. The Endowed Fund for Faculty Development may be announced after a signed commitment has been made by the donor(s) and when funding has been completed.
If, after consultation with the donor(s), it is determined by the Vice President for Seminary Relations that the minimum will not be achieved within five calendar years from the time of commitment to establish the Endowed Fund for Faculty Development, the fund may cease to exist and the fund balance may be added to the general endowment fund.
Endowed Presidential Scholarship A minimum of $250,000 is required to establish an Endowed Presidential Scholarship to provide full tuition, merit-based scholarships for exceptionally talented students. The Presidential Scholarship will be announced after a signed commitment has been made by the donor(s) and when funding has been completed.
If, after consultation with the donor(s), it is determined by the Vice President for Seminary Relations that the minimum will not be achieved within five calendar years from the time of commitment to establish the Presidential Scholarship, the fund may cease to exist and the fund balance may be added to the general scholarship endowment fund.
Endowed Program Funds A minimum of $50,000 is required to establish an Endowed Program Fund. The Endowed Program Fund will provide partial support for key academic projects and programs. The Endowed Program may be announced after a signed commitment has been made by the donor(s) and when funding has been completed.
If, after consultation with the donor(s), it is determined by the Vice President for Seminary Relations that the minimum will not be achieved within three calendar years from the time of the first gift to establish the Endowed Program Fund, the fund will cease to exist and the fund balance will be added to the general endowment fund.
Section: A Document Number 027 Document Page Number: 3 of 3 Original Date of Issue 11DEC91 Last Revision Date: 1 May 2008
Endowed Scholarship A minimum of $25,000 is required to establish an Endowed Scholarship. In consultation and agreement with the Seminary Relations staff, the donor(s) has the option of designating the purpose of the scholarship, with the Seminary having the right to change the eligibility or basis for selection if the specific purpose is no longer applicable. The Scholarship will be announced after a signed commitment has been made by the donor(s) and when funding has been completed. If, after consultation with the donor(s), it is determined by the Vice President for Seminary Relations that the minimum will not be achieved within three calendar years from the time of the first gift to establish the Scholarship, the fund will cease to exist and the fund balance will be added to the general scholarship endowment fund.
Funding Endowments With Deferred Commitments Named endowed funds created through deferred gifts should be structured in such a way that proceeds will fully endow the fund at the level required by future policies of the Seminary. The Seminary will take care to require the donor(s) to build in an inflation hedge in their deferred plan that will allow them to fully fund the endowment at future values. All pre-existing endowment agreements will be honored
Related Documents: A005 A016 A026 A030 B016
Section: A Document Number: 028 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Confidentiality/Release of Information
All Foundation and Seminary information and records will be considered confidential.
Donor/prospect information will not be released to anyone outside Luther Seminary who is not engaged in Seminary activities except with the permission of the donors, or with family members of a deceased donor, if possible, or except as required by law.
Seminary development staff may have access to any information that will assist them in their fundraising. The Seminary development staff member working with the volunteer will determine what information is appropriate for the volunteer to know in order to maximize the gift for which they are soliciting.
Failure to comply with this policy may have significant implications for the Seminary’s fundraising program and/or the donor(s) for whom information was not kept confidential.
Related Documents: A003 A004 A005
Section: A Document Number: 029 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Revocable and Irrevocable Deferred Arrangements
Revocable Deferred Arrangements are: Wills
Living trusts
Beneficiary assignments of: Donor owned Insurance Policies Certificates of Deposit or Savings Accounts Qualified Retirement Plans, such as IRA, 401(k), 403(b), etc.
Among acceptable Irrevocable Deferred Arrangements are: Charitable Gift Annuities Charitable Remainder Annuity Trusts Charitable Remainder Unitrusts Charitable Lead Trusts Life Estate Agreements
Seminary or Foundation owned insurance policies whether or not fully paid
Deferred contract held by another firm or institution of which the Seminary is a primary beneficiary.
Charitable Gift Annuities are received and managed by Luther Seminary. Trusts are received and managed by the Luther Seminary Foundation.
Related Documents: A008 A029 A012 A031 A019 A032
Section: A Document Number: 030 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Gifts of Securities
Gifts of securities will normally be sold upon receipt by the Seminary. Acceptance and disposal decisions regarding gifts of securities rests with the Office of Seminary Relations and the Office of Administration and Finance.
Related Documents: A007 B004 A008 B017 A017 B019 A019 B021 A031
Section: A Document Number: 031 Document Page Number: 1 of 1 Original Date of Issue: 08APR96 Last Revision Date: 1 May 2008
Minimums for Planned Gifts Funded with Cash, Securities or Real Estate
Funded with Cash or Securities
Charitable Gift Annuity $10,000 with a minimum age of 55 (unless donors have previously created CGAs with Luther Seminary Deferred Charitable Gift Annuity $10,000 with a minimum age of 50 (except for Deferred CGAs created to provide funding for college support) Charitable Remainder Annuity Trust $100,000
Charitable Remainder Unitrust $100,000 (but may be achieved incrementally within a period of up to five years. Normal minimum additions would be $20,000) Charitable Lead Trust While LS or LSF encourages Charitable Lead Trusts when in the best interest of the donor, LS and LSF normally will not manage such trusts. Funded with Real Estate
Charitable Gift Annuity Not eligible Deferred Charitable Gift Annuity $100,000 upon approval of Vice President for Seminary Relations and Vice President for Administration and Finance Charitable Remainder Annuity Trust Considered on a case by case basis Charitable Remainder Unitrust $200,000 Charitable Lead Trust While LS or LSF encourages Charitable Lead Trusts when in the best interest of the donor, LS and LSF normally will not manage such trusts.
