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Scope

This policy outlines the process for the approval, review, termination and dissolution of constituent Organizations that qualify as a 501(c)(3) Organization (referred to herein as Organization).

Reason for Policy

To account for the proper recording of gifts and donations to 501(c)(3) Organizations as well as ensuring the proper legal form of the Organization.

Policy Statement

Approval for Organizations
In order to fully outline the relationship between both parties, all affiliated organizations need to complete the UM System chartering process annually as outlined in the University’s Collected Rules and Regulations (Section 30.030, subsection C). 

Constituent Organizations using the name of the ÎçÒ¹Ó°Ôº or any college, school or division, or implying they are associated with the University will be approved and recognized by the University and, through the campus accounting office or campus advancement office, will submit annually, for approval, copies of currently effective articles of incorporation, charter, or constitution and an audited annual financial statement.  Such documents will specify the objectives of the Organization, its structure, and its financial arrangements.  Such documents will also include: the name of the Organization, the objectives of the association, requirements for membership, dues structure, Organizational structure, definition of officers, terms of office and basic responsibilities, financial arrangements, method of amendment and other pertinent information detailing the not-for-profit status of the Organization.

Annual Review
An Organization should participate in an annual review in accordance with ÎçÒ¹Ó°Ôº System Constituent 501(c)(3) Organizations Annual Affiliation Agreement and the Collected Rules and Regulation Section 30.030, subsection C.

The University chartering process is completed annually and submitted to the appropriate campus.  Changes or updates throughout the year will be communicated to the University in a timely manner to ensure complete and accurate records. 

Termination of Affiliation or Dissolution
Donor agreements for endowments and gifts held by the Organization shall include language that provides instruction as to whether (1) in the event of the termination of affiliation, funds provided by the donor are to be retained by the Organization or transferred to the University, in either case to be used exclusively for the benefit of the campus; and (2) in the event of the dissolution of the Organization, such funds are to be transferred to another 501(c)(3) determined by the Board of the Organization or transferred to the University, in either case to be used exclusively for the benefit of the campus.

Definitions

501(c)(3) Organization (also referred to as Organization) - section of the IRS code that outlines nonprofit organizations that are exempt from federal income tax.  Its purpose must be for educational activities to qualify as a 501(c)(3) Organization of the University.

Accountabilities

UM System Controller’s Office in conjunction with the Campus Accounting Office or Campus Advancement Office (depending on the campus) are responsible for the review and approval of new Constituent Organizations.

501(c)(3) Organization:

• Provide information on all gifts and pledges to the campus.
• Process all gifts in accordance with the Collected Rules and Regulations and University policies to ensure consistency and proper stewardship.
• Ensure its gift recording and receipting practices are be in tandem with the University’s donor acknowledgement and reporting processes.
• Provide biographical and other important Alumni and donor information in a timely manner to the University.
• Provide information on new gifts and pledges to the campus ADVANCE system, (the University’s official development and alumni database containing all gift/pledge and biographical records) in a manner consistent with University policies.
• Financial records maintained and/or audited outside the University by independent accountants will be made available in a timely manner to the University upon request.
• Get approval from Human Resources and the Office of the Chancellor for any personnel expenditures or personnel payments to University staff support outside of the University payroll system. 
• Get approval from the campus Chancellor to use University personnel to perform foundation, fundraising and administrative functions.
• Comply with any gift fee requirements as approved by the Board of Curators and in compliance with state of Missouri laws.
• Must have sufficient financial and personnel resources for hiring and oversight of outside counsel for general legal issues, and particularly for unique planned gifts. 
• Must have sufficient resources to provide appropriate donor acknowledgements, stewardship activities, management reporting, Board reporting, and related communication and marketing vehicles except as the University Chancellor has agreed to provide.

Additional Details

Forms

Constituent 501(c)(3) Organizations Annual Affiliation Agreement

Constituent Group Annual Registration Form

Related Information

Collective Rules and Regulations Chapter 30 – Development: www.umsystem.edu/ums/rules/collected_rules/administration/ch30

History

Formerly Business Policy Manual 112 – Affiliated 501(c)(3) Organizations and the Office of Advancement

Procedure