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Section 4: General Accounting

Accounting treatment of gifts

Effective Date:


Approved By:

Lenora Chapman, Associate Vice President, Financial Affairs

Last Revised On:


For Assistance Contact:

Assistant Vice President, Financial Affairs and University Controller

(210) 458-6914


To provide guidance for the accounting treatment of revenue and expenditures related to gifts including non-cash gifts and endowments from external parties and donors to UTSA.

This guideline does not address funds related to sponsored programs or gifts given by UTSA. For sponsored programs, see UTSA Financial Management Operational Guideline (FMOG) Grants and Contracts Accounting Practices. For gifts to employees, see FMOG Gifts and Awards to Employees (guideline pending).


The authority to accept gifts is vested in the University of Texas (UT) System Board of Regents (BOR) and delegated by the BOR as set out in the UT System Regents' Rules and Regulations Rule 60101.

The following policies provide information on the acceptance and administration of gifts:


Table of Contents

A. Private Sector Support

Private sector support is critical to UTSA. Contributions from individuals, foundations, corporations and other entities support the fulfillment of UTSA's mission and the provision of high-quality educational opportunities.

Faculty, staff and administrators are partners in fundraising for UTSA and are encouraged to attract private support to the university. UTSA procedures are intended to provide a systematic and controlled approach to securing private funding from individuals, corporations, foundations and other organizations to maximize philanthropic support for UTSA and ensure that these resources support university priorities.

B. Processing Gifts

A gift is a voluntary transfer of items of value, usually in the form of cash, checks, securities, real property (real estate) or personal property (all other gifts, such as works of art and equipment).

Gifts do not require specific deliverables or exhibit other characteristics of sponsored programs. For more information on sponsored programs, see FMOG Grants and Contracts Accounting Practices).

All gifts to UTSA including gifts to administrative units, colleges, divisions, departments, programs, faculty, and any operation under the auspices of UTSA must be processed through the Office of Advancement Services (OAS). The OAS works directly with UT System to process gifts on behalf of UTSA. Gifts will not be accepted, acknowledged or deposited without acceptance approval being granted by the OAS.

Processing gifts requires the submission of a complete gift processing package, which includes:

  1. A completed Gift Processing Form for cash/cash equivalents (cash, checks, money orders, credit card transactions, and stocks), or an In-Kind Gift Acceptance Form for personal property (all other gifts except real property). For these forms, and for potential gifts of real property, contact OAS.

  2. The check, cash, or other asset being transferred to UTSA; and

  3. An original signed copy of the gift letter or gift agreement, if any, from the donor. The gift letter/agreement must identify the asset being transferred, the purpose for which it is to be used, and the UTSA administrative or academic unit that is to benefit from the gift.

Gifts of readily marketable securities must be processed by the OAS in coordination with UT System Office of Development and Gift Planning Services (ODGPS). Gifts of closely-held securities, real estate and limited partnerships as well as bequests and gifts resulting from an interest in a trust will be processed by the OAS in coordination with the ODGPS prior to acceptance in accordance with Regents' Rules and Regulations (see Rule 60101).

Gifts of real property, including all gifts of surface and mineral estates in real property, are processed by the OAS in coordination with the UT System Real Estate Office and University Lands Office (for mineral estates) prior to acceptance in accordance with Regents' Rules and Regulations (see Rule 60103).

Gifts of Outdoor Works of Art are coordinated by the OAS in conjunction with the ODGPS as required by the BOR. Considerations include appropriateness with regard to UTSA's Campus Master Plan and expenses related to installation and/or continuing maintenance.

If a donor receives any gifts or services from UTSA or its personnel in advance or in response to a gift, OAS will consider the fair market value of the gift or service when determining the contribution portion of the gift.

EXAMPLE: An individual pays $50 for a ticket to a UTSA fundraising dinner. The value of the meal served at the dinner is $20. The gift portion of the ticket price is therefore $30 ($50 ticket price less the $20 value of the meal).

For further guidance on soliciting, receiving, processing and valuation of gifts, contact the OAS.

1. Accounting for Gifts

Gifts to UTSA are accounted for in Fund Group 30. For more information on Fund Group 30, see FMOG Chart of Accounts. Gift funds are used to record receipts and expenditures related to gifts received from donors. The majority of gift funds are restricted for use by a particular college or department and/or restricted for a specific purpose or program according to donor criteria.

