Purpose

The Apereo Foundation solicits and accepts gifts for purposes that will help the organization further and fulfill its mission. The following policies and guidelines govern the acceptance of gifts made to Apereo for the benefit of any of its operations, programs, or services. Apereo urges all prospective donors to seek the assistance of personal legal and financial advisors in matters relating to their gifts, including the resulting tax and estate planning consequences. Apereo will support donors in complying with the intents and purposes of the Internal Revenue Service in allowing charitable tax benefits. Key principles include safeguarding the confidentiality of the donor relationship, providing full disclosure to the donor, and ensuring that gifts are recorded, allocated, and used according to the donor's intent and designation.

Responsibility

Primary: Controller, Senior Accountant; Secondary: Apereo Board and Management

Frequency

Ad hoc

Due Dates

Ad hoc

Processes & Procedures

1. Gifts and The Apereo Foundation Mission
2. Gift Methods and Valuation
3. Gift Classification
4. Gift Review Process
5. Gift Recording Process
6. Gift Reconciliations
7. Charitable Solicitation and State Statute Compliance

1. Gifts and The Apereo Foundation Mission

Gifts accepted by Apereo must fit into the tax-exempt mission. According to Apereo's Articles of Incorporation filed 28 December 2012, the approved tax-exempt mission and purpose are (extract follows):

A. Mission:

The Foundation is a New Jersey non-stock, nonprofit corporation. The core mission of the Foundation is to assist and facilitate educational organizations which “collaborate to foster, develop, and sustain open technologies and innovation to support learning, teaching, and research."

B. Purposes:

The Foundation is organized exclusively for the purpose of receiving and administering funds, and carrying on activities in furtherance of the purposes set forth in Sections 501(c)(3) of the Internal Revenue Code of 1986 (or the corresponding provision of any future United States Internal Revenue law) (the "Code"), including, for such purposes, making of distributions to organizations that qualify as exempt organizations under Section 501(c)(3) of the Code in furtherance of the purposes of the Foundation. The purposes of the Foundation shall include:

1. Promoting and fostering education by strengthening the practical collaboration between educational organizations, the sharing of best practice, and dissemination of results of innovative approaches to applying open technology architectures and systems in an educational context;
2. Sustaining and developing a global community of interest among educational institutions to advance open source and open standards technologies, architectures, systems and content, and promoting international collaboration in these areas;
3. The Foundation shall be empowered to do anything permitted under the New Jersey Nonprofit Corporation Act, N.J.S.A. 15A: 1-1 et seq. (the “Act”) in furtherance of, or incidental to, the foregoing purposes.

