Document Currently Under Review
Current Status: Sent for endorsement to publish 22 December 2020
The purpose of this Policy is to:
- Identify when income should be classified as a “gift”;
- Ensure that Federation University Australia (“the University”) maintains its deductible gift recipient (DGR) status with the Australian Taxation Office (ATO);
- Maximise benefits received from fundraising opportunities and gifts
- Ensure accountability and transparency of financial transactions
- Ensure that all communication between the University and the Donor is concise with regards to the receipt and application of the donated funds;
- Outline the procedure for fundraising and gift arrangements for the University; and
- Create a framework for the use and promotion of the University’s status as an ATO endorsed DGR.
This Policy applies to all philanthropic gifts received by Federation University Australia, including its Teaching Schools, Research Office, Administration Portfolios, the Federation University Australia Foundation (the Foundation) and subsidiary entities.
Please refer to the Research Office for all research funding activities and donor management, and gifts of cultural materials (artworks, historical material, library materials) to the Director, Library Services.
- Federation University Australia Act 2010
- Financial Management Act 1994
The University shall maintain a separate gift fund for all gift funds endorsed under the University:
- to which gifts of money or property for that purpose are to be made, and
- to which any money received by the University because of the gifts, is to be credited
The University must ensure that all fundraising activities which the University engages in, either directly or indirectly through an external body, comply with the Donations Policy, in particular:
- Maintaining a proper book of accounts and records. Accounts are to be reconciled on a monthly basis and signed off by the Chief Operating Officer or nominee.
- Ensuring a Gift Agreement is in place for fundraising activities over $10,000
- Obtaining approval of the Vice-Chancellor or delegated officer for all Gift Agreements
- Ensuring funds received through fundraising are used in accordance with the relevant Gift Agreement
- Assessing risk management strategies when conducting fundraising, to ensure the level of risk is commensurate with the organisation’s exposure and capacity to manage the risk
|Advancement Committee||means the University Committee responsible for supporting the University in its philanthropic and fundraising ambitions and activities.|
|Advancement Unit||means the University office responsible for managing the University’s relationships with donors, prospective donors and alumni. Staff within this office have the responsibility of developing and implementing strategies for relationship management, in partnership with other University staff and contractors.|
|ATO||means the Australian Tax Office, which administers, on behalf of the Federal Government, the process by which charities such as the University may accept gifts and manage ongoing annual compliance requirements.|
|Bequest / Planned Gift||means a gift provided for by a donor during his/her own lifetime, the principle benefit of which is not available to the organisation until some future date – often at the time of the donor’s death, or at the end of a specified term.|
|Bursary||means a payment made to a student, or on behalf of a student, to assist with expenses associated with study at Federation University Australia.|
|Cash gift||means gifts of money, including foreign currency. The money may be paid in various ways, including by cash, cheque, credit card or electronically.|
|Chancellor’s Circle||means a benefactor recognition program with the specific purpose of acknowledging bequests and major donors of the University.|
|Contact Report||means a written record of a significant interaction between a fundraiser and a donor or prospective donor.|
|Contributor Relations||means a module of the Federation University Australia student management system, Oracle People Soft Campus Solutions which enables the tracking and acknowledgement of all gifts to the University.|
|Council remuneration||means a gift of pre-tax earnings of Council members.|
|Crowd funding||Crowd funding is the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet. It can be used to support a wide variety of activities, including scientific research. Multiple crowd funding websites (companies) currently exist to facilitate funding of these activities. Crowd funding companies are generally for-profit and charge a fee.|
|Cultural Gift||means gifts of culturally significant property (except property that is an estate or interest in land or in a building or part of a building). In Australia, cultural gifts are made under the Cultural Gifts Program administered by the Department of the Environment, Water, Heritage and the Arts (DEWHA) with the advice of the Committee on Taxation Incentives for the Arts. In Australia this gift type does not cover testamentary gifts made under a will.|
|Deductible Gift Recipient (DGR)||means an organisation entitled to receive income tax deductible gifts and deductible contributions. DGR entities are either endorsed by the Australian Taxation Office (ATO) or specifically listed by name in income tax.|
|Designated Gift||means a gift which a donor has given specific directions on the purpose for which the gift is to be used.|
|Donation||means a voluntary transfer of money or property to the University by way of benefaction where no material benefit is received by the donor.|
|Donor||means any person or organisation making a gift to the University.|
|Endowment||means an investment fund in which the capital is preserved and annual expenditure is restricted to all or a portion of the income from the investment, such that the activity or project funded may be supported in perpetuity. Gifts may also be invested with instructions that the capital may be spent, but such investments would not normally be called endowments.|
