Managing In-Kind Donations on Capital Projects
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In-kind gifts must not increase the project cost, delay completion, compromise quality or compromise the highest ethical standards established by the Board of Regents. See also Board of Regents Policy: Gift Solicitation and Acceptance.
Design Services are prohibited as In-Kind donations for any phase of a Capital Project.
The solicitation of in-kind gifts should be a part of the public bid process. The public bid process is inclusive and fair to all interested parties. If the potential for in-kind gifts exists, it is recommended that the project designer and construction manager take into consideration the in-kind gifts as they divide the project into bid packages and prepare the specifications and performance standards.
The receipt of proposals for in-kind gifts must be included with the receipt of competitive bids and proposals.
Those who donate services or materials must be held to the same standards as other vendors and contractors as defined in University policy, contract terms and conditions. Solicitations and discussions regarding in-kind gifts should make it clear that donors, like other vendors, will be expected to agree to standard University contract terms and conditions.
Pledges to provide in-kind design or construction services and/or materials cannot be counted toward meeting a capital project's funding requirement.
Define Bid Packages
Bid packages can be defined only after the designer and contract manager are selected. The number of bid packages should be limited. More bid packages will drive up administrative costs for the owner, architect and/or construction manager and increase the project cost.
Develop the RFBs/RFPs for the Bid Packages
The Requests for Proposals (RFPs) or Requests for Bids (RFBs) will be publicly available through the University Services Purchasing website. Vendors will be invited to submit bids that may or may not include a gift component. Consistent with standard University practices, the lowest bid or the highest rated proposal will receive the award without prejudice as to whether the vendor’s offer included a “gift” element. In the case of bids, the gift element will be reflected as a reduced price. In the case of proposals, if a gift is part of the vendor's proposal, the “gift” element will be taken into account in the cost section of the evaluation criteria.
The RFPs/RFBs must contain (1) complete specifications, (2) the contract terms and conditions, and, (3) A Gift Attachment called "Information/Instructions for Gifts." The Attachment must instruct vendors on how the University will respond to gifts, whether offered as part of a bid/proposal or otherwise. The Attachment must include procedures for valuation, tax document issuance (if any) donor recognition.
The vendor must break down components of the bid into goods and services and include proof of the value of the goods with the proposal or bid.
Review of RFP / RFB:
The Vice President for University Services or designee, on behalf of the University, reserves the right to:
- accept or decline any gift, whether offered as part of a bid/proposal or not.
- evaluate the acceptability of any gift that is offered: A gift's value will be considered reduced, or even unacceptable, if it is not considered advantageous to the University for any reason. Examples of gifts that would be considered disadvantageous:
- Gift includes obsolete equipment.
- Acceptance of gift will involve significant or excessive maintenance charges after installation.
- Gift requires unacceptable modification of other building components.
- Acceptance of gift will cause unacceptable delays or cost to the project.
- Acceptance of gift is inconsistent with the principles or goals established for the project.
- request any clarification or additional information requested in order to facilitate that bid/gift evaluation.
University Gift-Credit versus Charitable Contribution Credit for Tax Purposes
Gift credit is provided by the University to donors for purposes of giving preferential treatment at certain sporting events and other intangible benefits. The value of this gift credit is not the same value that a donor would use for income tax purposes. As a result, donors may receive gift credit for athletic events at a value different than what should be used for tax purposes.
University Foundations and University processes for In-Kind Donations
Normally, all contributors to the University are encouraged to work with the respective University of Minnesota foundation associated with the charitable activity. The recognized U of M Foundation is the policy owner with respect to processing most transactions. In the case of in-kind donations, such transactions require involvement of both the Foundation and the University of Minnesota. The Foundation is responsible for awarding and maintaining gift credit (see above) for these In-kind donations but not for determining the amount of charitable contribution deduction available to the donor. In addition, these donations need to be formally acknowledged by the University through the IRS Form 8283 process.
All in-kind donations must be first coordinated with the Foundation and any subsequent involvement of the University Tax Management Office for purposes of obtaining a signed IRS Form 8283 will be coordinated by the Foundation. With regards to in-kind donations, the tax value associated with those donations is the sole responsibility of the donors.
The recognized University Foundations understands that it will accept and process cash gifts, develop and implement a recognition program for all gifts (both cash and in-kind), and accept from University Services or their outside consultant the estimate of value for purposes of recognition and providing gift credit for purposes other than those relating to federal or state income taxes.