Introduction to FAI
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Who is Foundations Accounting & Investments (FAI)?
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How is a foundation different from “the University”?
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Types of revenue received in the foundation
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Miscellaneous Issues
Relationships
NC State University
Treasurer’s Office
Foundations Accounting &
Investments
University Advancement
Advancement Services
Associated Entities
(each have separate governing board and their own
development office)
Engineering Fdn
NC State Fdn
Alumni Assoc
PAMS Fdn
Tobacco Fdn
Vet Med Fdn
Nat. Res. Fdn
Ag Fdn
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Foundations Accounting and Investments (FAI)
Finance and Business – Treasurer’s Division
FAI provides accounting, investment and
financial reporting services to seven (7)
University-related foundations, the NC State
Alumni Association, Inc., the Endowment Fund
of North Carolina State University and the NC
State Investment Fund, Inc. Additionally, FAI
also provides similar services to 3 LLC’s,
including the Lonnie Poole Golf Course.
WEBSITE: http://www.fis.ncsu.edu/foundations_accounting/
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The North Carolina Agricultural Foundation, Inc.
NC State Alumni Association, Inc.
NC State Engineering Foundation, Inc.
North Carolina State University Foundation, Inc.
North Carolina State University Physical &
Mathematical Sciences Foundation, Inc.
NC State Natural Resources Foundation, Inc.
North Carolina Tobacco Foundation, Inc.
North Carolina Veterinary Medical Foundation, Inc.
The Endowment Fund of NC State University
NC State Investment Fund, Inc.
NC State Executive Education, LLC
NC State Centennial Development, LLC
NC State Residence, LLC
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Set up new funds
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Deposit gifts and other income receipts
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Record all deposits, EFT’s, wires, etc.
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Manage cash and investments
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Assist Foundation Office customers
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Other routine accounting services (e.g., bank
reconciliations, manual checks)
* For the entities FAI serves, including all foundations
(except the Textile Foundation), the University Endowment
Fund, NC State Investment Fund, and various LLC’s
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Operating budgets for foundations
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Periodic review of funds
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Unitization of endowments
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Endowment spending budgets
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Special analyses and reports
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Annual audit process and financial statements
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Preparation of IRS forms – 990, 1099’s
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Board materials and presentations
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Q&A sessions and other training opportunities
• Separately incorporated legal entities, IRS 501(c)3
classification, with governing boards, ‘associated’
with the University, but NOT part of the University
• University Treasurer and VC-Finance & Business serve
as Treasurer, Assistant Treasurer
• Fundraising support to NC State University primarily
through private and corporate gifts, including
scholarships, fellowships, professorships, and other
activities (e.g. research)
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University Financials system
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Projects* begin with ‘6’
◦ Foundation funds are often called “Ledger 6”
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Individual funds monitored via Wolfpack
Reporting System (WRS) Report #1
◦ Fiscal Year-to-Date Financial Status
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Expenses paid through University systems (A/P,
payroll, student financial aid, etc.)
* Projects are also interchangeably referred to as “funds”
 Restricted
Funds
◦ Regular
◦ Endowment income
◦ Building to endowment (BTE)
 Endowments
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Restriction is based on donor-specified
purpose for which it can be spent
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No restriction on when it is spent (unless
specified by the donor); can all be spent at
once, or over period of years
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Balances automatically carryover from year-toyear
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Funds are building to a minimum endowment
level
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Considered a restricted fund during the
“building period”
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Once minimum is reached, will become an
endowment fund
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May not spend from a restricted BTE fund
unless the donor gives money to be used for
spending while the fund is building
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Also referred to as ‘Spending Accounts’ or
‘Income Accounts’
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Restricted by purpose specified by donor in an
endowment agreement
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Budget is determined by the foundation’s
spending policy, subject to any additional
donor stipulations
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Balances automatically carryover from year-toyear, with option to return unspent funds to
principal
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A gift that is intended to last in perpetuity. Unless
allowed by the donor, the corpus (historical gift
amount) can never be spent
Value grows over time through investment returns
A portion of earnings is allocated for spending to
support the endowment purpose as specified by the
donor (e.g., scholarship, fellowship, professorship)
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Endowments provide a steady income stream for
support of NC State University.]