2. Gift Methods and Valuation

1. Cash
   • Cash gifts are acceptable in several forms, including currency in USD, check, money order, credit card, or on-line (including PayPal).
     • Gifts made by check should be made out to the Apereo Foundation and must identify the donor or donors.
     • Wire transfers, ACH, or EFT must be arranged with the Apereo staff.
     • Donors wishing to make a gift by credit card should be directed to use PayPal and will be asked for the card type (e.g., Visa, MasterCard, American Express), card number, expiration date, and name of the cardholder as it appears on the credit card.
2. Marketable Securities.
   • Marketable securities are financial instruments in the form of securities or bonds that are to be sold or redeemed within a year and can be easily converted to cash. such as government bonds, common stock, or certificates of deposit.
   • According to IRS requirements, the value of stock and bonds contributed as a charitable gift is calculated using the average between the high and low trading values on the gift
     date. For gifts of mutual fund shares, the value is based on the closing net asset value.
   • All marketable securities will be sold promptly upon receipt unless otherwise directed by Apereo’s Finance Committee and applicable Investment Policy.
     • In some cases, marketable securities may be restricted, for example, by applicable securities laws or the terms of the proposed gift; in such instances, the decision whether to accept the restricted securities shall be made by the Finance Committee and applicable Investment Policy.
3. Tangible property (non-cash)
   Apereo currently accepts donations of tangible property for annual events and ongoing activities. The following methods of valuing tangible gifts are effective [DATE]. Please see the Acknowledgements of Tangible property (non-cash) gifts section below for related information on acknowledgment requirements.
   • Value less than $250
     • The donor will provide an estimate of the property's value in writing. No qualified appraisal is required for Apereo to access the donor's estimate of the property's value.
   • Value between $250 and $500
     • The donor will provide an estimate of the property's value in writing. No qualified appraisal is required for Apereo to access the donor's estimate of the property's value.
   • Value between $500 and $5,00
     • The donor will provide an estimate of the property's value in writing. No qualified appraisal is required for Apereo to access the donor's estimate of the property's value.
   • Value greater than $5,000
     • Before recording the donation, the donor must acquire a qualified appraisal and provide a copy of the appraisal to Apereo.
4. In-kind gifts
   • Non-cash gifts, typically of services, tangible goods, or property.
     • In-kind gifts are valued at the donor’s estimated value (net of discounts), at fair market value (net of discounts), at the donor's cost, or by independently appraised
       value in accordance with IRS regulations.
     • Written proof of the value may be in a letter, invoice, or proof of purchase. Verbal estimates are not an acceptable form of valuation.
     • If an appraisal is used to substantiate the value of the property, the donor is responsible for securing and/or paying for the appraisal.
     • For ongoing services, Apereo prefers a gift agreement be signed by both parties and include details such as:
       • The names of the donor(s)
       • The name of Apereo
       • The start date and, if applicable, the end date
       • A description of the gift and the mode of giving
       • The intended purpose of the gift specified by the donor and how Apereo plans to fulfill that purpose
       • Any monitoring, reporting, or other undertakings that Apereo has agreed to or will do
       • A clause stating that the purpose of the gift is subject to change due to unforeseen events
5. Bequests and Beneficiary Designations
   • Includes Unrestricted Bequests and Beneficiary Designations under Revocable Trusts, Life Insurance Policies, Commercial Annuities, and Retirement Plans.
   • Donors are encouraged to make bequests to Apereo under their wills and to name Apereo as the beneficiary under trusts, life insurance policies, commercial annuities and
     retirement plans.
   • Gifts of life insurance where Apereo is named as both beneficiary and irrevocable owner of the insurance policy: Apereo should acquire a copy of the life insurance contract as part of substantiating the gift. The donor must agree to pay, before due, any future premium payments owing on the policy.
6. Charitable Remainder Trusts.
   • Apereo will accept designation as a remainder beneficiary of charitable remainder trusts.
7. Charitable Lead Trusts.
   • Apereo will accept the designation as an income beneficiary of charitable lead trusts.

Independent Qualified Appraisal Details

Per Section 170 of the Internal Revenue Code, an Independent Qualified Appraisal must contain certain information to be considered acceptable documentation. Also see IRS Publication 561, Determining the Value of Donated Property.

1. Full description of the property.
2. The physical condition of any tangible property.
3. Date (or expected date) of contribution.
4. List how the property will be used by the University.
5. Name, address, and taxpayer identification number of the appraiser.
6. Qualifications of the qualified appraiser.
7. A statement that the appraisal was prepared for income tax purposes.
8. Date (or dates) property was valued.
9. The appraised fair market value (one figure, not a range) on the date (or expected date) of the contribution.
10. Method of valuation (income approach, comparable sales or market data approach, replacement cost less depreciation, etc.)
11. The specific basis for the evaluation
12. Name, address, taxpayer identification number of the donor
13. Manner and date of acquisition and cost basis
14. Name, address, and tax ID number of the donee
    
    Effective January 1, 2019, the qualified appraisal must be conducted by a qualified appraiser. A qualified appraiser has “verifiable education and experience in valuing the relevant type of property for which the appraisal is performed” (Regs. Sec. 1.170A-17(b)(1)). According to the regulations, the qualified appraiser must: * successfully complete professional or college-level coursework in valuing the relevant type of property * have two or more years experience in valuing that type of property _or _ earned a recognized appraiser designation (Regs. Sec. 1.170A-17(b)(2)).

