Gift Funds
As outlined within the Banner Fund Codes webpage, the fund code is an important segment of the Banner accounting string which helps properly classify the University of Illinois System’s financial resources for financial reporting purposes. Classifying these financial resources into separate fund types also helps monitor compliance with applicable guidelines and restrictions to ensure proper stewardship of these funds.
Gift funds are a common type of fund used across the University of Illinois System. See the following sections for answers to commonly asked questions regarding gift funds, as well as tips for properly managing your gift fund C-FOPs.
If you have any further questions not answered below, feel free to reach out to the applicable subject matter experts listed in the Gift Funds section of Who to Ask list.
What Are Gift Funds?
Gift funds (which reside in fund type 4M) are funds which account for financial resources generated primarily from:
- Gifts/contributions made by donors
- Investment income distributions from endowments held by the University of Illinois Foundation (UIF)
- Non-gift proceeds generated from sales made during fundraising events (such fundraising sales made at a silent auction)
How Are Gift Funds Identified in Banner?
Gift funds can be identified by examining the fund code segment of the Banner C-FOP, along with the assigned fund type. The gift fund codes reside in the 620000 – 699999 numerical range within Banner. However, there are other fund types that reside within this numerical range as well (such as service plan funds), so it’s always important to look at the fund type in addition to the numerical range before determining whether or not a fund is a gift fund.
Where Do I Look in Banner to Identify the Fund Type Assigned to a Gift Fund?
As mentioned earlier, gift funds are assigned a 4M fund type. You can find a fund’s assigned fund type by going to Banner pages FZMFUND or FTVFUND. To find the fund type within these pages, simply filter by chart and fund code number (you can filter by pressing the Filter button within Banner or by pressing the F7 key on your keyboard), and then execute the query (by pressing the Go button in Banner or by pressing the F8 key on your keyboard). You can then locate the fund type within the Fund Type field.
How Do I Create a New Gift Fund in Banner?
To create a new Banner gift fund, you must first complete a Banner Fund, Program, Index Code Request Form which is located on Accounting and Financial Reporting’s Forms webpage. When completing this form, be sure to complete the following sections from the FPI Code Request tab with as much detail as possible:
- The General Information section
- The Request a New Fund Code section
- The Submitted By section
Once your request form is complete, you will then need to email the completed form to the UIF at NewAccounts@uif.uillinois.edu for review. Once the UIF reviews and processes the request within their system, they will then send the request to UAFR for additional review.
Note: There may be times where UIF will also need you to create a matching UIF fund for their system, in addition to your new Banner gift fund. If that is the case, UIF can provide further details.
After UAFR reviews and approves the request, the fund will then be established within Banner, and a notification will be sent to notify the requestor and anyone else that the requestor added within the Submitted By section of the form.
Are Gift Funds Required to Have Default Organization and Program Codes Assigned?
Most gift funds are assigned a default organization code and a generic default program code (i.e., a program code starting with 19nnnn, as opposed to a unit-specific program code). You can locate these assigned defaults within Banner page FZMFUND.
The primary reason for having default organization and program codes assigned to a gift fund are so that the UIF has a static C-FOP assigned within their system, so they know what exact C-FOP to sweep the related gift revenue to when they perform their weekly gift revenue sweeps. Another reason most units like to assign default organization and program codes to help prevent misclassified transactions that arise due to keying errors when processing journal vouchers and other sorts of transactions (as the organization and program codes will automatically populate when the fund code is entered when defaults are assigned).
Additionally, assigning a default generic program code helps properly classify all of the expenses within the gift fund to the proper NACUBO function for financial reporting purposes.
For example, if a gift fund is restricted for student scholarships, then a default generic program code of 191787 (Scholarships) would be assigned to ensure those expenses are properly classified for financial reporting purposes.
For more information on program codes, visit Banner Program Codes & NACUBO Functions webpage.
In order to see whether or not a gift fund has a default organization and/or program code assigned to it, you can query on the fund within Banner page FZMFUND and look to see if a default organization and/or program code is assigned to those specific fields within this Banner page. See below for some tips on how to do this:
Filter by chart and fund code number (you can filter by pressing the Filter button within Banner or by pressing the F7 key on your keyboard), and then execute the query (by pressing the Go button in Banner or by pressing the F8 key on your keyboard). You can then locate the default organization code in the Default Organization field and the default program code in the Default Program field.
How Do I Submit a Maintenance Request to Edit an Existing Gift Fund?
To request an edit to an existing gift fund (such as to request a title change to make the fund title a bit clearer or to request a change to the default organization code assigned to the gift fund), simply email UAFR at uas@uillinois.edu detailing your request.
