Babson College: Policy on Appropriate Use of Funds
Effective Date: February 1, 2012
I.
Introduction
Babson College funds come primarily from tuition payments from students and from gifts from College
supporters and alumni. As a result, it is incumbent on all Babson employees to ensure that they spend
College funds appropriately. In particular, it is important to ensure that expenditure of College funds
for gifts, parties, and other amenities is appropriate and equitable in its impact on Babson employees
and students. For example, historically some departments have routinely used College funds for parties
and gifts for employees, while other departments have never done so.
II.
Purposes
In light of the above, the purposes of this policy are to: 1) ensure that Babson College funds are used to
support appropriate College business, 2) ensure the equitable treatment of employees, and 3) prevent
inappropriate spending and the appearance of impropriety. The policy applies to all Babson College
employees and any other person authorized to spend Babson funds.
III.
Application
This policy applies to all expenditures of Babson funds, including PCards (see PCard Manual [PCARD
MANUAL - 12-09-11 .docx]), advances, check requests, purchase requisitions, etc.
IV.
Business Expenses
In general, Babson funds should be expended for business purposes only. Business expenses are
routine, operational in nature, and easily documented as College mission-based. They include faculty
and staff salaries, classroom equipment and supplies, research and support, and campus and plant
operation and maintenance.
Business expenses also include expenditures for goods and services that help to build, strengthen, and
promote relationships with groups and individuals, on or off campus. These may include travel, meals,
and entertainment (as delineated in the Babson College Travel Policy, last revised July 6, 2011), certain
recruitment and relocation expenses, and awards in accordance with College policy.
Examples of appropriate and inappropriate expenditures are listed below. If a proposed use of funds is
not listed, the following standards should guide the expenditure decision:

For business meetings and entertainment/hosting functions, each College department, unit,
and approving official must exercise prudent judgment to ensure that the commitment of
College funds is appropriate, essential, and supports the College’s academic, institutional, or
public service mission.

The expenditure should not be personal in nature.

For employees, the expenditure should not be used as additional compensation (the IRS
considers gift cards or gift certificates “cash equivalents” to be treated as additional
compensation). If the expenditure meets the IRS guidelines for “de minimis” fringe benefits, it
is appropriate. (See IRS Website for “De Minimis Fringe Benefits below).
http://www.irs.gov/govt/fslg/article/0,,id=184791,00.html
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Babson College: Policy on Appropriate Use of Funds
V.
Examples of Appropriate Uses of Funds
a. Meetings and College-Sponsored Functions

College funds may be used to provide meals or snacks for meetings and
functions related to College business. Expenses should be reasonable in nature and in
occurrence. These include functions held by the President, division chair meetings,
faculty and staff meetings, events sponsored or sanctioned by the Office of Student
Affairs, new faculty/staff receptions, employee service award ceremonies, employee
picnics, etc. Reduced cost lunches for faculty and staff (subsidized by the appropriate
department budget) are also acceptable. Whenever possible, College dining services
and facilities should be used for business meetings, hosting events, and receptions.

College funds may also be used to purchase meals for employees during, or in
recognition of, special circumstances, such as emergencies or workload “crunch”
times. Managers should use their judgment to ensure that the expenditures are
appropriate and not in support of routine activities.
b. Alcoholic Beverages—Use of College funds for alcoholic beverages is permitted only for
approved campus events and for business meals as outlined in the Babson College Travel
Policy. Exceptions must have prior approval from the appropriate College Vice President,
Dean, or Department Head.
c. Gifts – College departments may incur a gift expense on behalf of an employee or an
employee’s immediate family, only for the events listed below. There should be no more
than one gift per division or department.
 Going Away and Retirement Receptions—College funds may be used for
reasonable low-cost food and non-alcoholic beverages for “going-away” receptions
only with approval of the appropriate Division or Department Head or his/her
designee. For employees retiring or resigning from Babson, the College, through
Human Resources (HR), will contribute to the cost of a gift or on-campus farewell
party in accordance with the “Staff Retirement and Resignation Gift Policy. Please
see HR to review this policy.
 Employee Recognition—Use of College funds for employee gifts, prizes, and
awards is appropriate, in accordance with the following guidelines: College-funded
gift cards or certificates are not allowed due to strict IRS tax regulations, but
tangible, personal property such as flowers, fruit or gift baskets, or Babson
Bookstore “Spirit” items (e.g. apparel, clocks, pens, chairs) are acceptable, as long as
they are approved by the appropriate Division or Department Head.
A
recommended limit for this gift is $75, in order to meet the “de minimis” fringe
benefit requirement under IRS regulations. This amount may be supplemented by a
manager’s personal contribution.
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Babson College: Policy on Appropriate Use of Funds

Student Employee Appreciation
 Student employee appreciation events may be held and the use of College
funds is appropriate for reasonable low-cost food and non-alcoholic
beverages only with approval of the appropriate Division or Department
Head.
 Tangible personal property or small token gifts to student employees at the
end of their employment period are acceptable, provided they are
reasonable and below the IRS de minimis benefit of $75. Examples of such
gifts include flowers, fruit or gift baskets, and Babson Bookstore “Spirit”
items (e.g. apparel, clocks, pens).
 College funded expenditures for gift cards or gift certificates to student
employees as a token of appreciation for their work are not acceptable, per
IRS regulations.

