Managing and Expending Foundation Funds

Policy/Procedure Summary

The University of Minnesota Foundation (UMF) and the Minnesota Landscape Arboretum Foundation (MLAF) (collectively the “Foundations”) and University departments are responsible, during their period of stewardship and transfer, for ensuring that gifts are spent in accordance with donor intent.

Once gift funds have been transferred to the University and recorded in the related University Enterprise Financial System (EFS) ChartField String, the University assumes the responsibility for the following:

• using the gift in accordance with donor intent,
• complying with associated University policies and procedures,
• complying with tax reporting requirements, and
• providing sufficient detail and reference on authorizing documents to permit a compliance review (for example, the University, the Foundations, the donor). Documentation must be in compliance with Administrative Policy: Processing, Documenting, and Approving Financial and Accounting Transactions. This includes substantiation demonstrating fund expenditure in accordance with donor intent.

The individuals initiating, approving, and providing local financial oversight share the responsibility for compliance with donor intent.

The procedure covers any type of distribution from Foundation funds to the University including research, development, student aid, emergency assistance, etc.

Recording the Expenditure in EFS

Originating Accounting Transactions

Regardless of the method of incurring the expense, the transaction must be recorded in EFS using the appropriate ChartField String established for the gift activity and per Administrative Policy: Processing, Documenting, and Approving Financial and Accounting Transactions. ChartField 1 value should be used to record the respective Foundation fund being disbursed from (e.g. UMF0021313) for the respective expense. The expenses for which the foundation funds will be used must at a minimum be in the same DeptID and Program. The approver must ensure that sufficient documentation and detail exists to support the expense per Administrative Policy: Processing, Documenting, and Approving Financial and Accounting Transactions.

Adjusting/Correcting Accounting Transactions

• If an expense is transferred into the ChartField String established for the gift activity, the ChartField 1 value should include the respective Foundation fund. Similarly, if Foundation fund revenue is transferred into another ChartField string than the original ChartField string referred on the EFS invoice/bill, the ChartField 1 value should include the respective Foundation fund. The adjusting/correcting transactions must be in compliance with Administrative Policy: Processing, Documenting, and Approving Financial and Accounting Transactions.
• If the ChartField 1 value isn’t used for all the expenses the gift revenue covers, the unit must maintain a tracking document outside of EFS that allows for independent verification of funds spent in accordance with donor intent.

Additional Information Related to Scholarship Distributions

• Scholarships/fellowships are provided to students via the Campus Solutions system and interface into EFS daily.
• If UMF Funds will be used for other types of payments/stipends to students, review the Tax Management Office Guideline #8 Payments to Students Guide (PDF) to determine the correct payment system.
• For information on OSF managed scholarships see the One Stop Scholarships.
• Whenever a student registered at the University receives a non-service-related payment/stipend or personal property, it may impact any financial aid the student may be receiving. All forms of financial aid must be taken into consideration when evaluating a student's total financial aid package. Students should not receive more financial aid than their Cost of Attendance (COA).

Additional Requirements Related to Emergency Assistance Distributions

Donor intent might include the distribution of funds when there is an emergency financial hardship faced by a student, patient, or employee. Emergency assistance is generally defined as financial assistance provided to help alleviate financial hardship encountered by an individual for reasons beyond their control (medical emergency, natural or civil disaster, state or federally declared disaster, or other circumstances).

Emergency funds are not intended to be used for routine expenses. Instead, these funds are for those who experience an event or unforeseen circumstance that negatively and severely impacts them. Assistance can be in the form of funds, services, or goods to ensure they have the basic necessities, such as food, clothing, housing, transportation, and medical assistance. Units are required to take additional steps when disbursing emergency funds.

Documentation must be obtained demonstrating financial need and the emergency circumstances and how it meets the donor intent of the specific UMF Fund.

Individuals involved in distribution of emergency assistance must ensure an equitable process for distribution.

Initiation of a UMF Emergency Fund Distribution

Determine the recipient of the emergency assistance.

Patient or Patient Family

The reason for the emergency assistance is a result of the individual or family member being a patient. See the Distribution to a Patient or Patient Family section below for the specific procedure requirements.

Student

The reason for the emergency assistance is the result of the individual being a student enrolled at the University of Minnesota. It is important to note that if the individual has a “medical resident” status they will follow the employee procedures. See the Distribution to a Student section below for the specific procedure requirements.

Employee

The reason for the emergency assistance is the result of the individual having a current job appointment at the University of Minnesota. Emergency assistance is available to all full-time and part-time University of Minnesota faculty and staff. Student employment should be disregarded. See the Distribution to an Employee section below for the specific procedure requirements.

Distribution to a Patient or Patient Family

• The assistance is dependent on the individual patient or patient family need and the donor intent of the UMF Fund from which it is being disbursed.
• Documentation must be obtained regarding the patient or patient family financial need and how it meets the donor intent of the specific UMF Fund.
• Disbursement can be in many different forms: check, prepaid debit card, meal/parking vouchers, reimbursement for travel or accommodations, medicine, directly-paid medical expenses, gift cards, etc.
• Disbursements are paid through Accounts Payable. Direct payments for medical expenses should be coordinated with Fairview or the applicable clinic.
• Review of each request should take place by the Authorized Signer to approve expenditures from a UMF Fund.

Distribution to a Student

• Emergency assistance is a form of scholarship or grant (account 800102) and must be distributed to the student via the Campus Solutions System (interfaces to EFS daily). Any assistance provided is included in the student's Cost of Attendance (https://onestop.umn.edu/finances/costs/cost-attendance).
  • Emergency assistance distributed to the student as a tangible item must be reported to the Office of Student Finance directly and may after the fact impact the students current and future aid if received.
• Regardless of the source of funds, type of assistance, and management of the emergency assistance, the aid is reportable to the Office of Student Finance.
• Eligible students include:
  • Current enrolled, degree-seeking students at the University of Minnesota during the term when the emergency funds, including undergraduate, graduate, and professional students.
  • Maintaining a Satisfactory Academic Progress (SAP) or have successfully appealed an SAP suspension status.
• An eligibility review will determine if granting the emergency fund request will have an impact on current and future aid if received.
• Priority will be given to students whose persistence at the University may be at risk because of unexpected expenses.
• For information regarding eligibility of Office of Student Finance (OSF) Management Funds, the process to request funds, and other campus resources visit the One Stop Student Emergency Funds
• Review of each request should take place by the Authorized Signer to approve expenditures from a UMF Fund.

Distribution to an Employee

• The process for providing emergency assistance to an employee will vary based on the root cause of the life event that resulted in the need for the emergency assistance, and where the fund is managed. The cause of the need, the type of emergency assistance and the amount will dictate how the assistance is paid to the employee and if it is reportable as taxable income.
• Documentation must be obtained regarding the employee’s financial need, the emergency circumstance, and how it meets the donor intent of the specific UMF Fund.
• Review of each request should take place by the Authorized Signer to approve expenditures from a UMF Fund.
• All emergency funds paid to employees are paid via payroll and are reported as taxable income.
• If tangible personal property is provided to the employee, it must be reported to Payroll Services on the Taxable Benefit/Expense Reimbursement Reporting Form (XLSX).
• Distributions from a college or department managed fund will need to be scrutinized to determine if they are taxable and/or reportable, see the University Employee Recognition Awards Appendix. If the distribution is taxable it must be issued through the payroll distribution process. Questions on the taxability should be directed to [email protected] or 612-624-1053. To report a taxable distribution, call the Human Resources Call Center at 612-624-8647 4-UOHR) or in greater Minnesota 1-800-756-2363.