Budget and Finance Policy and Procedure Office
A Division of The Office of Budget and Finance
A Division of The Office of Budget and Finance
This procedure operationalizes the requirements and steps for receiving, evaluating, accepting, processing, recording, acknowledging, and administering contributions from non-governmental sources as required in Policy FN03 Receipt of Contributions from Non-Governmental Sources. It ensures contributions are handled consistently, used in accordance with donor intent, and managed in compliance with applicable laws, regulations, University policies, and internal control requirements.
This procedure applies to all University employees, offices, business areas, and affiliated organizations subject to Policy FN03 Receipt of Contributions from Non-Governmental Sources that are involved in the solicitation, acceptance, processing, recording, acknowledgment, stewardship, reporting, or administration of contributions received from non-governmental sources.
Penn State Health or its subsidiaries and the Pennsylvania College of Technology are exempt from this procedure consistent with Policy FN03 Receipt of Contributions from Non-Governmental Sources.
This procedure is issued under the authority granted by Policy AD00 Policy on Policies and FN03 Receipt of Contributions from Non-Governmental Sources.
All defined terms applicable to this procedure are set forth in Policy FN03 Receipt of Contributions from Non-Governmental Sources.
This procedure does not create, modify, or interpret definitions.
This procedure must be applied in a manner consistent with Policy FN03 Receipt of Contributions from Non-Governmental Sources. In the event of a conflict between this procedure and Policy FN03 Receipt of Contributions from Non-Governmental Sources, the policy takes precedence unless a law, regulation, or funding requirement states otherwise.
All contribution receipts from non-governmental sources must be processed and categorized promptly. This procedure outlines how to receipt, process, and categorize contributions, including cash, securities, gifts-in-kind, real estate gifts, scholarships, awards, fellowships, and miscellaneous loan-source contributions.
All contributions must be managed in accordance with a defined life cycle that includes solicitation (where applicable), acceptance, documentation, processing, acknowledgment, stewardship, reporting, and, where applicable, closeout or disposition.
Following acceptance and processing, units are responsible for ensuring that contributions are:
The Office of Donor and Member Services, in coordination with the Office of Gift Acceptance and the Office of Budget and Finance, is responsible for ensuring that appropriate donor acknowledgments, substantiation, and required reporting are completed in accordance with University policy and applicable regulatory requirements.
Where required, contributions must be included in institutional reporting, including reporting to University leadership, external stakeholders, and regulatory bodies. Units must ensure that all required documentation is complete, accurate, and submitted within established time-frames.
Units must maintain appropriate records and supporting documentation throughout the full life cycle of the contribution to support audit, compliance, and financial reporting requirements. Documentation must demonstrate the receipt, classification, use, and disposition of funds, as applicable.
Failure to properly manage contributions throughout the life cycle may result in financial misstatement, non-compliance with donor intent, or violation of regulatory requirements.
All contributions must be reviewed and accepted in a manner that ensures full compliance with documented donor intent and preserves the University’s institutional integrity.
Prior to acceptance or processing of any contribution, the receiving unit must confirm that:
Units must not alter, reinterpret, or override donor intent except in accordance with the terms of the agreement between the University and the donor, with required donor and University authorization, or as permitted by applicable law. Any uncertainty, conflict, or requested modification to donor restrictions must be escalated to the Office of Gift Acceptance for review and formal resolution.
The University reserves the right to decline contributions that:
When a potential concern is identified, the receiving unit must pause processing and coordinate with the Office of Gift Acceptance and, as appropriate, the Office of General Counsel and the Office of Budget and Finance to determine whether the contribution may be accepted.
Documentation supporting donor intent review, including any approvals, escalations, or determinations, must be retained in accordance with Policy AD35 University Archives and Records Management.
Prior to acceptance or processing of any contribution, the University must perform appropriate due diligence to identify and mitigate legal, regulatory, financial, and reputational risks associated with the donor and the proposed contribution.
At a minimum, due diligence must include:
Additional due diligence is required for higher-risk contributions, including but not limited to:
The Office of Gift Acceptance is responsible for coordinating due diligence activities and determining whether additional review is required. As appropriate, the Office of Gift Acceptance will engage the Office of General Counsel, the Office of Budget and Finance, or other relevant University offices.
Units must not accept, deposit, or otherwise process contributions until required due diligence has been completed and any identified risks have been reviewed and resolved.
All due diligence activities, including screening results, risk assessments, and approval determinations, must be documented and retained in accordance with Policy AD35 University Archives and Records Management.
Only authorized University personnel may solicit, approve, or accept contributions on behalf of the University. All contributions must be reviewed and approved in accordance with established authority levels prior to acceptance, deposit, or processing.
