Section 1.07: Contributions, Gifts and Awards

1. Introduction

This Section outlines the overall guidelines, allowable expenditures, and non-allowable expenditures related to contributions, gift cards, gifts, and recognition of employees.

2. Overall Guidelines

1. Gifts or awards of value should be infrequent, reasonable, and modest in nature, may not be provided as personal gratitude or in lieu of compensation, and must conform to the Internal Revenue Service (IRS) regulations and state ethics limitations.
2. Taxable Income for Gifts and Gift Cards Provided to Employees.
   1. The value of non-cash gifts provided to employees which exceed the $100 de minimus limit is taxable, with the exception of length of service or retirement gifts, which are taxable when they exceed $400.
   2. If the cost or value of a non-cash gift provided to an employee for retirement or length of service exceeds $400, the gift is reportable as taxable compensation to the employee.
   3. Gift Cards:
      • All Gift Cards, regardless of value, are considered cash or a cash equivalent gift or award and will be reported as taxable compensation to the employee, subject to appropriate federal, state and employment tax withholding, and must be included in the employee’s year end Form W-2, Wage and Tax Statement.
   4. Raffle and Door Prizes:
      • Non-cash raffle or door prizes provided to employees are not reportable as taxable compensation unless the de minimus limit of $100 is exceeded.
      • Cash or Gift Card raffle and door prizes are reportable as taxable compensation to the employee, subject to appropriate federal, state and employment tax withholding, and must be included in the employee’s year end Form W-2, Wage and Tax Statement.
3. Taxable Income for Gifts/Awards Provided to Non-Employees
   1. Gift Cards presented to non-employees (including students who are not University employees) will be taxable and included as reportable income to the recipient (on form 1099-MISC) only if the recipient receives $600 or more from the University in a calendar year.
   2. The University will track payments and distributions to such individuals and is required to report payments of $600 or more to US Residents on Form 1099 and to Foreign Nationals on Form 1042S. The $600 threshold can consist of smaller individual payments in the aggregate and include cash, checks, and gift cards from multiple University departments and funding sources.
4. Gifts/Awards to Volunteers
   1. Gifts may be provided as a thank you to nonemployees volunteering time for a University initiative; however, Gifts may not be given in lieu of payment for services or as quid pro quo.
5. Recordkeeping and Accountability for Gift Cards
   1. Proper safeguarding of Gift Cards is required at all times. At a minimum, the following steps should be in place:
      • The department issuing gift certificates/cards must keep a record of all gift certificates and Gift Cards issued.
      • A single individual must be designated as custodian of the Gift Cards.
      • Gift certificates and Gift Cards must be secured in a locked drawer, cabinet or room and be accessible to only the designated custodian.
      • Issuances of gift certificates and Gift Cards should be documented in a log (spreadsheet), by individually collected receipts or other documentation such as email or online confirmation, including the date of issuance, purpose, certificate/card amount and signature of recipient.
      • Campus-specific procedures for obtaining Gift Cards must be followed.
6. Conflict of Interest
   1. As public employees, UMass employees must adhere to state conflict of interest laws pertaining to receiving and providing gifts (MGL c. 268A).
7. Maximum Allowance for Gifts/Awards
   1. Non-Retirement, Non-Length of Service Gifts/Awards: the maximum allowance for Gifts and awards not related to retirement is $100. Exceptions may be allowed but require prior approval.
   2. Length of Services and Retirement Gifts: the maximum allowance for retirement gifts is $400 (for tangible items, cash equivalent items and gift cards).
8. All prizes and awards which are given to students for educational expenses and/or are educational in nature (laptops, lab supplies, textbooks, etc.), are considered a scholarship, and require financial aid reporting. Refer to campus Financial Aid Offices.

3. Allowable Expenditures

1. Employee Recognition Awards
   1. Employee recognition awards may be provided within an established recognition program and may not exceed the maximum allowable cost unless an exception is provided. Please note: Gift Cards are not allowed as employee recognition awards.
   2. Campuses have the discretion to delegate authority to departments to recognize an employee for outstanding work-related accomplishments. Awards must be presented to employees based on objective criteria as part of a ceremonial event held at the departmental level.
2. Employee Length of Service Awards
   1. Employee length of service awards may be provided within an established recognition program.
3. Employee Retirement
   1. A noncash Gift of University merchandise may be presented to an employee upon retirement from the University. The item must be commensurate with the nature and value of the employee’s contribution to the University.
   2. Campuses have the discretion to allow Gift Cards as a retirement gift.
4. Sympathy/Memorial/Extended Illness
   1. Only Gifts of tangible personal property, such as flowers, may be presented on behalf of the University as an expression of sympathy in the event of the death or major illness of an employee or a member of the employee's immediate family (spouse, child, parent, or sibling of the employee).
   2. Campuses have the discretion to not allow issuance of Gifts for sympathy, memorials, or extended illness.
5. Door and Raffle Prizes
   1. Occasionally, departments may hold raffles for door prizes and other Gifts to entice employee or student participation in an event.
   2. If conducting a random drawing and the recipient is not pre-determined, the prize (campus sweatshirt, gift card, etc.) may be given directly to the winners.
6. Human Subject Research Study Participants
   1. The University may provide Gift Cards to individuals who participate in research or studies as human subjects. Human subject compensation must adhere to Institutional Review Board’s policies and procedures.
   2. Gift Cards may be issued to employees when they serve as human subjects provided the service is not related to their employment. When Gift Cards are provided under these circumstances, the above section (106.3.c) on Taxable Income for Gifts/Awards Provided to Non-Employees applies.

4. Non-Allowable Expenditures

1. Campuses have the discretion to not allow issuance of Gift Cards for any purpose.
2. Gifts, awards, and Gift Cards may not be issued in lieu of employee or nonemployee compensation.
3. Gifts associated with employee birthdays, weddings, baby showers, anniversaries, or other occasions of a personal nature are not allowed.
4. Contributions by the University to any individual or organization directly or indirectly associated with a political party, campaign, candidate, or group engaged in an attempt to influence legislation, elections, referenda, or similar activities, are not allowed.
5. Contributions made to organizations as an expression of sympathy in lieu of a tangible gift such as flowers. However, this does not preclude employees from making personal contributions and/or gathering personal employee contributions to such organizations as an expression of sympathy.
6. Gift Cards may not be issued for vendor payments. Expenditures in excess of limits are not allowed unless an exception is provided.
7. Some exceptions may be granted for non-allowable expenses but require prior approval.

5. Approvals

The approval requirements for Contributions, Gifts, and Awards are outlined in the Approvals section of this standard. See Section 1.08.

6. Exceptions

Exceptions can be requested per the guidelines outlined in the Exceptions section of this standard. See Section 1.08.

7. Limits by Gift Type

8. Resources

UMass Chan Medical School Gift Card Policy (for UMass Chan employees only).