Normally, Luther Seminary would expect to be at least a 50% beneficiary of the remainder of planned gifts having multiple charitable beneficiaries for which the Seminary is the trustee. Such gifts shall have prior approval by the Vice President for Seminary Relations. Related Documents: A008 A024 B012 A012 A025 B014 A019 A029 B015 A021 A032 B019 A022 B004 B021 A023 B010
Section: A Document Number: 032 Document Page Number: 1 of 1 Original Date of Issue: 08APR96 Last Revision Date: 1 May 2008
Charitable Lead Trusts
While Luther Seminary and the Luther Seminary Foundation encourage Charitable Lead Trusts when in the best interest of the donor, LS and/or LSF normally will not manage such trusts. Development staff will assist the donor in finding a qualified trustee.
Related Documents: A008 A029 A031 B019 B021
Section: A Document Number: 033 Document Page Number: 1 of 1 Original Date of Issue: 15 April 2008 Last Revision Date: 15 April 2008
Criteria for Naming of Facilities
The criteria for naming buildings or spaces within buildings will include factors such as the donor’s level of financial support for the facility, the donor’s past and current financial commitment to Luther Seminary, the donor’s service to Luther Seminary, and the donor’s contributions to church and society. The Vice President for Seminary Relations, in consultation with the President and the Vice President for Administration and Finance will bring recommendations for the naming of buildings or major components of buildings to the boards for their approval.
Related Documents: A006 B022
Section B - Procedures Section: B Document Number: 001 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Gift Acknowledgments
Gifts are acknowledged as follows:
$1 to $1,000 All donors receive a written gift receipt acknowledgement letter from the appropriate Seminary Relations staff member. If the donor is not assigned to a staff member, the letter will be signed by the Assistant Director of Sustaining Fund. $1,000 or more All donors will receive a written gift receipt acknowledgement letter from the appropriate Seminary Relations staff member. If the donor is not assigned to a staff member, the letter will be signed by the Donor Liaison. $1,000 or more In addition to the written gift receipt acknowledgement letter signed by the appropriate Seminary Relations staff member, a letter will be prepared for the President’s signature.
Gifts of insurance, bequests, annuities, corporate matching funds and tuition support will be acknowledged by the appropriate Seminary Relations staff member.
Gifts from Donor Advised Funds and gifts from donor directed gifts from Foundations are acknowledged by the Vice President for Seminary Relations and/or by another individual from the Seminary who is a contact person for the Donor Advised Fund or the Foundation.
Related Documents: A008 B005 A009 B006 A011 B007 B002 B017 B004 B021
Section: B Document Number: 002 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Partners Membership Qualifications and Recognition
The criterion for annual membership in Partners is a minimum gift of $250 in the fiscal year. Partners may be individuals, congregations, corporations or Foundations.
Additionally, donors may become partners if:
A $250 gift is given in their name by another donor.
They are making payments of insurance premiums on Seminary owned policies directly to the issuing firm and the issuing firm notifies Seminary Relations of the annual amount of premiums paid and the annual total comprises all or part of the minimum giving in the fiscal year. The premiums will be credited to the donor giving record in the fiscal year in which the notice is received by Seminary Relations. Of course, when premium payments are made to Luther Seminary for policies owned by Luther Seminary, these gifts will be credited to the donor giving record in the fiscal year in which the notice is received by Seminary Relations
Gifts of tuition support for specific students qualify for Partner membership.
All Partners will be recognized in a manner deemed appropriate by the Vice President for Seminary Relations.
Related Documents: A007 A029 A008 B001 A011 B005 A012 B006 A013 B007 A015 B019 A020 B021 A027
Section: B Document Number: 003 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Gifts Needing an Appraisal
The Seminary shall be responsible for assisting the donor with completion of the IRS Form 8283 and shall be responsible for completion and submittal of form 8282 when the property has been sold.
Additionally, the donor(s) will be advised that if the gift value of hard-to-value property exceeds $5,000 or more (or $10,000 or more in the case of closely held stock), a qualified appraisal of all such gifts is required.
Related Documents: A017 B008 A018 B009 A019 B011 A021 B012 B003 B021 B004
Section: B Document Number: 004 Document Page Number: 1 of 3 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Criteria for Receipting, Acknowledging and Reporting a Non-Cash (In-Kind) Gift
1. As a convenience to the donor, Luther Seminary will prepare a Form 8283 for their use. If applicable, the donor is ultimately responsible for submitting Form 8283 for all non- cash gifts with a claimed value of $500 or more if the donor wishes to use the gift as a charitable income tax deduction. The $500 or more amount applies to the total aggregate value of all non-cash gifts given in a year for which the donor expects to claim a charitable deduction, not to each separate gift.
2. If the deduction claimed is $5,000 or more, a qualified appraisal must also be obtained by the donor(s) and attached to Form 8283 with the exception that non-publicly held stock does not require an appraisal unless the amount of the gift is $10,000 or more.
3. Donors will be advised about this filing requirement even though responsibility for executing and filing Form 8283 rests with them. 4. Non-cash gifts may be related or unrelated to the Seminary’s purposes but special rules apply: a. Securities and real estate are always related-use property because the IRS recognizes them as convertible to cash which is then used for the Seminary’s purposes. Therefore, the related use/unrelated use test does not apply to these types of property. b. Related means that the Seminary can and will use the gift in its present form for its purposes. c. Unrelated means that the Seminary cannot use the gift in its present form but will sell it, trade it, or do something else to it to create cash or other assets which the Seminary can use. d. For purposes of determining the amount of the charitable income tax deduction: (1.) Publicly traded securities are valued in the standard way (average of high and low times the number of shares contributed on the date of the gift). (2.) Non-publicly traded securities are valued by the donor if their value is under $10,000 and by a qualified appraisal if their value is over $10,000.
(3.) Real estate value is based on a qualified appraisal.
