6.7 Advancement Assessment

EFFECTIVE: 1/1/2020 · REVISED: 4/1/2020

Introduction

This is the Advancement Assessment Policy (Policy) of the University of Tennessee Foundation, Inc. (UTFI). The purpose of the Policy is to establish advancement assessment fees (Assessment) that UTFI will assess on charitable contributions received. The Assessment assessed by UTFI will be used to support UTFI’s mission including, without limitation, administrative and fundraising costs.

Policy

UTFI supports the university through fundraising, engagement and stewardship. To continue this work and reduce the dependency on university funds, UTFI has implemented an advancement assessment. UTFI is committed to administering funds (both endowed and non- endowed) in compliance with all relevant Foundation by-laws, organizational concerns, industry standards and federal and state laws and regulations. No policy will supersede any provision of federal or state law or regulation.

In determining the Assessment charged on gifts, UTFI will act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances and shall consider, as applicable and as required under laws or regulations, the following factors:

• The purposes of the Foundation and the gifts
• General economic conditions
• The possible effect of inflation or deflation
• The expected total return from income and the appreciation of investments
• Other resources of UTFI
• The investment policy of UTFI

UTFI will in good faith make information concerning the Assessment available to donors and potential donors.

Assessment Calculation Method

UTFI has considered the prudence of an Assessment on new gifts received by UTFI, and has determined that the Assessment will be as follows:

• Four point five percent (4.5%) on non-endowed gifts
• Four point five percent (4.5%) on new endowments
• Cap on the advancement assessment of $225,000 per gift

Any Assessment will be calculated as of the date of receipt by UTFI and will be transferred to UTFI’s appropriate operating funds as soon as practical. For assets requiring liquidation, the Assessment will be calculated of the date of receipt and transferred to operating funds as soon as practical following liquidation.

The assessment will be applied to new endowments. One half of the annual spending earnings will be used to reduce the assessment payable in year two, with one half of the spendable earnings applied to the fee in the following years until the entire assessment has been fulfilled.

Exemptions from the Assessment

The Assessment will not be assessed on:

• Gifts for capital projects
• Annual gifts to campus athletics
• Gifts to endowments funded at the minimum level as of December 31, 2019
• Gifts/grants from foundations that have by-laws preventing payment of fees
• Gifts to UT Chattanooga
• Gift annuities

Exceptions

All exceptions to this Policy must be approved by the president of UTFI and vice chancellor for advancement at the respective campus(es). Exceptions to this Policy should be granted in only the rarest of circumstances.
>> Complete the Assessment Exclusion Request Form.

Applicability

Except as otherwise provided, this Policy applies to all gifts received by UTFI.

Enforcement and Interpretation

It is the responsibility of all employees to uphold this Policy.

Effective Date

This Policy is effective January 1, 2020 and replaces and supersedes any proceeding policy concerning this subject matter. Gifts made on or after January 1, 2020 will be subject to the advancement assessment, excluding gifts received within year end giving deadlines for 2019.