Units are responsible for ensuring that contributions are not accepted or processed outside of delegated authority. When uncertainty exists regarding authority or required approvals, the receiving unit must consult the Office of Gift Acceptance prior to proceeding.
Contributions involving sponsored activity, deliverables, reporting requirements, intellectual property provisions, publication restrictions, data rights, or other sponsor expectations must be routed to the appropriate Research Administration office for classification and review before acceptance, deposit, or acknowledgment.
The Office of Gift Acceptance is responsible for coordinating the review and approval of contributions that involve elevated risk, complexity, or special conditions. Such contributions include, but are not limited to:
As appropriate, the Office of Gift Acceptance will coordinate review and approval with relevant University offices, including:
Certain contributions may require higher-level approval in accordance with University governance requirements. Contributions involving significant financial value, real estate, or complex/non-traditional assets may require review and approval by senior leadership.
Units must not:
All approvals must be documented and retained in accordance with Policy AD35 University Archives and Records Management.
In accordance with Policy FN01 Cash Revenues and Policy FN03 Receipt of Contributions from Non-Governmental Sources, the University must maintain proper documentation for all contributions received.
All contributions must be initiated and recorded using the University-approved Gift Reporting and Transmittal process or its approved system equivalent. The receiving unit is responsible for ensuring that all required contribution and donor documentation is complete and submitted to Donor and Member Services or the appropriate University office through the approved process.
Each contribution record must include:
Note: Documentation must be prenumbered or otherwise controlled so it cannot be lost or altered without detection. See Procedure FN2032 Processing and Controlling Prenumbered Receipts (pending) for details.
In addition to internal documentation requirements, all contributions must comply with applicable Internal Revenue Service (IRS) substantiation and disclosure requirements. Contributions of $250 or more require contemporaneous written acknowledgment issued by the University that includes the amount of cash and/or a description (but not value) of any non-cash contribution.
The donor must receive an acknowledgment from the University:
All Quid Pro Quo agreements must be approved before accepting the contribution.
For questions regarding IRS receipting rules, contact Donor and Member Services.
Units must not issue independent donor acknowledgments, valuations, or tax-related statements outside of established University processes. All donor-facing documentation related to tax substantiation must be coordinated through Donor and Member Services to ensure accuracy and compliance.
For contributions that include a quid pro quo arrangement (i.e., the donor receives goods or services in exchange for a portion of the contribution), and where the total payment exceeds $75, the University must provide a written disclosure statement that:
Donor and Member Services is responsible for issuing official acknowledgment and disclosure statements in accordance with IRS requirements.
For non-cash contributions requiring IRS reporting:
The Office of Gift Acceptance, in coordination with Donor and Member Services and the Office of Budget and Finance, is responsible for facilitating compliance with IRS reporting requirements for non-cash contributions.
All cash contributions must be delivered to the office responsible for processing - or to the local depository - as quickly as possible.
Units must contact the Office of Gift Acceptance before accepting restricted gifts on behalf of the University.
The following types of cash contributions must be delivered directly to Donor and Member Services and coordinated with the Office of Gift Acceptance, as applicable:
A pledge (gift commitment) is a documented promise to provide a contribution at a future date. All pledges must be properly reviewed, documented, recorded, and monitored to ensure compliance with University requirements and accurate financial reporting.
Prior to recording a pledge, the receiving unit must ensure that:
Pledges must be submitted to Development and Alumni Relations or the appropriate University office for entry into the official donor and financial systems of record. Units must not maintain unofficial pledge records outside of approved systems.
Pledge periods must not exceed five (5) years unless an exception is reviewed and approved by the Vice President for Development and Alumni Relations.
Units must not:
Payments received against a pledge must be processed in accordance with all applicable cash handling and receipting requirements outlined in this procedure.
Uncollectible pledges must be reviewed and resolved in accordance with University accounting standards and procedures. Units are responsible for coordinating with Development and Alumni Relations and the Office of Budget and Finance to ensure appropriate write-off or adjustment is recorded.
All pledge documentation, approvals, and related correspondence must be retained in accordance with Policy AD35 University Archives and Records Management.
Corporate matching gifts must be processed in accordance with the requirements of the employer’s matching gift program and applicable University gift acceptance requirements.
Units receiving or facilitating a corporate matching gift must:
Units must not agree to employer requirements that conflict with University policy, donor intent, or applicable legal or regulatory requirements. Any questions or conflicting requirements must be referred to the Office of Gift Acceptance for review before the matching gift is accepted or processed.
Endowments are donor-restricted contributions established to provide long-term financial support for the University. The creation, funding, and management of endowments must comply with University requirements governing minimum funding levels, documentation, and stewardship.