Section: B Document Number: 004 Document Page Number: 2 of 3 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
(4.) Related use property is deductible at its present fair market value determined either by the donor or a qualified appraisal, again depending upon whether it is worth less or more than $5,000. (5.) Unrelated use property is deductible at either its present fair market value or its cost basis, whichever is less. 5. The Seminary will report the sale, trade, or other type of disposal of non-cash gifts on Form 8282 if such action occurs within two years after receiving the gift.
6. Acknowledging and Reporting Gifts of Real Estate. a. Gifts of real estate will be included in the donor’s gift history and will be included as cash in development reports. b. A gift receipt will be issued for these types of gifts. Any gift of $250 or more is subject to the donor acknowledgement provisions as required by law. c. Donors of real estate gifts of up to $5,000 will receive an acknowledgment from appropriate Seminary Relations staff. Upon authorization of the Vice President for Seminary Relations, an appropriate amount will be entered as a gift in the donor’s gift history. d. Donors of gifts of $5,000 or more must have an IRS Form 8283 signed by a development staff member who has been duly authorized by the Vice President for Seminary Relations, and a donor-supplied appraisal of the gift. The donor will receive an acknowledgment from Seminary Relations staff. Upon authorization of the Vice President for Seminary Relations, the amount of the appraisal will be the amount of the gift entered into the donor’s gift history. 7. Acknowledging and Reporting Gifts of Securities: a. Gifts of securities will be included in the donor’s gift history and will be included as cash in financial reports. Any gift of $250 or more is subject to the donor acknowledgement provisions as required by law. b. A gift receipt will be issued for these types of gifts. c. All donors of these types of gifts will receive a letter of acknowledgment from appropriate Seminary Relations staff.
Section: B Document Number: 004 Document Page Number: 3 of 3 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
8. Acknowledging and Reporting Gifts in Kind other than Securities and Real Estate: a. These types of gifts will be included in the donor’s gift history and will be included in financial reports. b. Any gift of $250 or more is subject to the donor acknowledgment provisions as required by law. Any gift of $500 or more is also subject to form 8283 filing requirements. c. Donors will receive a letter of acknowledgment from appropriate Seminary Relations staff. The amount of the gift to be included in the donor’s gift history will be authorized by the Vice President for Seminary Relations. d. Donors of gifts of $5,000 or more must have an IRS Form 8283 signed by a development staff member who has been duly authorized the Vice President for Seminary Relations or a donor-supplied appraisal of the gift. The donor will receive an acknowledgment from Seminary Relations staff. Upon authorization of the Vice President for Seminary Relations, the amount of the appraisal will be the amount of the gift entered into the donor’s gift history.
Related Documents: A008 A019 A009 A021 A011 A029 A012 B001 A017 B004 A018 B005
Section: B Document Number: 005 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Criteria for Accepting a Life Insurance Policy as a Gift
Gifts of life insurance are acceptable if the Foundation or the Seminary is the owner and a primary beneficiary of the policies such as: 1. An outright gift of a paid-up policy.
2. An outright gift of a policy for which a donor continues to pay the premiums.
3. Whole life insurance policies are most desirable. Universal life policies are acceptable provided the owner makes annual premium payments to insure adequate cash value.
4. Term insurance is acceptable as a gift only in rare circumstances as determined by the Vice President for Seminary Relations.
The face value of the policy in either of the above cases will be entered into the donor’s file as an irrevocable deferred arrangement at the time the Seminary or the Foundation becomes the owner of the policy.
The gift value of the policy in either of the above cases will be entered into the donor’s gift history and be receipted at the time the Seminary or the Foundation becomes the owner of the policy. Donor will be acknowledged as required by law. In addition, the requirements of IRS form 8283 must be complied with.
Also, in either of the above cases, the donor may become a member of the Heritage Society if the amount of the policy and type of policy qualifies for membership.
Related Documents: A008 B004 A012 B006 A013 B007 A020 B019 A029 B021
Section: B Document Number: 006 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Fully Paid Life Insurance as a Gift
When a donor names the Seminary owner of a fully-paid life insurance policy:
1. The charitable deduction will be the cash value of the policy as determined by the issuing insurance company.
2. The amount of the face value of the policy at the time the policy was or is issued will be entered into the donor’s file as an irrevocable deferred arrangement.
3. The gift value of the policy will be entered into the donor’s gift history and be receipted at the time the Seminary becomes the owner of the policy. Donors will be acknowledged as required by law. In addition, the requirements of IRS form 8283 will be complied with.
Related Documents: A007 B004 A008 B005 A012 B007 A013 B019 A020 B021 A029
Section: B Document Number: 007 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Insurance Premium Payments
When a donor is making payments on a life insurance policy that is Seminary owned:
1. The donor may make the payments directly to the issuing firm and have that firm notify the Seminary or Foundation of the amount of the premium paid. A gift amount with the date of notification by the issuing firm as the gift date will then be entered in the donor’s giving record for the amount of the premium. Donors will receive written acknowledgment upon notification by the insurance company that the premium has been paid.
2. The donor may give a gift to the Seminary or Foundation covering the cost of the premium. The Seminary or Foundation may pay the actual premium to the issuing firm. A gift receipt will be issued to the donor and the gift amount will appear in the donor’s giving history.
Related Documents: A007 A029 A008 B004 A012 B005 A013 B007 A020 B019 B021
Section: B Document Number: 008 Document Page Number: 1 of 2 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Criteria for Accepting Outright Gifts of Real Estate
A gift of real estate will be accepted if the gift meets these criteria:
1. The donor obtains at the donor’s expense a qualified appraisal as required by law.
2. Mortgaged property had the mortgage placed at least five years prior to the gift. Generally, the amount of mortgage balance should not exceed 50% of the agreed-upon property valuation.
