Valuation Procedures for Gifts-in-Kind

Corporate and Foundation Relations, WPI

The University's gift recording procedures and policies require placing a value on all gifts in kind.

Note that if the donor plans to take a tax deduction for the gift, he or she is responsible for an appraisal of the item, according to the IRS. WPI does not provide valuation information to donors. WPI acknowledgment letters do not refer to the value of the gift.

Internally, gift value is determined in the following ways:

List price of the item, less any educational discount.
If the item is used, information on comparable equipment cost is used to determine the value. Faculty and donors can obtain this information from used equipment dealers.
If no commercial pricing information is available, faculty members assist the Office of Corporate and Foundation Relations (C&FR) in ascertaining the market value by making comparisons to similar items for which pricing is known.
For equipment provided to WPI for a fixed amount of time (e.g. 2 years, or 5 years), the value of the gift is considered to be the amount that it would cost the University to lease the equipment for that amount of time. This lease value should be used instead of the purchase price. An example of this method is the equipment from Haas Automation, Inc., "entrusted" to the Mechanical Engineering Department. Haas will replace the equipment every two years. This policy was adopted by C&FR on 7/2/02.
Services: The value of a person's or organization's time or service is not considered a charitable contribution and is not countable as a gift in kind, regardless of whether the individual assists as a volunteer or as a professional providing a specialized service (e.g. accounting, legal, consulting, training, installation). WPI encourages the provider of these services to bill the University for the service, accept payment from the institution, and then make a gift back to WPI in the same amount.
Software licenses: The Development Office treats such licenses as gifts, unless there is a maintenance fee charged. In some cases, when the cost of the maintenance fee is relatively low as compared to the value of the license, the gift may be counted. The cost of the service agreement is considered to be a service and is not countable as a gift. Recent practice has been to ask the donors to waive the maintenance fee to help clear up any ambiguity about gift status. Valuation considerations include: the number of "seats" that will actually be used by WPI, using course registration figures and estimates from faculty; wording of the license agreement (usually license agreements are signed by Siamak Najafi); e-mail correspondence from the donor; and pricing of comparable software. Sia Najafi, Manager of Academic Computing, is asked to validate, if at all possible, the value provided by the donor.

NOTE: Gifts of real (e.g. real estate) and personal property (e.g. anything subject to personal ownership) are subject to different valuation rules. Contact Individual Giving at 508/831-5611 for further information.

Reviewed and approved on Sept. 30, 2003 by J. Heyl, R. Dietrich, D. Rodino, L. Johnson.