OPERATIONS EXPERT: WHAT ALL DEVELOPMENT PROFESSIONALS NEED TO KNOW

1. OPERATIONS EXPERT: WHAT ALL DEVELOPMENT PROFESSIONALS NEED TO KNOW Presentation for AFPLI September 11, 2012 Meredith H. Celentano AVP, Development and Alumni Affairs, Hofstra University Gabrielle McCartin Director for Development Operations, Hofstra University

2. AFPLI September 2012 Presentation Remember This… • Not all organizations are the same but all organizations need to be organized • Operations vary from place to place but the outcome must remain the same – keeping a tip-top operation running well makes everything better • Don’t get blindsided by the time it takes to set-up good systems because it will surely take longer to untangle a giant mess

3. AFPLI September 2012 Presentation The Importance of “Operationally Sound” • Keeping an organized operation makes the business of raising money an easier task to accomplish • Maintaining a sound operation allows you to focus time on the things that actually matter – like dollars and cents • When operations run well, professionals are better able to focus, to communicate with colleagues and donors and can manage their time better

4. AFPLI September 2012 Presentation Areas of Focus • Process • Money • Reports and Reporting

5. AFPLI September 2012 Presentation Process, Process, Process Think it, Write it, Execute it, and Revisit

6. AFPLI September 2012 Presentation Policies and Procedures • Create a gift acceptance policy – what kinds of gifts can you accept? What are the terms of acceptance? How long is “in perpetuity?” for your organization? Do you accept cash/appreciated securities, how about real estate? Art? If a donor wants to give you these things, what would you do? • Create an office manual and/or process narratives that can be used by any person in the office to determine how the operation runs. Can include such things as: • How to create new bank accounts • Where to order the coffee from • How to and who can handle money and/or credit cards • How gift acknowledgments are created • Process for record retention/shredding confidential documents • What person is responsible for what area of the office • Confidentiality issues and handling Social Security numbers • How to secure a venue for a special event • What to do with gifts that come in during the usual holiday break and/or end of tax year • Vacation/time out of the office policies, if different than for the general org • P&L reports – when to close out accounts, etc.

7. AFPLI September 2012 Presentation What We Do…Policies and Procedures • Create an office manual; review and update annually • Sign off on process narratives quarterly • Communicate regularly with the Office for Finance • Communicate regularly with the General Counsel’s office • Mask Social Security numbers from most system users • Don’t allow students and/or interns to shred confidential documents • Don’t hold on to credit card numbers or hold money in unsecured spots • Protect ourselves when it comes to sensitive information and/or money issues • Lock files and cabinets with sensitive information overnight • HR performs background checks on each new hire and all new employees are assigned unique passwords and usernames into the system and no one is permitted to give out that information to another employee • Ensure there is ample coverage of key office members during vacation times

8. AFPLI September 2012 Presentation Best Lessons We’ve Learned • Understand that if we spend the time creating processes then everyone is always on the right page and the process becomes nearly automated, which means less time spent performing mundane actions and more time spent with calling/meeting with prospects • Getting to know our partners in other key offices – IT, Finance, Legal, Purchasing, etc., ensures we have advocates when things get sticky and allows for smooth communication between offices when needed • Double and triple check the process – and communicate it to all • Reconcile with Finance once a month • When in doubt…Ask

9. AFPLI September 2012 Presentation Record Retention/Shredding Work with your Legal Office to establish guidelines that set forth the length of time that records should be retained by your department. 1. Create a retention schedule 2. Identify what documents can be destroyed 3. Find a method for destruction which does not permit recovery or reconstruction (such as cross shredding or burning)

10. AFPLI September 2012 Presentation $ Money, Money, Money $ How you handle it, collect it, count it, acknowledge it and report it

11. AFPLI September 2012 Presentation Safety and Security of Handling Money • Create the scenario and walk through it, step by step and then write it out on paper and then walk through it again to ensure all steps are feasible – • Think of the following – • How does money flow into the office? Events? Mail? Online? And what happens to it when it arrives? • How many people “touch” it (“it” being cash/checks or credit cards) • How long is money held before it’s deposited? • Is there a central person to handle money? Mail? Online gift processing? • Is there more than one person assigned to verify that what’s being reported as deposited is actually being deposited?

12. AFPLI September 2012 Presentation What We Do…for Cash/Checks • Mail comes in and it’s disseminated • Checks and/or credit cards received through the mail are copied (checks – not CCs) and recorded onto a “daily deposit” log (see example) • Actual cash/check is reviewed by 2nd person and put into an envelope, signed, sealed, logged in, and placed into a safe • Gift processing person enters gift into the computer system(s) using the photocopied information • End of day, deposits are tallied, envelopes are retrieved from the safe by authorized person, logged out and opened in front of two people. Bank bag is prepared and signed off by two people

13. AFPLI September 2012 Presentation What We Do…for Cash/Checks • At events, we have a locked box and two people need to sign form accepting money (particularly relevant to cash) • No one is allowed to hold checks or cash in their desks – must get put into the safe • There are designated people with keys to the safe and only those people can open it • Students and/or interns are not allowed to carry money across campus • Anyone handing in a gift must follow the process - photocopy material, complete the log, etc. • End of Year Giving – hold on to those envelopes!

