L&S UW Foundation Overview
Overview of UW Foundation including: how accounts are set up, types of Foundation accounts, 112- expendable or 132- endowments, check requests, gift deposits, policies on deposits and how the money can be used.
The UW Foundation (UWF) is the entity that handles gifts and donations for UW-Madison. The UWF is separate from the University but serves UW-Madison. Because it is separate, the UW Foundation accounting system is separate from the UW's accounting system and the two systems don't interact directly.
The UW Foundation holds gift funds that can be accessed by using a UW Foundation Check Request (Log in, hover over Fund Management in red navigation bar, select "Check/ACH request" from the pull down menu). These requests can be used to pay vendors directly, or transfer money from the UWF to a UW 233 account. UW 233 fund accounts can accept only gift revenue. Vendor payment are made by submitting a check request with invoice and proper documentation. A transfer is made by combining a Foundation Check Request with a gift check routing form (select Check Routing Form - Create New Entry).
UW Foundation funds can be accessed with e-Reimbursement in order to pay individuals. Take note, e-Reimbursement is the only method to pay individuals from Foundation funds.
Departments have been assigned a development officer who can assist departments with fund raising. For questions about development, please contact the L&S Office of Advancement.
UW Foundation accounts have a title, a number, and a fund description that lays out the terms of the fund. Many UWF accounts are discretionary, usable for whatever purpose the Department Chair requires, some are for grad or undergrad fellowships or support, some support a specific researcher's program, and some are for very specific projects. Be sure you are aware of the fund terms before you use the money. Terms and conditions information is available on the Advancement Resources website (log in, hover over Fund Reporting in red navigation bar, select Fund/List Information; select the account you want, click "view" under the Fund Details column, scroll down and click the Fund Description tab).
The 112- expendable accounts are like a money market checkbook: you can spend the cash that is available; if you have a high cash balance, then your cash balance will earn a small amount of interest. These funds are accessed using a UW Foundation Check Request (Log in, hover over Fund Management in red navigation bar, select "Check/ACH request" from the pull down menu). Gifts and donations received by the department can be deposited into these accounts with a UW Foundation Gift Deposit Form (Log in, hover over Fund Management in red navigation bar, select "Gift & Special Deposit" from the pull down menu). Donors may give gifts electronically by using a donation link on your website, or the UW Foundation donation link.
The 132- endowments earn interest each year, currently about 4% on the market value of the principal. Interest earned is paid quarterly and put into the "spendable endowment income" category of your account. Some 132- accounts allow you to spend the principal, but most do not. You must consider carefully before spending the principal of an endowment, because that will eat away at the endowment's interest earning capability. Pay attention to your endowment's earning power. If you pay a scholarship, fellowship or a regular award out of 132- endowment, be sure that you are giving at a sustainable level. If you earn more than what you give, your cash balance will build up and be wasted by not being used. If you spend more than you earn, you will overdraw the endowment and create an expectation for an award or fellowship or scholarship that you can't fulfill every year.
NOTE: Donations to 132- accounts that are not department annual funds will be considered to be cash to be invested. This means UWF will assume such donations are not to be spent, but meant to be added to the principal of the account. Those donations are added to the principal at the close of the next quarter and, unless your endowment allows the spending of the principal, will never be spendable. If your donor wants the donation to be spendable as cash, the donor must indicate that clearly to UWF at the time of donation. Donations to endowed annual funds are treated differently, because it is common practice for donors to give money meant to be spent as cash to those funds, and that is what the donor, department, and UWF expect. Although donations to annual funds will initially be put into the "cash to be endowed" category, they will be moved to spendable cash at the end of the next quarter. If you have questions about this process, please contact Ben Ball at 5-1170.
UW-Madison and UW Foundation Policies
Campus policy guidelines govern the gift deposit and expenditure of funds held for units of the University by the University of Wisconsin Foundation. Such funds vary widely in scope and purpose, from funds attached to a particular named professorship, to general or highly specific scholarship funds, to discretionary funds or donor-restricted funds for activities of a particular department or the College as a whole. The intent of the guidelines is to assure accountability to donors and the public for the appropriate expenditure of all University funds, including funds held by the UW Foundation.
Departments can obtain information about their funds at the Foundation by using Advancement Resources website through their authorized user. Only authorized users will be able to enter and use this site. To request authorization contact Ben Ball at email@example.com or at 265-1170, indicating which accounts you need to access.
Whenever possible, Foundation funds should be transferred to the University and held in a UW gift account (Fund 233) for subsequent expenditure through the normal University purchasing, payroll, and accounting systems. Any expense that is allowable or can be submitted through the University cannot be paid by the Foundation. This means you cannot arbitrarily decide to use UW or UWF funding sources. If the UW can pay, you must pay through UW. Keep in mind, once UWF money is transferred into a UW 233- account, that money becomes UW money, subject to all UW policies and limitations, and that money cannot be returned to the UWF.
For business-related activities that cannot be funded through the University, it is permissible to request direct payment from the Foundation via a check request. Before transmittal to the Foundation for payment, all direct payments to vendors by the Foundation must be validated by two signatures: one at the initiating level by the department chair or director, and two the Dean's office level. The Dean has delegated that authority to Mary Machaj, and you should send all UW foundation payment requests to her (408 South Hall) for approval. Requests for payments to individuals by UW Foundation must be processed through the e-Reimbursement system.
Regardless of whether the payment is made from a University account or from a UW Foundation account, the same level of documentation is required and should accompany payment requests. The request must be accompanied by documentation supporting the expenditure, similar to that required by UW Internal Audit for the expenditure of other University funds. If meals are involved, the materials should include a list of those participating. For receptions, an estimated head count is required. Such documentation will be retained by the Budget Office.
More specific information on the purposes for which gifts will be accepted and the policies and procedures for expenditures may be found in the Chancellor's memo on UW-Madison and UW Foundation Policies. Also, as a companion to this memo, Business Services has developed a "how to" page for depositing gifts. For further information about this topic, or for advice about establishing a 233 (gift) account, please contact Ben Ball (265-1170).