1. Introduction to FAI

2.  Who is Foundations Accounting & Investments (FAI)?  How is a foundation different from “the University”?  Types of revenue received in the foundation  Miscellaneous Issues

3. Relationships Vet Med Fdn Ag Fdn PAMS Fdn Alumni Assoc Nat. Res. Fdn NC State Fdn Tobacco Fdn Associated Entities (each have separate governing board and their own development office) 3 Treasurer’s Office Foundations Accounting & Investments University Advancement Advancement Services NC State University Engineering Fdn

4. Foundations Accounting and Investments (FAI) Finance and Business – Treasurer’s Division FAI provides accounting, investment and financial reporting services to seven (7) University-related foundations, the NC State Alumni Association, Inc., the Endowment Fund of North Carolina State University and the NC State Investment Fund, Inc. Additionally, FAI also provides similar services to 3 LLC’s, including the Lonnie Poole Golf Course. WEBSITE: http://www.fis.ncsu.edu/foundations_accounting/

5. 1. The North Carolina Agricultural Foundation, Inc. 2. NC State Alumni Association, Inc. 3. NC State Engineering Foundation, Inc. 4. North Carolina State University Foundation, Inc. 5. North Carolina State University Physical & Mathematical Sciences Foundation, Inc. 6. NC State Natural Resources Foundation, Inc. 7. North Carolina Tobacco Foundation, Inc. 8. North Carolina Veterinary Medical Foundation, Inc. 9. The Endowment Fund of NC State University 10. NC State Investment Fund, Inc. 11. NC State Executive Education, LLC 12. NC State Centennial Development, LLC 13. NC State Residence, LLC

6.  Set up new funds  Deposit gifts and other income receipts  Record all deposits, EFT’s, wires, etc.  Manage cash and investments  Assist Foundation Office customers  Other routine accounting services (e.g., bank reconciliations, manual checks) * For the entities FAI serves, including all foundations (except the Textile Foundation), the University Endowment Fund, NC State Investment Fund, and various LLC’s

7.  Operating budgets for foundations  Periodic review of funds  Unitization of endowments  Endowment spending budgets  Special analyses and reports  Annual audit process and financial statements  Preparation of IRS forms – 990, 1099’s  Board materials and presentations  Q&A sessions and other training opportunities

8. Separately incorporated legal entities, IRS 501(c)3 classification, with governing boards, ‘associated’ with the University, but NOT part of the University University Treasurer and VC-Finance & Business serve as Treasurer, Assistant Treasurer Fundraising support to NC State University primarily through private and corporate gifts, including scholarships, fellowships, professorships, and other activities (e.g. research)

9.  University Financials system  Projects* begin with ‘6’ ◦ Foundation funds are often called “Ledger 6”  Individual funds monitored via Wolfpack Reporting System (WRS) Report #1 ◦ Fiscal Year-to-Date Financial Status  Expenses paid through University systems (A/P, payroll, student financial aid, etc.) * Projects are also interchangeably referred to as “funds”

10.  Restricted Funds ◦ Regular ◦ Endowment income ◦ Building to endowment (BTE)  Endowments 4

11.  Restriction is based on donor-specified purpose for which it can be spent  No restriction on when it is spent (unless specified by the donor); can all be spent at once, or over period of years  Balances automatically carryover from year-to- year

12.  Funds are building to a minimum endowment level  Considered a restricted fund during the “building period”  Once minimum is reached, will become an endowment fund  May not spend from a restricted BTE fund unless the donor gives money to be used for spending while the fund is building

13.  Also referred to as ‘Spending Accounts’ or ‘Income Accounts’  Restricted by purpose specified by donor in an endowment agreement  Budget is determined by the foundation’s spending policy, subject to any additional donor stipulations  Balances automatically carryover from year-to- year, with option to return unspent funds to principal