Gifts to UTSA for endowment are recorded in the appropriate endowment clearing 30-account, while gifts for current operations are recorded in the appropriate expendable 30-account using Object Class Codes assigned by the OAS.

Gifts to UTSA are never recorded in the Agency Fund Group (41 accounts) because Agency accounts do not belong to UTSA. For more information on Fund Group 41, see FMOG Chart of Accounts.

The Object Class Codes used for gift donations are as follows:

  • 3340 – Misc Gifts - undetermined donor

  • 3341 – Donation from alumni

  • 3342 – Donation from individual (non-alumni)

  • 3343 – Donation from foundation

  • 3344 – Donation from business & industry; corporation

  • 3345 – Donation received via a fundraising consortia

Fund Group 30 is also used to account for expendable endowment distributions (each endowment account has a related 30-account to which distributions from the endowment are transferred. See Accounting for Endowments for details.

Fund group 30 must never be used to deposit miscellaneous revenues unrelated to the solicitation of donations and gifts to UTSA.

C. Processing Endowments

Endowments may be established with gifts that have been completed for tax purposes (the donor has relinquished all claim and control over the gift funds or property) or with a combination of such gifts, pledges and other funds.

Endowments may fund scholarship programs and other educational activities as well as certain endowed academic positions (see Regents' Rules and Regulations Rule 60202). The minimum funding level varies according to the type of endowment. Contact the OAS for minimum levels for various types of endowments (for example scholarships, professorships, chairs).

All endowments must be reviewed and approved by the OAS in coordination with the ODGPS.

Endowment Agreements are drafted and finalized by the OAS in coordination with the donor, the development officer and the ODGPS. A written endowment agreement signed by the donor(s) is required for each new permanent endowment established. The instrument must, absent compelling reasons, include:

  • Donor name(s);

  • Gift description and/or amount;

  • Pledge description, amount and due date;

  • Endowment name;

  • College, school and/or department to benefit;

  • A statement setting out the intended use or purpose for funds distributed from the endowment;

  • A statement that the funds shall never become a part of the Permanent University Fund, the Available University Fund or the General Fund of the State of Texas;

  • A statement that, if in the opinion of the BOR, future circumstances change so that the purposes for which the endowment is established become illegal, impracticable or no longer able to be carried out to meet the needs of the university, the BOR may designate an alternative use for the endowment payout, in accordance with applicable state law, to further the objectives of the university, in the spirit of the original purpose;

  • A statement providing that all future additions to the endowment, including those made by the BOR or UTSA administration, shall be subject to the provisions of the endowment agreement and shall be classified as permanent endowment funds: and

  • Other provisions which the responsible development officer and the ODGPS determine are necessary or appropriate.

For more information on endowment agreements, contact the OAS.

Pledges from donors that follow these procedures may be accepted to fund endowments of any level recognized by the Regents' Rules and Regulations.

  • At least 20 percent of the donor's total required minimum funding amount must be received prior to the acceptance of an endowment.

  • The pledge for payment of the remaining funds shall not extend beyond five years after the date of the execution of the endowment agreement.

  • All funds that otherwise would be distributed from the endowment will be reinvested as a permanent addition to the endowment until the endowment is funded at the required minimum level.

  • Funding levels will not be determined by the amount of net sale proceeds received from a non-cash gift or by the current market value of the investment held in an endowment.

    EXAMPLE: If a donor gives a gift of stock valued at $10,000 to create a new endowment and the stock is sold for net sales proceeds of $9,500, the $10,000 endowment may still be created because the donor contributed a gift valued at $10,000.

  • If the donor is unable to fulfill the pledge by the end of the five-year period, the endowment will either be dissolved or redesignated upon the formal request of OAS to the BOR.

Assets donated to fund an endowment may be delivered to the ODGPS for custody and investment by the University of Texas Investment Management Company (UTIMCO) pending acceptance. The OAS must be contacted to coordinate this transfer on behalf of UTSA.

Once an endowment is created, the terms, purpose or existence of that endowment may be changed only if authorized by the terms of the endowment agreement, Regents' Rules and Regulations, and applicable laws. The OAS prepares and coordinates documentation for endowment amendments in coordination with the donor, the development officer and the ODGPS.