|Federation University Australia Foundation (the Foundation)||means the University administrative section charged with the active promotion of philanthropy and management of donated resources for the advancement of the University. The financial accounts of the Federation University Australia Foundation will be managed by the Advancement Unit with oversight from the Advancement Committee.|
|Federation University Australia Library the Library)||is the section of the University charged with managing the University’s Cultural Gifts Program.|
|Foundation||means the Federation University Australia Foundation.|
|Fundraiser||means a person whose job or task is to seek financial support for Federation University Australia or the Federation University Australia Foundation.|
|Fundraising||means any activity undertaken by or on behalf of the University with the aim of soliciting or receiving gift.|
|Gift||means any transfer of money or property to the University made voluntarily by way of benefaction where no material benefit is received by the donor. The money or property must be owned in full by the University once received. Grants received by the University may be considered gifts if they comply with this definition. Sponsorships are not considered gifts, as they normally confer material benefit on the sponsor. Federation University Australia is an endorsed Deductible Gift Recipient in Australia. Most gifts made to the University of AUD$2 or more are allowable deductions for income tax payers in Australia.|
|Gift Agreement||means a document finalising an agreement between the University and donors involved in a planned gift such as a bequest.|
|Grant||means the provision of financial assistance from a grant-making entity (such as a charitable foundation) to the University. Grants may be treated as gifts if the grant does not involve the return of any material benefit to the grant maker.|
|In kind||means gifts of personal property, including but not limited to works of art, furniture, rare books, manuscripts, or any other item that is determined as being of value.|
|Material benefit||means a material advantage. It does not matter if the advantage returned is of less value than the gift amount. This can still be considered material. Mere recognition or acknowledgement of the gift (such as a small plaque or mention in a newsletter) does not constitute a material benefit. However, enlarging the acknowledgement into forms of advertising or promotion would constitute a material benefit.|
|Naming Right||means the naming of a building, structure, facility, academic position or Scholarship in honour of an individual or organisation, or in recognition of financial contribution and support.|
|Pledge||means an expression of intent to give a gift in the future. Pledges may be fulfilled as once-off payments or instalments over a finite period of time.|
|Prize||means an annual award made to students based on designated criteria for eligibility, academic excellence and/or practical performance or exhibition. They may be monetary, product, in-kind or experience based.|
|Prospective||means a prospective donor, i.e. an individual or organisation with both the financial capacity and the likely inclination to support the University via a major gift (as may be defined by the University from time to time) or a bequest.|
|Property||As well as physical things, property includes rights and interests that are capable of ownership and have a value. This gift types does not cover testamentary gifts, that is, gifts made under a will.|
|Real Estate||may include improved or unimproved land, personal residences, commercial property, rental property, or rural land.|
|Recognition||means actions taken by the University to recognise the generosity of donors, individually or collectively.|
|Recurring gift:||means a gift committed by the donor to be given at regular intervals (e.g. monthly, annually) for an indefinite period of time.|
|Scholarship||means a payment made to a student, or on behalf of a student, to assist with expenses associated with study at Federation University Australia.|
one of the equal parts into which a company’s capital is divided, entitling the holder to a proportion of the profits
To be eligible to be considered a DGR gift shares must be:
|Sponsor||means the corporate organisation or individual who provides a cash and/or in-kind fee paid in return for access to commercial benefits associated with that asset / property sponsored.|
|Sponsorship||has an expectation of benefit to the sponsor, such as naming rights, promotion and public recognition. Sponsorship is not tax deductible under the same rules as philanthropic gifts|
|Staff remuneration gift||means a gift of pre-tax earnings of staff.|
|Stewardship||means advising donors on the use of gifts and the impact of their giving.|
|Testamentary Gift||means when certain property is left in a will to a specific person or entity. There are two terms used to refer testamentary gifts, a ‘devise’ and a ‘bequest’. A devise is where the gift is of real property (eg land) while a bequest is where the gift is of personal property.|
|Tied donation||means any gift given and received for a specified purpose that cannot normally be used for any other purpose without the donor’s approval. For example, to specifically fund the salary of a professional chair, the purchase of equipment, or to fund a named annual student prize or scholarship. Tied gifts may have an end date.|
In Australia this refers to the trading stock of a business, but only if two conditions are met:
For this gift type, it is not necessary for the trading stock to have been purchased during the 12 months before the fit was made.
