Administrative Procedures

Procedure for Recognition of Independent Foundations

Procedure Number: 7.4-P

Current Effective Date: 04/28/2020

Original Effective Date: 04/28/2020

Revision Dates: 0

Revision Number: 0

Revision Summary: Creation of new procedure.

Responsible Official: Vice President, Institutional Advancement

References: Administrative Policy 7.4

1. Purpose

This procedure implements the KCTCS Administrative Policy on Recognition of Independent KCTCS Foundations.

2. Scope

This procedure applies to non-KCTCS entities seeking initial recognition or maintaining recognition by KCTCS as a duly organized, official foundation properly affiliated with KCTCS.

3. Procedure

To achieve and maintain recognition by KCTCS as a duly organized, official foundation properly affiliated with KCTCS for the primary purpose of raising private funds and enhancing programs and services of any KCTCS institution, non-KCTCS entities must substantially comply with the provisions of this policy.

Legal Status. The foundation shall first be recognized by the Internal Revenue Service (IRS) as a Section 501(c)(3) organization. A copy of the IRS Determination of Tax Status shall be supplied to the applicable college and to KCTCS.
1. The foundation’s Articles of Incorporation shall provide that the primary purpose of the foundation is to support KCTCS and college with which it is associated. The Articles shall also provide that, in the event the foundation is dissolved, all donations and contributions shall be disposed of in accordance with donor intent.
2. The foundation’s bylaws will more specifically provide for the role of the foundation, its governing board, and its committees. The by-laws shall not be inconsistent with these guidelines.
3. The foundation shall enter into a Memorandum of Understanding (MOU) with its recognizing organization that stipulates the obligations of both parties and defines the use of and compensation for facilities, equipment, personnel, and services leased or loaned between the two organizations. Such agreements shall comply with all applicable state and federal laws, as well as KCTCS policies and procedures.
Required Documents.
1. Organizations seeking to obtain or maintain recognition under the KCTCS Administrative Policy on Recognition of Independent Foundations shall timely submit the following documents and information:
  1. Copy of IRS Determination of Tax Status
  2. Copy of Recognized Foundation Articles of Incorporation and By-laws
  3. Copy of annual IRS Form 990
  4. Copy of independent external auditor’s final annual audit report
  5. Annual copy of Recognized Foundation Stewardship Plan
  6. Annual copy of Recognized Foundation Annual Report
  7. Annual copies of fully executed agreements on ethics, conflict of interest, and confidentially for all foundation governing board and committee members
  8. Updated, twice annually, the membership listing for all foundation governing board and committee members including names, home and business addresses, and telephone numbers, titles, along with title or offices currently held, if any.
2. KCTCS shall recognize the independent foundation if the required documents are proper, complete, and meet all applicable standards, and the foundation otherwise meets requirements of KCTCS policy and procedure.
Board of Trustees/Directors.
1. System Foundation. The KCTCS-recognized System Foundation Board of Trustees should:
  1. Be comprised of no less than 6 members and no more than 30 members.
  2. Meet the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC) of Principles of Accreditation standard that “The institution’s chief executive officer has ultimate control of the institution’s fund-raising activities.” The KCTCS President should be an ex-officio voting member of the System Foundation’s Board of Trustees.
  3. Designate the KCTCS Chief Advancement Officer, or other person identified by the KCTCS President as the KCTCS administration official primarily responsible for foundations, advancement, and philanthropy, as an ex-officio voting member of the System Foundation’s Board of Trustees and should serve as its Executive Director.
  4. Appoint at least one member of the System Foundation’s Board of Trustees from the current membership of the KCTCS Board of Regents to serve as an ex-officio voting member.
  5. Appoint as an ex-officio voting member of the System Foundation’s Board of Trustees, one member designated to represent the interest of any KCTCS college that uses the System Foundation as its independent Internal Revenue Service (IRS) Section 501(c)(3) fiscal agent.
  6. Stagger the terms of all members of the System Foundation’s Board of Trustees so that approximately one-third of the terms expire each year, except that the ex-officio members shall serve for as long as they hold their respective KCTCS offices.
2. College Foundations. The governing boards of KCTCS-recognized college foundations should:
  1. Be comprised of no less than 6 members and no more than 30 members. Elected board members from the community shall comprise the majority of College Foundation’s governing board.
  2. Meet the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC) of Principles of Accreditation standard that “The institution’s chief executive officer has ultimate control of the institution’s fund-raising activities.” The College President should be an ex-officio voting member of the College Foundation’s governing board.
  3. Designate the College’s Chief Advancement Officer, or other person chosen by the College President as the College administration official primarily responsible for foundations, advancement, and philanthropy, as an ex-officio voting member of the College Foundation’s governing board and shall serve as the Foundation’s Executive Director.
  4. Elect or appoint at least one member of the College Foundation’s governing board from the current membership of the College’s Local Board of Directors to serve as an ex-officio voting member.
  5. Stagger the terms of all members of the College Foundation’s governing board so that approximately one-third of the terms expire each year, except that the ex-officio members shall serve for as long as they hold their respective College offices.
Compensation. Members of the Foundation boards should serve without compensation, but by resolution of the board, may be reimbursed for expenses paid or incurred in the performance of their duties.
Meetings/Minutes. The Foundation boards should meet a minimum of twice per year with a majority of members present for each meeting. The Executive Committee or other committees of the board may meet on a more frequent basis as needed. The Foundation secretary shall ensure accurate minutes of all meetings of the board and shall have the care and custody of the foundation’s minute book.