14.  A gift that is intended to last in perpetuity. Unless allowed by the donor, the corpus (historical gift amount) can never be spent  Value grows over time through investment returns  A portion of earnings is allocated for spending to support the endowment purpose as specified by the donor (e.g., scholarship, fellowship, professorship)  Endowments provide a steady income stream for support of NC State University.]  Most colleges/units have endowments in a Foundation as well asthe University Endowment Fund

15. Gifts Other Income

16.  A gift is a voluntary and non-reciprocal donation provided by a non-governmental donor for which no goods or services are expected or provided.  A gift is a charitable contribution, and has IRS implications (must provide gift receipt).  Gifts are captured in the donor database system – referred to as ADVANCE.  Gifts may be restricted to a specific purpose or may be unrestricted in nature.

17. Foundation Gifts University Gifts Complete BA-151 and submit to tAdv. Services for prcoessing in ADVANCE. Check deposited directly with Cashiers Office Fdn Business Office will complete a Gift Transmittal Form and submit to Adv. Serv.

18.  In addition to distinguishing a gift from other income, you must also determine whether the gift belongs to the foundation or to the University  Must look at how the gift was solicited  Non-specific ‘grants’ (i.e. there are NO deliverables) are treated as gifts. Many result from a proposal submitted to the funding entity – in order for the gift to be deposited into a foundation project, the proposal MUST be in the name of the foundation, NOT the University, College, or department Refer to Gifts, Grants, Contracts 3D memo recently published

19.  Gifts in odd dollar amounts must provide backup documentation supporting the fact that it is a gift.  Gifts must be processed through ADVANCE, via a Gift Transmittal Form (for foundation gifts) or a BA-151 (for University trust funds).  Non-endowment gifts are subject to a 5% assessment fee (to be used for fundraising activities only).

20.  Checks MUST be payable to the foundation to be deposited in the foundation. ◦ For example, to be deposited in the NC State Engineering Foundation, payee should read “NC State Engineering Foundation” rather than “NCSU”  Checks payable to NC State University* and submitted for deposit in a foundation require sufficient written back-up from the donor to support intent the funds were for the foundation. ◦ Checks without sufficient donor documentation will be deposited to clearing until documentation is provided * Or a college, academic or administrative department of the University (e.g., CALS, CHASS Dean’s Office, Biomechanical Engineering Department)

21.  Distinguishable from a gift because the person/entity receives something of value in return  Examples of Other income include money received from fundraising events (e.g., football game tailgate event) or the sale of merchandise, for which there is no charitable deduction  FAI deposits and records other income received by the foundations  Other income receipts go to FAI directly, and do not need to be sent to Adv. Services, unless there is also a gift component. The other income receipts should be sent along with a completed “Other Income Transmittal” form http://www.fis.ncsu.edu/foundations_accounting/services/documents/cont_list%20other%20inco me.doc

22.  Activity generating other income MUST be in the name of the foundation – if the marketing materials only indicate the University, the College, or a department they MUST be deposited in a University fund. If in the name of the foundation, must make sure adequate insurance coverage – University insurance will not cover foundation events.  Must provide support/documentation that the other income receipt belongs in a foundation project – this would include marketing materials, such as a flyer, brochure, weblink, etc.  Associated expenses must be paid from the same fund where the receipts are deposited.

23.  An activity could have both a gift and an other income component. For example, a $100 fundraising dinner, with a meal valued at $30 would have both components - $70 gift and $30 other income.  A Gift Transmittal form must be completed for the gift portion.  A Other Income Transmittal Form must be completed for the other income portion.  The check(s) should be sent to Adv. Services if there is a gift component, or if no gift component then it can be submitted directly to FAI.

24.  The primary point of contact for Foundation funds is generally someone in your college business or development office  New Fund Requests: must include documentation supporting the fund request  Funds cannot be transferred from a university project to a foundation project (transfers can occur in the other direction, because the Foundation exists to support the College)

25. QUESTIONS?