Receiving, Booking, and Spending Gift and Endowment Funds

Receiving and Booking Gifts

All gifts to UC San Francisco and the UCSF Foundation should be sent to the UCSF Foundation's Union Bank of California Lockbox along with copies of relevant backup documentation. Departments should not deposit gifts into the campus ATMs. Complete the Gift Transmittal Form and mail the completed form and all backup documentation to:

For gifts being sent by courier that required a street address:

Gift Administration will process the gift.

Other documentation includes:

• Statement of Economic Interest Form (700-U) required when the donor is non-governmental entity or industry.
• Gifts from industry and corporate foundations should include an award letter on company letterhead; see Conditions of Gift Award Letter for a template.
• Informed Participation Letter for continuing education, continuing medical education, and other educational activities gifts

UCSF General Endowment Pool

UCSF Foundation's general endowment pool is the Foundation's primary investment vehicle for endowed gifts. It is an investment portfolio in which all Foundation endowments participate.

View the general endowment pool unit values per share by fiscal year and payout per average share.

Accumulations of Endowment Income - Five Year Rule

In accepting endowment funds, the University is legally bound to keep the principal intact and to comply with the donor's restrictions governing the use of income. An implied requirement of this legal principle is that the University must actually put endowment income to use; income may not be allowed to accumulate for an unreasonable period of time. To ensure compliance, it is University policy that endowment income accounts should accumulate no more than the equivalent of five year's income. The same policy extends to funds functioning as endowments.

The Budget Office and Gift & Endowment Accounting will provide each control point with a report of endowment income funds with balances in excess of 5 years accumulated income annually in October of each year.

Methods for Spending Gift and Endowment Income Funds

UCSF and the UCSF Foundation receive gifts to further UCSF's mission of advancing health worldwide through innovative health sciences education, discovery and patient care. Gifts are received for current spending, and for endowments which provide an ongoing stream of endowment income for current spending. Endowments include permanent endowments and funds functioning as endowments (FFEs). At UCSF, two methods are used when spending gift and endowment income: 1) direct charge method and 2) transfer method. These spending methods are intended to provide flexibility to schools and departments in managing their finances and gift/endowment income projects, while ensuring effective stewardship over restricted funds and appropriate classification of fund balances in the University's financial statements.

Direct Charge Method (spending from a single Parent ID)

Spending from a single Parent ID (also commonly referred to in PeopleSoft as "Award/Parent ID"), the “direct charge method”, should be the default accounting practice for spending from restricted gift and endowment income projects. Gift and endowment income funds are administered through distinct spending Project(s) sharing a common Parent ID, with all expenditures charged to related parent and child Projects.

Although it may involve charging portions of an expense transaction to several Funds/Projects, spending via the “direct charge” method supports compliance with donor intent and purpose restrictions, and is most appropriate for projects with specific purpose restrictions. The “direct charge” method is also the most efficient method to account for gift or endowment income funds that require a high level of donor stewardship as donor reporting is facilitated with all activity under a common Parent ID.

Under the “direct charge” method, revenue is assessed when the original gift is directed to UCSF or upon transfer of gift and endowment balances from the UCSF Foundation; no assessment will be made when revenue is transferred among Projects sharing the same Parent ID using the specified transfer Accounts.

Transfer Method (consolidating restricted and unrestricted funds from multiple sources)

It may be impractical and onerous to allocate detailed expenditures for the same purpose to multiple Funds and Projects, and the “transfer method” consolidates restricted gift and/or endowment income balances with existing unrestricted funds. The balance, or any portion thereof, in a gift Fund/Project or endowment income Fund/Project can be transferred to an unrestricted non-gift or non-endowment income Fund/Project combination (such as a sales and service Fund and a PI Project); spending from the unrestricted Fund must be in accordance with donor restrictions and intent. The amount transferred can be comprised of current year revenue, or the accumulation of net position over multiple years.

Use of the “transfer method” should be the exception and based on business need. Such transfers are intended to provide flexibility to departments in managing their finances; used properly this method facilitates spending from multiple Fund sources, while retaining a clear audit trail of the ultimate use of restricted funds.

