Fund Management 101 Presented by: Stephanie Bradford April 23, 2018

What Does Fund Management Do? • Establish New Gift Funds • Fund Maintenance • Fund (and gift) Troubleshooting • Facilitate Fund Transfers • Provide Gift Fund Management Customer Service

Administration of Gifts & Gift Funds Administration of Gift Funds

Administration of Gifts & Gift Funds Importance of Administering Gifts & Gift Funds Money in fund is administered according to donor intent Department know how to use their fund Fund reporting is accurate Donor reporting is accurate Development can steward donors Money is in the correct fund Department spending money from correct fund Financial reporting is accurate Gift deposited & recorded to correct agency and fund Donor’s CRM records are accurate Donor’s tax receipt is accurate Gift Processing Accounting/ Treasury Fund Management Donor Stewardship

What is Gift Acceptance? What does it mean when a gift is recorded in CRM? It means that the money given to the UCLA Foundation or Regents can be: Accepted as gift The donor can receive a Tax Receipt for their charitable contribution The accounting office can record the money as gift revenue for the fund that has been entered in CRM

What is Gift Acceptance? Gifts vs. Grants What is a gift? Generally a “gift” is awarded irrevocably by individuals or organizations to the University without any expectation of a quid pro quo and without any contractual obligations imposed upon the University. What is a grant? Generally a “grant” is a written agreement under which the University conducts research, training, public service or other services. Deliverables other than technical or financial reports are generally not required. -Research funding falls across a spectrum of award types. There are those that clearly fit onto the spectrum with distinct definition. However, there are many that fall “in between” the definitions and are not absolutely defined. -Whether a particular award is a gift, a grant or a contract, can often depend upon the awarding organization. Awards from private sources may not fall clearly in one category or another. Sometimes, the distinctions are blurred. -Whether funds are treated as a gift, a grant, or a contract is important for a number of reasons. A faculty member generally has more flexibility in determining how gift funds are used. In addition, gifts are not subject to indirect costs. However, at UCLA gifts are charged a 5% administrative fee by the Chancellor’s Office.

What is Gift Acceptance? Directing Gifts Almost any type of gift asset can be accepted by, or any type of gift fund held by, either the UCLA Foundation or the UC Regents. The UCLA Foundation is the preferred recipient of gifts for the UCLA campus.

What is Gift Acceptance? Directing Gifts – Special Cases • Inventions • Mineral Rights • Student Loans • Real Estate – to hold • In-kind Gifts – to use • In-kind Gifts that are perishable • In-kind Gifts for auctions • Planned gifts • Gift Annuities • Charitable Trusts • Life Insurance & Life Estates • Real Estate – to sell • In-kind Gifts – to sell

What is Gift Acceptance? Major Gifts Gifts with a total value of $500,000 or more are considered “Major Gifts”. Major Gifts must be accepted and routed before a new fund can be established. Major Gifts should not be booked until after the routing and acceptance process has been completed. Facilitated by Bill Kinsella

What is Gift Acceptance? Solicitations Any standardized appeal for the purpose of soliciting gifts, donations, or membership, to a large number of donors, and carried out on behalf of various UCLA activities or programs. • All solicitations must be approved • Solicitations should match the fund purpose • Facilitated by Minolie Jayamaha-Gordon

What is Gift Acceptance? Pledges A pledge by definition is an unconditional promise to give money or other assets. A gift can only be classified as a pledge by the donor. A signed pledge agreement with a pledge payment schedule is required in order to book the gift as a pledge. Written approval from the donor is needed to modify a pledge.

Gift Funds 101 Establishing a New Gift Fund Why? How? Donor request Administrative decision by department to financially administer gift money for a specific purpose (purpose determined by the donor’s gift intention) Development fund raising effort for a program/department/school How? According to the terms of the donor’s gift agreement* According to the approved terms of the department’s allocation or reallocation memo (UCLA Policy 193: Gift Allocation & Reallocation) According to the terms identified by the fund raising effort * For donor and gift fund stewardship best practices, it is recommended all donations have a gift agreement. When there is no gift agreement any written communication from, or to, the donor regarding the gift is acceptable.

