Each year administrative advisory and consultation groups are asked to participate in and facilitate the work of different administrators. The input of the members is important in the life of the College. Committees are advisory, not legislative.

Unless otherwise noted, the term of service is one year, meetings are held at the call of the convener, and the President appoints all members to the committees upon recommendation of the appropriate Vice President who receives recommendations from the respective conveners.

1. Rhodes Planning Cooperative (RPC)

Membership.
Two administrators: the Director of the Physical Plant and the Comptroller; five students: Chair of Campus Green, Chair of Friends of VECA, and the ACS intern; two staff members: the Assistant Superintendent of Housekeeping, and an open position to be filled from the Building and Grounds division; three members of the Faculty: the ACS Fellow, and the past ACS Fellow, and one member of the Faculty recruited by the RPC; two alumni or trustee members recruited by the RPC. Representatives serve terms of two years, renewable at the discretion of each group represented. A chair is elected by RPC committee members and serves for a two-year term.

Duties.

1. Create and maintain a cross-campus collaborative of students, faculty, staff, and administrators for the purpose of developing a practicing perspective of environmental stewardship at the College;

2. Aid in institutionalizing sustainable practices throughout every aspect of college functioning, i.e., energy production, reduction and consumption, academic curriculum, purchasing, waste reduction and disposal, building and road construction, landscaping, vehicle purchasing and maintenance, and technology;

3. Liaison and coordination with the Vollintine Evergreen Community Association on campus and community projects involving matters of sustainability and environmental stewardship. Reports of RPC business and annual summary reports are sent to the Dean of the Faculty, Vice President for Finance and Business Affairs, Dean of Students, and the Vice President for Information Services.

Expected Involvement. 
Meetings are scheduled biweekly during the academic year, and as needed during the summer.

2. Traffic Appeals and Campus Safety Committee

Membership.

Convener (appointed by the Director of Campus Safety or designee); three faculty members, three staff (one of whom is an office administrator); three students; ex officio: Director of Campus Safety or designee

Duties.

1. Hear and decide on appeals of parking/traffic citations and report the decision of the committee to the Bursar and the person making the appeal.
2. Make recommendation to the Dean of Students and the Vice President for Finance and Business Affairs regarding parking and traffic regulation, via the Director of Campus Safety or designee.
3. To promote understanding of the need for College-wide cooperation concerning parking and traffic.

3. Administrative Assessment Committee (AAC)

Provides assistance to education programs and faculty committees as needed to facilitate the faculty’s regular and on-going efforts to assess the curriculum.

Membership: SACSCOC liaison, Chair
Director of Assessment
One or two faculty members appointed by the Provost for their relevant areas of expertise

The charge of this committee is to:

• Guide and evaluate the College’s assessment activities in regard to educational programs
• Make policy recommendations in this regard as needed, although it will not establish policy
• When needed, recruit personnel from the Faculty and Staff who can provide task-specific skills
• Work closely with Institutional Research to collect appropriate data

Faculty.
The College Bylaws delegate to the Faculty, through the regular channels described in Article VIII the responsibility to admit students.

Admissions Office.
The Dean of Admissions and Financial Aid is responsible for recruiting new students, admitting all first-year, transfers, and special (non-degree), and teaching certification students whose academic qualifications are within the standards set by the Faculty Committee on Admissions. The Dean of Admissions and Financial Aid is also responsible for marketing the admissions program, and administering all financial aid programs.

Selection committees for Bellingrath scholarships shall include faculty members, staff, students, and off-campus participants appointed by the Dean of the Faculty upon recommendation of the Dean of Admissions and Financial Aid.

Financial Aid Office.
The Director of Financial Aid is responsible for evaluating financial needs of all students (first-year students, transfers, and "readmits,") and processing the required forms.

All agencies related to the College in any contractual or fiduciary relationship shall follow all policies and procedures for accounting, human resources, and purchasing as defined by the College. The policies and procedures will be administered in a manner consistent with that of any department within the College.

Should any such agency desire a variation from the normal operating policies or procedures of Rhodes, a resolution from the chief executive of the agency shall be sent to the Comptroller and to the Vice President for Finance and Business Affairs of the College for review. This document shall be viewed as an addendum to the existing contract only when accepted and signed by the Vice President for Finance and Business Affairs.

A. Preliminary Operating Budget

B. Detailed Operating Budget

C. Renovation & Replacement Budget and

D. Update Capital Needs

E. Administration of Current Operating Budget

Requesting Funds. Requests for funds should be made in the following manner:

Recurring Expenses come from the regular College budget. Requests for recurring expenses should be submitted to the Vice President for Finance and Business Affairs by the appropriate Vice President or Dean as part of the annual budget request process early in the Fall.

