Fund Agreements

Overview

When the University of Georgia Foundation accepts a gift from a donor(s), the Foundation is required to use the gift as intended by the donor(s).  The intent should be clearly stated and agreed upon by all parties.  A fund agreement is created to describe the purpose of the gift and to document the mutual approval of the donor(s), the unit(s), the University of Georgia, and the Foundation.  A fund agreement serves as a guide to ensure gifts are deposited correctly, spent appropriately, and stewarded accordingly.

The boilerplate language in the fund agreement templates has been developed in consultation with Foundation legal counsel to ensure all funds are administered according to law and University and Foundation policy.  There is little to no flexibility in making changes to this language.

The honorary naming of funds is reserved for endowments only.  Non-endowed funds are created and named based on purpose.  Only in unique situations will exceptions be made.

Most non-endowed fund agreements are signed by internal University and Foundation parties only and do not include an external donor(s)/donor representative(s) signature.    

Clauses for proposals, gift agreements, or solicitations that discriminate on the basis of race, color, sex (including sexual harassment and pregnancy), sexual orientation, gender identity, ethnicity or national origin, religion, age, genetic information, disability, or veteran status are prohibited as mandated by federal and state laws and regulations and University of Georgia policy.

Procedure

1. For a new non-endowed fund, the Development Officer should work with relevant members of the benefiting unit to determine a purpose statement and criteria before completing the New Fund and Addendum Request form through the Foundation’s ticketing system.
2. For a new endowed fund, the Development Officer should work with the donor(s) or donor representative(s) to develop a purpose statement and criteria based on the descriptions and amounts listed in the Endowment Requirements.  The Development Officer should then work with relevant members of the benefiting unit to determine if the donor(s)/rep(s) purpose statement and criteria are appropriate and beneficial to the unit before completing the New Fund and Addendum Request form through the Foundation’s ticketing system.
3. The Foundation Office will prepare a draft fund agreement and share it with the Development Officer through the ticketing system. The Development Officer is responsible for reviewing the draft agreement, sharing the draft with relevant members of the benefiting unit, and sharing the draft with the donor(s)/rep(s).
4. The Development Officer should respond to the TeamDynamix ticket with any questions, concerns, or edits related to the draft agreement. The Foundation Office will review the requested edits and provide a revised draft agreement.  Once all parties have reviewed and approved the agreement, then the Development Officer should respond to the ticket with approval to move forward with the automated signature process.  If the donor(s)/rep(s) wishes to sign in person, then the Development Officer should inform the Foundation Office before the signature process begins.
5. The final version of the fund agreement will be loaded into the automated signature process.  The automated process has two stages: (1) official approval from all relevant UGA internal parties and (2) signatures from the donor(s)/rep(s) and all UGA internal signers.  The approval stage will begin with the Development Officer giving official approval for the final version of the agreement before the agreement goes to all relevant UGA internal parties for approval.  Once all relevant UGA internal parties have approved, the signature stage will begin.   The signature stage will also begin with the Development Officer, to give them the opportunity to notify the donor(s)/rep(s) the agreement email is forthcoming for their signature.  This awareness is important, in case the email goes into the donor(s)/rep(s) spam folder.
6. Once all signatures are obtained on the fund agreement, the signature process will automatically email a pdf copy of the finalized agreement to all relevant parties, including the donor(s)/rep(s).  The finalized agreement will then be attached to the fund in the financial accounting system and will also be viewable in the fundraising system.

Fund Agreement Criteria

1. Endowed Funds
   1. An endowed gift is one in which the original principal is never invaded, and the gift exists in perpetuity. Endowments are generally funded within five years (or less) of the initial contribution. Income is distributed annually pursuant to policies adopted by the Foundation.
   2. The type of endowment determines the type of fund agreement required. Please see “Endowment Requirements” for the various kinds of endowed funds and the minimum funding required to establish each one. There are generally four endowed fund agreement formats:
      1. Endowed – This agreement is used when the initial gift(s) is sufficient to meet the endowment requirement.
      2. Time-Period Specification – This agreement is used when the gift(s) will be received over a period of time (up to five years). The time-period is indicated in the fund agreement and expenditures from the fund are prohibited until the minimum funding has been reached.
      3. Chairs / Professorships – Chairs and professorships are generally created as endowments. Language in the fund agreement satisfies University of Georgia and Board of Regent requirements for hiring professors to a named chair or professorship position.
      4. Declaration of Trust – This agreement is used when a gift(s) is received through a deferred mechanism. The donor(s) is deceased, and the gift(s) has been received through a deferred gift or from an estate. A finalized planned gift agreement or will is usually the source for drafting this type of agreement (a declaration of trust may also be a non-endowed agreement).
2. Non-Endowed Funds
   1. A non-endowed gift agreement ensures the gift(s) will be spent to support the fund purpose. There are two types of formats for non-endowed fund agreements:
      1. Non-Endowed – A non-endowed fund generates no investment earnings and is not assessed a fee.
      2. Declaration of Trust – This agreement is used when a gift(s) is received through a deferred mechanism. The donor(s) is deceased, and the gift(s) has been received through a deferred gift or from an estate. This fund follows the same criteria as the endowed declaration of trust, except that the donor’s intent is for the entire gift to be expended for the intended purpose indicated by a deferred gift arrangement, a finalized planned gift agreement, a will, or any other document which transfers the estate gift to the Foundation.
3. Addendums: 
   1. Addendums are used to make minor modifications to original fund agreements. Changes to original fund agreements are not encouraged and should be decided on a case-by-case basis.
   2. In some cases, to be determined by the Foundation Office, a full replacement agreement may be more appropriate than an addendum.
   3. Addendums may be requested using the New Fund and Addendum Request form.
   4. Changes to benefiting department names through department mergers or University renaming will be handled by the Foundation Office and do not require an addendum, except in certain rare instances.

Fund Maintenance

The Foundation periodically reviews unsigned, expired, and inactive funds and may contact the benefitting unit to discuss possible options for next steps. This ensures donations are utilized to support UGA’s mission. The terms of each fund agreement are followed in all cases, and highest priority is placed on honoring the intent of the donor(s).

1. Unsigned fund agreements are reported on a quarterly basis to ensure progress through the approval stages. The UGAF Gift Agreements Team will contact the appropriate Development Officer to determine the status and the necessary steps to finalize the agreement.
2. Endowments not fully funded during the time-period described in the agreement are reported on an annual basis. The UGAF Gift Agreements Team will contact the appropriate Development Officer for information. The Development Officer will work with the head of the unit to choose an appropriate path forward.  The unit may choose to (1) provide a plan to raise additional gifts, (2) transfer the balance needed from one of the unit’s general funds, or (3) close the fund and transfer the balance to the unit’s general fund.  If a fund closure is requested, the fund agreement will be used to guide the process.
3. Funds having no activity for twelve consecutive months are reported on an annual basis. The UGAF Gift Agreements Team will contact the appropriate Development Officer for information.  The Development Officer will work with the head of the unit to choose an appropriate path forward.  The unit may request (1) the fund remain open for future needs or (2) the fund be closed and the balance transferred to the unit’s general fund.  If a fund closure is requested, the fund agreement will be used to guide the process.