Prior to establishing a new endowment, the receiving unit must ensure that:
All endowment agreements must be:
Endowment contributions must be submitted to Development and Alumni Relations or the appropriate University office for processing and recording in the official donor and financial systems of record. Units must not establish or manage endowments outside of approved University systems.
Funds contributed to establish or support an endowment must be:
Units must coordinate with the Office of Gift Acceptance, Development and Alumni Relations, and the Office of Budget and Finance to ensure proper establishment, classification, and ongoing management of endowment funds.
All endowment-related documentation, including agreements, approvals, and donor correspondence, must be retained in accordance with Policy AD35 University Archives and Records Management.
Cash for unrestricted grants must be taken immediately to the designated Research Office along with supporting documentation.
The Research Office will:
Cash for restricted grants - or checks divided between gifts and grants - must also be brought to the Research Office with all supporting documentation, including approval of any Quid Pro Quo agreement.
For split contributions, the Journal Entry must clearly identify the separate allocation amounts.
For contributions that include both gift and non-gift (e.g., contract or sponsored) components, the unit responsible must coordinate with the appropriate Research Office to determine and document the correct allocation to each cost object prior to deposit, ensuring accurate classification and compliance with University financial and reporting requirements.
Deposits must follow Policies FN01 Cash Revenues, FN03 Receipt of Contributions from Non-Governmental Sources, RA04 Gifts, Grants and Contracts (The Funding Matrix), and Procedure FN2001 Processing Cash Revenues.
Cash contributions received by Development and Alumni Relations must be safeguarded, documented, processed, and deposited in accordance with Policies FN01 Cash Revenues, FN03 Receipt of Contributions from Non-Governmental Sources, and Procedure FN2001 Processing Cash Revenues. Development personnel must verify the contribution and supporting documentation, restrictively endorse check when applicable, and ensure the contribution is submitted through the appropriate University process for deposit, recording, and donor acknowledgment.
Processing routing requirements vary by location:
Donor and Member Services is responsible for final gift processing, recording, reporting, and official donor acknowledgment, as applicable.
The Office of Gift Acceptance coordinates acceptance, valuation, and communication with the Office of Budget and Finance.
Gift Reporting and Transmittal forms are prepared and submitted to Donor and Member Services for acknowledgment.
Donors should work directly with the Office of Gift Acceptance to ensure correct identification and registration.
The University does not accept U.S. Savings Bonds (Series E, EE, H, or HH). Units presented with U.S. Savings must not accept or take possession of the bonds on behalf of the University and should refer the donor to the Office of Gift Acceptance.
Envelopes must be saved as proof of the gift date.
Staff must prepare a signed memo documenting:
Securities must be sent to the Office of Gift Acceptance using controlled methods.
Upon receiving securities, the office will:
Includes reviewing valuations, preparing deposits, properly crediting funds, and handling restricted securities.
Restricted securities retain their valuation until sold; proceeds are deposited once eligible for liquidation.
Donor and Member Services must issue the official donor acknowledgment and receipt in accordance with applicable IRS and University requirements.
Units must consult the Office of Gift Acceptance before accepting gifts-in-kind such as artwork, equipment, books, or collectibles.
Prior to acceptance, the receiving unit, in coordination with the Office of Gift Acceptance, must evaluate and document that the gift-in-kind:
Valuation must follow IRS requirements, including qualified appraisals where applicable, coordinated through the Office of Gift Acceptance.
Development staff must:
The Office of Gift Acceptance will issue the official acknowledgment and manage required gift records.
Asset Management will tag and track applicable gifts in accordance with University requirements.
All real estate gifts must be coordinated through the Office of Gift Acceptance, which is responsible for coordinating the overall gift acceptance process. University Real Estate Services is responsible for coordinating the real-property due diligence process, in collaboration with the Office of Physical Plant (OPP) or third-party vendors, as appropriate.
Requirements include:
Mortgaged property cannot be accepted unless the donor clears the mortgage.
Non-traditional or complex assets include contributions that require specialized evaluation due to legal, financial, tax, or operational considerations. These assets may include, but are not limited to:
Units must not accept, transfer, or otherwise process non-traditional or complex assets without prior review and approval from the Office of Gift Acceptance.
Prior to acceptance, the Office of Gift Acceptance, in coordination with the Office of Budget and Finance and, as appropriate, the Office of General Counsel, will evaluate:
Additional review may be required depending on the nature of the asset, including consultation with external advisors or subject matter experts.
Acceptance of non-traditional or complex assets is contingent upon:
Units must not:
Once approved, the Office of Gift Acceptance will coordinate the acceptance, documentation, and transfer of the asset. The Office of Budget and Finance will ensure proper classification, valuation, and financial recording in accordance with University accounting standards.
