1. Business Leadership Symposium 2019
FUNDRAISING ON CAMPUS
4/22/2019

2. Presenters Jaqueline Anderson, Urbana Purchasing
Christy Devocelle, University Illinois Foundation
Roger Fredenhagen, University Accounting & Financial Reporting
John Laroe, University Accounting & Financial Reporting
Brenda Sutherland, Tax Compliance & Analysis
Julie Townsend, Contract Services Office
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3. Agenda Overview University Event vs. External Event Sponsorships
Raffles & Auctions
Financial Support
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4. Overview
Julie Townsend
Contract Service Office
4/22/2019

5. Fundraising: Overview
Various types of events occur on campus throughout the year.
Some of these events may involve fundraising for a University department or Registered Student Organization (RSO)
This fundraising can come from a variety of sources, and each funding source has different implications that are important to keep in mind.
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6. University Event vs. External Event
Roger Fredenhagen
University Accounting and Financial Reporting
4/22/2019

7. University Event vs. External Event
Many revenue-generating events occur on campus, such as conferences, banquets, fundraising events, student/alumni events, etc.
Proper accounting guidelines vary depending on whether the event is an official University event or external event or has an advancement related purpose.
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8. University Event Characteristics of a University event include:
Owned and operated by the University of Illinois System;
Publicized and organized as a University of Illinois System event;
All event revenues belong to the University of Illinois System;
All event expenses are the responsibility of the University of Illinois System; and
The University of Illinois System assumes the risks of operating the event (including the responsibility for any loss or profit).
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9. University Event
If the revenue-generating event is a university event unrelated to any sponsored project funding, then it should be accounted for in a self-supporting fund (e.g., to collect registration fees and the related expenses).
If the event has a advancement related purpose it should be processed through the Foundation.
A gift fund may also be needed (e.g., if you receive any qualified sponsorships and/or donations for the event).
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10. External Event Characteristics of an external event include:
Owned and operated by the external party;
Publicized and organized on behalf of the external party;
All event revenues belong to the external party;
All event expenses are the responsibility of the external party; and
The external party assumes the risks of sponsoring the event (including responsibility for any loss or profit).
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11. External Event
If the revenue-generating event is an external event that your unit is simply hosting or coordinating, then it should be accounted for in an agency fund.
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12. Sponsorships Christine Devocelle University of Illinois Foundation
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13. Sponsorship: Qualified Sponsorships
Section Sponsorships Gifts of the OBFS Policies and Procedures
Per the IRS, a qualified sponsorship is any payment made by a person engaged in a trade or business and for which the person will receive no substantial benefit other than the use or acknowledgment of the business name, logo, or product lines in connection with the organization’s activities.
In contrast to non-qualified sponsorships, these may be processed as gifts and should be directed to the Foundation.
We commonly receive sponsorships in the form of hosting a booth at an event, listing the company/donor name in a brochure, etc.
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14. Sponsorship: Qualified Sponsorships
How to process qualified sponsorships
Qualified sponsorships should be processed through the Foundation
If a qualified sponsorship is received, the campus unit/department should record it as a gift or gift-in-kind, less any goods or services provided to the donor, in accordance with 11.3 Campus Processing of Gifts using the gift transmittal.
The fair market value (FMV) of any benefits provided in return for the sponsorship must be identified as non-gift on the gift transmittal.
Sponsors should be informed of the benefits received prior to their gift should they prefer to decline those benefits.
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15. Sponsorship: Qualified Sponsorships
Other items to consider:
Resources
Square, CVENT
Quid Pro Quo/Benefits – if you need assistance in determining the value of benefits please contact UIF Gift Administration at or refer to IRS Publication
All receipts indicate “no goods or services were provided”; any benefits or quid pro quo reduces the value of the gift and is identified on their receipt
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16. Sponsorships: Non-Qualified Sponsorships
Non-qualified sponsorships occur when the sponsor receives substantial benefit approximately equal to the value of what they paid for their sponsorship.
They do not have charitable intent and are typically arm’s length transactions where both parties are acting in their own self-interest.
These should be processed through self-supporting funds using revenue account code
For example, the sponsor may receive advertisements with a fair market value approximately equal to the amount they paid for the sponsorship.
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17. Sponsorship Agreements
Julie Townsend
Contract Services Office
4/22/2019