|University||means Federation University Australia.|
|Undesignated gift||means a gift for which the donor has made no clearly indicated designation as to the method or purpose of expenditure is deemed an unrestricted gift. This term may also be applied to gifts designated to general support of the University.|
|Will||means a legal declaration of a person’s wishes regarding the disposition of their property after death.|
The objective of this Policy is to provide guidance to University staff on the conduct of gift activities at Federation University Australia and the rights and obligations of donors and University staff involved in those gift activities.
Under the auspices of the Deputy Vice-Chancellor (Engagement), the Director, Marketing Advancement and Community Engagement is responsible for managing the University’s relationship with donors and prospective donors. There will be a strategic, uniform and coordinated approach for the seeking and acceptance of gifts.
The Director, Marketing Advancement and Community Engagement may delegate the responsibility for managing relationships with donors and prospective donors as is required.
The Vice-Chancellor must approve all University-wide fundraising campaigns and initiatives.
The Deputy Vice-Chancellor (Engagement) must approve all fundraising campaigns and initiatives for Schools.
The Deputy Vice-Chancellor (Research and Innovation) must approve all research funding applications where the income received is a gift.
No member of the University may finalise approaches for fundraising purposes unless coordinated with, and approved through the Federation University Australia Advancement Unit.
Federation University Australia Advancement staff who are engaged in fundraising activities and donor management must conduct themselves as ambassadors for the entire University.
To implement a strategic, uniform and coordinated approach, the University will:
- adopt transparent and ethical processes for the acceptance and management of gifts and fundraising activities across the entire University.
- develop operational procedures to accompany each fundraising activity such that a strategic, uniform and coordinated approach to fundraising, gift acceptance and receipting is achieved. This is to ensure that multiple, conflicting, or inappropriate solicitations will be minimised.
- protect the confidentiality of donors and sponsors consistent with their wishes and to the extent provided by law.
- adequately identify funds and use them for the purpose which they were intended.
- maintain Deductible Gift Recipient (DGR) status under the Income Tax Assessment Act.
University staff or any authorised representative must be conscious of situations where the offer of a gift may appear to be designed to influence a decision of a staff member or to influence the appointment of staff at the University.
Any offer of a gift that may carry actual or apparent conflict of interest concerns, or potentially the grant or acceptance of favours for personal gain, must be reported immediately to the Vice-Chancellor. No further consideration of the offer may occur without the Vice-Chancellor’s explicit approval and any further discussions with the prospective donor should only occur through a person nominated by the Vice-Chancellor.
The University’s Conflict of Interest Policy and Procedure should be referred to in relation to any conflict of interest situations, together with the University’s Gifts, Benefits, Hospitality, Food and Beverages Policy.
- The University will maintain confidentiality concerning gifts, fundraising proposals and negotiations, including proceedings relating to proposals for recognition, until they have been approved, or as requested by the donor. The University will report all gifts and gifts as required by law.
- Foundation is an administrative section of the University.
- The University, through the Advancement Unit, employs staff responsible for providing administrative support to the Foundation and strategic support to the University and its Schools, and other units within the University.
- Only authorised representatives of the Foundation may undertake fundraising activities on behalf of the University’s Foundation.
- The University, through the Foundation, will use a tied gift in the manner in which it was intended. Where this is not possible, the University will contact the donor or their representative and discuss alternative arrangements.
- Where the University receives an untied gift (through the Foundation), the Advancement Unit in consultation with the University’s Advancement Committee will determine where the gift is to be allocated.
Gifts may be in the form of:
1. Bequests / Planned Gifts
A charitable bequest or planned gift involves the donor’s transfer of money or property to the University at the donor’s death through either the donor’s will or trust.
2. Cash and Cash Equivalents Gifts
These gifts may take the form of currency, cheque, or credit card contribution. Cash gifts are reported as at the date the gift is received by the University. If the gifts are transferred electronically, the date the funds are transferred into the University’s bank account is reported as the receipt date of the gift. In Australia the gift to a Deductible Gift Recipient must be AUD$2 or more.
