A range of goods and services are purchased to support the university's goals and mission. Below are the common categories of purchases, definitions, and links to more guidance. While all purchases must be in alignment with established purchasing policies and guidelines, certain categories of purchases, such as capital purchases or other special goods or services, require additional actions or specific purchasing methods.
Goods are generally defined as tangible items such as supplies, materials or equipment. Commonly purchased goods at the university include office supplies and research or lab materials. Certain goods should be purchased through pre-negotiated supplier relationships available through the university’s catalog ordering systems (i.e., SmartMart Catalog Suppliers) to ensure the best pricing and terms. In addition, some goods require special consideration or treatment to ensure regulatory and compliance needs are met.
The Purchase Goods page provides the recommended purchasing method and related guidance for:
- Capital equipment
- Office and home office equipment and furnishings
- Office supplies
- Computers, printers and software
- Lab, life science, research or medical supplies
- Stanford-branded merchandise
Services are generally defined as a transaction where work or action is performed and there may not be a physical good involved. At the broadest level, this includes labor, maintenance, consulting, business services, and venue or facility rentals. Some services require special consideration or treatment to ensure regulatory and compliance needs are met.
The Purchase Services page provides the recommended purchasing method and related guidance for:
- Professional services, performed by an independent contractor or consultant, including the following:
- Proofreading/Editing/Copywriting/Publishing/Indexing Services
- Graphic Design/Branding/Illustration Services
- Transcription/Translation Services
- Video/Photography Services
- Equipment Repair
- Legal related services (e.g., notary, fingerprinting, document scanning, etc.)
- Temporary staffing services
- Speaker or participant honorarium
- Cloud services
- Website or application development
- Shipping, freight, and import services
- Advertising on social media network
- Moving and relocation
- Event venues and catering
- Lab-coat laundering
- Commissioned work
- Construction services
A subaward is when a portion of Stanford's sponsored project is passed through to another entity in order to complete a portion of the sponsored project's scope of work. It does not include payments to a contractor or payments to an individual that is a beneficiary of a program.
Subawards are administered by the Office of Research Administration (ORA) but payments are made using iProcurement Purchase Orders. For information, refer to Subawards at the Office of Research Administration.
The university pays directly or reimburses individuals for expenses that are necessary and appropriate to conduct university business. Expenditures must be consistent with the university’s purchasing policies and guidelines as well as the guiding principles and IRS regulations with regard to Business and Travel Expense policies. To review the policies and resources associated with business and travel expenses, visit the Topic Overview: Business and Travel Expense Policies.
Travel Bookings and Expenses
It is highly encouraged that Stanford travelers use Stanford Travel booking channels when booking flights, hotels, and rental cars for university-sponsored travel. Stanford Travel booking channels automatically register itineraries and any booking updates to the Travel Registry, streamline the reimbursement process, and offer discounts, benefits, and perks to travelers. In addition, the Stanford Travel team can provide specialized assistance as needed to travelers who book through Stanford Travel.
For more information about business and travel policies see the Topic Overview: Business and Travel Expense Policies.
Types of Business Expenses
Common types of business expenses include business and travel meals, lodging, transportation, conference and training fees, and employee morale. These and additional common types are covered in more detail in the Topic Overview: Other Business Expenses.
Note: Per the updated gift policy as of July 20, 2023, $100 is the threshold for the non-taxable amount for occasional, non performance-related gifts (e.g., events and holidays). This is an increase from the prior amount of $50. Tangible gifts below the value of $100 over the course of the calendar year per individual will be non-taxable. If the gift value is over $100, the entire amount is taxable.
Per Administrative Guide Memo 2.2.10: Gifts and Awards for University Employees, at the discretion of each department or school, gifts or awards may be made to university employees for non-performance related recognition, such as to give an occasional gift or celebrate retirement. The expense of such gifts or awards must come from appropriate university funds and comply with guidelines such as when gifts need to be reported as taxable income to the employee.
Types of Gifts
- Service milestone gifts are not related to performance recognition and are made to university employees through UHR’s Stanford Celebrates You program to acknowledge years of service in five year increments. Per AGM 2.2.10, the current annual non-taxable limit for tangible gifts is $400 a year, and the value of the gift provided by UHR is commensurate with years of service. If the tangible gift amount is over $400, only the amount above the threshold will be taxable.
- Departments not participating in this program may issue gifts up to the non-taxable limit of $400. Gifts must still be administered in increments of five years of service and with amounts commensurate with years of service.
- Gifts given in addition to a gift issued through the Stanford Celebrates You program are taxable to the recipient.
- Retirement gifts may be provided to employees by departments and are similar to service milestone gifts in that the value should be commensurate with years of service and tangible gifts have the same non-taxable threshold of $400.
- Other occasional gifts, such as for events or holidays, are referred to as nominal gifts and have a non-taxable limit of $100 per individual per calendar year and are not related to performance recognition. If the tangible gift exceeds the threshold of $100, the entire amount becomes taxable.
- Note that sympathy or bereavement gifts are considered a separate type of occasional gift and their non-taxable threshold is also $100 per year.
Some high level guidance for employee gifts includes:
- All gift cards (cash equivalent or non-cash equivalent) are taxable at the entire value when provided as gifts, regardless of amount or type.
- Gifts for regular employees (50% full time equivalent, FTE, or more) should be occasional and non-recurring.
- For both types of gifts, purchases of Stanford-branded merchandise or other tangible items, including food, is strongly encouraged by the university over the use of gift cards.
- Tax and shipping costs are excluded from the thresholds.
- Gifts cannot be in lieu of compensation for services performed or extra earnings, i.e., overtime pay or retroactive pay. Gifts should not be given for assuming additional duties while another employee is on leave or for a vacant position. In these instances, managers should consider the bonus & incentive program and have a conversation with the school or unit human resources manager to determine the appropriate option.
