Stanford receives over 80,000 gifts a year from donors who support students, drive groundbreaking research and advance solutions to address societal challenges. Most of these gifts flow into the university through donations submitted to departments and programs spread across schools and units.
The staff who manage these funds play a critical role in ensuring excellence in the stewardship of these vital gifts. The first step for that stewardship is to make sure gifts are deposited into the right funds. With thousands of active gifts and endowments, it can sometimes be difficult to know whether a gift should be added to an existing fund or established in a new one.
The Office of Development and Financial Management Services have collaborated on this article to provide departments with some best practices and helpful tips to support excellence in gift funds management.
Always follow the donor’s wishes
Stewarding a gift correctly begins with the donor’s intent. Donors trust Stanford to use the philanthropic support they provide according to the terms they have established, and legally, the university is required to do so. Donors expect three things from an organization after they make a gift: a prompt thank-you note, confidence that their gift went to its intended purpose, and information about the impact of their gift. Putting a gift in the wrong place undermines all three of these very reasonable pillars of trust.
Reminders and tips:
- School and unit staff should always look for documentation of the donor’s intent and ensure it is included as part of the information submitted to the development office. If you don’t have any documentation, ask for some – even an e-mail can help.
- Avoid layering in unnecessary restrictions where the donor did not intend them. When gifts with different levels of restriction are combined, the most restrictive terms apply to the whole. Faculty and administrators should have as much flexibility as possible, which requires honoring the donor’s intentions.
- Don’t wait to deposit funds. If you have questions, ask for help instead of delaying the process (see resources below).
With thousands of existing gifts and endowments on Stanford’s books, it can be difficult to know whether a new gift should be added to an existing fund or established in a new one. When funds go to the wrong place or are combined, support that is less restricted may become commingled with support that is more restricted. This increases the risk of the gift not being stewarded appropriately, and may result in funds going unused over a longer period of time.
Excellent stewardship begins on day one. When a gift first arrives, it should be deposited right away into the correct fund, at which point a series of cascading processes begin -- including drafting thank you notes, presidential acknowledgements, and the issuance of receipts. The more time that passes, particularly as funds are spent or distributed for various purposes, the harder it is to unwind these processes and fix an incorrect allocation.
Reminders and tips:
- Gifts of $100,000 or more that are not explicitly directed to annual giving funds or capital projects, or are additions to existing named funds from the named donor, should virtually always be deposited in their own named funds.
- Do not deposit gifts from other donors into a fund with a specific donor name. There may be rare situations where it is appropriate if the original donor has consented to the addition in writing.
- Check the contingency language on existing funds, and open a new fund if that language isn’t present or isn’t robust. Oftentimes, older funds don’t have language in their terms for dealing with unexpected circumstances. This is referred to as “cy pres” language, and it describes what happens if a program is discontinued, or if a department head or program director leaves Stanford. In order to add this language to an existing fund, the donor must be informed of the cy pres terms.
- Gifts for COVID-related activity must be booked to COVID-designated funds for tracking purposes.
Finally, ask for help
The Office of Development and the FMS Fund Accounting team are here to help. You can also reach out to the development office in your school and unit. There’s a close partnership among all these teams, which has led to Stanford’s excellent gift management record. In fact, the development office has reviewed the error rate over the last number of years based on adjustments made in the system, and it is consistently less than one percent of the gifts processed. Still, with over 80,000 gifts made each year and Stanford’s commitment to financial excellence, we strive for continuous improvement.
- Learn more about Gifts, including how to distinguish among different types of gifts, how gifts should be received, when and how gifts should be used, and who is responsible for them.
- Contact your school or department’s fund accountant for any questions regarding non-sponsored funds.
- Visit the Office of Development (OOD) or get in touch with Development Services. OOD manages all direct contact with donors and advises on any proposed fundraising activities.
- Review Administrative Guide Memo 4.1.1: Gifts to the University and 4.2.1 Receiving and Processing Gifts to revisit the universities codified policies and definitions.
- Talk to your local Development Donor Relations Officer.