All documentation, approvals, and supporting analysis related to non-traditional or complex assets must be retained in accordance with Policy AD35 University Archives and Records Management.
The University may accept anonymous contributions; however, all anonymous gifts must be handled in a manner that ensures compliance with internal control, audit, legal, and regulatory requirements.
Prior to acceptance, units must coordinate with the Office of Gift Acceptance to evaluate the appropriateness of accepting an anonymous contribution. Anonymous gifts are subject to the same donor intent validation, due diligence, and approval requirements outlined in this procedure.
While a donor may request anonymity in public recognition or external communications, the identity of the donor must be obtained, verified, and retained within University records for internal purposes, including audit, compliance, and legal review.
Access to donor identity information for anonymous contributions must be:
Units must not:
All documentation related to anonymous contributions, including donor identity verification, approvals, and correspondence, must be retained in accordance with Policy AD35 University Archives and Records Management.
All scholarship, award, and fellowship contributions must comply with the requirements of Policy FN09 Scholarships and Awards. Scholarship, award, and fellowship criteria must comply with applicable University nondiscrimination requirements and applicable laws. Units must not accept or establish contribution restrictions or eligibility criteria that conflict with these requirements.
Contributions with donor-imposed restrictions must be reviewed and approved in accordance with Policy FN09 Scholarships and Awards and applicable gift acceptance requirements before acceptance.
Contributions that include a Quid Pro Quo arrangement or other terms, conditions, reporting requirements, or deliverables must receive all required reviews and approvals before acceptance.
Once approved, the contribution and documentation must be sent to Development and Alumni Relations for processing.
Unrestricted contributions must also be sent to Development and Alumni Relations with supporting documentation.
Gifts are deposited into Fund 9900000028, then transferred after the gift is recorded to the correct internal order.
Deposits for outside scholarships (funds sent to support a specific student but not governed by University awarding criteria) must be made to:
These are administered by the External Awards team in the Bursar’s Office.
The responsibilities established in Policy FN03 Receipt of Contributions from Non-Governmental Sources apply to this procedure.
The following identifies the primary University offices and units responsible for performing the operational activities established by this procedure. Roles established in Policy FN03 Receipt of Contributions from Non-Governmental Sources that do not perform recurring operational activities under this procedure are not repeated below:
| Role | Responsibilities |
|---|---|
| Office of Gift Acceptance |
|
| Donor and Member Services |
|
| Office of Budget and Finance |
|
| Development and Alumni Relations |
|
| Research Administration |
|
| University Real Estate Services |
|
| Office of General Counsel |
|
| Receiving Units |
|
Units involved in receiving, processing, recording, acknowledging, or administering contributions must maintain appropriate internal controls throughout the contribution life cycle.
At a minimum, controls must:
Identified control deficiencies, unexplained discrepancies, suspected misuse, or other compliance concerns must be promptly reported and escalated to the appropriate University office for review and resolution.
Any deviation from the requirements outlined in this procedure must be formally reviewed and approved prior to implementation.
Requests for exceptions must:
All exception requests must be reviewed and approved by the Senior Vice President for Finance and Business/Treasurer. As appropriate, the Office of Gift Acceptance, Office of General Counsel, and other relevant University offices may be consulted as part of the review process.
Units must not implement exceptions to this procedure without documented approval.
Approved exceptions must:
Failure to obtain appropriate approval for an exception may result in the activity being classified as a violation of University policy and procedure.
Approved exceptions do not waive compliance with applicable laws, regulations, or other University policies.
Violations of University policy should be reported to the appropriate supervisor, unit manager, Human Resources representative, or the office responsible for the relevant policy or procedure. If these channels are insufficient or unavailable, individuals may submit an anonymous report through the Penn State University Hotline, accessible via the Reporting at Penn State website.
The Office of Budget and Finance, in collaboration with the appropriate business area, is responsible for ensuring compliance with this procedure and supporting audit activities related to contributions received from non-governmental sources. Audits may be conducted by Internal Audit, external auditors, sponsoring agencies, or other authorized parties.
Audit reviews may include contribution classification, donor intent compliance, acknowledgment and documentation requirements, due diligence records, gift agreements, endowment administration, valuation methodologies, and compliance with applicable laws, regulations, and University requirements.
Units must maintain appropriate documentation and cooperate with all audit, review, and compliance activities.
University Records must be retained and managed in accordance with Policy AD35 University Archives and Records Management and the University's Records Retention Schedules.
Additional questions may be directed to the Office of Records Management.
For questions, additional details, or to request changes to this procedure, please contact the Policy and Procedure Office by submitting a Technical Support Request Form.
There are no exhibits associated with this procedure.
September 8, 2026