WFAA has a strong fiduciary responsibility to donors to ensure that gifts are used for the purpose for which they were given. Everyone, including university personnel, is responsible for respecting the sacrosanct fiduciary responsibility WFAA has to donors. Expenditures must be “ordinary, necessary, and reasonable” in relation to strengthening the university’s mission. Expenditures should be supportive of the university’s objectives and should not inure to the private or personal benefit of individuals entrusted to administer the funds against these standards.
WFAA has a strong fiduciary responsibility to donors to ensure that gifts are used for the purpose for which they were given. Everyone, including university personnel, is responsible for respecting the sacrosanct fiduciary responsibility WFAA has to donors. When WFAA disburses funds, both the nature of the expense and the requested payee must be taken into consideration.
Donor gift funds may be disbursed to a campus 233/533 for campus to pay vendors, or WFAA can make payments directly to vendors on behalf of the university, when appropriate. Disbursing funds from WFAA to a campus 233/533 is required when expenses are allowable per UW policy. To the maximum extent feasible, all support to the university from WFAA gift funds will be disbursed to the university and deposited on the university’s ledger (233/533) and not paid directly to the vendor. Only under unique circumstances will WFAA make payments directly to a vendor to support a university program.
Expenditures must be “ordinary, necessary, and reasonable” in relation to strengthening the university’s mission. Expenditures should be supportive of the university’s objectives and should not inure to the private or personal benefit of individuals entrusted to administer the funds against these standards. Funds disbursed to the university (233 or 533 funds) must follow the guidelines outlined here, although it is important to understand that once funds are disbursed to the UW, they are considered university funds not WFAA funds and, therefore, must also comply with university policy and procedures.
All expenditures paid for using WFAA funds, regardless of which entity makes the payment, must be:
- Consistent with donor intent and WFAA’s fiduciary responsibility
- Consistent with WFAA’s mission
- Consistent with commonly accepted business practices, including those considered to be somewhat unique for higher education institutions and/or the organizations that support them, including WFAA
- Consistent with required standards of prudence and reasonableness
- Consistent with all laws and regulations applicable to our respective organizations, including IRS guidance applicable to not-for-profit business entities and the compensation-related rules that apply to the individuals and contractors they employ
- Consistent with and not in contrast to policies the university is held accountable to by the State of Wisconsin or the University of Wisconsin System, or procedures the university has created to help govern itself
Before incurring expenses or submitting expenditures to WFAA, it is the claimant’s responsibility to:
- Understand university policy and procedures. See:
- Utilize university payment mechanisms to pay for all allowable expenses before requesting the use of WFAA funds.
- Understand WFAA policy and procedures.
- Acknowledge and honor the donor’s intent for the fund.
- Confirm the account balance is sufficient to cover the expense. If you have an account on Gift and Fund Management, please log in to check the balance of accounts to which you have access.
- Obtain the appropriate approval for the request.
If you are uncertain whether expenses are appropriate, faculty and staff should first contact their respective dean/divisional business office for policy and/or procedural questions.
Dean/divisional business offices may contact WFAA with questions.
Types of Funds
Expenditures are subject to the terms and conditions of each specific fund (e.g., research, programs, discretionary) as well as applicable program guidelines, which may restrict the use of the funds for certain types of expenses. Please refer to the fund descriptions/details on the Gift and Fund Management website prior to incurring an expense.
The appropriateness of an expense should be considered before incurring it and before requesting reimbursement/payment from a WFAA account. Requests must include appropriate supporting documentation for the type of expenditure.
- Check request with appropriate approvals
- Invoice, when applicable
- Itemized receipts, when applicable
- An approved business need supporting the use of the requested funds
- A description of the specific reason(s) the expense(s) could not be paid through authorized university payment mechanisms
- Attendee list, when applicable
WFAA funds are provided through the generous support of donors who are interested in supporting the mission of the university. Good business ethics and common sense dictate that expenditures deemed to be extravagant or excessive, or which provide significant personal benefit are not allowed. When questions arise as to the appropriateness of an expenditure, the expenditure should be cleared through WFAA’s director of fund administration and compliance before the expense is incurred or submitted for payment/reimbursement.