18. Sponsorship: Event(s) that Sponsor supports
Corporation that is listed as the “Sponsor” of the Event or Events
Levels of support provided by sponsor
Acknowledgement or benefit(s) provided to sponsor in exchange for sponsorship
Logo usage
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19. Non-Monetary Exchanges
John Laroe
University Accounting & Financial Reporting
4/22/2019

20. Sponsorships: Non-Monetary Exchanges
Non-monetary exchanges may occur independently or may occur as a secondary aspect within other types of transactions, such as:
Sponsorships
Gifts-in-kind
Reduced cost agreements
Trade agreements
Non-monetary exchange transactions must be properly valued and reported to University Accounting and Financial Reporting (UAFR).
4/22/2019

21. Sponsorships: Non-Monetary Exchanges
Non-monetary exchange transactions are recorded at the estimated fair market value of the goods and/or services provided by the system.
However, if that fair market value cannot be determined, then the non-monetary exchange transaction is recorded at the estimated fair market value of the goods/services received by the system.
See Non-Monetary Exchanges for further details.
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22. Unrelated Business Income Tax (ubit) Implications
Brenda Sutherland
Tax Compliance & Analysis
4/22/2019

23. Sponsorships: UBIT Qualified Sponsorship Payment (QSP) not UBIT
Any payment (money, property, or services) from a person engaged in a trade of business
No arrangement or expectation of substantial return benefit other than the use or acknowledgement of the business name or logo
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24. Sponsorships: UBIT Implications
Substantial Return Benefits
Any benefit received by the sponsor other than:
Use or acknowledgement, or
Goods, services, or other benefits of insubstantial value (i.e. aggregate FMV of all benefits is <2% of amount received)
Examples include:
Advertising
Exclusive providers arrangements
Goods, facilities, services or other privileges (rent, appearances, etc.)
Right to use intangible assets (marks, mailing lists, etc.)
Complimentary tickets
Discounts
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25. Sponsorships: UBIT Implications
Acknowledgement: logos and slogans that do not contain qualitative or comparative descriptions of the sponsor’s products or services
Examples:
Value-neutral descriptions
Sponsor’s information
Display or distribution of products
Exclusive provider
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26. Sponsorships: UBIT Implications
Advertising: messages containing qualitative or comparative language
Examples:
Price information
Endorsement
Inducement to purchase or sell
Messages with both advertising and acknowledgements are advertising for UBI purposes
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27. Raffles On University Premises
Julie Townsend
Contract Services Office
4/22/2019

28. Raffles: Who Can Conduct Raffles on University Premises?
Only University Departments and Registered Student Organizations See Campus Administrative Manual Policy APR-18: Raffles on University Premises and at University Facilities
4/22/2019

29. Raffles: Requirements for Raffles on Campus
Must apply and receive a license from the City of Champaign and/or City of Urbana.
Be in existence for 5 years continuously before applying for a license
Individuals under the age of 18 may not participate in conducting raffles or chances.
Individuals under the age of 18 may not participate in the raffle itself as a participant.
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30. What Can Be Raffled? John Laroe
University Accounting and Financial Reporting
4/22/2019

31. What Can Be Raffled at a University Event?
Typically, it is recommended to only raffle off items at a University event which have been donated to the University as a gift-in-kind.  The University has an exemption from CMS which allows us to sell items which have been donated retaining proceeds in the related gift fund.    
However, if you must purchase an item for the purpose of a raffle, then keep in mind that these purchases should be limited to items that could be considered consumable supplies which have a useful life of less than one year and which typically have a unit value of less than $100 and which are not considered to be any type of moveable equipment or tagged University property. 
Examples of common items which could safely be purchased and subsequently raffled off are t-shirts, water bottles, calendars, small figurines, etc.   
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32. What Can Be Raffled at an External Event?
If any raffles are being conducted at an external event which the University is simply hosting/coordinating, then the best business practice to follow is to have the external party provide the item that will be raffled off.
It is best to avoid using the agency fund for any purchase of an item that will be raffled off. If this is not possible, contact UAFR Property Accounting for further guidance.
4/22/2019