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Most colleges/units have endowments in a Foundation
as well asthe University Endowment Fund
Gifts
Other Income
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A gift is a voluntary and non-reciprocal
donation provided by a non-governmental
donor for which no goods or services are
expected or provided.
A gift is a charitable contribution, and has IRS
implications (must provide gift receipt).
Gifts are captured in the donor database
system – referred to as ADVANCE.
Gifts may be restricted to a specific purpose
or may be unrestricted in nature.
Foundation Gifts
Fundraiser
(Development Officer)
$$$$$
Money received from donor
Gift Processing
Fdn Business Office
will complete a Gift
Transmittal Form and
submit to Adv. Serv.
University Gifts
(Advancement Services)
$$$$$
Prepare receipt for donor
and enter donor
information into
ADVANCE System
Foundations
Accounting & Investments
$$$$$
Deposits money and records in
financials
Monitors
Complete BA-151 and
submit to tAdv. Services
for prcoessing in
ADVANCE. Check
deposited directly with
Cashiers Office
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In addition to distinguishing a gift from other income,
you must also determine whether the gift belongs to
the foundation or to the University
Must look at how the gift was solicited
Non-specific ‘grants’ (i.e. there are NO deliverables)
are treated as gifts. Many result from a proposal
submitted to the funding entity – in order for the gift
to be deposited into a foundation project, the
proposal MUST be in the name of the foundation,
NOT the University, College, or department
Refer to Gifts, Grants, Contracts
3D memo recently published
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Gifts in odd dollar amounts must provide backup
documentation supporting the fact that it is a gift.
Gifts must be processed through ADVANCE, via a
Gift Transmittal Form (for foundation gifts) or a
BA-151 (for University trust funds).
Non-endowment gifts are subject to a 5%
assessment fee (to be used for fundraising
activities only).
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Checks MUST be payable to the foundation to be deposited in
the foundation.
◦ For example, to be deposited in the NC State Engineering
Foundation, payee should read “NC State Engineering Foundation”
rather than “NCSU”
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Checks payable to NC State University* and submitted for
deposit in a foundation require sufficient written back-up
from the donor to support intent the funds were for the
foundation.
◦ Checks without sufficient donor documentation will be deposited to
clearing until documentation is provided
*Or a college, academic or administrative department
of the University (e.g., CALS, CHASS Dean’s Office,
Biomechanical Engineering Department)
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Distinguishable from a gift because the
person/entity receives something of value in
return
Examples of Other income include money received
from fundraising events (e.g., football game
tailgate event) or the sale of merchandise, for
which there is no charitable deduction
FAI deposits and records other income received by
the foundations
Other income receipts go to FAI directly, and do
not need to be sent to Adv. Services, unless there
is also a gift component. The other income
receipts should be sent along with a completed
“Other Income Transmittal” form
http://www.fis.ncsu.edu/foundations_accounting/services/documents/cont_list%20other%20inco
me.doc
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Activity generating other income MUST be in the name of the
foundation – if the marketing materials only indicate the
University, the College, or a department they MUST be deposited
in a University fund. If in the name of the foundation, must make
sure adequate insurance coverage – University insurance will not
cover foundation events.
Must provide support/documentation that the other income
receipt belongs in a foundation project – this would include
marketing materials, such as a flyer, brochure, weblink, etc.
Associated expenses must be paid from the same fund where the
receipts are deposited.
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An activity could have both a gift and an other income component.
For example, a $100 fundraising dinner, with a meal valued at $30
would have both components - $70 gift and $30 other income.
A Gift Transmittal form must be completed for the gift portion.
A Other Income Transmittal Form must be completed for the other
income portion.
The check(s) should be sent to Adv. Services if there is a gift
component, or if no gift component then it can be submitted
directly to FAI.
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The primary point of contact for Foundation
funds is generally someone in your college
business or development office
New Fund Requests: must include
documentation supporting the fund request
Funds cannot be transferred from a university
project to a foundation project (transfers can
occur in the other direction, because the
Foundation exists to support the College)
QUESTIONS?