===Estate Planning - Planned Gifts Policy Statement

Planned Gifts Policy Statement

Introduction
Definition and Objective
Management Policies
Instrument Guidelines
Establishment Procedures
Oversight

Introduction

A strong planned gifts program is essential to the fulfillment of the long-range objectives of Ashland University. A high percentage of the endowment and capital assets of private colleges and universities have been derived from such programs. Public policy encourages private support of institutions like Ashland University not only through tax benefits designed into the income tax laws, but also in even greater measure through estate tax laws. Planned gifts are often the largest single investment an individual can make in support of education.
In order to reach the level of endowment funds it deems necessary to undergird its program of education, and because of the unique situation in history of the greatest generational wealth transfer ever, the University is committed to securing the greatest good for both its constituents and the institution for which it holds trust.

The Office of Legacy Estate Programs serves under the direct supervision of the Associate Vice President for University Campaigns. The program of the Office of Legacy Estate Programs is an integral part of the total financial program of development for the University. Contacts with constituents must be part of a coordinated effort to maximize donor confidence and participation. The planned giving program seeks to secure the portion of these resources available only through this type of effort. An aggressive educational and informational program will be presented in a sensitive, confidential, and individualized manner.

The planned gifts program offers prospective donors the opportunity to incorporate their charitable objectives into total estate and financial planning for their maximum benefit, as well as the University's benefit.

Definition and Objective

Definition

Planned gift: A planned gift is any gift, for any amount given, for any purpose...operations, capital expansion, or endowment...whether for current or deferred use if the assistance of a professional staff person, a qualified volunteer, or the donor's adviser is necessary to complete the gift. In addition, it includes any gift which is carefully considered by a donor in light of estate and financial plans.

Objective
The objectives of the planned gifts program are:

To provide comprehensive educational planned giving and estate planning information and counsel to alumni and friends of Ashland University whereby they may accomplish their financial planning and charitable objectives.

To develop additional resources for Ashland University.

Ashland University seeks to provide only the most up-to-date and correct information to its constituents. Its representatives are trained by the best qualified professional standards. At all times these representatives will perform their duties with the highest professional, ethical and fund-raising standards, and provide only the very best information and service possible.

Management Policies

The planned gifts program legally commits Ashland University and its Board of Trustees to obligations extending into the future. Therefore, the Board of Trustees has formally adopted the following policies which protect:

The best interests of the donor.

The official representatives of the institution.

The welfare of the institution itself.

The administrators charged with management of the planned gifts program.

The following policies are to be adhered to by representatives of Ashland University:
Conflict of Interest
The planned gifts program is guided by principles of Christian stewardship and is donor-centered to help each individual in the context of his or her own unique circumstances, interests and needs.

The interests of Ashland University will not take precedence over the interests of the donor. No program or commitment is urged upon any prospective donor which benefits Ashland University at the expense of the donor. The University will not knowingly enter into any agreement which will jeopardize the donor's interests.

It is the practice of Ashland University to recommend that an outside party serve as executor of any estate in which the University is a beneficiary.

If Ashland University serves as a trustee or co-trustee of any trust of which the University is the beneficiary or of any partial interest thereof, the trust management/administration will be supervised by the Vice President for Business Affairs, consistent with the current investment policy for trust funds established by the Board of Trustees or its designee, the University's Investment Committee.

In the case of very specialized planned giving instruments that require professional services of a legal investment or purchase nature, neither the University nor any representative or employee of the University shall profit financially, directly or indirectly, from any such transaction. This policy would exempt legal and ethically sound open transactions between close personal friends and previous business associates, but in no way should cast any suspicion or conflict of interest.

Tax and/or Additional Counsel
Prospective participants in planned gift instruments or gifts from estate planning efforts must be urged by University representatives to consult with their own personal advisers (e.g., accountants, certified estate planners, investment brokers, legal counsel, etc.) prior to any formal agreement being finalized.

Solicitation Procedures
Representatives of Ashland University shall exercise extreme caution to avoid pressure or undue persuasion when dealing with prospective donors. Information regarding a plan including benefits, limitations, and tax implications must be provided to a prospective donor before a gift is made.

All personnel employed by Ashland University to contact prospective donors or to promote the planned gifts program shall be paid a salary or fixed wage, and shall not receive commissions or other benefits which could give such personnel a personal interest in any agreement.

Scope of Service
Services of representatives of Ashland University shall extend beyond the interest of the University by encouraging donors to remember personal and family responsibilities.

Confidential Information
All information concerning prospective donors including names and addresses, beneficiaries, nature and worth of estates, amount of bequests, etc., shall be kept strictly confidential by Ashland University and its personnel unless the donors grant written permission to use certain information for purposes of referral, testimony, or example.

Authorizations for Negotiation
Only the personnel approved by the President, in concert with the Vice President for Development and Public Relations, shall be authorized to negotiate on behalf of Ashland University with respect to planned gift programs.

Instrument Guidelines

Gift Annuities
No gift annuity shall be issued in exchange for an amount of less than five thousand dollars ($5,000) without special circumstances being cleared with the Vice President for Business Affairs; nor will an immediate one-life gift annuity be considered on an individual under forty (40) years of age without similar clearance. Deferred one-life gift annuities on lives under forty (40) years of age will be considered without the above restrictions.