3. Gift Classification

Apereo accounts for gifts using FASB 116 and the Uniform Prudent Management of Institutional Funds Act (UPMIFA) as adopted in all states except Pennsylvania. Gifts can be classified into three categories: unrestricted, temporarily restricted, or permanently restricted.

1. Unrestricted
   • Funds that may be used for any purpose that fits within Apereo's mission.
2. Temporarily Restricted
   • Funds that have been restricted by the donor, grantee, or Apereo Board or in a response to a solicitation for a specific purpose or for a specific length of time.
   • Apereo currently maintains restricted funds for fiscal sponsorees and for certain grants or projects.
3. Permanently Restricted
   • Funds that have been restricted or endowed in perpetuity by the donor or in response to a solicitation for a specific purpose.
   • Apereo does not currently maintain any permanently restricted funds.
   • Apereo will not accept gifts that violate Apereo's corporate charter, that does not fit with Apereo's mission and/or may jeopardize Apereo's status as an IRS § 501(c)(3) not-for-profit organization, are too difficult or too expensive to administer in relation to their value, are illegal, or would result in any unacceptable consequences for Apereo.

Decisions on the restrictive nature of a gift, and its acceptance or refusal, shall be first reviewed by the Controller or Treasurer. Gifts that are not part of established temporarily restricted funds shall be reviewed by the Apereo Board in consultation with the Executive Director.

4. Gift Review Process

Many types of gifts are accepted without the need for review by legal counsel or the Finance Committee under applicable Investment Policy. Gifts generally accepted without review by legal counsel or the Investment
Committee includes:

1. Cash
   1. Unrestricted by the donor
   2. Restricted by the donor for an approved temporarily restricted purpose.
2. In-kind gifts
   1. In-kind gifts must be of general or specific value to Apereo prior to acceptance. Gifts deemed not to be of general or specific value will be returned to the donor.
      1. Apereo staff shall review and determine whether to accept any gifts of the tangible personal property considering the following:
         1. Does the property further the organization’s mission?
         2.  Is the property marketable?
         3. Are there any unacceptable restrictions imposed on the property?
         4. Are there any carrying costs for the property for which the organization may be responsible?
         5. Is the title/provenance of the property clear?
   2. Apereo Finance Committee under applicable Investment Policy shall review and determine whether to accept any gifts of real property considering the following:
      1. Prior to acceptance of any gift of real estate other than a personal residence, Apereo shall require an initial environmental review by a qualified environmental firm. In the event that the initial review reveals a potential problem, the organization may retain a qualified environmental firm to conduct an environmental audit.
         1. Is the property useful for the organization’s purposes?
         2. Is the property readily marketable?
         3. Are there covenants, conditions, restrictions, reservations, easements, encumbrances, or other limitations associated with the property?
         4. Are there carrying costs (including insurance, property taxes, mortgages, notes, or the like) or maintenance expenses associated with the property?
         5. Does the environmental review or audit reflect that the property is damaged or otherwise requires remediation
3. Marketable securities
   1. Unrestricted by the donor and by applicable securities law.
   2. Restricted by the donor for an approved temporarily restricted purpose.
4. Bequests and Beneficiary Designations
   1. Unrestricted by the donor.
   2. Restricted by the donor for an approved temporarily restricted purpose.
5. Unrestricted Charitable Remainder Trusts.
   1. Unrestricted by the donor.
   2. Restricted by the donor for an approved temporarily restricted purpose.

Use of Legal Counsel

Apereo will seek the advice of legal counsel in matters relating to the acceptance of gifts when appropriate. Review by counsel is recommended for:

• Gifts of marketable securities that are subject to restrictions or buy-sell agreements.
• Documents naming Apereo as trustee or requiring Apereo to act in any fiduciary capacity.
• Gifts requiring Apereo to assume financial or other obligations

5. Gift Recording Process

1. Determine the gift date
2. Collect and retain gift documentation
3. Record the gift
4. Send gift acknowledgment letter
5. Canceling recurring gift subscriptions

1. Determining Gift Date

Generally, the gift date is established as the date on which the donor gave up control of the asset. Please see below for specific guidance on selecting the gift date for different types of gifts.