Flowers
 Condolences - Death of Employee, His/Her Immediate Family Member, or a
Student’s Parent - Memorial gifts made on behalf of an employee, his/her
immediate family member, or a student’s parent, include flowers or a
donation to a charitable organization. Condolence flowers may be paid out
of the HR budget or paid by a department using a designated Pcard. An
immediate family member is defined as a spouse or partner, child, parent, or
sibling. In such cases, the College should be acknowledged as the sender
(e.g. ”from all your friends and colleagues at [Department/Division].”). A
recommended limit for flowers is $100.00.
This amount may be
supplemented by a manager’s personal contribution or by personal
contributions from fellow employees.

Illness of Employee or Student Requiring Hospitalization - A recommended
limit for flowers is $100.00. This amount may be supplemented by a
manager’s personal contribution or by personal contributions from fellow
employees.
d. Annual Holiday Parties—College funds may be used for annual employee holiday parties,
provided they are accessible to all employees within that department. The appropriate
Division or Department Head will coordinate and approve all such events to ensure that
celebrations are not duplicated within departmental business areas. Expenditures should
be reasonable in nature, with a recommended limit of $25 or less per employee. This
amount may be supplemented by a manager’s personal contribution or by personal
contributions from fellow employees. While such events are important to building a sense
of community, fiscal responsibility should also be a consideration in planning these
activities.
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VI.
Examples of Inappropriate Expenditures
a. Parties, Receptions, or Other functions for Individuals—College funds may not be used for
non-work related, achievements, events, or receptions for individuals, such as baby
showers, wedding showers, housewarmings, or similar activities that are of a personal
nature and that are not related to College business. College funds may not be used to
purchase individual gifts or gift cards/certificates for such personal celebrations. Spending
for non-work related achievements, events, receptions, or gifts for individual colleagues
should come from fellow employees. However, using college funds for reasonable lowcost food and non-alcoholic beverages and cards are acceptable for “group birthday
celebrations” as part of a monthly departmental staff meeting.
b. Alcoholic Beverages—Except as noted above in Section V b., College funds may not be used
to purchase alcoholic beverages.
VII.
Exceptions
a. Gift cards or certificates may be used as thank-you gifts, prizes, or rewards only to:*
 non-employee guest speakers;
 student volunteers (e.g. tour guides);
 non-employee students for campus-wide academic or co-curricular
achievements, contests, or competitions; and to provide incentives for participation
in student activities and events. Note: Students who also happen to be employees
may accept gift cards or gift certificates as long as they are “outside of the
employment relationship” at the time of receipt (e.g. contest or raffle at a student
event). College funded expenditures for gift cards or gift certificates to student
employees as a token of appreciation for their work are not acceptable, per IRS
regulations. *Note: See Appendix for a list of recommended gift cards/certificates.
Please see the Procurement Card Manual (Purchasing website) for more details, including
limits on gift card amounts for non-employee students.[PCARD MANUAL - 12-09-11 .docx]
b. Exceptions to this policy must be approved by the appropriate President’s Cabinet Member
or his/her designee. The review of requests for exceptions will be based on the
appropriateness, magnitude, and fairness of the proposed expenditure. An example of an
appropriate exception would be rewarding employees who perform “above and beyond”
expectations during a weather or health emergency on campus. However, such recognition
should be presented at the discretion of the reporting manager or his/her designee.
VIII.
Consequences for Inappropriate Use of Babson Funds
a. Employees who spend College funds inappropriately, as defined in this policy, as well as
managers who approve such expenditures, will reimburse the College, and may also be
subject to disciplinary action.
IX.
Responsibility
a. Supervisors, managers, department heads, etc. are responsible for ensuring compliance
with the requirements of this Policy within their respective areas of responsibility.
b. Prudent use of funds is the responsibility of every Babson employee.
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APPENDIX: Recommended List of Gift Cards and Certificates
PLEASE NOTE: As stated in the policy, college-funded purchases of gift
cards or certificates for employees are NOT ALLOWED under this policy.
Gift cards or certificates may be used as thank-you gifts, prizes, or rewards only to:
 non-employee guest speakers;
 student volunteers (e.g. tour guides);
 non-employee students for campus-wide academic or co-curricular
achievements, contests, or competitions; and to provide incentives for participation
in student activities and events.
Note: Students who also happen to be employees may accept gift cards or gift certificates as
long as they are “outside of the employment relationship” at the time of receipt (e.g. contest
or raffle at a student event). College funded expenditures for gift cards or gift certificates to
student employees as a token of appreciation for their work are not acceptable, per IRS
regulations.
Examples of “acceptable” gift cards are listed below in the left hand column and may be
purchased at the Babson Bookstore:
Acceptable
Barnes & Noble
Not Acceptable
Visa, MasterCard or American Express Gift
Cards Redeemable for Cash
Dunkin Donuts
Retail Merchandise Stores (e.g. T.J Maxx,
Marshalls, Kohls, Macy’s, J.C. Penney, Gap)
Retail Restaurants (e.g. Chili’s,
Panera,Bertucci’s)
Movie Theaters (e.g. AMC, Showcase Cinemas)
See the link below for more comprehensive information on “Retail Rights” with gift cards and
certificates in the Commonwealth of Massachusetts:
http://www.mass.gov/ago/consumer-resources/consumer-information/retail-rights/giftcards-and-certificates/
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