Custody and Care of Funds. Each Foundation should have a Treasurer who is a voting member of its board. The Treasurer, subject to the order of the board, shall have the care and custody of the money, funds, valuable papers, and documents of the Foundation, and shall, under the supervision of the board, exercise all the powers and duties commonly incident to such office only for the legitimate purposes of the Foundation. The Treasurer shall oversee deposit of all Foundation funds in such bank or banks, trust company or trust companies, or with such firm or firms doing a banking business, as the board shall designate.
1. During the term of recognition, the foundations shall acknowledge, recognize, and afford privileges to its donors no less than as donors to KCTCS or KCTCS colleges.
Reporting Guidelines. The Foundation shall:
1. Submit timely updates of annually filed required documents.
2. Provide to KCTCS and the advancement office of the college with which it is associated, the names and addresses of prospective donors and the donors’ names, addresses, and amounts and designation of gifts received in a manner prescribed by the KCTCS Office of Philanthropy, for the purpose of appropriate reporting, acknowledgment, and recognition by KCTCS.
Fund-Raising Practices.
1. Each Foundation should assure that in all solicitations, the solicitors:
  1. Identify his/her relationship to the Foundation and the organization for which they are seeking support.
  2. Clearly state the purpose, programs, and activities for which the funds will be used.
  3. Conduct fund-raising without excessive pressure.
  4. Do not directly or indirectly solicit contributions for any purpose by misrepresentation of his/her name, occupation, financial condition, social condition or residence, and no person should make any other misstatement, practice any deception or fraud in connection with any solicitation or any contribution for any purpose.
  5. Should establish and exercise adequate controls over fundraising activities and contributions received, including commitment to writing of all fund-raising transactions.
  6. Should also seek to keep fund-raising and administrative costs below 20% of the Foundation’s total annual income.
2. In all cases where funds are transferred from the Foundation to KCTCS or a college, copies of documentation from the donors that state the intended use of the gift and include the donor’s names and addresses shall accompany the transfer. The Foundation, and any recognizing organization, must respect the wishes of donors who wish to remain anonymous.
Privileges of Recognition
1. As long as the Foundation remains recognized, KCTCS and the college shall acknowledge the Foundation as the official private fund-raising arm of the KCTCS entity with which it is associated.
2. KCTCS recognized foundations may use the KCTCS name and logo, and the name and logo of the KCTCS college with which it is associated and may request preferred access to areas of the campus and KCTCS events as determined in the sole discretion of KCTCS or the college. The Foundation may also negotiate and enter into an understanding with the KCTCS System Office or the college for the lease, loan, or other use of facilities, equipment, supplies, or other support consistent with KCTCS and college policies and procedures as may from time to time be amended.
3. Additionally, organizations recognized by KCTCS as independent foundations of KCTCS or any college thereof may have the following benefits provided by KCTCS:
  1. Access to constituent relationship management software (CRM) for recording gifts
  2. Access to CRM for gift and constituent reporting
  3. Access to constituent research and data enrichment
  4. Access to pooled endowment management
  5. Matching funds for endowment gifts (based on availability)
  6. Association of Fundraising Professionals (AFP) membership for fundraising staff
  7. Staff registration in Kentucky as charitable solicitors
  8. Other benefits as may from time to time be determined by the KCTCS Chief Advancement Officer primarily responsible for advancement and fundraising activities
4. In the sole discretion of the KCTCS Chief Advancement Officer primarily responsible for advancement and fundraising activities, KCTCS may from time to time add, modify, or eliminate benefits available to recognized foundations.
5. Privileges of recognition shall terminate immediately when the Foundation is no longer recognized by KCTCS. Any leases, loans, or other uses of facilities, equipment, supplies, or other support to the foundation shall convert to the market rate for such services as reasonably determined by the Chief Business Officer of the KCTCS entity with which the Foundation is associated.
Maintaining Recognition.
1. To maintain recognized status, KCTCS foundations shall comply with the guidelines and standards reflected in this procedure.
2. Recognized foundations shall annually submit to the KCTCS Office of Institutional Advancement copies of properly and timely completed documents.
3. KCTCS may deny or withdraw recognition of a Foundation and terminate all benefits thereof if the Foundation substantially fails to comply with any applicable laws, policies, or procedures as may from time to time be amended, or to make prompt and reasonable progress to cure any deficiencies brought to its attention by any source.
4. The KCTCS President may administratively withdraw KCTCS recognized foundation status and such action shall trigger the actions provided in this section. The withdrawal of recognition shall be presented to the KCTCS Board of Regents for ratification at a subsequent meeting of the KCTCS Board of Regents.
  1. In the event of withdrawal of recognition, KCTCS shall notify the Foundation in writing of its pending action. The withdrawal of Recognition shall become effective 60 days after mailing of such written notice, unless within that time, the Foundation secures a renewal of its recognition in accordance with KCTCS policy.
  2. The Foundation shall promptly notify all donors in writing, to the last known address, that it is no longer recognized by KCTCS and shall copy to KCTCS on such correspondence.
    1. The Foundation shall also promptly distribute all funds donated for the benefit of KCTCS or its stakeholders in accordance with donor intent.
Audit and Cooperation. Recognized Foundations shall upon request of KCTCS submit to and cooperate with a limited audit or review to determine its compliance. Recognized Foundations shall reasonably cooperate with KCTCS and the college with which it is affiliated for these purposes.