FAQ
What do I do when I receive a check for a gift?
First step is to determine if it’s a gift for a new purpose or donor. And to make sure that it’s not related to a sponsored project (see section on sponsored vs gift). If it’s a new gift or new purpose, please contact the FAS Gift/Endowment Manger in the FAS Finance Office. If a new fund needs to be established, FAS Development will need to draft new terms. If the donation is for an existing gift account, please see instructions related to processing to existing gifts.
The FAS Gift/Endowment area will work with departments to set up new accounts or post gifts to an existing account. Department with new gift accounts will receive a notification from the FAS Finance Office providing all the information needed to use the account.
If a Department receives a check, for an existing fund, please complete the University transmittal form and send with the check to:
Harvard University Alumni and Development Services
PO Box 419209
Boston, MA 02241-9209
Gifts an also be wired
Bank wire instructions for charitable gifts only to President and Fellows of Harvard College.
Receiving Bank Name: Bank of America, N.A.
Receiving Bank Address: 100 Federal Street, Boston, MA 02110
Beneficiary Legal Account Name: President & Fellows of Harvard College - RSO Account
Account #: 009429263621
Receiving Bank ACH ABA: 011000138
Receiving Bank Wire ABA: 026009593
Receiving Bank SWIFT Code: BOFAUS3N
Memo/Reference: Fundraiser 5-Digit Phone # (e.g. X-XXXX), Donor Last Name, Gift Designation
Important
To ensure accurate handling, donors should send a confirmation email to ADS@harvard.edu with the following details:
•Donor Name
•Contact Phone Number
•Date the wire was sent
•Name of the originating bank
•Amount of the bank wire
•Was a wiring fee deducted from the wire amount?
When will a department begin receiving income distributions from an endowment account?
The University has set minimum capitalization levels for different types of endowment funds. This means that principal must accumulate to a specified amount before an annual income distribution is available for current use.
Until a fund reaches its minimum capitalization level, annual interest earnings from the endowment will be added to principal. If the donation already meets the University minimum, the fund will earn a prorated treasurer’s distribution, in the following FY.
The minimum level to create a new endowed fund is $250,000. Exceptions may only be granted by ADS and FAS Development Offices.
This policy exists to ensure that endowment funds are large enough to fund the purpose for which they have been established. When a fund has reached the required minimum, departments will receive a notification from the FAS Office of Finance that the fund has been activated.
If additional gifts to an existing endowment are received during the year, will it yield additional income to be used in that year?
No. The gifts will receive their first (pro-rated) distribution in the following July, which is calculated based on how many units were held during the previous 12 months. These are often referred to as the average principal units (APU).
Here is an example to illustrate the policy:
A gift of $1 million is added to an existing endowment on July 15, 2010. Assume that the gift received 2,000 units, with a unit value of $500 and a distribution rate of $20 per share. Assume that there are no additional gifts in FY2011.
Under the policy, the first payout on the endowment would occur in July 2011 (FY12) and would be based upon the average number of units the fund held during FY11. The APU is calculated on a June 1 through May 31 basis. Therefore, the average number of units this fund has in FY11 is 1,833.3333 ((2,000 units/12 months) X 11 months). The yield in FY12 would be $36,666.67. In FY13, the fund would calculate its distribution based on 2,000 units because the average number of units for FY12 would be 2,000 units.
If an endowment fund has accumulated a large unexpended income balance can a department capitalize this income? (Capitalize means to add the income balance to principal.)
Yes, pending approval of the FAS Office of Finance. Typically, this occurs during fiscal year close. Please complete a Capitalization request form. If the FAS Office of Finance approves the request, it will be forwarded to the Recording Secretary's Office for final approval and processing.
Because capitalization is not a temporary action, a department must be reasonably sure that it will not need the funds in the foreseeable future. By capitalizing unexpended funds, a department will increase the endowment's future annual distributions.
Can faculty members make gifts to the University to support their research? How about prize funds?
No, the university no longer allows faculty members to give gifts to support their own research. The faculty member can give donations to support their department, which will used to at the discretion of the department chair.
Gifts to faculty from other sources:
All gift funds belong to the University and cannot be withdrawn should ae faculty member leave the University, unless specified/approved by the donor. Also, any equipment purchased from these gift accounts becomes the property of the University.
Also, the University no longer accept new requests or gifts establishing prize funds.
What happens if an account falls into deficit?
Financial managers have a fiduciary responsibility to ensure that accounts do not finish the year in deficit. Throughout the year, departments should check the status of their endowment, gift, and unrestricted designated funds. If any funds are in deficit, expenses should be transferred out of the fund to bring it into balance. If the fund remains in deficit at the end of the fiscal year, an interest charge will be posted to the fund in July of the following year.
What should a department do if a gift deposit is made by accident via credit voucher?
All gift and endowed checks should be sent directly to ADS for processing. NEVER DEPOSIT A GIFT USING A CREDIT VOUCHER FORM.
If somehow the gift gets processed via Cash Management, please follow the following steps to correct:
1.Submit a request through Buy to Pay, to get the check back from Cash Management. The check should be made payable to the President and Fellows of Harvard College and should be delivered to the requesting department. Use the deposit coding for this request.
2. A copy of the original check is needed as well as any donor correspondence.
3. When the check is received, send it, the copy of the original check, the donor correspondence, and a completed gift transmittal form to ADS for processing. code you credit.
Donors receive a tax credit for gifts given to the University. If the check or wire is not processed through the ADS system (Advance) the donor will not receive this credit. Gifts should never be sent to Cash Management for processing.
What Should a department Do if a gift is posted to an incorrect Account?
Contact the FAS Gift/Endowment Manager…please provide the incorrect deposit account, the amount, (donor if know) and the correct account. FAS Finance will work with ADS to correct the error.
How Often are gifts posted to the GL?
The ADS system (Advance) posts restricted gifts (current use) once a week into the GL. And endowment gifts once a month.