3. The property is free of liens (other than a possible first mortgage), judgments, suits, or other financial and legal claims.
4. An examination of title (paid for by the Seminary) verifies that the donor(s) is the current owner of the property. Or, preferably, a title insurance binder is obtained, showing the donor as owner of the property and has clear title. Payment for the title insurance may be negotiated with the donor.
5. Taxes and assessments on the property are current and fully paid.
6. A qualified, professional on-site check of the property determines the property to be salable for the price of the property appraisal. Payment for the inspection may be negotiated with the donor.
7. An environmental assessment will be performed to determine the presence, nature and extent of any toxic wastes or other environmental hazards. This item shall not be satisfied until the Vice President for Seminary Relations accepts or approves this item in writing. Payment for the assessment may be negotiated with the donor.
8. An examination of the property determines that it meets “code” in such areas as wiring, plumbing, heating, etc. to ensure the salability of the property.
9. Bargain sale rules as required by law apply if the Foundation or Seminary either purchases the property for an amount less than its appraised fair market value or accepts responsibility for an unpaid mortgage which the donor passes on as part of the property transfer.
Section: B Document Number 008 Document Page Number: 2 of 2 Original Date of Issue 11DEC91 Last Revision Date: 1 May 2008
10. The Seminary or Foundation will advise the donor in writing regarding tax and other financial implications where known, but will also be encouraged, in writing, to consult with their tax and financial advisors to see how the tax laws apply to them.
11. Property gifts at variance with these policies will be considered on a case-by-case basis in consultation with the Vice President for Seminary Relations, the Vice President for Administration and Finance, and/or the President.
Related Documents: A017 B008 A018 B009 A019 B010 A021 B011 A022 B012 A031 B013 B003 B019 B004 B021
Section: B Document Number: 009 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Criteria for Accepting Gifts of Real Estate with a Life Estate Reserved to the Donor
A gift of personal residence or farm in exchange for a life estate agreement will be accepted if the gift meets these criteria:
1. The donor provides a qualified appraisal as required by law.
2. The property is free of debt or has the debt removed prior to the date of transfer.
3. The donor(s) will accept full responsibility to maintain, insure, pay taxes and other costs associated with home ownership, excepting the right to sell the property. Such agreement shall be in effect for the donor’s lifetime but may be removed if the donor relinquishes their claim on the life estate.
4. The Foundation or the Seminary will exercise its right to take full possession of the property when the terms of the agreement end.
Related Documents: B008 A018 B009 A019 B010 A021 B011 A022 B012 A031 B013 B003 B010 B004 B021
Section: B Document Number: 010 Document Page Number: 1 of 1 Original Date of Issue: 21JAN92 Last Revision Date: 1 May 2008
Criteria for Accepting a Gift of Real Estate Involving a Charitable Gift Annuity
A gift of real estate will normally not be accepted for creating an Immediate Payment Charitable Gift Annuity . A gift of real estate will be considered for creating a Deferred Payment Charitable Gift Annuity.
Related Documents: A015 B004 A018 B008 A019 B009 A021 B010 A022 B011 A023 B012 A025 B013 A031 B019 B003 B021
Section: B Document Number: 011 Document Page Number: 1 of 2 Original Date of Issue: 21JAN92 Last Revision Date: 1 May 2008
Criteria for Accepting a Gift of Real Estate Involving a Charitable Remainder Trust
A gift of real estate will be accepted if the gift meets these criteria:
1. The amount of the trust is now or within five years is expected to be at least $200,000.
2. Should the donor desire to claim a charitable deduction, said donor must obtain a qualified appraisal as required by law.
3. The donor, after negotiation, accepts the Seminary’s or Foundation’s valuation of the property in the event the donor’s and the Seminary’s or Foundation’s valuations are at variance.
4. Normally, the property will be free of liens, judgments, suits, or other financial and legal claims. The exception would be to have a plan worked out between the donor and the Seminary under the guidance of counsel through which the mortgage or other claim would be removed from this property.
5. Normally, the donors will obtain a title insurance binder showing the donor as owner of the property and has clear title. Payment for the title insurance may be negotiated with the donor.
6. Taxes and assessments on the property are current and fully paid.
7. An environmental assessment will be performed to determine the presence, nature and extent of toxic wastes or other environmental hazards. This item shall not be satisfied until the Vice President for Seminary Relations accepts or approves this item in writing. Payment for the assessment may be negotiated with the donor.
Section: B Document Number 011 Document Page Number: 2 of 2 Original Date of Issue 21JAN92 Last Revision Date: 1 May 2008
8. An examination of the property determines that it meets “code” in such areas as wiring, plumbing, heating, etc. to ensure the salability of the property. Payment for the inspection may be negotiated with the donor. 9. Bargain sale rules apply. 10. The Seminary will advise the donors in writing regarding tax and other financial implications where known, and will also encourage them in writing, to consult with their tax and financial advisors to see how the tax laws apply to them.
11. The property may be accepted for funding net income with makeup unitrusts or net income without makeup unitrusts until the property is sold. In the year succeeding the sale, the property will be “flipped” to a standard unitrust. Trust documents must be prepared by counsel at the time the trust is created to allow for the provisions.
12. All requirements for a qualified charitable remainder trust will be met.
13. Property gifts at variance with these policies will be considered on a case-by-case basis in consultation with the Vice President for Administration and Finance, the Vice President for Seminary Relations and the President.
Related Documents: A021 B009 A022 B010 A031 B012 B003 B013 B004 B021 B008
Section: B Document Number: 012 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Determining the Foundation’s or Seminary’s Valuation of Gifts of Real Estate
Examination of property is entrusted to the Seminary Relations staff person working with the gift. Generally, the Foundation or Seminary will abide by the qualified appraisal amount, allowing for negotiation. The Seminary or Foundation will take care to insure that the qualified appraisal accurately reflects market value. The final decision will be made by Seminary Relations staff in consultation with the Vice President for Seminary Relations and the Vice President for Administration and Finance.