- Faculty Retirement Awards: Faculty members with more than five years of service are eligible to receive an award from the university upon retirement or departure from the university to recognize their service and contribution. (Faculty members do not participate in the staff five-year incremental length-of-service award.) For retirement awards to be nontaxable to the recipient, they must meet the five-year service requirement and the award must be presented in a meaningful presentation or ceremony. The value of a retirement or departure award should not exceed $400 in the taxable year and the cost of the award should be commensurate with the number of years of service being recognized. Any award that does not meet the IRS requirements will be taxable income to the recipient. Such awards must be coded to the ‘Employee Gift - Taxable’ expenditure type and the employee’s name and Employee ID Number should be included in the business purpose for the transaction.
Note: To align with IRS guidelines, the university policy was clarified that all gift cards are taxable when provided as gifts, regardless of amount. See the updated gift policy as of July 20, 2023 for additional guidance on employee gifts.
Gift cards should only be provided in support of an identified university business purpose. Gift cards, including electronic gift cards, can be used for human subject payments, conference meals, event or research study prizes, or employee appreciation gifts. Stanford-branded merchandise or other tangible items, including food, are strongly encouraged instead of gift cards as employee gifts.
Refer to the following university policies:
- Administrative Guide Policy 2.2.10: Gifts and Awards for University Employees
- Administrative Guide Policy 5.4.2: Business and Travel Expenses
- Research Policy Handbook 13.1 Gift vs. Sponsored Projects and Distinctions from Other Forms of Funding
All gift cards, regardless of type or amount, are taxable from the first dollar and for the entire value, even when given as employee gifts. The university strongly encourages departments to purchase tangible goods, such as Stanford-branded merchandise. This minimizes the tax burden for the recipient and the risks associated with storing and handling gift cards.
Tax reporting guidance:
- Gift cards provided to employees: Provide recipient details with the Expense Request or PCard transaction and use the appropriate taxable gift expenditure type.
- Gift cards provided to human subjects: When gift cards are used as incentives to human subjects, they are treated as taxable income. Follow guidance on Paying Human Subjects to appropriately tax report in these instances.
It is recommended that purchases of gift cards of a total amount less than $5,000 be made using a Purchasing Card (PCard). Other methods of purchasing gift cards for university business include using personal funds and getting reimbursed through an expense report, requesting an advance (for human subjects only), or a non-PO payment request. Please note that Stanford’s Amazon Business account does not support the purchasing of gift cards.
Refer to the table below for specific gift card use cases and appropriate purchasing methods.
|Gift Card Use Case
|Stanford Purchasing Card (PCard)
|Expense Requests - Expense Report
|Expense Requests - Advance
|Expense Requests - Non PO Payment
|Human Subject Payments - Visitors
|N/A - used for direct human subject payments only.
|Human Subject Payments - Employees
|Tangible gifts or non-PO payment are preferred. See more information on paying human subjects.
|Not recommended. Instead, use other method
Gift Card Best Practices
To safeguard university assets, the following best practices are recommended when purchasing and stewarding gift cards:
- Storing and Tracking: Store gift cards securely as these are treated as cash. Each gift card should be distributed to its intended recipient shortly after purchase. Track all gift card recipients and include the name of recipient and amount received in backup documentation to be stored locally and attached to applicable transactions. This enables purchasing traceability and alignment with financial stewardship expectations.
- Documentation: For Human Subject gift card payments, attach the Human Subject Incentive Certification Form to the transaction as backup documentation. Doing so ensures accurate record-keeping, traceability and transactional integrity.
- Timing: Process transactions accurately and within a timely manner to ensure that the purchase is properly applied to the PTA that was charged.
- Support: Contact the Financial Support Center for assistance.
Gift Card Purchases Exceeding $5,000
There are occasions when departments need to purchase gift cards in bulk for later distribution to individuals for Human Subjects participating in forthcoming research studies. When purchasing bulk gift cards for human subjects totaling $5,000 or more, departments may use an iProcurement Non-catalog Requisition.
Bulk purchases of gift cards for employees are highly discouraged. If bulk purchases for employee gift cards are still required, those may be purchased with a PCard but please note that each gift card must have an intended recipient and the recipient’s information must be included with the transaction.
Storage of large purchases of gift cards presents a risk to the university. Gift cards must be appropriately secured and tracked in the same manner as cash. Departments must ensure proper local controls are in place for dual custody of the gift cards, throughout the purchasing, storage and distribution processes.
Optional Gift Card Supplier - Blackhawk Network Inc
There are many programs available for departments to purchase gift cards. Procurement Services has worked with Blackhawk Network Inc to support bulk purchases of gift cards for human subjects. To set up a Blackhawk Network Inc account, departments need to contact the Stanford Account Manager, Justin Tullis, to receive login credentials for the Hawk Marketplace website to put in an order and obtain an invoice document. To process this transaction, departments should create an iProcurement Non-catalog Requisition. Once the purchase order (PO) is created, departments will need to upload the invoice document to the PO for processing and payment.
A lease agreement (sometimes referred to as a "rental agreement") is established when Stanford funds are used to rent, borrow or use an asset for a specific period of time greater than one month.
Real Estate Leases are contracts under which a lessee has committed to stipulated cash payments for the use of real estate for a specific period of time. Real Estate leases are considered long-term financial obligations of the university. Refer to Real Estate Leases for more information. Leases cannot be established using a PCard.
An equipment lease is considered the commitment to pay for the use of an asset for longer than one year, with total contracted cash payments over the term of the lease of $5,000 or greater. Refer to Equipment Leases for more information.