UW Foundation and 233- Gift Fund Overview

1. UW Foundation and 233- Gift Fund Overview Welcome to the presentation “UW Foundation and 233-Gift Fund Overview. After you review a slide, click anywhere to advance the presentation. To exit the presentation at any time, press the Escape Key. To go back to a previous slide, use the Backspace Key Click to begin the presentation. This presentation was given live on November 29, 2012, and was modified into a self-paced presentation. It is part of a series or seminars coordinated by L&S Administration, intended to connect L&S faculty and staff with topics and information that may be helpful in their positions. More presentations and information about this series of trainings can be found at https://kb.wisc.edu/ls/page.php?id=25131 John Varda, from the L&S Budget Office presented the information. He welcomes calls and emails if you have any questions or need assistance with gift funds! Presented by John Varda L&S Budget Office 265-1170 jgvarda@ls.wisc.edu

2. What is UW Foundation? Independent is an important distinction -- the UW Foundation is not part of UW-Madison. It is a separate entity that provide services for UW-Madison. In Their Own Words The Foundation is a independent, not-for-profit, tax-exempt organization, which raises funds and receives gifts for the UW-Madison. An elected board of directors oversees its assets and activities. The Foundation works closely with the University to determine and support fundraising priorities. In Their Own Words The Foundation is a independent, not-for-profit, tax-exempt organization, which raises funds and receives gifts for the UW-Madison. An elected board of directors oversees its assets and activities. The Foundation works closely with the University to determine and support fundraising priorities.

3. What is UW Foundation? A nice, shiny building... Separate from UW... But right next door.

4. What is UW Foundation? • UW Foundation is not the UW. • UW Foundation’s purpose is to raise, invest and distributefunds for the benefit of the UW-Madison.

5. What is UW Foundation? • L&S Departments have been assigned Development Officers who solicit gifts on behalf of your department. • The Foundation accepts gifts and holds them in two kinds of accounts: 12- Expendable accounts 32- Endowments L&S departments, and departments across campus are assigned Foundation Development Officers that work on the department’s behalf. They work with donors and potential donors to bring in gifts into the Foundation (that your department then will be able to use).

6. Foundation Funds Are The department may use the Foundation 12- Expendable Funds for purposes that meets the terms and conditions set by the donor. If the fund is discretionary, the department will have additional flexibility. 12- Expendable Funds Act like a check book: • the gifts deposited by donors can be spent. • No interest is usually earned on the cash balance. (However, if the balance is unusually high, a small amount interest will be posted quarterly.) • Some funds have terms or conditions set by the donor. Some funds are discretionary. Funds will be clearly marked whether they are discretionary or have terms and conditions set by the donor. You can find this information in Campus Access, the Foundation’s website for administration of gift funds. If you have any questions about the information you see in Campus Access, or what is allowable, you can contact John Varda or the Foundation. While some terms and conditions are quite specific, there is always some element of department discretion. An example: a fund may have terms and conditions that indicate it must be used for scholarships, but the department can choose the student that best meets the qualifications for the scholarship.

7. Foundation Funds Are 32- Endowment Funds Foundation invests the principal. At the end of each quarter, interest is added to your available cash. Usually the principal cannot be spent, but some funds have been set up to allow the principal to be spent with Chair and Dean approval. Another type of gift fund the Foundation administers for UW-Madison is 32-Endowment Funds. Because endowment funds are invested and generate interest, they are renewable. A department might be able to fund an annual scholarship with the interest, or, in the case of a very large fund, a professorship or other large activities. The terms of particular 32 Endowment Funds can be viewed through the Foundation’s Campus Access. You can also contact John Varda if you have questions about your department’s Foundation fund. Usually only the interest may be spent, to ensure the principal continues to generate interest for the department. If a department has an endowment fund that allows this, using any principal requires both Chair and Dean approval. Spending principal is an important decision, because a lower principal will generate lower interest in future years.

8. Foundation Funds Are 32- and 12- Endowment Fund Pairs 32- funds do not accept donations. 32- funds are almost always paired with a 12- funds to accept donations. These 12- funds seldom carry a balance. Donations that are received are normally transferred to the principal of the 32- account. Usually, 32- Endowment Funds are created with a large one-time donation, without anticipation of adding additional funds to the account. But of course, there’s always exceptions. In a situation where a donor wants to give a gift to an existing 32- Endowment Fund (for example, a donor wants to give to an existing professorship endowment fund), the paired 12-fund will accept those additional donations.

9. What is UW Foundation? A seriously nice, shiny building!

10. No Coincidence That is the year Wisconsin Governor Nelson Dewey signed the act that formally created the UW-Madison.

11. Mellon funds are sponsored projects (not gifts) that come to UW-Madison. Mellon funds require the money earn interest while it’s not being used, so the Foundation invests those funds for us. Foundation Funds Are • Gifts (of course there are exceptions, like Mellon funds) • Available to Departments, in some cases directly from the Foundation, in others after transfer into a UW 233- project. • Viewable at UWF's Campus Access site • Sometimes discretionary. • Sometimes for a broadly defined purpose, like grad scholarships, building expansion, or research in a particular area. Once the money has been transferred by the Foundation into a UW 233-project fund, the funds can be used like any other UW fund (and has UW fund rules) . Again, if a fund is discretionary, or is to be used for a specific purpose, it will be clearly indicated as such on the UWF’s Campus Access site.