When the “transfer method” is used, transfer of gift or endowment income balances should be made in amounts sufficient to provide funding for expenditures expected to be incurred during the subsequent 12 months. Accumulation of restricted gift and endowment income balances in unrestricted Funds is not permitted. The intent of the “transfer method” is to consolidate gift/endowment income with significant amounts of unrestricted funds. It would not be appropriate to consolidate gift/endowment income balances into an unrestricted Fund with little or no money in it. Gift and endowment Fund/Project “transfer method” transfers are allowed on current unrestricted Funds, such as:

Under the “transfer method”, revenue is assessed when the original gift is directed to UCSF or upon transfer of gift and endowment income balances from the UCSF Foundation; no assessment will be made when revenue is transferred from a restricted gift or endowment income Fund/Project to an unrestricted Fund/Project.

Approval, Responsibility and Oversight

Under both methods, individuals with approval authority over transactions are responsible for maintaining compliance with donor restrictions by understanding and adhering to the purpose restrictions on the gift and endowment income funds that are entrusted to their schools and departments. Each Control Point has responsibility for implementation of proper controls. Controls should include the following:

• Department Controls
  • As with all PeopleSoft Journals, transfers from restricted gift/endowment income Funds/Projects to unrestricted Funds to facilitate spending for purpose from a consolidated source requires journal approval from the designated reviewer, using PeopleSoft existing journal entry workflow process.
  • The requestor and reviewer are expected to be familiar with donor restrictions and intent of the underlying gift/endowment. The reviewer should verify that the unrestricted Fund/Project will be spent for the same purpose and document business need for use of the “transfer method”.
  • Departments should monitor expenditures on the unrestricted Fund to ensure spending is in accordance with donor restrictions and intent associated with the gift/endowment income that has been transferred into the unrestricted Fund.
  • Departments are often required to provide stewardship reporting details on gift/endowment income balances that have been transferred to other unrestricted Funds to facilitate spending.
• Control Point Controls
  • Control points should consider additional approval or review steps that may be appropriate, including periodic review of balances moved through the transfer accounts, business need for such transfers, review for spending, excessive use of the “transfer method”, etc.
• Central Controls
  • Because the facts and circumstances that give rise to transfers are varied, the Controller’s Office and the Foundation retain the discretion to disallow any transfers that, in their judgment, negatively impact the University’s ability to account for the expenditure of restricted resources or conflicts with other University policies.
  • The Controller’s Office will periodically review transactions designated under the “transfer method”; if transfers are permitted to accumulate longer than 12 months, the school/department may be assessed a STIP penalty if it is determined that use of the “transfer method” was in excess of business needs, or that transfers did not reflect the intent of the “transfer method”.

Transfer of Unspent Gift/Endowment Income Balances back to Restricted Funds for Financial Reporting at Year-End

To properly classify restricted and unrestricted Fund balances in UCSF’s financial statements and UC’s system wide financial statements, at fiscal year end the Controller’s Office will review balances remaining in unrestricted Funds that include “transfer method” activity. Unspent gift and endowment income balances will be transferred back to a restricted gift or endowment income Fund using a central control point department ID for year-end reporting, with such transfers auto-reversing back to the unrestricted Fund for the subsequent year.

Net position on a consolidated basis for UCSF is reported based on the existence or absence of donor-imposed restrictions. An external reporting requirement exists to report the unspent portion of restricted gifts and endowment income. 

See Examples of Year-End Processes for more details. 

Transferring Gift & Endowment Income Funds

Prior to spending, Foundation gift and Endowment income balances must be transferred from the Foundation Business Unit (SFFDN) to the Campus (SFCMP) or Medical Center (SFMED) Business Units.

For transfers of less than $1.0 million, departments are encouraged to transfer gift and foundation endowment income from SFFND to SFCMP or SFMED by initiating an Inter-Business Unit journal entry in PeopleSoft.

For transfers in excess of $1 million dollars, departments should complete the Transfer of Funds Request Form and submit the completed form to [email protected] for processing.

See Transferring Gift & Endowment Income Funds for rules and step-by-step instructions.

Infrastructure and Operations (I&O) Fund

The Infrastructure and Operations (I&O) Fund is a component of the Core Financial Plan that supports the basic operations of the schools, administration, utilities and infrastructure across the campus, and strategic campus-wide initiatives. Assessments (including the gift fee) on gifts and endowments are transferred into the I&O Fund.

See the quick reference guide for details on the assessments and how you can view the assessments in MyReports.

Contact Information

If you have questions, contact Gift Administration Customer Service.