North Dakota State University

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The purpose of this is to consolidate and summarize the existing policies and procedures surrounding business transactions between NDSU and the NDSU Development Foundation. The following summary is based on a number of NDSU policies and procedures, a memorandum of understanding between NDSU and the Foundation, and NDSU Development Foundation Guidelines for Disbursement of Funds to NDSU Personnel (dated July 2011).    

NDSU and the NDSU Development Foundation are two separate legal entities.  NDSU is a part of the state government of North Dakota.  The NDSU Development Foundation is a legally separate foundation, which is tax-exempt under IRS Section 501(c)(3).  Since both entities fall under extensive legal and regulatory requirements, it is important to process transactions under the appropriate entity.

There is a Memorandum of Agreement between NDSU and the NDSU Development Foundation that directs NDSU departments to work with the NDSU Development Foundation on coordination of all fund raising campaigns.

• The Foundation’s coordination of fund raising campaigns for NDSU is critical to its long-term success.
• The Foundation has extensive experience in development and fund raising, along with administrative processes already in place.
• This requirement also applies to student groups (Example: Fallen Bison Memorial Campaign)

Gifts

• Whether a gift from an outside donor is deposited in NDSU funds or at the NDSU Development Foundation must be based on the intent of the donor, not the sole discretion of NDSU or the Foundation.   The donor’s intent should be evidenced by how the payment is made out, along with any supporting documentation.
  
  • Contributions resulting from an NDSU Development Foundation fund raising campaign must be deposited at the Foundation, as the donor’s intent is clear in this case.
  • If the donor makes a payment out to “NDSU” or the name of the department, but there is other compelling evidence that supports depositing the money at the Foundation, rather than NDSU; a Foundation deposit is appropriate.
  • If the intent of the donor is unclear, departments should contact the donor to request acceptable documentation to support the contribution as a Foundation gift.
• When an incoming gift is not part of a Foundation fund raising campaign and it is clear that the intent of the donor is to contribute directly to NDSU and not the Foundation, the NDSU department must contact the NDSU President’s Office before accepting and depositing the donation. 
• NDSU will review any attempts to bypass the Foundation to avoid receipting fees.
• If NDSU accepts a tax-exempt donation, NDSU becomes responsible for issuing a tax acknowledgement letter to the donor.  The NDSU Accounting Office has a template available that NDSU departments may use as a tax acknowledgement and thank you letter.
• Gifts accepted under NDSU Policy 803 – Restricted Gifts vs Grant Policy are exempt from the approval requirement, as these monies are clearly not part of a fund raising campaign and are borderline grants to departments.

Other Revenues

• Any other revenues (such as: grants, sales of goods or services) generated and received by an NDSU department must be deposited in NDSU funds, as they are considered “public funds” under state law.  Any exceptions must be approved by the NDSU Accounting Office, and such approval would need to be based on documentation that the department generated the revenues on behalf of the NDSU Development Foundation, not NDSU.  Such an exception would be an extremely rare situation.

The NDSU Development Foundation’s Finance Department will work closely with the NDSU Accounting Office on any questionable situations where it is unclear as to which entity should process a transaction.

The NDSU Development Foundation’s document entitled “Guidelines for Disbursement of Funds from NDSU Development Foundation to NDSU Personnel” provides good guidance to be followed by NDSU departments.

• Units within the Provost’s division will obtain prior approval from the Provost’s Office before disbursements can be made from the Foundation. Units under other Vice Presidents, not reporting to the Provost, will obtain prior approval from their respective Vice Presidents.
• Monthly transaction reports will be supplied to the NDSU Provost & NDSU Accounting Office.

Generally, NDSU departments are to process their expenditures through NDSU’s accounting system. If the expenditures are to be financed from gift revenue held at the NDSU Development Foundation, the department will need to process a request to the Foundation for payment to NDSU. Such Foundation payments to NDSU will generally be receipted at NDSU in a department’s unrestricted local fund under revenue account codes as follows:

• Account 478007 (Gifts from Related Foundations)
• Account 478015 (Capital Gifts from Related Foundations)
• In some cases an NDSU department may receive payment with a letter from the NDSU Development Foundation stating there is a more restrictive purpose than just general support for the department. These Foundation gifts should not be co-mingled with other departmental unrestricted local funds and should be handled through the NDSU Grant & Contract Accounting Office. They should be deposited in a separate NDSU restricted gift fund (fund number range 79000-79999) to better document compliance with the gift’s restrictions.
• Certain expenses may be better executed through the NDSU Development Foundation, in situations where a proposed expense does not meet the requirements of NDSU Policy. For example: NDUS & NDSU Policy prohibits the purchase of alcoholic beverage from any source of funds, where Foundation guidelines allow this in certain cases.

NDSU Policy 503 – Receipting
NDSU Policy 803 – Gifts vs. Grant Policy

NDSU Accounting Office Guidelines – Bank & Investment Accounts – Foundation Accounts (source:  NDSU Accounting Office website)
Memorandum of Agreement between NDSU & the NDSU Development Foundation
Guidelines for Disbursement of Funds from NDSU Development Foundation to NDSU Personnel