Related Documents: A021 A022 A031 B004 B008 B009 B010 B011 B013 B019 B021
Section: B Document Number: 013 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Environmental Study Relating to Gifts of Real Estate
Seminary Relations staff will seek to learn from the donor(s) and other sources the necessity and extent of an environmental assessment. Staff will advise the donor of the type of assessment to be conducted. Any associated costs will be typically paid by the donor(s) but this is subject to negotiation.
Related Documents: A021 B010 A022 B011 A031 B012 B004 B019 B008 B021 B009
Section: B Document Number: 014 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Charitable Gift Annuity Minimum Age, Minimum Amount, and Schedule of Payments
1. The income beneficiary of a gift annuity agreement should be at least 55 years of age.
2. Gift annuity contracts are preferred to be written for an amount of not less than $10,000.
3. Annuities may have payments scheduled, quarterly, semi-annually, or annually as negotiated with the donor(s). Partial first payments will be the norm in order to standardize payment schedules for all annuitants.
4. Quarterly payments will be made at the end of each calendar quarter.
5. The Seminary will encourage annuitants to take advantage of the opportunity to direct deposit their payments.
6. Once annuity (if an educational annuity) payments begin, they will continue on schedule for the life of the annuitant(s), or term of years, unless the annuitant gives up (assigns) the right to future payments to Luther Seminary or Luther Seminary Foundation.
7. In cases where a gift annuity is funding a named endowment fund, the net present value of the charitable gift annuity must meet the minimum funding requirements for the type of endowment to be established.
Related Documents: A012 B004 A023 B015 A025 B019 A031 B021
Section: B Document Number: 015 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Deferred Gift Annuity Minimum Age, Minimum Amount, and Schedule of Payments
1. A donor of a deferred gift annuity agreement should be at least 60 years old when payments begin.
2. Deferred gift annuity contracts are preferred to be written for an amount of not less than $10,000.
3. Annuities will have payments scheduled quarterly, semi-annually, or annually as negotiated with the donor(s).
4. The first annuity payment on a contract of any amount must be deferred at least more than one calendar year from the date of the contract.
5. Once annuity payments begin, they will continue on schedule for the life of the annuitant(s) unless the annuitant gives up (assigns) their right to future payments to Luther Seminary or Luther Seminary Foundation.
6. In cases where a deferred charitable gift annuity is funding a named endowment fund, the net present value of the gift annuity must meet the minimum funding requirements for the type of endowment to be established.
Related Documents: A007 B014 A012 B015 A025 B021 A031
Section: B Document Number: 016 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Review of Endowed Fund Balances
Endowments, including those that are in the process of being fully funded according to these policies and procedures, will be reviewed annually and reported to the donor or donor’s family (if donor is deceased). The report may include the fund balance at the end of the previous fiscal year, any gift additions, any gain/loss on investment, and the remaining balance of the endowed fund.
Related Documents: A026 A027 B020 B021
Section: B Document Number: 017 Document Page Number: 1 of 1 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Gifts of Securities
When gifts of securities are made to the Seminary and/or Foundation, the Seminary Relations staff will be consulted for appropriate details of the transaction and a “Stock Information Summary” will be completed in conjunction with the Gift Processing staff. Copies of the completed “Stock Gift Information Summary” will be sent to the appropriate staff in the business office.
Securities, whether the certificates have been given to the Seminary and/or Foundation or transferred electronically, will be disposed of as determined by the Vice President for Administration and Finance who may consult with the Vice President for Seminary Relations. Normally, securities will be sold within 48 hours of receipt by Luther Seminary.
Related Documents: A007 A031 A008 B004 A017 B019 A030 B021
Section: B Document Number: 018 Document Page Number: 1 of 1 Original Date of Issue: 17NOV92 Last Revision Date: 1 May 2008
Gift Support Documentation
In the event a gift of $5,000 or more is undocumented, the following staff members will be responsible for obtaining the required written documentation. Written documentation will include appropriate valuation, and stated purpose of the gift. Documentation may be in the form of a letter signed by the donor. Donor notation of purpose of the gift in the memo line of the check is adequate documentation.
1. Documentation of a solicited gift will be the responsibility of the Director of the Sustaining Fund.
2. Documentation of an unsolicited gift which is neither a planned gift nor a deferred gift will be the responsibility of the Director of the Sustaining Fund.
3. Documentation of an unsolicited planned or deferred gift will be the responsibility of the Seminary Relations staff member most closely related to the gift.
Related Documents: A007 A009 A022
Section: B Document Number: 019 Document Page Number: 1 of 2 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008
Heritage Society Membership Qualifications and Recognition
Membership in the Heritage Society, which was established January 1, 1988, is offered to individuals, couples or congregations who have completed qualified planned gifts that benefit Luther Seminary (LS) or Luther Seminary Foundation (LSF).
In cases where a qualified donor is deceased but survived by a spouse, the deceased donor and spouse may both be named as members. Where a qualifying gift is received from the estate of an individual with no spouse surviving, the estate may be named as a member. Qualifying members will be asked for permission before their names are published in the annual membership register.
Qualifying gifts include the following
1. Wills and Revocable Trusts that provide a bequest or provision for LS or LSF. Although there is no minimum requirement, contingent bequests do not qualify unless the contingency is only dependent upon the death of a surviving spouse. Written verification (preferably from donors) is required. Where the amount of the bequest cannot be determined, the gift will be valued at $10,000.
2. Charitable Gift Annuities and Deferred Payment Charitable Gift Annuities established through LS ($10,000 preferred minimum for CGAs and Deferred CGAs).