1. Accounting for Endowments

Endowments are accounted for in the Endowment Funds, and are invested by UTIMCO. Endowment earnings are generally distributed to the related expendable 30-account on a quarterly basis. See Gift Pledges for details.

There are three types of endowments:

    a. True Endowments: The principal of true endowments is not expendable, and must be invested in perpetuity (the income from such endowments may be distributed to an expendable 30-account, see Gift Pledges for details)

    b. Funds Functioning as Endowments (Quasi-Endowments): Institutional funds that BOR/UTSA has elected to treat as True Endowments although not required to do so. The income may be distributed to the related 30-account (see Gift Pledges for details), but unlike True Endowments, Funds Functioning as Endowments may be dissolved and the principal returned to UTSA with BOR approval.

    c. Term Endowments: Term Endowments are treated as True Endowments until a specified date or the occurrence of a certain event, after which the principal is expendable.

The majority of endowed gifts are restricted for use by a particular college or department and/or a specific purpose or program according to donor criteria.

Fund transfers from endowed 30-accounts are not allowed except when transferring to the Endowment Funds to reinvest earnings or to establish new endowments.

For questions regarding endowments, email the Director of Endowment Compliance and Gift Services in the OAS.

D. Gift Pledges

Gift pledges are voluntary nonexchange transactions that result from legislative or contractual agreements entered into willingly by two or more parties.

Unfortunately, not all gift pledges receivable will be collected. To match revenue and expenses and properly value pledges receivable, the OAS , with the assistance of Accounting Services, will develop policies for estimating the allowance for uncollectible pledges and writing off uncollectible pledges in accordance with generally accepted accounting principles. For more information and detailed instructions, see UT System policy UTS142.2.

UTSA processes unconditional and conditional gift pledges.

1. Unconditional Gift Pledges

An unconditional gift pledge is a gift promise that is binding on the donor when the promise is made and depends only upon the passage of time or collection efforts for its performance.

Material (face value of $10,000 or greater) unconditional gift pledges must be included in the financial statements.

UTSA records the pledge's net present value when it accepts the pledge and the pledge is verifiable, measurable and probable to collect:




Gift Pledge Receivable



Gift Revenue



When the pledge is collected, Gift Pledge Receivable is credited for the original present value and additional gift revenue is credited for the interest accrual difference between the present value and the amount received from the donor:

  Debit Credit




Gift Pledge Receivable



"Additional" Gift Revenue



Multi-year gift pledges must be reported at the discounted present value, calculated by both of the following:

  • Using an interest rate for the applicable federal mid-term rate in effect for valuing certain debt instruments established annually in September of the fiscal year in which valuations or receipts of resources occur.
    NOTE: Interest rates must be re-established annually for subsequent new nonexchange transactions using the September or nearest maturity applicable debt instrument (i.e., US Treasury Bills and Notes quoted yields as listed in the Wall Street Journal).

  • Basing the calculations on the most recent mortality experience available.

Pledges that are expected to be collected in less than one year are not discounted, and such pledges of non-cash assets may be recorded at net realizable value because that amount results in a reasonable estimate of value.

2. Conditional Gift Pledges

Conditional gift pledges are dependent upon the passage of time or the occurrence of a future uncertain event. Such pledges are monitored by the OAS, but are not recorded until all conditions have been met. At that time, the pledge is recorded as described above, provided that the pledge is measurable and probable to collect.


Term Description

Sponsored Program

An externally funded activity evidenced by a written agreement between UTSA and an awarding agency. Sponsored programs normally involve a reciprocal transfer of something of value, such as the generation of a product, service or other consideration by UTSA in return for the support from the sponsor. For more information, see FMOG Grants and Contracts Accounting Practices.

Present Value

The value of a future series of cash inflows discounted at a specific interest rate, i.e., the amount that needs to be invested on a certain date to produce a specified future amount.

Net Realizable Value

An estimate of the current selling price of a non-cash asset net of expenses related to the sale.

University of Texas Investment Management Company (UTIMCO)

Created in March 1996 as an external investment corporation formed by a public university system to oversee investments for The University of Texas and Texas A&M Systems.





Contact the OAS for gift processing forms and instructions.


Date Description


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