1. Cash
   • Physical cash gifts (currency, check)
     • The envelope date: according to IRS guidelines established for determining the date of gifts, envelopes must be retained to substantiate the gift date.
     • The date received: when currency gifts are handed to a Apereo staff member or volunteer, the date the gift was received should be recorded.
   • Credit Cards
     • The settlement date according to Apereo's credit card merchant services data.
2. Securities
   • The date supplied by the broker (the date the owner relinquishes control) if donated to a brokerage account.
   • The date the certificates were received if physical certificates are received.
3. All other Gifts/Pledges
   • Received via the U.S. Postal Service
     • The postmark.
     • If two postmarks exist, the earlier date prevails unless it is a metered postmark; the official U.S. Postal Service postmark is used.
     • If the postmark is missing, then the earliest date that Apereo staff can determine as its arrival, as evidenced by stamping or writing the date received.
   • Received by private courier (i.e. Federal Express, UPS, etc.)
     • The date received by Apereo staff or volunteer
     • If no indication of arrival date exists, then the arrival date that is provided on the package or by the courier.
   • Received by hand delivery
     • The date received by Apereo staff or volunteer
     • If no indication of arrival date exists, then the arrival date that is provided on the package or by the courier.

2. Collect and retain gift documentation

Documentation such as checks, online gift data, gift agreements, and correspondence from donors ensures that Apereo has the information necessary to properly process, acknowledge and
utilize gifts. Any correspondence that accompanies a gift should be recorded and/or retained with Apereo gift records to ensure adherence to donor wishes and appropriate stewardship of the gift.

A gift agreement should include the purpose of the gift, a payment schedule, the restrictions placed on the gift, any naming associated with the gift, and, if appropriate, a provision for
completion of the pledge through the donor’s estate.

Gift-related documentation must be retained for specific periods of time in accordance with legal or other institutional requirements or for historical value. Refer to IRS publication 4221:
Compliance Guide (c)(3) for 501(c)(3) Public Charities viii for schedule recommendations.

Retention periods for selected records may be increased for various reasons, including, but not limited to, government regulation, judicial or administrative orders, contracts, pending or
threatened litigation, audit requirements, historical value, and/or other institutional requirements.

Destruction Records should be deleted/destroyed when they have reached the conclusion of the retention period. Records should be disposed of in a manner that preserves the confidentiality of the record(s).

3. Record the gift

1. Donations received via CiviCRM/PayPal
   • The Accounting Manager daily runs the Donations Database script. This script manages a local database which is primarily populated by querying the PayPal API for donation transactions. If the donation originated in CiviCRM, then CiviCRM will have sent a donation acknowledgment to the donor. If no matching record is found in CiviCRM, the script creates a Contribution record in CiviCRM and emails an acknowledgment.
2. Donations received by cash or check
   • The Donations Database script provides an entry point to read an Excel file for manual The Donations Database script provides an entry point to read an Excel file for manual
     additions to the database to record checks or other donations. These are also added to CiviCRM if possible, and an acknowledgment email is sent to the donor.
3. Stock donations
   The Accounting Team receives monthly statements for the stock brokerage account(s). Using the monthly account statements and any available settlement statements, the Accounting Team will record the following journal entries in the General Ledger:
   • Journal Entry on the date stock is received in the investment account:
     • Debit: Investment Account
     • Credit: Contribution Revenue (average of the high and low prices on the date of stock donation) and restricted, if appropriate, by donor intent documents.
   • Journal Entry on the ate stock sold (often a few-day lag from stock receipt even with an immediate sale order)
     • Debit: Bank/Brokerage Fees Expense (commissions and other costs of selling the stock)
     • Debit: Cash (net proceeds from the sale)
     • Credit: Marketable Securities or Investment Account (amount recorded when stock received)
     • Debit or Credit: Plug-gain or loss