3. LS or LSF Charitable Remainder Annuity or Unitrusts funded with cash or publicly funded securities funded at $200,000 and established through LS or LSF.
4. LS or LSF Charitable Remainder Annuity or Unitrusts established through funded with real estate having a fair market value of at least $100,000.
5. Charitable Lead Trusts naming LS or LSF as an income beneficiary.
6. Life Insurance policies where LS’s or LSF’s share of a current death benefit is $10,000 or more, whether the policy is paid up or one for which premiums are still being made. Term life insurance is not a qualifying gift.
7. IRA accounts, qualified pension and retirement plans, such as 401-ks, certificates of deposit, money market accounts, and savings accounts that name LS or LSF as a beneficiary.
B Document Number 019 Document Page Number: 2 of 2 Original Date of Issue 11DEC91 Last Revision Date: 1 May 2008
8. Life Estates reserved in a farm or other personal residence given to LS or LSF. No minimums apply.
9. Gifts made through other qualified charities naming LS or LSF as a beneficiary also qualify. If the other charity’s requirements are less stringent than ours, the donor will have to meet the Seminary’s more stringent requirements before qualifying for membership.
Related Documents: A015 A031 B018
Section: B Document Number: 020 Document Page Number: 1 of 1 Original Date of Issue: 01AUG95 Last Revision Date: 1 May 2008
Leadership Circle Membership Qualifications and Recognition
Membership in the Leadership Circle is open to individuals or couples who make an outright gift of $10,000 or more in any fiscal year. The Leadership Circle recognizes annual and not cumulative lifetime giving.
Leadership Circle gifts may be unrestricted, restricted to the current program, or restricted to endowment.
Individuals may qualify for Leadership Circle membership either by their own gift of $10,000 or more, or by a combination of their own giving and matching gifts for which they are eligible. For example, a donor who makes a gift of $5,000 and takes advantage of a matching corporate gift for an additional $5,000 is eligible for Leadership Circle membership.
Deferred gifts, or life-income agreements, do not qualify for Leadership Circle membership.
Leadership Circle gifts will be recognized in a manner deemed appropriate by the Vice President for Seminary Relations.
Related Documents: A015
Section: B Document Number: 021 Document Page Number: 1 of 2 Original Date of Issue: 05FEB97 Last Revision Date: 1 May 2008
Gift Counting for Campaigns
All gifts to Luther Seminary during the campaign period will be counted toward the campaign goal, according to the following guidelines:
I. Current Gifts
A. Cash Gifts 1. Cash/check/credit card – counted at actual amount on the date of receipt by Seminary or Foundation, or on the date of postmark on the envelope if this is advantageous to the donor. B. Pledges and Promises 1. Pledges for capital projects of five years or less are counted on the date of a signed commitment. Pledges of more than five years may be counted, but only five years of the pledge will count toward the campaign’s current giving goal. 2. Pledges should be documented in writing, including pledge amount, designation of gift, payment schedule, date and donor signature. Normally, pledges will be recorded when they support brick and mortar projects or when the Seminary will incur financial liability by using the pledge gift. 3. Promises will count towards the campaign totals but not be counted by the Business Office for accounting purposes. Promises are not legally binding statements of intentions to give.
C. Securities 1. Publicly-traded securities – counted at the average of the high and low sales price on the date the donor relinquishes control of the gift, as per IRS regulations. 2. Closely-held securities – counted at the fair market value placed on them by a qualified independent appraiser as required by the IRS for valuing gifts of non- publicly traded stock. D. Realized bequests 1. If not already counted toward the deferred goal of the campaign, will be counted toward the current giving goal at the full value of the gift when received by the Seminary. 2. If already counted toward the deferred goal of the campaign, will be counted toward the current giving goal at the full value of the gift when received by the Seminary, and the deferred giving total of gifts committed will be reduced by the amount the commitment was previously booked at. Section: B Document Number: 021 Document Page Number: 2 of 2 Original Date of Issue: 05FEB97 Last Revision Date: 1 May 2008
E. Hard-to-value-property (such as real estate, personal property, art, books) 1. Counted at the appraised value, or at $1 if no appraisal is required for IRS purposes. F. Government grants 1. Grants from government sources will not be counted toward the campaign goal. G. Charitable lead trusts 1. Total amount of projected income to be paid (up to five years) will be counted toward the current giving goal of the campaign. Income to be received beyond a five-year period will be counted toward the deferred giving goal.
II. Deferred gifts Deferred gifts will be counted at face value toward the deferred gifts goal of the campaign. The value of all deferred gifts will also be calculated at discounted present value, for internal planning purposes.
A. Charitable gift annuity, deferred gift annuity, charitable remainder unitrust 1. Counted at face value toward the deferred gifts goal of the campaign. B. Life insurance policy where the Seminary or Foundation is named owner and beneficiary 1. Counted at cash value of the policy or proportionate share of death benefit (if more than one beneficiary) as a deferred gift, provided the policy meets the standards for gift receipt outlined in this manual. Will count toward deferred gifts goal of the campaign. C. Real estate with a life estate reserved 1. Counted at the amount of the charitable deduction allowable as of the date of the transfer of deed to the Seminary or Foundation, toward the deferred gifts goal of the campaign. D. Will or living trust commitments 1. Counted toward the deferred gifts goal of the campaign at the current estimate of value provided by the donor with written documentation (or substantiated by the appropriate development officer), or at $10,000 when informed by donor about will or trust inclusion but with no information about amount.
Related Documents: A003 A008 A030 B017
Section: B Document Number: 022 Document Page Number: 1 of 1 Original Date of Issue: 11OCT01 Last Revision Date: 1 May 2008
Society of Stewards Membership Qualifications and Recognition
Membership in the Society of Stewards is open to individuals or couples who make an outright gift of $1,000 or more in any fiscal year. The Society of Stewards recognizes annual and not cumulative lifetime giving.