14. AFPLI September 2012 Presentation Credit Cards and Stock Gifts CREDIT CARDS • All credit card information must be stored in locked filing cabinets • All credit card information must be stamped confidential • Students or volunteers cannot accept credit card information • Credit card information cannot be accepted via email • Credit card information cannot be accepted through the fax unless the fax machine is located in a private, secured office STOCK GIFTS • Create a one-pager on how to wire shares of stock that you can share with your donor • Get the following information from the donor: • Name and address of donor • Name of stock and # of shares • Is it in an electronic account or as paper certificates • Name, address and phone # of donor’s stockbroker • Purpose of gifts/designation (i.e. scholarship, unrestricted, etc.) For valuation purposes, our broker will provide us with the high and low value of the stock for the day the University takes control of it. We then multiply the average of the high and low stock prices for that day by the number of shares to determine the value of the donor’s charitable gift.

15. AFPLI September 2012 Presentation Acknowledgments and Receipts • Establish polices/procedures that are in accordance with IRS regulations, e.g. only gifts of $250+ are required to get a receipt • Acknowledge all gifts, regardless of the amount • Any gift of $10,000 or more is given top priority. The thank you letter is generated as quickly as possible • Establish levels for thank you acknowledgements: • Gifts $10,000+ - thank you letter from the President of the University • Gifts $1,000-$9,999 – thank you letter from the Vice President for Development and Alumni Affairs • Gifts $1 – 999 – Informal note card acknowledgement from the Vice President for Development and Alumni Affairs • Inform various areas/departments of gifts being made so the area heads can write personalized thank you notes • Calendar year-end gifts follow the “mailbox rule.” The postmark on the donor’s envelope determines the gift date. During this period it is crucial to retain all envelopes with gift correspondence • In-Kind Gifts – it is the responsibility of the DONOR to place an estimated value on their gift ($5,000+ in-kind gifts should secure an official appraisal) • Thank you letters for In-Kind gifts should include a description of the item, but not the value

16. AFPLI September 2012 Presentation Tax Deductions and Benefits • Tax Deductions/Fair Market Value (FMV): • If a benefit is provided in conjunction with a gift, the donor’s tax deduction is reduced by the FMV of the benefit. This is noted on the donor’s tax receipt • Example - $575 - ticket for golf and lunch/dinner $550 - FMV $25 - Donor’s Deduction • For events such as a golf outing or Gala, the FMV received by the donor would be the amount a person would pay for a similar type of event without regard to any charitable contribution • The calculation should take into account the estimated costs which benefit the donor (food, beverage, entertainment, rentals, favors, etc.) • Donor recognition clubs are important recognition tools and help push donors through the pipeline but think long and hard about the “stuff” you give to them at each level – must be minimal to ensure there isn’t a tax liability (e.g., gift of $100 and the thank-you gifts total $125)

17. AFPLI September 2012 Presentation Reports and Reporting Keeping track of what your donors give, communicating dollars raised to the Board and others – without solid structure, this could be a disaster

18. AFPLI September 2012 Presentation Reports • Garbage in…garbage out. Invest the time to enter quality information into your tracking system so that it can be extracted easily and with little issue • Create a series of reports you prefer to use and use them over and over so they always pull and compare the same set of information. If you have an IT/Systems administrator on site, use their knowledge and be sure they know the system’s capabilities inside and out. If they don’t know the system enough, provide training. Send them to a conference…have them meet with the system rep, call customer service, etc., but be sure that someone can extract the information you need from the system

19. AFPLI September 2012 Presentation What We Do…Reports • Ad-Hoc reports, as needed • Standard reports • Deposit Report/Daily • YTD/Weekly • Annual Fund/Weekly • HUF/Monthly • Pledge Reports/Monthly • GIK/Monthly • LYBUNT/Monthly

20. AFPLI September 2012 Presentation Reporting – Different than “Reports” • BOT HUF Report - quarterly • Annual Honor Roll of Donors • Grants vs. Gifts – and how to account for them

21. AFPLI September 2012 Presentation Odds and Ends The additional items that don’t fit in neatly anywhere!

22. AFPLI September 2012 Presentation Extra Odds and Ends • Raffles - Don’t send through the mail, number in sequential order, etc., must collect certain information. NEVER send a tax-receipt • P&L – close out within 3 months. • Pledges – create a standard pledge form for donors to sign in order to track and for your records

23. AFPLI September 2012 Presentation SUCCESS!!!!! NOW you can focus on what is really important…raising MONEY

24. AFPLI September 2012 Presentation Finally…Remember This… • Even if you’re the only one in the development operation, set aside the time to chart a course and to be sure that you have good policies so you can focus on raising money • If you ARE the only development professional in the office, account for your time carefully – secure checks and cash if you’re not able to deal with them on the day they arrive. • Set aside time each day and/or week to sign acknowledgement letters, or have them signed by an ED or BOT chair, etc. • Most of all, remember: there are other operation experts out there – tap into their knowledge. Don’t reinvent the wheel if you don’t have to!