Purpose

This policy was established to appropriately record and receipt gifts of publicly-traded securities to the University and to comply with IRS requirements. Generally, restricted stock will not be accepted by the University.

Scope

This policy applies to all securities donated to Hofstra University, whether transferred electronically through the University’s broker or received as physical stock certificates.

Policy

Background

The Office for Development and Alumni Affairs is generally notified by a donor or a donor’s financial advisor when securities are to be gifted to the University. Upon notification, the Office for Development and Alumni Affairs issues instructions to the donor to transfer the securities to an account maintained by the University at the direction of the Office of Financial Affairs (currently at Merrill Lynch). The Office for Development and Alumni Affairs then contacts Merrill Lynch to notify them that securities will be deposited by an outside donor.

Alternatively, in rare cases, stock certificates may be mailed to the Office for Development and Alumni Affairs with a letter of intent and authorization. In such cases, the Office for Development and Alumni Affairs will immediately hand-deliver them to the Assistant Treasurer in the Office of Financial Affairs.

Valuation and Recording

The valuation of a security gift is determined to be the mean of the high and the low price per share on the date of the gift (using the date the University takes control of the stock). Security prices are typically provided by the University’s broker or can be obtained from recorded trade publications such as The Wall Street Journal.

Example: To determine the value of the donor’s charitable gift, multiply the average of the high and low stock prices for that given day by the number of shares given to the University:

(High + Low) ÷ 2 = Mean Value per share

Mean Value per share × number of shares = Value of Donor gift

All gifts of securities shall be recorded by the Office of Financial Affairs via manual journal entries upon receipt of bank confirmation of the receipt and sale of the securities. The Office for Development and Alumni Affairs shall record the gift of securities into the Raiser’s Edge database and issue all donor receipts, following authorization of the proper valuation by the Office of Financial Affairs.

Related Policies and References

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