Office of Investment Management
Procedure for Acceptance and Processing of Gifts of Securities
Stocks and Bonds
Both Pepperdine University and its Board of Regents accept donations of securities (stocks and bonds).
The University's policy requires that securities donated to Pepperdine University be sold as soon as possible. At times, a donor may express his/her wish that the donated securities be held for a specific period of time. The University may or may not honor this request depending on a decision made by the Vice President for Finance and Administration of Pepperdine University . Any restriction by a donor jeopardizes his/her deductibility unless a Rule 144 stock is involved.
Delivery of Securities
A donor may deliver or transfer a gift of stock in the following manner:
- By personal delivery (certificate);
- Via registered or regular mail (certificate); or,
- Via an electronic transfer through the donor's broker.
For gifts funded with mutual funds, please call the Investment Management Office for special instructions. Transfers of mutual fund shares may take three to four weeks (or longer) to accomplish. Please allow plenty of time for this type of gift and request that the donor provide a copy of his/her latest statement and include a letter indicating the fund name and dollar amount to be given. It is very important to contact the Office of the Investment Management | Pepperdine Universityearly for mutual fund transfers.
Individual. Under Options A and B, the donor forwards the stock certificate and signed stock power (the latter under separate cover) to the University. Careful attention must be paid to the registration of the stock. A stock certificate registered in the donor's name must be endorsed exactly as it appears on the certificate and accompanied by a donor letter indicating the gift and beneficiary designation. Registration under a "Mr. and Mrs.," joint tenancy or multiple names must be signed/endorsed accordingly in both the stock power and donor letter. Failure to do so will result in delays as the Securities & Exchange Commission requires strict compliance and the University's broker cannot sell the stock.
Corporate/Foundation. For gifts by corporations or foundations, a corporate resolution should also accompany the certificate and stock power.
Trust. For Trusteeships, a copy of the page designating individuals authorized to make transfers should accompany the certificate and stock power.
By far, Option C is the most efficient and easiest for all concerned. Under Option C, a donor may instruct his/her broker to transfer the security to the University's account. A form that can be faxed to the donor or his/her broker is attached at the end of this packet. It is extremely important that the Investment Management Office is notified before a transfer is to occur. The Investment Management Office will handle the transfer and coordinate with the donor's broker. In any event, a letter of instruction should be sent by the donor to the broker, indicating the following:
- Security name and quantity;
- Purpose of gift/beneficiary designation;
- Proposed date of transfer; and,
- Donor name, address, and phone number.
A copy of the letter should be mailed or faxed to:
Investment Management Office
24255 Pacific Coast Hwy.
Malibu, CA 90263-4525
Fax (310) 506-4585
For any other arrangement, please call Faye Holton at the Investment Management Office (310) 506-4710.
Valuation of Security
A gift is valued on the date of transfer, assuming the security is marketable to The University at that time, which may be:
- The postmark date
- The date of delivery, if done personally
- The date the certificate is registered in the University's name with specific instructions authorized by any one of the following; or
- The date the gift enters the University's account.
The donor may communicate the transfer to his/her broker, but under no circumstance should a sell order be given. The authority to sell must originate from the Office of the Investment Management | Pepperdine Universitywith specific instructions authorized by any one of the following:
- Investment Management | Pepperdine Universityand Chief Financial Officer
- Associate Investment Management | Pepperdine University
- Treasury Analyst
Gift valuation is based on the average of the high and low price of the security on the date of transfer. For example:
|Dec. 1 transfer date 100 shares XYZ Corp.|
|High of Day||$81.00|
|Low of Day||$78.00|
|Gift Value||$79.50x 100 shares = $7,950.00|
For securities whose value is not readily ascertainable through the Wall Street Journal, or through an accredited market maker, determination shall be based on the most reliable source possible and this shall be approved by the Office of the Treasurer. The Development Officer shall be notified in special situations where a valuation is outside of the norm. A qualified appraisal report may also be requested for closely held stock.
When a donor wishes to give a stock that has appreciated, it may be advantageous to transfer the stock. On the other hand, when a stock's value is below a donor's cost basis, it may be of more benefit tax-wise for the donor to sell the stock, take the loss, and donate the cash proceeds. The donor should be referred to his/her accountant or lawyer to determine the best option.
Donors should be discouraged from registering stocks in the University's name when making a gift. Reissuance of a certificate in the University's name takes three to four weeks. The donor and the University become exposed to market risk and valuation issues arise. Should a donor require this, notice should be given to Office of the Investment Management | Pepperdine Universityso appropriate measures may be taken.
Please date stamp each gift letter and retain the envelope for valuation purposes.