33. Tax Implications
Brenda Sutherland
Tax Compliance & Analysis
4/22/2019

34. Raffles: Tax Implications
Cash winnings: tax withholding may be required to be withheld from proceeds
Non-cash winnings: winner may be required to pay system the amount of tax withholdings
Fair Market Value (FMV) is a good faith estimate
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35. Raffles: Tax Implications
Federal Reporting Requirements
U.S. citizens/residents for tax purposes
Form W-2G, Certain Gambling Winnings, if winnings are over $5,000 and/or if tax withholding
Form 1099-MISC, Miscellaneous Income if winnings are between $600-$4,999
Collect Form 5754, Statement by Person(s) Receiving Gambling Winnings, if applicable
Request Vendor Information Form
Foreign nationals
Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, for any amount, unless exempt per tax treaty
Collect Form W-8BEN, Certificate of Foreign Status of beneficial Owner for United States Tax Withholding and Reporting (Individuals)
4/22/2019

36. Raffles: Tax Implications
Federal Withholding Requirements
U.S. citizens/residents for tax purposes
FMV of raffle winnings less recipient’s wager if $5,000 or more
Rate: 24%
Foreign nationals
FMV of raffle winnings less recipient’s wager
Rate: 30%
4/22/2019

37. Raffles: Tax Implications
State of Illinois Reporting Requirements
U.S. citizens/residents for tax purposes
Form W-2G, Certain Gambling Winnings if any tax withholding
Collection of IDOR Form IL-5754, Statement by Person Receiving Gambling Winnings, if winnings are over $1,000
Foreign nationals
Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding
4/22/2019

38. Raffles: Tax Implications
State of Illinois Withholding Requirements
U.S. citizens/residents for tax purposes
FMV of raffle winnings less recipient’s wager is $1,000 or more and Illinois resident
Illinois rate: 4.95%
Foreign nationals
FMV of raffle winnings less recipient’s wager
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39. Raffle Proceeds – Gift Processing
Christine Devocelle
University of Illinois Foundation
4/22/2019

40. Raffles: Gift Processing
How to Process Raffle Proceeds
All Raffle proceeds for fundraising events should be processed through the Foundation as a non-gift.
Non-gift is the non-deductible portion of a gift.
The proceeds should be transmitted to UIF using the Gift Transmittal located at
Cash should be hand-delivered to your GPSSO office or directly to the Foundation.
Transaction will be posted to the Various Donors constituent in our donor database (TED)
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41. Raffles: Gift Processing
Other items to consider:
Raffle proceeds are non-deductible per IRS publication 526 (
See also OBFS Policy regarding handling raffle winnings
If you do not have a non-gift fund, please contact UIF Gift Administration for assistance –
Raffle proceeds without any charitable purpose should be handled according to guidelines provided in Section 10 - Cash Handling of the Business and Financial Policies and Procedures Manual.
4/22/2019

42. Depositing Receipts From the Raffle Sales
All proceeds received from the sale of raffle tickets at an external event which the University is simply hosting/coordinating should be deposited directly to a revenue account code on the applicable agency fund.   
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43. RSO Raffle & Fundraising Requirements
Julie Townsend
Contract Services Office
4/22/2019

44. RSO Raffle Requirements
All registered organizations that wish to hold raffles, drawings, etc., on University premises and at University facilities must first receive event approval from the director of registered organizations and the unit responsible for scheduling the requested facility.
The Office of Registered Organizations can be contacted at (217) or
RSOs must complete an Event Budget Form ( Office%20of%20Registered%20Organizations/Event%20Budget%20Fo rm.ashx) along with a space request to be approved for a raffle.
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45. RSO Fundraising Requirements
Can RSOs have fundraising activities on campus? RSOs may sponsor events on campus where revenue is generated through donations, ticket sales, food/clothing sales, admission charges etc.
4/22/2019

