106 - University of North Carolina at Chapel Hill Policy on Gifts of Honoraria, Consulting Fees, or Licensing Income

Reason for Policy

To provide tax ramifications related to the University faculty and EHRA non-faculty employees donating their honoraria or consulting fees to the University. To provide guidelines for accepting such gifts by the University, deductibility for tax purposes of such gifts by the University employee and to the proper accounting for such gifts within the University.

Policy Statement

There is a long tradition and practice by many University faculty and EHRA non-faculty employees of donating their honoraria or consulting fees to the University. The practice of making such gifts has provided important sources of funding for a variety of important University functions, such as graduate student travel, professional development, supply purchases, and faculty travel. The University accepts such gifts provided they are made and received in full compliance with the relevant tax laws and University Regulations.

Facts considered in connection with gifts of consulting fees, honoraria or licensing income:

1. The employee, if entitled to receive the honorarium or consulting payment from the company, or to receive the licensing income from the University, has received income for purposes of federal and state personal income tax. This is true even where the employee says to the company for which he or she consulted to "pay it directly to UNC." Thus individuals making such gifts should check with their tax advisor to make sure that they are reporting such matters correctly.
2. The employee, by directing that the company for which he or she was consulting pay the University directly, or by directing that licensing income be deposited directly with a University unit or department, has made a gift to the University, for which the employee may be entitled to a charitable contribution deduction. The individual should check with his or her tax advisor about this.
3. The University unit to which the gift of honoraria, consulting fees, or licensing income is directed must account accurately for its receipt of the gift and notify the Office of University Development that the funds have been received. Such accounting assures that the individual will receive a receipt for the gift which is essential to its deductibility if its value is $250 or more.
4. If the individual wishes the gifts to be deposited in a trust fund over which he or she has signature authority, the following checks should be put into place:
   • the Department Chair or Dean or Director must approve the expenditure from the trust fund in addition to the employee;
   • none of the funds can be used to supplement to the employee's salary, except through regular University salary increase channels;
   • and the funds can be used only for University purposes.
5. This Statement must not be used to circumvent any University policies concerning sponsored programs, the collection of overhead, the Policy on External Professional Activities of Faculty and Other Professional Staff, or the Policy on Individual Conflicts of Interest and Commitment.
6. Such funds cannot be turned over personally to the donor at separation of service.

Exclusions

None

Special Situations

None

Procedures

None

Additional Information

Frequently Asked Questions

None

Related Data

• University of North Carolina at Chapel Hill Policy on External Professional Activities of Faculty and Other Professional Staff
• University of North Carolina at Chapel Hill Policy on Individual Conflicts of Interest and Commitment

Contacts

History

Revised:

• July 15, 2010