One of the subject matter experts from UAFR’s gift fund team will then look into your request and will let you know if there are any questions or concerns prior to processing your request. The UAFR staff may also have to send the request to UIF for their review, depending on the nature of the request. So, this may add time to the processing of your request but will ensure that both Banner and the UI Foundation’s records are updated accordingly and will also help ensure that the UI Foundation approves of the change as well, if applicable.
How is Gift Revenue Deposited & Distributed to Units?
All donations must be processed and deposited through the UIF, along with a completed gift transmittal form. UIF is then responsible for processing the gift and sending the necessary acknowledgments and tax reporting documentation to the donors.
If the gift is a current-use gift (in other words, a gift that can be used immediately, as opposed to a gift which is meant to be invested into an endowment or held for some other reason), then the UIF will distribute that gift revenue to the related Banner gift fund the following week (typically on Tuesday mornings). These revenue sweeps will be credited to revenue account codes 303241 (for gift revenue) and 303242 (for non-gift revenue, such as amounts generated from the non-gift portion of sales made at fundraising events).
UIF also receives donations meant to be held in a UIF endowment for investment. For those types of donations, UIF holds the principle within an endowment, and then once a month, investment earnings from those endowments will be distributed to Banner. These amounts will be credited to revenue account code 303240 within your applicable gift fund.
Am I Ever Allowed to Deposit Cash or Checks Directly to a Gift Fund via the Bursar’s Cashiering Office?
It is not allowable to deposit gift revenue, contributions, donations, etc. through the Bursar’s Cashiering Office. As mentioned earlier, all donations must be deposited through the UIF along with a completed gift transmittal form.
The only time it is allowable to make a deposit to a gift fund via the Bursar’s Cashiering Office are when you are depositing a refund, rebate, or reimbursement as a credit against a previously incurred expense on an expense account code.
Examples:
- Your unit received a vendor refund or rebate from a past purchase that was charged to an expense account code on the applicable gift fund.
- Your unit received reimbursement from an employee who erroneously charged the gift fund for a personal expense (such as a movie rental in a hotel during a business trip that was charged to the state fund).
What Is the Difference Between Gift Revenue and Non-Gift Revenue in a Gift Fund?
As mentioned earlier within this webpage, there are times when non-gift revenue is credited to the 303242 revenue account code of a gift fund, along with the gift revenue which is credited to the 303241 revenue account code. This commonly occurs when a unit holds a fundraising activity or a charitable fundraising event.
Examples:
- A unit holds a fundraising dinner, where tickets to the dinner cost $100 a piece ($25 to cover the cost of the meal and entertainment and $75 to cover the charitable donation). In this example, the unit would denote $75 as a gift and $25 as a non-gift when they are completing the gift transmittal form. UIF would then sweep over the applicable gift and non-gift proceeds to the 303241 and 303242 revenue account codes, respectively.
- A unit holds a silent auction, where items that were donated as a gift in kind are being sold to generate proceeds for scholarships. An item with a fair market value of $50 is sold for $250. This would lead to $50 of non-gift revenue and $200 of gift revenue to be reported to UIF.
When Are Gift Funds Used to Account for Sponsorship Revenue?
There are many intricacies to consider when accounting for sponsorship revenue. In summary, if a sponsor is receiving no substantial return benefits in exchange for their sponsorship payment (other than the use or acknowledgment of their business name, logo, or their company’s product lines), then the payment is a qualified sponsorship and should be accounted for in a gift fund.
However, if the sponsor is receiving substantial return benefits (such as advertising, tickets to a university event, etc.) of approximately equal value in exchange for the sponsorship payment, then the payment is a non-qualified sponsorship and should be accounted for in a self-supporting fund, crediting revenue account code 303590, Non-Qualified Sponsorship Revenue.
Note: Non-qualified sponsorships may generate unrelated business income which you would need to report to UAFR. See Section 18.13, Unrelated Business Income Tax for further details, and feel free to reach out to UAFR for guidance if needed.
For further details and guidance on how to navigate sponsorship payments, refer to the following policies:
How Do I Locate the Donor Intent Restrictions Assigned to a Gift Fund?
Given how essential it is to have access to the exact language used within the assigned donor intent restrictions in order to properly manage a gift fund, we strongly encourage all financial managers to have access to this critical information. The best way to locate the donor intent restrictions assigned to a gift fund is to obtain access to UIF Online. This is UIF’s online database, which contains a wealth of information related to gift funds, including the assigned donor intent restrictions. To learn more about how to obtain access to this system, visit the Banner Program Codes webpage.
