Guideline on the Use of Divisional Operating Reserves for the Purpose of Matching New Donor Gifts

June 2015

Preamble:

From time to time, the University establishes various matching programs to create endowments and other restricted trust funds in order to encourage external donations to support approved academic initiatives. University of Toronto units/divisions periodically have sufficient operating reserves to allocate a portion of those operating funds to create and fund these matching commitments. This Guideline has been developed to articulate principles and the approval process under which unit/divisional operating reserves can be allocated for strategic donor matching initiatives.

Objective:

To stimulate enhanced donations in support of the University’s academic priorities by leveraging divisional operating reserves as matching funds.

Principles:

  1. The proposed use of operating reserves must be in service to the University’s academic mission and approved funding priorities, particularly in line with goals of the Boundless Campaign.
  2. The "unit" (division, department, or EDU) wishing to commit operating funds towards restricted purposes must have sufficient contingency reserves against the unit’s own operating expenses as confirmed by the Dean.
  3. The use of operating reserves that will serve as a match must remain in University accounts and, for example, cannot be moved to a hospital foundation or other partner organization.
  4. Matches for eligible gifts cannot exceed 1:1.
  5. The use of matching funds from operational reserves may NOT be combined with other University-wide matching programs.
  6. Matching funds have greater leverage and more impact on the University’s mission when they are used to match donations of significant amounts. Accordingly, matching funds are intended for use in major gift or principal gift programs and proposals. Using matching funds in minimum increments of $25,000 is preferred. Use of matching funds from operating reserves for annual giving programs (gifts of $25,000 or less) is strongly discouraged, and will be approved only in exceptional circumstances.
  7. The use of matching funds for chairs and professorships is highly desired and preferred over one-off scholarship matches. Scholarship/financial aid support should be framed in terms of a program that will impact many donors.
  8. Retroactive matching for existing donations will not be permitted.

Approval Requirements:

  1. All requests for transfers from operating reserves to a restricted fund in support of a donor matching initiative must be approved by the Dean and then submitted for approval by the Vice-President & Provost and Vice-President, Advancement.
  2. Requests may be approved:
    1. within the annual budget process; or
    2. by the Provost and Vice President, Advancement on a case by case basis up to $2 million per instance, when in line with this Guideline and not approved within the annual budget process; or
    3. by the Business Board if it exceeds $2 million per instance, when not approved within the annual budget process.

Administration and Approval Process:

Within the Annual Budget Process

  1. Units are encouraged to request transfers from operating to restricted funds for the purpose of matching funds within the annual budget planning process. The transfers can be planned on a detailed level (i.e. setting individual target amounts for specific matching programs or initiatives) or specified as a maximum limit to be allocated towards all matching programs. Since the operating budget is approved every year, the amounts of planned transfers should also be specified annually.
  2. The Dean will consolidate and incorporate all of these plans in the annual academic budget review report, which is submitted to the Provost in the fall of each year.
  3. The Provost and Planning & Budget will meet with the Dean of the Faculty and will assess all the items in the academic budget review report including the proposed transfers from operating to restricted funds. The Provost will ensure that the central Advancement offices have been consulted and will seek approval from the Vice-President, Advancement on the use of the proposed transfers from operating to restricted funds.
  4. The Provost will provide a written response to the Dean, which will include the approval or denial of the proposed transfers. This normally happens between January and February.

Outside the Annual Budget Process

  1. Similar to the current approval process for new fundraising priorities, a ‘request for approval’ memo should be completed by each division and approved by the Dean. The Dean will assess and determine if there is a sufficient level of operating reserves available to match the proposed new gift.
  2. The memo approved by the divisional Dean should be submitted to the Manager, Development Logistics, Major Gifts, Divisional Relations and Campaigns (Manager) at University Advancement.
  3. The Manager will move the matching request memo through to Divisional Relations and Campaigns, the Provost and the Vice-President, Advancement for review and approval. If the request exceeds the $2 million per instance threshold, the request will be brought forward for approval by the Business Board.
  4. The Manager will notify the divisional contact when the approval is complete and a forthcoming formal approval notification email will be sent from the Provost’s Office to the requesting Dean.

For further information or questions, please contact:

Tad Brown
Counsel, Business Affairs and Advancement
tad.brown@utoronto.ca
416-978-2796

Helen Choy
Manager, Trust Accounting & Treasury
Financial Services Department
helen.choy@utoronto.ca
416-978-2981

Catherine Gagne
Chief Administrative Officer
Office of the Vice-President & Provost
catherine.gagne@utoronto.ca
416-978-7356