Society of Stewards gifts may be unrestricted, restricted to the current program, or restricted to endowment.
Gifts of cash, securities, personal property and real estate qualify for Society of Stewards membership.
Society of Stewards gifts will be recognized in a manner deemed appropriate by the Vice President for Seminary Relations.
Related Documents: A015
Section C - Definition of Terms Section: C Document Number: 001 Original Date of Issue: 18FEB92 Last Revision Date: 1 May 2008 Definition of Terms
annuity Annuities are issued by companies engaged in the sale of life insurance or other investments. They offer a fixed income to the investor for lifetime or a stated number of years. In certain circumstances, annuities may be used also for charitable gifts (also see charitable gift annuity). appraisal Action to determine the value of non-cash contributions to the Seminary. The procedure is set forth in IRS Form 8283 and accompanying instructions. appreciated asset An asset whose current value exceeds its cost basis. bequest Assets received from an estate in accordance with instructions set forth in a person’s will, or similar instrument, written for the purpose of distributing estate assets following death. campaign An organized, intensive fundraising effort to secure gifts, pledges, and promises for specific purposes during a specified period of time. capital/plant fund Luther Seminary accounting fund dealing with monies for the acquisition/maintenance of the physical plant. challenge gift A gift contingent upon fulfillment of specified conditions from other donors. charitable gift annuity A deferred gift created when one or more persons contribute money or securities to the Seminary in exchange for annuity payments and certain tax benefits. The term of the annuity period is either for the life of the annuitant(s), or for a fixed term of years, after which the assets then in the annuity account are transferred to the funds of the Seminary.
Page 1 of 8 charitable remainder annuity trust An irrevocable transfer by a donor of cash, property, or both to the Seminary or Luther Seminary Foundation, which asset is invested and managed as a separate trust. Donor(s) receive a fixed income for life, or a term of years, together with certain tax benefits. No further additions to the fund are possible. charitable remainder unitrust Similar to charitable remainder annuity trust except that the income stream is not fixed but is a percentage of the net fair market value of the unitrust as valued annually. Additional contributions may be made to the trust once established. contract for deed A legal document between two or more parties, in this case the Seminary and others, which sets out the terms of a sale of real property in which the seller assumes financing of the unpaid balance. current fund Luther Seminary accounting fund dealing with operating monies (see Sustaining Fund). current gift A completed irrevocable transfer of cash and/or other asset. deferred gift A gift which is arranged now with benefits to the Seminary deferred until a later time, usually the death of the donor(s). deferred payment gift annuity A deferred gift created when one or more persons contribute money or property to the Seminary in exchange for annuity payments and certain tax benefits. The first annuity payment is deferred for at least one year following the date of the contract. The term of the annuity period is either for the life of the annuitant(s), or for a fixed term of years, after which the assets then in the annuity account are transferred to the funds of the Seminary. deferred gift funds Luther Seminary accounting funds dealing with monies received as a result of writing a deferred gift instrument. deferred gift instrument Any written contract or agreement in which the donor(s) set aside assets for the benefit of the Seminary such as a bequest in their will or revocable trust, a gift annuity plan, a remainder trust, a life estate agreement, or a life insurance policy, to name the most prevalent forms. Page 2 of 8 depreciated asset An asset whose current value is lower than its cost basis. designated gift A restricted gift with a subsequent specific designation as specified by the donor. direct mail A solicitation appeal conducted by mail. donor A person, organization, corporation, Foundation, church, and/or other entity that supports the Seminary financially. endowed chair An endowment established by a donor with a minimum of $2,000,000, with a portion of the earnings being used to support the salary and benefits of a faculty member. endowed professorship An endowment established by a donor with a minimum of $1,000,000, with a portion of the earnings being used to support the salary of a faculty member. endowed fund for faculty development An endowment established by a donor with a minimum of $500,000, with the earnings used to provide support for faculty sabbaticals and research. endowed presidential scholarship An endowment established by a donor with a minimum of $250,000, with the earnings used to provide full tuition scholarships for exceptional Seminary students. endowed program fund An endowment established by a donor with a minimum of $50,000 with no upper limit, with the earnings used to support an academic or administrative program of the Seminary. endowed scholarship An endowment established by a donor with a minimum of $25,000, with the earnings used to support student(s).
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endowment fund Luther Seminary accounting fund dealing with investment funds the corpus of which is non- expendable. expectancy A will, living trust, or donor-owned insurance policy (all revocable instruments) in which the donor has named the Seminary as partial or total recipient of proceeds. expendable gift A gift which may be spent in full within the fiscal year in which it is received.
gift A donation of money or other assets given in support of the institution and its mission. gift support documents A letter, note, check memo line, signed contractor will, or signed pledge commitment from a donor supporting a gift given to the Seminary. grant A gift of money, usually from a Foundation or a corporation, usually restricted to a specific use and required periodic program and financial reports.
FASB 116/117 Federal Accounting Standards Board regulations that changed accounting procedures for higher education from accounting by fund balances to accounting by net assets (to make financial statement comparable to other institutions or businesses). in-kind gift Any gift other than cash including securities, real estate, personal property, and ordinary income property. insurance gift Life insurance, for which the Seminary is a designated beneficiary. Page 4 of 8 irrevocable gift A gift which, once made, cannot be returned to the donor, and over which the donor may exercise no restrictive powers concerning the use or management of the gift except those which are specifically allowed. life estate agreement The irrevocable transfer of a personal residence or farm to the Seminary in exchange for a life estate. Donors may continue living in the residence as if it had never been given away, for as long as they live. The donor maintains, pays all expenses, and receives all income related to the property. The donor receives a charitable deduction in the year of the transfer for a portion of the property’s value. The Seminary owns a remainder interest in the property and takes possession either when the donor gives it up or dies.