Once you have access to this system, you can search on your applicable fund’s donor intent restrictions using a variety of search parameters (such as fund title, UIF fund number, or Banner fund number). Once you locate the fund in question, you can see detailed documents that give specific information on the fund's restrictions, including language from the actual fund agreement with the donor. This is where you'll find the most detailed information regarding your fund's donor intent restrictions.
In addition to this information from UIF, there are also ways to get a sense of the donor intent restrictions assigned to a gift fund within Banner. While this by no means replaces what you can find within UIF’s system (as it is not as detailed), it can provide a good starting point. Within Banner page FTMFATA, you will find two attributes: 1) the Donor Intent Restriction Indicator (which denotes whether the fund is restricted or unrestricted) and 2) the Donor Intent Objective (which gives a bit more insight as to what the fund is restricted for).
A full list of the available Donor Intent Objective codes can be found in the Purpose Codes and Definitions document which is located in Section 11.10, Expenditure of Gift Funds of the Business and Financial Policies and Procedures.
For example, if a gift fund was restricted for undergraduate scholarships, you would see that these two codes within Banner would show that the fund is: 1) restricted (with an “R” assigned to the Donor Intent Restriction Indicator) and 2) restricted specifically for scholarships (with a "5Q" – Scholarships code assigned as the Donor Intent Objective.)
So, while you can see that this gives a sense of the donor intent restrictions assigned to the fund, it doesn’t give all of the necessary details which UIF Online would be able to give (such as what county the student must be from or what GPA the student must have in order to qualify for the scholarship).
How Often Should I Monitor Gift Funds for Compliance with Donor Intent Restrictions?
Regularly monitoring gift fund activity for compliance with the assigned donor intent restrictions is extremely important. In order to ensure proper stewardship of the funds donated to the University of Illinois System, and to ensure positive relationships with our donors (which can lead to future gifts), it is extremely important to ensure all expenditures posting to a gift fund are compliant with the assigned donor intent restrictions.
Given how important compliance monitoring is when managing gift funds and given the fact that it will be easier to address and fix any compliance issues if they are found sooner rather than later, we strongly encourage all units who manage gift funds to perform these compliance reviews on a monthly basis, along with their monthly financial reconciliations.
For example, if a unit is managing a gift fund which is restricted for providing an annual lectureship, and they find unrelated expenses posting to that fund during their monthly reconciliation process (e.g., from a misclassified transaction that posted to the fund by mistake by another unit), then the chances of identifying and fixing the erroneous transaction are much higher if the unallowable expenditure is identified and reclassified on a timely basis.
In addition to monitoring expenditure activity for donor intent compliance, it is also important to monitor gift funds which may appear to be stagnant and unused from month-to-month, or even from year-to-year. Funds which become stagnant like this may be unintentionally violating donor intent, and those issues would need to be addressed.
For example, if a donor requires that an annual scholarship be issued from the funds that they donated, but a unit ignores that request and lets the related gift fund become dormant, then the donor’s wishes are not being met and the donor intent is being violated (even though no expenses are posting to the fund).
Why Is It Important to Use Accurate Account Codes on Gift Fund Expenses?
To ensure compliance with financial reporting requirements, as well as to prevent state compliance audit findings, it is very important to use accurate expense account codes when posting expenses to gift funds. The expense account code should accurately reflect the goods, services, or personnel expenses which are being paid for.
In addition, by using accurate account codes when posting expenditures to your gift funds, it creates a cleaner audit trail when examining activity within the gift fund for compliance with donor intent restrictions.
For example, if a gift fund is restricted for scholarships, but you see expenses for office supplies and employee travel posting to the fund during your monthly reconciliations, this could be a sign of expenses posting to the fund which are not in compliance with the assigned donor intent restrictions.
What Rule Code Should I Use When Posting Journal Vouchers Involving Gift Funds?
When processing journal vouchers (JVs) involving gift funds (e.g., for expense reclassifications), you are required to use either a 100 or 125 rule code (also referred to as a Journal Type within Banner) on the JV sequence which contains the gift fund. See below for a breakdown of which rule code to use when:
- If your JV includes only one debit and one credit, then you would use the 100 rule code on the JV sequence which contains the gift fund.
- If your JV includes one debit and multiple credits (or vice versa), then you would use the 100 rule code on the JV sequences which contain the gift fund.
- However, if you are completing a JV which has multiple debits and multiple credits, then you would be required to use the 125 rule code on any of the sequences containing the gift fund.
- If your intentions are to complete a funds transfer (e.g., transferring funds from one gift fund to another using the 417001 transfer account code), then you would be required to use a 104 rule code on each sequence of the journal voucher.
How Do I Transfer Funding from One Gift Fund to Another?
There are times where a unit may want to transfer funding from one gift fund to another.