3. Cultural Gifts Program
Federation University Australia is eligible to receive gifts of art works and cultural materials under The Cultural Gifts Program, for approval by the Federal Government’s Committee on taxation Incentives for the Arts, by which the donor can claim the approved value of the donated material as a tax deduction. Gifts under The Cultural Gifts Program can include items such as visual and decorative arts, Indigenous arts and cultural artefacts, social history and scientific collections and archival material. In some cases, the cost of valuing a collection may be paid by Federation University Australia.
Federation University Australia will not accept collections of materials under the scheme without first assessing the suitability of resources to meet the learning, teaching and research needs of the University, set out in The Federation University Australia Library Gifts and Donations Guidelines (https://federation.edu.au/__data/assets/pdf_file/0012/6114/Library-Donations.pdf). The University reserves the right to refuse gifts at the discretion of the Director, Library Services. Enquiries regarding the Federation University Australia Library Gifts and Donations Guidelines and The Cultural Gifts Program should be directed to Director, Library Services in the first instance.
Gifts may be directed to a donor identified account or a general endowment account.
The minimum amount to establish a donor identified endowment account is $10,000 over three (3) years. Distributions from the endowment account will be reinvested until the minimum amount is met or unless advised otherwise by the donor.
Grants may be treated as a gift if the grant does not involve the return of any material benefit to the grant maker.
6. In kind
The University may accept gifts of cultural type material, including but not limited to works of art, furniture, rare books, manuscripts, or any other item that is determined as being of value. Please refer to the Library Gifts and Donations Guidelines for these items.
Pledges are commitments to give a specific dollar amount according to a fixed time schedule. All pledges or changes to a pledge must be made in writing.
8. Real Estate
Real Estate may include improved or unimproved land, personal residences, commercial property, rental property, or rural land. If it is the intention of the donor that the University not immediately dispose of the real estate, an agreement between the University and the donor must be in place before the University may accept such a property. A gift of real estate must be tested with state and Commonwealth laws, including EPA regulations, and the donor must provide satisfactory evidence of environmental compliance.
The value of the shares is determined on the recognised gift date which is established when the donor relinquishes control of the shares.
10. University Staff Contribution
Gifts of pre-tax earnings of staff and University Council member. Special procedures must be observed, however, to ensure taxation laws are not breached and the University’s privileged taxation status is not compromised.
a) General Principles
In the event of such earnings being donated to the University by a member of staff or Council, the funds become the property of the University. How those funds are utilised is a matter for determination by the Advancement Unit.
b) Use of Donated Pre-Tax Earnings
It is proper and welcome for the staff or Council member making such a gift to give advice or make suggestions about the appropriate use of the funds. The University will give full and careful consideration to such suggestions when making decisions about the appropriate use of the funds. The University is, however, under no obligation to accept such advice and any attempt to enforce such advice or suggestions may breach taxation legislation and invalidate the nature of the funds as a gift.
The University will accept gifts that assist the University in pursuit of its goals. While gifts are most welcome, the University may not be able to accept all gifts, and reserves the rights to decline gifts which compromise its strategies, academic programs or principles.
The Advancement Committee makes decisions on whether gifts, excluding gifts received through the Cultural Gifts Program (managed by the Federal Government’s Committee on Taxation Incentives for the Arts), can be accepted.
The University retains absolute discretion to return a gift if it sees fit, whether in part or in full.
The University will use a Tied Gift for the purpose for which it was intended. Where this is not possible the Advancement Unit will discuss alternative arrangements with the donor.
While gifts (other than gifts to endowment) are distributed to Schools and scholarships according to the donors’ wishes, endowment funds will be managed by the Chief Financial Officer in accordance with the University’s Investment Policy
Stewardship or the reporting to donors on the impact of their gift is a vitally important part of the responsibility in accepting a gift. Timely acknowledgements will be sent to all donors and, where appropriate, special recognition of certain gifts will be given. This acknowledgement demonstrates the University’s commitment to maintaining long term donor relations and thereby maximising support to the University.
The Income Tax Assessment Act 1997 allows organisations or individuals making gifts or providing gifts to organisations registered as Deductible Gift Recipients (DGR) to claim income tax deductions for the value of the gifts or gifts provided. All DGR registered organisations must be endorsed by the Australian Tax Office (ATO) to receive income tax deductible donations/gifts.
In order to encourage gifts to the University, endorsement has been obtained from the ATO of the University’s DGR status.
Gifts may be in the form of financial gifts or property. Specific requirements are contained in the ATO - GiftPack for deductible gift recipients and donors.
