Auctions

Policy Statement

In the event that Adelphi University identifies that a transaction utilizing an auction process best serves the interests of the University, the Office of the Vice President of University Advancement may utilize or authorize the use of an auction transaction.

Reason for Policy

Adelphi University may find that its interests are best served by utilizing auctions. This policy sets guidelines regarding the University’s responsibilities for conducting auctions to the public.

Who Is Governed by this Policy

Staff

Policy

Processes

1. Adelphi University may conduct auctions for fundraising events.
2. The Office of the Vice President of University Advancement will conduct all auctions to be in compliance with guidelines and policies established by Adelphi University.
3. Donors who purchase items at Adelphi University’s auctions may claim a charitable contribution deduction for the excess of the purchase price paid for an item over its fair market value.
4. All items donated to this auction become the property of Adelphi University and are offered for sale at auction within three years of receipt.
5. Adelphi University is required to file IRS Form 8282 at time of disposal or sale, and Adelphi University must provide a description of its use of the property, a statement of whether the use of the property was related to University’s exempt purpose. Form 8282 must be signed by the individual authorized to sign a tax return on behalf of Adelphi University.
6. Adelphi University will maintain a separate file of all completed Form 8283 for gifts of merchandise used as auction items.

Procedures

1. University Staff
   1. The University has a responsibility to value the item, because it must provide this information to potential bidders, and more importantly, to the winning bidder for his or her deduction. Many charities include this information in their auction brochure or bidding list.
   2. Collect the proceeds and issue the donor a receipt for the amount of the winning bid including the following information:
      1. Date and location of the auction
      2. Describes the donated item and states whether the donor received any goods or services in return.
      3. The information should include a good faith written estimate of the service or item won at auction.
2. Winning Bidder
   1. The winning bidder must be able to show that he or she knew that the value of the item was less than the amount paid. Assuming the donor has no reason to doubt the accuracy of the published estimate, if he or she pays more than the published value, the difference between the amount paid and the published value may constitute a
      charitable contribution deduction, to be determined by the donor or the donor’s tax consultant.

Gifts of Merchandise for Auctions will be accepted under the following conditions:

1. The items are of good taste and uphold the integrity of Adelphi University.
2. The donor must complete IRS Form 8283 if the fair market value exceeds $500.
3. The donor must provide a written appraisal by a qualified appraiser on all gifts in excess of $5,000.
   1. A qualified appraiser cannot be the donor, Adelphi University, a member of the Board of Trustees, or person employed by or related to the donor or University.
   2. The qualified appraiser will be required to certify Form 8283 for the donor.
4. The Office of the Vice President of University Advancement will will complete Section B, Part I Form 8283 (Donee Acknowledgement) if properly completed by the donor.
5. For gifts of prizes under $5,000, the University will provide the donor with an in-kind gift form, and a description of the item, but not including and perceived value.

Definitions

Silent Auction: A silent auction is one in which a card or bid sheet is placed next to each item that can be purchased. This card or sheet notes the minimum bid for the item and the fair market value of the item. Bidders then write their number and the amount they are willing to bid on the card or sheet. At the end of the auction, the highest bidder is the winning bidder and pays for the item.

Open Auction: An open auction is one in which bidding is conducted under the supervision of an auctioneer. The auction items are typically published in a brochure with a detailed description, minimum bid, and fair market value. The auctioneer begins the bidding at the minimum bid and bidders bid by raising their hand or a placard to indicate their desire to bid at the price called out by the auctioneer. The winning bidder is the highest bidder and pays for the item after the bidding has closed for that item.

Gifts from Individuals: Gifts of services by individuals typically do not qualify for a deduction. However, tangible gifts for unrelated use qualifying for a deduction is based on the actual cost basis less depreciation of the item. Use caution with a gift of an auction item that has appreciated in value since the donor purchased it. For gifts of tangible personal property for an unrelated use, the donor only may claim his or her cost basis in the item, rather than the fair market value.

Gifts from Businesses: A gift of a business’s services are typically not deductible because the IRS deems the services “lost income.” Income is ordinary and gifts of ordinary income are not deductible. Examples of services given by businesses include ad space, television airtime, and legal services. Tangible gifts by corporations are permitted charitable deductions. Many businesses make gifts of excess inventory. A corporation may deduct a gift of inventory at its cost basis, rather than at the fair market value of the item.

Unrelated Use: The term “unrelated use” means a use that is unrelated to the charity’s exempt purposes or function, or, in the case of a governmental unit, a use of the contributed property for other than exclusively public purposes. The sale of an item is considered unrelated, even if the sale raises money for the charity to use in its programs.

Forms

This policy does not have forms associated with it at this time. Upon periodic policy review this area will be evaluated to determine if additional information is needed to supplement the policy.

Related Information

This policy does not have related information at this time. Upon periodic policy review this area will be evaluated to determine if additional information is needed to supplement the policy.

Document History

• Last Reviewed Date: October 29, 2017
• Last Revised Date: October 29, 2017
• Policy Origination Date: Unknown

Who Approved This Policy

Unavailable