659  Gifts, Prizes, and Awards

Approved by President
Effective Date: June 5, 2017
Responsible Division: Business and Finance
Responsible Office:  Business and Finance
Responsible Officer:  Associate Vice President, Business and Finance

I. Purpose

Where permitted by applicable law, expenses for gifts, prizes, and awards are allowed to the extent the expense is reasonable and necessary to carry out the mission of Middle Tennessee State University (MTSU or University). As with all expenditures of University funds, money spent on gifts, prizes, and awards may not be lavish or extravagant, and must be spent ethically and in accordance with the law, delegated authority, funding source restrictions, and University policies and procedures.

This policy provides guidance to academic and administrative units regarding the University’s tax reporting obligation. Gifts, prizes, and awards under this policy are intended to conform to Internal Revenue Service (IRS) regulations for the proper inclusion with, or exclusion from, an individual’s gross income. Cash and non-cash gifts, prizes, and awards given must be reported by the University to the IRS as other income to an individual, if the value exceeds the calendar year reporting limit. Consequently, it is incumbent on University departments to have good record-keeping procedures in place to meet possible reporting requirements and document business purposes.

Any single gift, award, or prize is subject to this policy and will require appropriate documentation of the business purpose and recipient tax reporting information. In no event may a single cash or non-cash gift, prize, or award exceed five hundred dollars ($500.00). It is the responsibility of University officials to use good judgment in making these expenditures, in both frequency and cost.

II. Applicability

This policy does not apply to research incentive payments, tuition support, payment for services rendered, gifts, prizes, and awards to employees. Generally, awards to students that are related to academic performance are considered financial aid, and as such are not subject to the provisions of this policy. Gifts to students (i.e., Christmas, graduation, birthday, etc.) are not authorized by this policy. 

This policy also does not apply to gifts, prizes, and awards that are awarded through the use of a lottery, raffle, or other game of chance. All such awards are unlawful and will subject the employees participating in the illegal game of chance to University disciplinary action and criminal penalties. T.C.A. § 39-17-501(1). Any questions regarding whether a proposed activity constitutes an illegal game of chance should be referred to the Office of the University Counsel.

III. Definitions

A.  Gifts. Non-cash gifts typically are presented as tokens of appreciation to a dignitary, guest, volunteer, or visitor, when a valid and documented business purpose exists, such as to honor a distinguished visitor or lecturer. A gift is generally of nominal value, given to express appreciation or gratitude, and, ideally, bears the University’s licensed logo or is MTSU themed. 

B.  Honorarium. A cash gift, or token payment, given to express appreciation or gratitude is considered an honorarium. Honorariums are not related to job performance or a service performed for the University and may not be negotiated in advance. Honorariums cannot be greater than five hundred