This Policy sets out the University’s requirements to ensure the University retains its status as a registered and endorsed Deductible Gift Recipient (DGR) for tax deductibility purposes.
A gift made to the University of AUD$2.00 or more is generally tax deductible to the donor (Income Tax Assessment Act 1997, Section 30-25). The University has received ‘Deductible Gift Recipient’ (DGR) status from the Australian Taxation Office (ATO) and therefore donors may claim an income tax deductible for gifts made, subject to the rules below.
A donation or gift will only be tax deductible to the donor where the gift is made voluntarily and there is no material benefit to the donor. The amount will not fall within the definition of gift if it is provided as a result of a prior contractual obligation.
If a donor receives something of material value in return for the gift there are two consequences:
- There is no tax deduction available to the donor (under the gift provisions in the Income Tax Assessment Act); and
- The receipt of the funds by the University will be regarded as consideration for the supply of the material benefit, the University will recognise that the value of the funds received includes GST and will remit GST on the payment to the ATO.
3. Policy Guidelines
DGR donations/gifts have the following characteristics:
- there is a transfer of money or property,
- the transfer is made voluntarily,
- the transfer arises by way of benefaction, and
- no material benefit or advantage is received by the donor.
Where these characteristics are met there will be no GST deducted from the gift.
Generally, the following items are not DGR donations/gifts and should not be treated as such, nor will they be GST free:
- sponsorship income
- income from commercial activities, and
- proceeds from raffles, charity auctions, fundraising dinners and the like where the proceeds are not deductible contributions.
In some cases, fundraising events such as dinners and charity auctions may be deductible contributions. Specific requirements must be met and these are outlined in the ATO Gift Pack for deductible gift recipients and donors.
For valuation rules as they apply to property and shares, also refer to the ATO Gift Pack for deductible gift recipients and donors
4. Gift Fund
A separate gift fund within the University’s general ledger chart of accounts will be maintained to record donations or gifts of money and property made to the University for general use or specific purposes. It will also act as a conduit for passing on gifts to specific elements or activities of the University to meet the requirements specified by the donor.
Appropriate receipts will be issued for all individuals and organisations that make gifts to the University. All receipts must contain the following information:
- Name of the donor making the gift
- Name of the fund or institution to which the gift is made
- University’s Australian Business Number (ABN)
- Date the gift was received
- Amount of money donated
5. Money gifts
Gifts of money will provide the donor with an income tax deduction subject to the above rules. Receipts issued to donors should include the University’s ABN (51 818 692 256), the name of the donor and state that the gift is tax deductible.
A gift of services is not considered a tax deductible gift.
Property gifts which include as well as physical things, rights and interests that are capable of ownership and have a value in excess of $5000, must be valued by the Australian Valuation Office.
8. Winding Up
At the first occurrence of:
- the winding up of any gift fund, or
- the University ceasing to be entitled to DGR endorsement for the Federation University Australia and Federation University Australia Foundation,
- any surplus assets of the gift fund remaining after the payment of liabilities attributable to it, must be transferred to another fund, authority or institution to which income tax deductible gifts can be made.
- The University, through the Marketing, Advancement and Community Engagement (MACE) division, employs staff responsible for providing administrative support for gifts.
- The Deputy Vice-Chancellor (Engagement) is responsible for overseeing the strategic direction of philanthropy for Federation University Australia and the Foundation, and is Chair of the Federation University Australia Advancement Committee.
- The Director, MACE, is responsible for the day to day management of the Advancement Unit and meeting the strategic objectives of the University and the Foundation, and is a member of the Federation University Australia Advancement Committee.
- The Advancement Unit is responsible for:
- coordinating and providing strategic support and guidance to the Advancement Committee within the University;
- supporting Contributor Relations;
- administration duties in relation to fundraising for the University and the Foundation on a day to day basis;
- seeking necessary advice and input from other resources (e.g. Finance, Legal, consultants etc.)
The Philanthropic Donations Policy will be communicated throughout the University via:
- an Announcement Notice under ‘FedNews’ website and through the University Policy - ‘Recently Approved Documents’ webpage to alert the University-wide community of the approved Policy;
- inclusion on the University Policy, Procedure and Forms website; and/or
- inclusion on the relevant Federation University Australia website and Federation University Australia Foundation website page;
- advising the Federation University Australia Advancement Committee of the approval.
The Philanthropic Donations Policy will be implemented throughout the University via publication on the website page.