How does UW Foundation process gifts that result from outside work?
Many University of Washington faculty and staff members receive non-UW compensation above and beyond their UW compensation (e.g., compensation for serving on a corporate board, honoraria for speaking engagements, royalty compensation, etc.) Some faculty and staff members choose to direct this compensation back to the University of Washington in the form of a gift. In some cases, faculty and staff members waive compensation and the organization chooses to make a gift to UW Foundation. As a reminder, whenever conducting outside work, faculty must fill out the Request for Approval of Outside Professional Work for Compensation Form and professional and classified staff must fill out the Request for Approval of Outside Work Form. (See Appendix I)
The Council for Advancement and Support of Education (CASE) provides a set of guidelines for gift accounting that address this sort of compensation in their Reporting Standards and Management Guidelines for Educational Fundraising, 4th Edition. (See Appendix II) The University of Washington follows these Case Guidelines.
Outlined below are the different procedures for processing gifts if 1) the faculty/staff member has agreed to compensation for outside work, or 2) the faculty/staff member has waived compensation for outside work.
Faculty/staff member agrees to compensation for outside work and has decided to make a personal gift to the UW Foundation:
Faculty/staff member waives compensation for services and organization chooses to make a charitable contribution to the UW Foundation:
When processing checks, the department should submit the check, along with accompanying documentation, and a signed gift transmittal to the UW Gift Services, Box 359505. (For UW Medicine Gifts, use the UW Medicine specific gift transmittal and send to UW Medicine Advancement, Box 358045.)
It is not within the scope of UW Foundation’s responsibilities to instruct faculty and staff on how to comply with IRS regulations regarding income tax. Faculty and staff who wish to take advantage of an opportunity to make a gift in this manner should consult with their accountant to ensure compliance with tax law. It should be noted that federal courts have found that income from services is generally taxed to the party who performed the services (Lucas v. Earl, 1930; Helvering v. Horst, 1940).