For example, if a unit had a restricted gift fund which was in deficit, they may want to use some of the available funding in their unrestricted gift fund to clear the deficit. In order to do this, a unit must complete a funds transfer via a journal voucher (JV). In summary, once the unit confirms that the funds transfer is compliant with the assigned donor intent restrictions, they would debit the unrestricted gift fund (using a 104 rule code) and they would credit the gift fund which needed the extra funding (using a 104 rule code).
Keep in mind that these types of fund transfers can only occur between gift funds which both have a 4M fund type. It is generally unallowable to perform fund transfers between a gift fund and other fund types (such as a 4J endowment income fund).
For additional details surrounding how this process works and how to complete the necessary JV, refer to the Processing Fund Transfers Between Gift Funds job aid.
How Do I Find the Budget Balance Available (BBA) For My Gift Fund?
- To find the available budget balance for a gift fund, go to Banner page FGIBDST and enter the applicable C-FOP string.
- Next, uncheck the Include Revenue Accounts box within this page, and hit the Go button.
- Your available budget balance will then appear in the lower right-hand corner of the page, on the Net Total row of the Available Balance column.
Do Unspent Funds Within a Banner Gift Fund Carry Forward to the Following Fiscal Year?
Yes – any unspent funds within your Banner gift fund simply carry forward to the following fiscal year. This unspent balance from the prior fiscal year can be found within the 109910 budget carryforward account code within Banner page FGIBDST.
For example, if a new gift fund was created and received $10,000 in donations during the initial year, but then only spent $7,500 within that first fiscal year, then the remaining $2,500 of unspent funds would carry forward to the 109910 budget account code in the following fiscal year.
If We Have an Accumulation of Gift Funding with No Immediate Need, Can Those Funds Be Invested for Future Growth?
Yes – if you have an accumulation of funding within your Banner gift funds which you do not have an immediate need for (i.e., within the next five years), then you are allowed to work with UAFR and the UIF to send those accumulated funds back to the UIF for investment into a UIF quasi-endowment or reinvestment into the original UIF endowment that the funding came from. This will help allow future growth of your funding for use in the future.
Note: If you would like to pursue this option, you will need to complete the Return of Gift Funds to UI Foundation form from the Fund section of this webpage and submit it to the Foundation as instructed on the form. The Foundation will then review your request and if they approve, they will then forward it to UAFR. Then, UAFR will process the return of funds to UIF during the monthly returns process.
Am I Required to Track Fundraising and Development Costs?
It is required to track fundraising and development costs (such as telemarketing, direct mail campaign expenses, dinners with potential donors where donations are being solicited, and development officer salaries) within Banner. This allows the UIF to track the amount spent in fundraising efforts for each unit so they can determine the efficiency and effectiveness of each unit’s fundraising efforts.
For further details on how to properly account for these costs within Banner, visit Section 11.6, Accounting for Fundraising and Development Costs within the Business and Financial Policies and Procedures.
What Types of Transactions Are Prohibited on Gift Funds?
Any transactions which are not in compliance with the donor intent restrictions assigned to the gift fund are prohibited. As said earlier, ensuring full compliance with the assigned donor intent restrictions is a critical responsibility when managing gift funds.
Given that gift funds are only meant to account for gift and non-gift revenue collected during fundraising events, it is inappropriate to credit any type of sales revenue to a gift fund when that sales revenue is unrelated to a fundraising activity or fundraising event.
For example, if a unit agrees in advance with an external party to send a professor, coach, or staff member to speak at an external event in exchange for a non-charitable payment to cover travel costs, that type of payment would need to be credited to a self-supporting fund, not a gift fund.
What Do We Do If We Accidentally Deposited a Gift into a Grant Fund (or vice versa)?
Sometimes, gift revenue and grant revenue can be confused, given some of the intricacies surrounding each. If a gift was accidentally deposited into a grant fund (or vice versa), simply contact your applicable university grant office, along with UAFR (see the Contact section to the side of this webpage), and the applicable subject matter experts within each office will help you correct the mistake.
How Do I Terminate a Gift Fund Which is No Longer Need?
- If you have a gift fund which you have fully spent out and no longer need, email both UIF (NewAccounts@uif.uillinois.edu) and UAFR (uas@uillinois.edu) asking to terminate the fund.
- UIF will then review the request for allowability and will confirm whether or not you will want to terminate the related UIF fund, if applicable. Once UIF approves, they will then pass the request along to UAFR for review.
- After UAFR reviews the request and ensures that there are no further issues that need addressed (such as open jobs, payroll positions, index codes, balances, etc. which are still tied to the fund), they will then proceed with terminating the fund in Banner.
For further details on the termination process, refer to UAFR’s Gift Fund Terminations job aid.