46. Auctions Christine Devocelle University of Illinois Foundation
4/22/2019

47. Auctions: Gift Processing
How to Process Auction Gifts-in-Kind (GIK) and Proceeds
All Auction GIKs and proceeds for fundraising events should be processed through the Foundation.
A GIK is a gift of an item that is tangible or intangible – e.g. items for auction, speaker fees, catering, venue.
There are two transactions involved with every auction item:
The item donated to auction (GIK = Gift-in-Kind)
The sale of the donated item (Gift and Non-Gift)
Use the auction transmittal form
This is available from UIF and allows you to enter all the information needed to process the GIKs (items donated for auction) and the proceeds of the sale of these items – donor names, addresses, sale amount, fair market value, etc.
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48. Financial Support Jacqueline Anderson Urbana Purchasing Office
4/22/2019

49. Financial Support: What Is It?
Section of the OBFS Policy
Financial support payments are those made to a non- University entity to support initiatives that promote or advance one or more of the University of Illinois System’s missions. 
Payments to a Recipient cannot be used to:
carry on propaganda or otherwise attempt to influence legislation;
influence the outcome of any public election;
carry on, directly or indirectly, any voter registration drive; or,
conduct illegal activity.
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50. Financial Support: What Is Allowed?
Allowable Example (supply): Payment can be made to a Recipient for the purchase of lanyards to be given out at their annual meeting if the Recipient’s annual meeting promotes or advances one or more of the University of Illinois System’s missions.
Allowable Example (service): Payment can be made to a Recipient to pay for catering services at their annual meeting if the Recipient’s annual meeting promotes or advances one or more of the University of Illinois System’s missions.
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51. Financial Support: What Is Allowed?
Allowable Example (with consideration): A payment may be made to sponsor a Recipient’s annual conference if the conference promotes or advances one or more of the University of Illinois System’s missions.
It is acceptable to obtain consideration:
such as advertising in the annual conference’s brochure as a sponsor; or,
in the form of conference registrations.
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52. Financial Support: What Is NOT Allowed?
Unallowable Example (supply): If the University of Illinois System is directing that the financial support payment must be used to purchase 100 green, 100 red and 100 blue nametag- lanyards from Office Depot to be provided to attendees
Unallowable Example (service): If the University of Illinois System is directing that the financial support payment must be used to pay $500 to a specific catering company to cater the Recipient’s annual meeting.
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53. Financial Support: What Is NOT Allowed?
Unallowable Example (with consideration): A payment cannot be made to solely: purchase conference registrations; obtain access to a vendor booth at the Recipient’s conference; or pay for an individual’s dues to an organization.
These activities would be considered a purchase regardless whether or not the conference promotes or advances one or more of the University of Illinois System’s missions.
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54. Financial Support: Process under $5,000
Unit determines eligibility, obtains assurances from recipient, and completes payment form and submits to Unit Head.
Unit Head approves payment by completing signature process of payment form.
Unit submits payment request in Travel and Expense Management (TEM) and attaches supporting documentation
Payables reviews request and processes payment
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55. Financial Support: Process over $5,000 -- Contract Required
Unit determines eligibility, obtains and completes payment form then submits to Unit Head.
Unit Head approves payment by completing signature process of payment form.
Unit submits all documentation to Purchasing for review and contract creation and execution
Once Contract is fully executed, recipient and unit receive a copy
Unit submits payment request in TEM and attaches supporting documentation referencing the contract number.
Payables reviews request and processes payment.
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56. Financial Support: Payment
Recipient must have a Banner Vendor ID
Payments may only be funded from institutional funds, gift or endowment income funds, or self-supporting funds and use account code
If payment(s) exceed $ over a calendar year University System is required to report as taxable income on IRS Form MISC
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57. QUESTIONS?
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