NC State University

Criteria and Procedures for Accepting Gifts of Real Property

REG 03.00.3

Advancement

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Authority: Vice Chancellor of Advancement

History: First Issued: June 8, 2004. Last Revised: February 13, 2008. Additional History Information.

Contact Info:  Associate Vice Chancellor for Development (919) 515-9086

1. Introduction

1.1. Gifts of real property include gifts of land, buildings and improvements.

1.2.  Gifts of real property can be valuable assets for furthering the missions of North Carolina State University by enhancing the delivery of high quality teaching, research, and extension and engagement activities and programs.  However, gifts of real property can create financial, legal and logistical obligations for the university, particularly if the gift is provided with the expectation or condition that the University retains the gift for extended periods, for specific purposes, or in a specific condition.  For these reasons, it is important that there be criteria in place for the acceptance of gifts of real property and a process for administrative approval before gifts are accepted either by the University or a University affiliated foundation.  

1.3.  This regulation addresses the criteria to be applied by the University in accepting gifts of real property and the process for review and University approval that must take place before the University will accept gifts of real property or endorse the acceptance by a University affiliated foundation.

2. Criteria for acceptance of gifts of real property

Gifts of real property must meet all of the following criteria:

2.1. Gifts of real property must benefit the University in at least one of the following ways:

2.1.1.  Programmatic purpose.  Gifts of real property may be accepted to advance the programs of the University (teaching, research, and extension and engagement) either as the location for specific programs or as long-term sources of income to support programs.

2.1.1a.   Location for specific programs.  Gifts of real property may be accepted if the property provides a direct enhancement for a particular program (e.g., land or facility for a research site, demonstration area, field teaching laboratory, or public education site).  In these cases, the specific gift must provide a unique opportunity or other advantage that could not be achieved by using resources owned by others (e.g., long term research and the ability to generate grants in support of existing research often depends on the ability to assure that land-use will not change over time and that research will not be compromised by the disturbance of research areas that must be maintained as undisturbed sites; University ownership may better support this objective than a short term or long-term lease of land).

2.1.1b.  Generation of income for programs. Gifts of real property may be accepted that generate income to support programs financially (e.g., facility rental, contract farming, timber management).  The University must also have a programmatic interest in the property to accept such income producing gifts (e.g., a working forest that can demonstrate leading-edge forest practices may also produce income to support those programs through planting, culture and harvesting of trees; a site at which students serve internships required by their academic program in which public programs are held may also produce income to support those programs through admission prices or rental for special events).

2.1.2. Real property to be sold.  Gifts of real property may be accepted for immediate sale or short-term retention in anticipation of sale for purposes of providing funds to support other University objectives.

2.1.3. Other institutional purposes.  Gifts of real property may be accepted if the gifts are determined to be valuable assets to the University for other appropriate purposes (e.g., serving as a potential site for a University facility, serving as a potential site for a cooperative venture with another state agency, being part of a major grant submission, adding to the cultural richness of the University, permitting the retention of farmland or open space, or historical-site conservation). 

2.2.  Gifts of real property that are programmatically advantageous must be accompanied by endowed funds, a revenue generating mechanism, or some other explicit financial plan to support the maintenance of the gift and the fulfillment of the programmatic purpose.

2.3.  Gifts of real property must be accompanied by an express understanding that the property may be sold by the University at the University's sole discretion at any time. 

3. Procedures for Review of Proposals for Accepting Gifts of Real Property

3.1.  Submission of Proposal.  Any proposal for the acceptance of a gift of real property must be in writing and contain a description of the specific criteria that supports acceptance of the gift and identify whether the gift will be held by the State of North Carolina, the University Endowment Fund or a University affiliated entity.  In addition the following information also must be provided:

3.1.1. Proposals to accept gifts of real property that support programmatic goals (as described in section 2.1.1.a) also must address the following:

3.1.1a. the immediate and long term potential for the gift to support one or more specific programs;

3.1.1b. the faculty/staff and programs that the gift would support;

3.1.1c. the uniqueness or special value of the gift to support the identified programs;

3.1.1d. a proposed financial, management, and maintenance plan for the property and the programs that will occur on it; and

3.1.1e. specific criteria to be used over time to evaluate the success of the proposed program and whether or not the program should be continued, and to enable a judgment as to  whether the property should be retained, used for another purpose, sold or transferred to another owner.

3.1.2. Proposals to accept gifts of real property that may generate income to support programs (as described in Section 2.1.1.b) also must include a business plan that addresses the following:

3.1.2a. the intended use of the gift;

3.1.2b. the relation of the gift to a programmatic interest of the University;

3.1.2c. a logistical plan for managing the property;

3.1.2d. the expected annual net returns to the University over the expected retention period of the property;

3.1.2e. the identification of a source of funds to cover expenses incurred while holding the property until it becomes income generating; and

3.1.2f. specific criteria to be used over time to evaluate the proposed business plan to enable a judgment as to whether the property should be retained, used for another purpose, sold or transferred to another owner.

3.1.3. Proposals to accept gifts of real property to be sold for proceeds to support other university objectives (as described in section 2.1.2) also must include the following:

3.1.3a.   a plan for sale and immediate management of the property;

3.1.3b. the identification of a source of funds to cover expenses incurred while holding the property until it is sold; and

3.1.3c. a description of the anticipated proceeds to be realized from the sale and the proposed use of such proceeds.

3.1.4. Proposals to accept gifts for other institutional purposes (as described in Section 3.1.3) must include all of the information in section 3.1.1 above and be supported by a compelling rationale for acceptance of the gift.

3.2.  The Proposal must be approved by the applicable department head/program director and college dean/vice-chancellor and sent to the University Real Estate Office. 

3.3.  The University Real Estate Office shall evaluate the proposal relative to legal, financial and other general property-related considerations and make a recommendation to the Vice Chancellor for Advancement and the Vice Chancellor for Finance and Business.

3.4.  Upon approval of the Vice Chancellor for Advancement and the Vice Chancellor for Business and Finance, the gift of real property may be accepted. Acceptance of any real property to be owned by the University Endowment Fund, the State of North Carolina or a University affiliated entity requires subsequent approval by the appropriate entities.

4. Exceptions

The Chancellor may make exceptions to the criteria set forth in this regulation after consultation with the executive officers.