Leadership Circle Donor recognition club recognizing outright, annual gifts from individuals of $10,000 or more. loan fund Luther Seminary accounting fund dealing with monies available for loans to students who repay according to Seminary policy.
Luther Seminary Heritage Society An association which identifies and recognizes persons who have arranged or make deferred gifts benefiting Luther Seminary. matched gift A gift from an individual that has been honored by a corporate matching gift program or other Seminary-administered matching gift program. matching gift A gift from a corporation, Foundation or individual to match (in varying ratios) a gift from a donor. matured deferred gift Money or other property which is irrevocably placed in the Seminary’s accounts after the terms of the original contract which created the gift have been completed non-cash gift Any gift other than cash including securities, real estate, personal property and ordinary income property. Page 5 of 8 non-expendable gift A gift placed in a permanent endowment or loan fund, the principal of which may not be invaded. ordinary income property A gift of inventory from a business such as an automobile from a car dealer, furniture from a department store, etc. partners A Luther Seminary association which identifies and recognizes donors of $250 or more (excluding estate gifts) given in a fiscal year. permanently restricted An accounting term for: a) contributions and other inflows of assets whose use by the Seminary is limited by donor- imposed stipulations that neither expire by the passage of time nor can be fulfilled or otherwise removed by actions of the Seminary, b) other asset enhancements and diminishments subject to the same kinds of stipulations, and c) reclassifications from or to other classes of net assets as a consequence of donor-imposed stipulations. personal property See “in-kind gift.” phonathon A fundraising effort conducted via telephone. phone campaign A fundraising effort conducted via telephone. planned gift A gift, whether current or deferred, which requires special planning and execution. Such planning may include legal documents, outside professional counsel, and coordination with other financial and estate plans of the donor which are related to the gift. pledge A written commitment signed by a donor to provide a future gift(s) for which a pledge reminder may be issued. The written commitment typically includes the total amount, amount and frequency of payments, use of the funds, and date on which the donor wishes to begin payments. Pledges are typically documented when supporting brick and mortar projects, or projects for which the Seminary will incur financial obligations when acting on the pledge. Page 6 of 8
probate The legal process for collecting, administering and distributing a person’s estate following death in which the court affirms the validity of the will and the personal representative’s actions in accordance with that will. Probate is done either in accordance with a testamentary document or, lacking such a document, in accordance with intestacy laws established by the state. program A method used by Seminary Relations to solicit gifts, presently categorized as direct mail, phonathon, publications/public relations, director cultivations, matching gifts, tuition support, regular independent giving, memorials/honorariums, GMI cultivation events, grant, giving online and other. promise An informal, written statement of a donor’s intentions to make a gift. prospect A person, organization, corporation, Foundation, church and/or other entity which has been identified by the Seminary for potential gift support. real estate Real property, such as land and/or buildings and may include other fixtures attached to the land. receipt Document issued to a donor certifying the receipt of and, (if appropriate),value of a gift received from that donor, including date, amount and purpose of gift. receipt letter A letter of acknowledgment to a donor issued in response to receiving a gift from that donor. restricted gift A gift restricted to a specific purpose as specified by the donor. revocable gift An incomplete gift which may be rescinded by the donor. The gift is not realized and, therefore, no tax benefits are allowed. securities Stocks, bonds, debentures, etc., which represent the donor’s shared ownership in a business, corporation or fund. Page 7 of 8
Society of Stewards A Luther Seminary association which identifies and recognizes donors of $1,000 or more (excluding estate gifts) in a fiscal year.
Sustaining Fund Unrestricted current gifts from individuals, congregations, corporations or Foundations as a result of solicitation via direct mail, the phonathon, online giving, personal contacts and independent giving. Unrestricted matching funds from corporations will also be considered Sustaining Fund gifts. temporarily restricted An accounting term for: a) contributions and other inflows of assets whose use by the Seminary is limited by donor- imposed stipulations that either expire by the passage of time or can be fulfilled and removed by actions of the Seminary pursuant to those stipulations, b) other asset enhancements and diminishments subject to the same kinds of stipulations, or c) reclassifications from or to other classes of net assets as a consequence of donor-imposed stipulations. tuition support Non-tax-deductible monies provided for a specific student account. unrestricted gift A gift without any donor restrictions valuation Determination of the fair market value of property, which is the amount of money a willing buyer will pay to a willing seller, all parties being full aware of the circumstances of the property. will Usually titled “The Last Will and Testament” because it directs the survivors, personal representative and court as to how they should manage and distribute assets of the estate. A will is revocable until the person dies after which time it is irrevocable unless contested. Page 8 of 8
Section D – Exhibits
Section: D Document Number: 001 Original Date of Issue: 11DEC91 Last Revision Date: 1 May 2008 Exhibits
Exhibit 1. Legal name of the Seminary and the Foundation with tax identification numbers Exhibit 2. “Code of Ethical Principles and Practices” – Association of Lutheran Development Executive Exhibit 3. “Code of Ethical Principles and Standards of Professional Practice” – National Society of Fundraising Executives Exhibit 4. Model Standards of Practice for the Charitable Gift Planner Exhibit 5. The Benefits of Donor Services and Management Options Brochure Exhibit 6. Heritage membership materials Exhibit 7. Sample of Christian preamble for wills Exhibit 8. Sample forms of bequest Exhibit 9. Sample fiscal year summary report Exhibit 10. IRS Form 8282 and instructions Exhibit 11. IRS Form 8283 and instructions Exhibit 12. Guide to Forms 8282 and 8283 Exhibit 13. Sample endowed scholarship agreement Exhibit 14. Sample endowed chair agreement