12. Since Foundation funds are not UW Funds, they’re not visible in WISDM. Instead, you must use the UWF’s Campus Access to view the Foundation fund information. 233- Fund information can be viewed in WISDM, because those funds were transferred from the Foundation to UW. After that transfer occurs, the funds are considered UW funds, and follow UW fund rules. (More information on this later). Foundation Funds Are • Not UW funds. • Not visible in WISDM, the UW accounting system. • Not subject to the same rules as UW funds. In general, Foundation fund rules are more flexible. If Foundation funds are used through a check request (or if the Foundation pays directly), they are not considered UW funds, and UW rules to not apply. There may be instances where Foundation funds can pay for something that UW cannot ……

13. Foundation Funds Are Useable for things like Alcohol

14. And Things Like an occasional Over-the-Max Meal

15. Sometimes... It seems that UWF funds can be used for almost anything, BUT...

16. Foundation Funds Are Not There are always rules and limits.

17. Stewardship of our donor’s money is the most important consideration; we honor and respect the intentions of the donor. And, donors may ask for updates about how the funds were used. We should be able to report back that their gift has been used responsibly. Foundation Funds Are Subject to Certain Rules • Above all, we must honor the intent of the donor. Those intentions are spelled out in the terms and conditions of the fund. • There are hard limits, like the $75/person meal max, and reasonability checks. • There always must be a UW business purpose, except with Community Funds. If you have any questions about reasonability checks or what is allowable, please contact John Varda or the Foundation.

18. Community Funds are similar to a “Sunshine Fund” (where employees in an area contribute informally to a fund). Community Funds are administered by the Foundation, and typically the donors are department members. Community Funds Are Special Foundation funds for boosting morale and promoting community your unit. • The funds can be used for certain things with no UW business purpose because the money is donated with that in mind. • Some things Community Funds pay for are retirement parties, department-only gatherings, and flowers for employees. • No Foundation fund can buy gifts. Since donors are usually department employees, and they understand how Community Funds may be spent, the fund has additional flexibility to be used for certain things that would otherwise not be allowable. Regardless of the type of fund, it is not appropriate to purchase gifts using any type of Foundation or UW fund.

19. Once the money is transferred from the Foundation to a UW 233-account, it is considered UW funds. You will be able to see the account information in WISDM, and you must follow all UW rules. For example, if you’re using funds from a 233- account, you must follow UW’s rules regarding meal maxes and it may not be used pay for alcohol. What Are 233- Accounts? 233- accounts are UW gift projects. • Only gifts can be deposited into 233- accounts, no sales credits or non-gift revenue are allowed. • Once transferred, the money becomes UW money and subject to all UW rules. • It's a one way trip: once transferred from Foundation, the money can't go back. Departments should be strategic about the amount of money they transfer into their 233-account. Money in the 233-account will not earn interest.

20. What are 233- Accounts? • Gifts made payable to the UW, the Department, or the UW Board of Regents can be deposited directly into 233- accounts using a gift check routing form. • Gift checks payable to Foundation must be deposited into Foundation accounts. When gifts are made directly to the department, it is deposited into a UW 233- account; the Foundation is not involved. John Varda handles these donations through a gift check routing form for L&S department. Donations directly to the department requires more stewardship on the department’s part (if it goes through the Foundation, for example, the donor is automatically sent a thank you letter).

21. Why Are Gifts A Big Deal? As you can see, the total state contributions have been declining, and are declining as a percentage of our budget as well. By contrast, our Gifts, Grants and Segregated Funds have been increasing, and in 2011 was significantly more than our GPR and specific tax money.

22. Why are Gifts A Big Deal? • State funding is on the decline, and budget cuts are the norm. • Gift funding has become more and more important, filling the widening budget gap.

23. Why are Gifts A Big Deal? • Budget Cuts, Budget Status Reports, and Innovations! Gift money can help. • Some gift funding is discretionary. • Gift funding is very flexible. • It doesn't expire. • There are no sponsors. • No federal reports. And even non-discretionary gifts often have more flexibility than sponsored funding. Gift funding stays in the account until you use it. This is contrast to some federal accounts that return money to the sponsor if you wasn’t used it by the end-date.

24. Where to go for Answers? Call or email John Varda 265-1170, jgvarda@ls.wisc.edu All gift forms should be sent to John Varda at 201D South Hall Go to the Foundation Website: http://www.supportuw.org/ Go to the Foundation Campus Access Website: https://www5.supportuw.org/login.aspx Go to the Accounting Services Website: http://www.bussvc.wisc.edu/acct/gifts/gifts.html • For an overview of UW-Madison and UW Foundation policies: https://www.rsp.wisc.edu/policies/UWF_Policy.pdf The Foundation website is geared towards donors and has helpful information for staff as well. Login is through your NetID, -- you will need initial authorization from the Foundation. If you’d like authorization, contact John Varda, and he can help you with that process. Accounting Services handles UW 233 – Gift Funds accounts. Their website has a lot of helpful information. This links to an excellent overview of Foundation gift fund policies and procedures, in the form of a five page memo from the Chancellor.