4. Send a gift acknowledgment letter

A Gift Acknowledgement Letter is a thank you letter sent to a gift/pledge donor. A gift acknowledgment should contain:

1. The name of the donor(s)
2. The name of Apereo
3. A statement that your nonprofit is a charity that is recognized as tax-exempt by the IRS under section 501(c)(3)
4. A description of the donation
5. Either:
   1. A statement that no goods or services were provided by the organization in return for the contribution, if that was the case
   2. A description and good faith estimate of the value of any goods or services that the nonprofit provided in return for the contribution.

A written gift acknowledgment should be sent to the donor within 7 days of receiving the gift. Upon request, a donor may request an annual summary of contributions by January 31 of the
calendar year following the donation.

On July 30th, 2018, the IRS published final regulations regarding the American Jobs Creation Act of 2004, P.L. 108-357, and the Pension Protection Act of 2006, P.L. 109-280. The revised
regulations require the donor to maintain the following information in order to substantiate a gift taken as a tax deduction: * a bank record or a written communication from the donee showing the name of the donee, the date of the contribution, and the amount of the contribution.

Apereo's gift acknowledgment letter includes the required information to substantiate gifts according to the 07/30/18 regulations.

Prior to July 30, 2018, IRS regulations (Sec. 170(f)(8)) required a contemporaneous written acknowledgment for contributions greater than or equal to $250, which is replaced by the new
IRS interpretations issued in 2018.

Apereo Gift Acknowledgement System

TBD

Event Gift Acknowledgement System

TBD

Acknowledgments of Stock gifts

TBD

Acknowledgments of Tangible property (non-cash) gifts

TBD

Acknowledgments of Successful Bids on Donated Property (non-cash)

TBD

5. Canceling recurring gift subscriptions

1. Cancel the subscription in CiviCRM
   1. Login to CiviCRM
   2. In the search box in the upper left-hand corner, enter the email address or name of the donor requesting that a subscription be canceled.
   3. Select the Contributions tab.
   4. Scroll down to the Recurring Contributions section and Select "Cancel" under the Status column.
   5. The status will be changed to "Cancelled," and the subscription will be grayed out.
2. Cancel the subscription in PayPal
   1. Login to PayPal.
   2. Select the Activity tab.
   3. Find the latest transaction for the donee by searching by email, date, etc.
   4. Click the "View Recurring Payment Details" link.
   5. Click the "Cancel" link under the Subscription Details section.
   6. The status will change to "Cancelled," and the subscription will no longer be pulled from the donee's account
3. Email the donee to confirm that the subscription has been canceled.

6. Gift Reconciliation Process

Apereo conducts regular reconciliations of gifts recorded in the general ledger against the donation database. The purpose of the gift reconciliation process is to ensure the account
balances are accurate, and they reflect donor intent.

1. After all the donations have been recorded for the calendar month, the Accounting Team completes a comparison of general ledger account balances for contribution revenue accounts against the reports generated by the Treasurer from the donation database.
2. The Accounting Team will investigate any discrepancies between the two data sets and record new entries or correct existing entries in the general ledger. The Treasurer will assist with investigating discrepancies.
3. The reconciliation and related reports will be stored in Apereo's Dropbox folder for each fiscal year.

7. Charitable Solicitation and State Statute Compliance

Most states require that charities register with that state if a fundraising effort is going to take place in the state's boundaries. Generally, it is recommended that charitable organizations who
conduct online solicitations should register in each state because online activity is considered within that state's borders.

The Finance Committee will revisit charitable solicitation in most states each Fall every year. Apereo Accounting Team recommends that Apereo registers with New Jersey (state of domicile), Oregon (headquarters address), states where Apereo employees reside, and any state in which a major Apereo event will be held.