As part of WFAA’s careful stewardship of contributions, the following expenditures are not allowed:
- Expenditures not directly related to an individual’s university appointment or official WFAA business
- Contributions to other nonprofit organizations
- Payment of fines and penalties
- Purchase of cultural or athletic tickets for personal or student use. Business-related athletic ticket purchases must be made through the UW’s official process.
- Taxable items (including gift cards or gifts) for university personnel or students
- Gifts of cash or cash equivalent (e.g., gift cards)
- Office parties and gifts for employees that were not approved under the UW’s Official Functions and Expenses Policy
- First class/business class airfare
- Payment of personal expenses, such as:
- Parking fees, fines, towing charges, traffic violations, or other payments due to illegal actions
- Routine maintenance on cars
- Cell phones
- Internet charges
- Kennel charges
- Travel expenses related to children (and other non-spouses/significant others) of either university personnel or candidates
- Direct payments to students. Student scholarships/stipends/grants/awards must be paid to a student through the Bursar’s Office.
- Direct payment of salaries or wages to faculty, staff, students, or other full- or part-time employees of the university. Salaries/wage payments to employees of the university and related benefits for university employees must be processed through the university payroll office.
*Note: UW faculty/staff honoraria and awards related to work performed for WFAA trigger a taxable event. In this case, WFAA will pay the university employee directly and distribute a 1099 in compliance with IRS regulations.
- Memberships to social clubs (including airline clubs) without authorized pre-approval by the dean/divisional business office and the director of fund administration and compliance.
Note: This listing is illustrative; it is not intended to be an exhaustive list of all potential university operational situations.
Exceptions to Policy
Exceptions to this policy must be pre-approved by WFAA’s director of fund administration and compliance, including unique circumstances not included in the policy above. Please submit requests, in advance, to firstname.lastname@example.org and include the business need for the exception along with supporting documentation.
WFAA recognizes this and other campus and WFAA policies are effectively replacing the Chancellor’s Memo, historically observed as the highest level of guidance published by campus regarding the relationship between WFAA and the university. A summary of applicable directives relating to the Chancellor’s Memo, as well as excerpts from the Memo of Understanding between WFAA and the university are included as Appendix A.
WFAA Fund Expenditure Procedures
WFAA and campus use two primary methods to process payments: WFAA ’s check request process and the UW’s expense reimbursement system.
Campus uses the check request process to request disbursement of funds from WFAA to a campus 233/533, and in certain situations, it is used for campus to request that WFAA facilitate payments directly to vendors on the UW’s behalf.
To request a disbursement to a campus 233/533 or a payment to a vendor, fill out a Check Request Form by logging into the Gift and Fund Management website. Once the online form is completed, it should be routed with the supporting documentation for required university approvals and then submitted to the WFAA’s disbursement department for processing.
WFAA — ATTN: Disbursements
1848 University Avenue
Madison, WI 53726
The university uses e-Reimbursement to process employee and nonemployee travel expenses, as well as non-travel-related expenses that do not require a purchase order. Expense requests for an individual, including those to be paid using Foundation funds must be submitted using e-Reimbursement. Through the e-Reimbursement system, expenses (or a portion of an expense) not allowable with university funding can be allocated to be paid with WFAA funds using the account code of 6240.
When processed in e-Reimbursement, the claimant will receive a single payment for the total amount approved through this process. Subsequently, the university invoices WFAA for reimbursement of the expenses that were allocated to be paid with WFAA funds. If approved, WFAA reimburses the university for the expenses that were coded to 6240. WFAA reserves the right to determine that an expense is inappropriate or unreasonable and, therefore, deny the request for payment. In this case, WFAA will notify UW Business Services.
Determining Whether WFAA or the UW Should Facilitate the Payment/Reimbursement
- Keep these two things separate: The use of funds versus who is facilitating the payment.
- Use of funds — WFAA funds can be utilized in two ways: on the UW side and on the WFAA side.