Gift Funds 101 CRM Designation vs. Fund CRM Designation Fund A designation is a gift fund in CRM. A CRM designation is comprised of the fund number and its two letter purpose code. Fund A gift fund is where all donations designated for a specific category of support are deposited. In the Regents accounting system this is a five digit number. In the UCLA Foundation accounting system this is a five digit number and a letter. *Due to the conversion from Advance to CRM, there are open gift funds that have inactive CRM Designations. Likewise, there may be closed gift funds with active CRM Designations.

Gift Funds 101 Fund Numbers UCLA Foundation UC Regents Five numbers plus the letter E or O E – Endowment; O – Other UC Regents Five numbers

Gift Funds 101 UCLA Foundation Fund Number Ranges • 80000e to 89999e Endowment Funds • 90000e to 99999e Quasi-Endowment Funds • 60000o to 69999o Current Expenditure Funds • 30000o to 39999o Student Support (Current Use) • 50000o to 59999o Construction/Plant Gift Funds • 40000o to 49999o Planned Giving

Gift Funds 101 UC Regents Fund Number Ranges Endowment Funds Principal - 04100 to 09799, 14001 to 14999, 17000 to 17999, & 92000 to 95999 Income - 34100 to 39799, 13001 to 13999, 16000 to 16999, & 92000 to 92999 Current Expenditure Funds Unrestricted - 39800 to 39999 Restricted - 40000 to 56999 Plant Gift Funds - 00300 to 01999 Student Loan Funds - 02200 to 03999

Gift Funds 101 Fund Types Current Expenditure True Endowment For immediate use by the department Liquid and is available to be withdrawn at any time True Endowment Gift is invested and intended to last in perpetuity Only revenue (payout) generated by investments can be spent Can only be established by donor Fund Functioning as an Endowment/FFE or Quasi-Endowment Managed like an endowment in order to fund the long-term needs of the department Principal can be invaded, but require specific levels of approval

*Each fund can only have one purpose code. Gift Funds 101 Fund Purpose Codes A purpose code represents a Gift Fund’s category of support. The purpose codes are used to categorize gift funds based on how the fund will be used. All UC campuses adhere to Fund Accounting Principles (managing money by fund types). Gift Fund purpose codes allow UCLA to categorize gift funds by support type so donor money can be accepted, managed, and reported on in accordance with the donor’s intention, Fund Accounting Principles, and UCOP/UCLA financial and gift policies. *Each fund can only have one purpose code.

Gift Funds 101 Administrative Gift Fee The Administrative Gift Fee is a one-time fee applied to all new gifts and pledge payments that provides support to UCLA's overall operation. The fee is currently 6.5%. * Only the Chancellor can exempt a gift, donor, or fund from the administrative gift fee

Fund Fact Sheets

Fund Fact Sheets The Fund Fact Sheet is the document where fund information in CRM, Solomon, and the Consolidated Gift Fund Report intersect. Most fund information can be found on the fund fact sheet. Only Fund Management updates fund fact sheets.

Gift Fund Information

Gift Fund Information How It Gets Updated SOLOMON CRM FUND MANAGEMENT Fund Management enters fund information in Solomon It is reviewed and approved in Solomon for CRM Fund Management facilitates fund updates for the Consolidated Gift Fund Report with General Accounting FUND MANAGEMENT CONSOLIDATED GIFT FUND REPORT

Gift Fund Information Common Misconceptions CRM has all the information I need to know about a gift fund. CRM has basic fund information and all of the donor/gift information for a fund. Solomon (Fund Fact Sheets) and the Consolidated Gift Fund Report have fund information. If a Designation is “Inactive” in CRM, the gift fund is closed. Designation status does not dictate fund status. (Quick solution: check the balance of a fund in the Consolidated Gift Fund Report and/or fund status on the Fund Fact Sheet)

Fund Fact Sheet (Solomon) Consolidated Gift Fund Report Gift Fund Information Where To Find It Fund Fact Sheet (Solomon) Administration of gift money in the fund Accounting Administration of the fund History of the fund CRM Basic Fund Information (Number, Name, Department/School) List of gifts to a fund List of donors to a fund Consolidated Gift Fund Report Administration of gift money in the fund Accounting summary report for a fund Customized reports for funds in a department/school

Fund Management 101 Reference Guide Helpful UCLA Policies http://www.policies.ucla.edu/administrationoperations.htm