Gift annuity rates of return, as a general rule, shall be those most recently approved by the American Council on Gift Annuities. Gift Annuities that may be written for special purposes with respect to either health conditions or educational opportunities for designated beneficiaries will generally follow the same rates. However, they will be able to be adjusted to serve the donor and beneficiary as approved by the Vice President for Business Affairs in consultation with the current investment committee of the University.

Investment of gift annuity funds shall be overseen by the Vice President for Business Affairs consistent with the current investment policy for life income funds established by the Investment Committee of the University.

Unrestricted maturing gift annuities shall be recognized as additions to general endowment funds in accordance with generally accepted accounting principles, or may be placed in the current operations budget in the year in which they mature only upon the recommendation and approval by the Board of Trustees of the University.

The Board of Trustees may consider reinsuring annuities with one or more financially sound insurance companies, as recommended by the Board's Investment Committee.

Charitable Remainder Trusts

The following must be considered by Ashland University to serve as trustee of a charitable remainder trust:

Unitrust and annuity trust agreements are generally written for one or two lives. However, in cases involving term of years or multi-generational unitrusts, more than two lives may be considered in certain cases. The Executive Committee of the Board of Trustees must give their approval for agreements that reach beyond two generations.
Normally, Ashland University shall not serve as trustee or co-trustee pursuant to a charitable remainder trust unless the University is designated to receive at least one percent more than the next highest remainderman and is an irrevocable beneficiary. Appropriate fees may or may not be charged. Special considerations will be made and can be approved by the Executive Committee of the Board of Trustees.

Ashland University recognizes there are many professional agents of charitable trusts outside of charities themselves. In order to maximize the available resources possible within the scope of the highest ethical standards, the office of Legacy Estate Programs will seek to obtain referrals from attorneys, accountants, financial planners and other professionals. Ashland University shall not pay finders fees and nothing shall be done to jeopardize or compromise any standard or procedure that is adhered to within the normal context of direct relationships with a donor.

Annuity Trusts -- The minimum principal amount shall be twenty-five thousand dollars ($25,000). The amount to be paid annually shall be no less than 5 percent of the initial net fair market value of the assets transferred (the minimum set by law) and no more than 10 percent of initial net fair market value of the assets transferred.

Unitrusts -- The minimum principal amount accepted will be two hundred dollars ($200) per month, with the overall expected commitment being twenty-five thousand dollars ($25,000). The same percentage limits mentioned above for annuity trusts will be applied to unitrusts. However, due to the nature of the three types of unitrust vehicle options and their many possible variations of investment opportunity (either with Ashland University serving as administrator and/or fiduciary or with an outside administrator and fiduciary) that aim to meet donor's objectives, these rates are paid per direction of individual document. (See investment policy statement for ongoing valuation guidelines).

All trusts under one hundred thousand dollars ($100,000) shall be administered by Renaissance, Inc., or a similarly equipped administrator.

Pooled Income Funds

The Ashland University Long-Term Pooled Income Fund of 1981 and the Ashland University U.S. Bond Pooled Income Fund of 1985 and any such new funds established in the future exist so investors with charitable intent may participate.
Designated university personnel from the Development Office and/or the Business Office are directed to present a comprehensive prospectus of performance of these funds to potentially interested participants prior to securing any agreement. The fund will be administered by the University's Vice President for Business Affairs under direction of the Investment Committee of Ashland University. All funds will be invested to recognize a market competitive return with careful attention to potential risk of principal erosion and a balance of growth opportunities.

Bequests

The University shall not prepare wills or living trusts for individuals. However, proper wording for a bequest remembering the University may be provided. In addition, assistance with either will or living trust preparation may be proper so long as the final document is drafted by the prospective donor's attorney.

Other Arrangements

The preceding are considered the most commonly used planned giving instruments. However, other gift arrangements (i.e., life insurance, lead trusts, gifts-in-kind, estate note, loans, etc.) are also viable and shall be executed when appropriate.

Establishment Procedures

All proposed planned giving agreements shall be reviewed and approved by the Director of Legacy Estate Programs and University Counsel prior to implementation. The Legacy Estate Programs Director is charged to secure approval of initial guidelines for each proposed planned giving document via the Vice President for Business Affairs (or designated member of the Investment Committee) and to keep the President and the Vice President for Development and Public Relations informed at all times of these matters. In particular, should any unusual or new document, planned gift vehicle or investment strategy be employed, this notification is imperative. Prospective donors shall be clearly advised of the necessity of this prior approval procedure.
Items for review and approval shall include initial fair market valuation of asset's marketability, payout percentages, payment dates, fiscal year, investment policies and any other financial and legal consideration that might affect the agreement.

Prospective donors shall be advised that the University, should it serve as fiduciary, is legally responsible to both income and remainder beneficiaries and must be allowed discretion in investment of funds.

Trust agreements shall be executed by the President of Ashland University and by prospective donors in the presence of two witnesses and shall be notarized. The University's Vice President for Business Affairs may sign the agreement on behalf of the University in the absence of the President and upon his approval.