- WFAA funds held by the university that WFAA disbursed to a UW 233/533
- WFAA funds held by WFAA
- Facilitation of the payment
- UW — The UW can only facilitate payments from a 233/533 for expenses that are allowed per UW policy. WFAA funds should not be disbursed to the university for expenditures the university does not allow per policy. Any payments facilitated by the university, regardless of fund type, including 233/533, need to be compliant with UW policy.
- WFAA — WFAA can only facilitate payments, via e-Reimbursement or directly to vendors, for expenses the university cannot facilitate payment for but that are still compliant with WFAA policy
- Use of funds — WFAA funds can be utilized in two ways: on the UW side and on the WFAA side.
- Donor intent — The intended purpose of the funds given by the donor must always be honored regardless of which entity holds the funds and/or who is facilitating a payment for expenses.
- Who planned the event — Who planned the event, not the purpose of the event or the reason the expense was incurred, determines whether WFAA or the UW should facilitate the payment to the vendor.
- When WFAA organizes the event, then WFAA should facilitate the payment to the vendors.
- When the university organizes the event, then the UW should facilitate the payment to the vendors up to the maximum allowed, through university payment mechanisms.
- University employee and student payments — WFAA will not make payments directly to a university employee for services, honoraria, fellowships, prizes, or similar awards. These payments must be made through the university as required by the Internal Revenue Code. The only exception is when WFAA officially hires UW faculty or staff to perform services on their behalf.
WFAA will not reimburse university employees directly for allowable travel and expenses, including meal and alcohol overages. These expenses must be submitted via the UW’s employee reimbursement process.
Contract and Consultant Fees
WFAA has an approved process in place for contract review and signature authority. The policy stipulates that WFAA Legal Affairs is required to review and approve all contracts that bind WFAA to any commitments. All invoices related to contracts signed by WFAA personnel must be paid by WFAA directly to the associated vendor(s). Similarly, all invoices related to contracts signed by university personnel must be paid by the university, with the exception of alcohol that is in adherence with WFAA policy.
Direct payment for event-related goods and/or services (excluding payments to UW personnel/institutions) will only be paid if approved under the provisions of WFAA Policies for Event and Registration Services for Campus-Sponsored Events.
Details for Expenditure Categories
Entertainment and Business Meals
Meal overages and alcohol expenses incurred for entertaining guests of the university are allowed within the following limitations:
- The university has paid all allowable meal-related expenses.
- The total amount reimbursed by the university and WFAA combined does not exceed $150 per person. The $150 per person amount includes meal, beverages, tip, and tax (when appropriate).
Note: WFAA is tax exempt in the following states: Wisconsin, Illinois, Florida, New York, Texas, and Utah.
- WFAA recognizes that certain situations may involve the consumption of alcoholic beverages. WFAA’s limit for the allowance of alcohol is to not exceed $50 per person for a single event (included in the overall $150 per person maximum).
Travel and Expenses
All university personnel are expected to comply with university travel policies and utilize university funds for allowable expenses prior to requesting payment/reimbursement by WFAA. WFAA funds must not be used as a way to navigate around university policies or procedures.
WFAA will reimburse eligible travel expenses submitted through the university’s expense reimbursement system assuming requests for reimbursement are consistent with joint policies regarding eligibility. WFAA will not directly pay individuals for travel expenses received outside of the university’s expense reimbursement system. WFAA employees must not pay for university employee expenses unless the expenses are for a WFAA event, in which WFAA requested the university employee attend to actively work at the event on WFAA’s behalf.
Note: “Unreasonable” travel expenditures as defined by the IRS or as otherwise prescribed by law are not allowed.
Once all university funds have been utilized to the maximum allowed, WFAA will generally honor campus-based, travel-related reimbursement for non-faculty/staff submitted via e-Reimbursement.
WFAA generally does not reimburse for first class/business class airfare. Pre-approval by WFAA’s fund services director, approval by the dean/divisional business office, and adequate justification of the benefit to the university are required to consider reimbursement of first class/business class airfare.
Payments for spousal or family expenses may be deemed as compensation by the IRS and are not encouraged but are allowed with authorization from the dean/divisional business office. Any expenses in this category must be submitted via the university’s expense reimbursement process. An explanation of why it is appropriate to use donor funds for these type of expenses must accompany the reimbursement request. Requests for such payments may be reported to Business Services and, if found tax reportable, will be included as compensation on the employee’s W-2 form.
For specific guidelines related to campus event activities, please see WFAA Policies for Event and Registration Services for Campus-Sponsored Events.
WFAA will generally honor requests for fund disbursements for event-related activities if:
- The event has been accepted by WFAA as a supported event, wherein all invoices related to contracts were signed by WFAA; therefore, these payments must be paid directly to the vendor by WFAA. Non-contract vendor invoices related to the specific event will also generally be honored by WFAA.
- As a general rule, WFAA will not honor any direct-pay vendor requests related to contracts that have been signed by university personnel.
Campus 340 Official Functions and Expense Policy
Per campus policy, 340 Official Functions and Expense Policy, expenses related to the following can be paid by the university using gift, program revenue, or trust fund monies. When using WFAA donor funds that were disbursed to a 233/533, discretionary funds (coded as “J”) may be used for approved official functions. Expenses in this category that are not approved as an Official Function according to the university policy and procedure will not be approved for payment by WFAA.
Tickets for Athletic Sporting Events
Tickets purchased for campus employees outside of the approved campus or WFAA documented procedures will not be paid/reimbursed.
University property must be purchased through UW–Madison’s Purchasing Services, whenever possible.
Departmental faculty and staff should first contact their respective dean/divisional business office for policy or procedural questions.
Dean/divisional business offices with questions may contact WFAA via the Gift and Fund Management page.
- WFAA Policies for Event and Registration Services for Campus-Sponsored Events
- 340 Official Functions and Expense Policy
- 131 Gift Funds Policy
- 131.2 Use of Gift Funds Procedure
- Division of Business Services Policy and Procedures Index
University of Wisconsin Chancellor’s Memo
The following Chancellor’s Memo was widely recognized as the highest level of guidance published by campus, for campus, regarding the relationship between the University of Wisconsin–Madison and the University of Wisconsin Foundation.
- The primary purpose of the UWF (WFAA) is to solicit and accept gifts on behalf of the University, as well as to invest and protect those gifts until needed by the University.
- The primary purpose of this (Chancellor’s) memo is to help ensure the UWF does NOT become an “Operating Arm of the University”.
- UWF will not accept funds, for deposit, derived from University sponsored revenue producing activities (UWF ‘event’ guidelines outline potential noted exceptions to this).
- All checks deposited by the UWF should be intended as such BY A DONOR, as a GIFT. All other checks should be deposited by the University, into University accounts.
- Funds disbursed from UWF gift funds should be forwarded to University 233 accounts only. Only under extraordinary circumstances should the University request the UWF to pay vendors directly, from gift funds, in support of a University program. University ‘custodians’ are responsible (not UWF) for documenting why University funds could not be used under these guidelines … subject to open records.
- The UWF should NOT provide any direct payments to University employees for services or honoraria, or to recipients of University scholarships, fellowships, prizes or awards. The University will be responsible for related 1099 reporting.
- If direct payments can be paid under state procurement / travel rules, they MUST be paid through University procedures. The “press” (i.e., newspaper print) test must rest with University personnel, not UWF.
Memo of Understanding between the University and the WFAA
This agreement, dated November 1, 2014, was executed shortly after the merger between UWF and WAA, and supersedes all preexisting MOU’s between the university and either UWF or WAA.
- The UWF shall NOT receive direct payments from the University for fundraising activities. The University may, however, pay for services provided to support University activities, provided such services are outlined under a preexisting separate written agreement.
- UWF may elect to disburse funds on behalf of the University provided they are consistent with donor intent, as well as all UW and UWF policies, and applicable law.
- The UWF shall NOT receive GRANTS (State or Federal), unless special circumstances apply and they are approved by the UWF BOD.