In all cases where the University serves as trustee or co-trustee of a charitable trust, its legal council shall approve the document in writing prior to signing by University representatives. Ashland University may serve as trustee pursuant to a revocable instrument with the following considerations:
A fee may be charged for trustee services.
Ashland University is a remainderman of at least 1% more than the next largest beneficiary of the revocable instrument.
No gift of a partnership interest or of stock representing ownership of all or substantially all of a closely held corporation shall be accepted until Ashland University has received satisfactory evidence indicating the net value of the assets and amount of liabilities, both fixed and contingent.
In the case of hard to value assets donated to a charitable trust for which the University is trustee or co-trustee, or should the assets that are donated be such so the University believes its resources are insufficient to supervise operation of or disposal of these assets, or if the trust instrument so dictates, Ashland University may employ an Independent Special Trustee to serve as adviser/supervisor of the necessary activities involved with the assets of the trust.

Upon receipt of a gift of publicly traded securities, Ashland University shall, as soon as practicable, place the securities with the University's money managers for evaluation and/or sale. In the event that donated securities have a limited market, the certificates will be placed in a safe repository and on a quarterly basis the value and marketability of these securities will be investigated to determine whether the securities shall be sold. Exceptions may be granted with the approval of the Investment Committee of the Board.

No gift of real property shall be accepted without an attorney's title opinion or a title search by a reputable title insurance company. Real property or substantial tangible personal property shall not be accepted without evaluation by an independent appraiser chosen by mutual agreement of the donor and Ashland University. Second appraisals are standard in most cases where valuations must be precisely established. Expenses of appraisals shall be at the cost of the donor unless previously agreed to otherwise. The University shall investigate all real property for compliance with environmental laws prior to accepting title and shall request professional environmental audits if deemed advisable by the Vice President for Business Affairs. Costs of such an audit would be the responsibility of the donor unless otherwise individually determined. Should there be any question as to the acceptability of specific property, the Vice President for Business Affairs is instructed to obtain permission for acceptance from the Executive Committee of the Board of Trustees.

Ashland University reserves the right to decline gifts that are not in keeping with its mission statement and/or which may be restricted in such a manner or of a nature the University deems inadvisable to accept.

All written instruments establishing non-cash funded Gift Annuities, Deferred Gift Annuities, Charitable Remainder Trusts, Pooled Income Funds, or other gift arrangements shall include reference to the donor's cost basis in the property constituting the corpus of the fund, to enable the fiduciary to account for capital gains (distributed or reinvested) implications in reporting to both appropriate governmental agencies and donor as well as type of income generated upon liquidation of such property.

In all cases of gift valuation, it is the policy of the University that it is done honestly and accurately. All tax reporting procedures concerning these gifts will be followed as required by law.

No employee of Ashland University shall serve or agree to serve in an individual personal capacity as a fiduciary for a donor pursuant to a will, trust agreement, or other planned giving instrument unless he/she is already serving in a similar capacity for the donor/donors prior to such agreement or he/she is a relative or close personal friend of said donor/donors.

In determining age for use in gift annuities or life-income contracts, the age indicated by IRS Regulations will be used.

Investment of funds received in return for life or term of years (specified or not) income agreements in which Ashland University is the administrator and/or has the fiduciary responsibility shall be overseen by the Investment Committee of the Board of Trustees.

Investment of funds in which Ashland University is party to or trustee or co-trustee of a negotiated contract that does not involve it as administrator or fiduciary must be reviewed and approved by the Vice President for Business Affairs and the Board's Investment Committee.

Funds received for gift annuities and Charitable Remainder Annuity Trusts may be commingled only after close examination of the goals of the gift instruments to see that they are consistent with similar goals and objectives of funds in which they are to be combined. However, in all cases the gift agreements shall be monitored as specified in the following investment guidelines. When the commingled funds of annuities exceed ten percent (10%) of the entire endowment funds of the University, such obligations over that amount shall be reinsured through a sound qualified insurance company.

Payments on gift annuities and life-income contracts shall be made monthly, quarterly, semi-annually, or annually according to the donor's choice at the execution of the agreement.

It shall be, however, the policy of this program to use the least frequent interval of payment that is practical within the framework of the donor's desires.

The Office of Legacy Estate Programs shall assume responsibility for maintenance of prospect mailing lists, files, reports, contact records, donors' personal and financial information, gift plan negotiations, systems for handling receipting, acknowledgments, account designations, and record expectancies. Until the Business Office should obtain specific software to respond to annuity, trust and other life agreements, the Office of Legacy Estate Programs will make available its information processing software regarding tax records and information needed by the donor for confirmation and assistance purposes to appropriate Business Office personnel upon request.

The Business Office will be responsible for accounting, payment schedules, reporting for tax purposes, business records, trust administration, outside trust administration monitoring, managing investments, and disposition of funds.

Oversight

The Development Committee of the Board of Trustees shall provide oversight and guidance to the Office of Legacy Estate Programs. Development staff members shall consult with the chairperson of the Development Committee regarding specific policy questions.