Capital Expenditures and One-Time Obligations of the College come from the Renovation and Replacement budget. Such requests should be sent to the appropriate Vice President or Dean by January 10. The Vice President or Dean, in turn, sends requests to the Vice President for Finance and Business Affairs as part of the regular process for renovation and replacement requests.

One-Time, Non-Capital Funds come from the discretionary fund of the appropriate Vice President or Dean. Requests may be made at any time but for one year only. Subsequent requests must be made in the regular budget process.

Overage Funds, above a department’s budget, normally come from the Emergency Fund, although Deans/VPs should first determine if their discretionary funds can be used to cover the requested overage. Such requests should be sent immediately to the appropriate Vice President or Dean, thence to the Vice President for Finance and Business Affairs.

Requests to Solicit Funds from off-campus sources must be approved by the appropriate Vice President or Dean and sent to the Vice President for Development for consideration by the Development Committee.

Annual Budget

• Department heads may overspend in a particular account as long as the department′s total budget is not overspent.
• If a department overspends its budget, the Vice President for Finance and Business Affairs in consultation with the appropriate VP, Dean or Department Head will consult to determine if unforeseen circumstances require future adjustments to the departmental budget or if an allocation from the emergency fund is appropriate.
• After May 1st each year, equipment purchases over $400 must be approved by the Vice President for Finance and Business Affairs.
• There are three ways for Deans/VPs to allow a department in their division to overspend the department’s original budget: The Vice President or Dean must either, pay the overage amount from the Dean/VP′s discretionary fund, transfer funds from another department in their division to the department requesting the overage (so the requesting department will not exceed its budgeted amount), or request that funds from the Emergency Fund be transferred to the department requesting the overage, so the department’s budget will not be exceeded.
• Budget amounts may be transferred between departments only with the appropriate Dean/VP′s approval. Funds may not be transferred between fund balances and budgeted income and expense accounts.
• Each department and division head is evaluated on the quality of budget management.
• The Vice President for Finance and Business Affairs will contact promptly the department heads of those departments whose expenses exceed their year-to-date budget, and whose incomes are below their year-to-date budget. Together they will devise ways to avoid budget problems before the end of the fiscal year.
• Telephone equipment charges will be assessed in November of each year and will equal the amount provided for budgeting in the original budget process. Telephone equipment charges are charged to the appropriate department.

Capital Budget

The Capital Budget establishes a College-wide priority list for funding capital and one-time needs. Funding for these items can come from gifts designated specifically for an item on the list, undesignated capital gifts (with the written approval of the President), and renovation and replacements funds. If a designated grant is received (e.g. Biology scientific equipment) the Biology scientific equipment on the capital priority list shall be funded first before any Biology equipment not on the priority list is funded. The Capital Budget also focuses the efforts by the Advancement Office on items of highest priority. By following this policy the College is able to focus limited resources on its highest needs. Capital Budget funds not spent within two years will be reallocated by the President to other capital needs.

Allocation of Information Technology Resources

The College recognizes that information technology plays an important role in teaching effectiveness and administrative efficiencies. With the exception of regular computer and printer replacements, which are budgeted on a three-year cycle, the allocation of resources for information technology will be given equal consideration with all other requests during the annual Renovation and Replacement (R&R) budget process. Recommendations for funding will come from department heads to their respective Vice Presidents (i.e., the Provost, the Vice President for Development, or the Vice President for Finance and Business Affairs). Each Vice President or Dean will then consult with the Chief Information Officer, who will submit an overall list of information technology priorities to the Vice President for Finance and Business Affairs, who will compile a master list of all R & R requests. The master list will then be forwarded to the President’s Senior Leadership team for final review prior to being submitted to the President.

Auxiliary Services Budgets

These budgets are in a unique category in that it is likely that increases in income generated in excess of budgeted income may also cause increases in expenses. The College does not want unnecessarily to limit these auxiliary services to their original budget amounts provided sufficient additional off-setting income can be generated. At the same time, budget control must be maintained to assure a College-wide balanced budget. To accomplish this task the named auxiliary services should use the following procedure:

• Auxiliary service department heads will project their best estimates on expense and income for the budget process.
• These figures will be reviewed, and refined if necessary, by the Vice President for Finance and Business Affairs before the amounts are approved in the College’s income and expense budgets.
• During the budget year, if an auxiliary service department wishes to exceed its expense budget in order to exceed its income budget by the same amount or more, the department head must request authority from the Vice President for Finance and Business Affairs to exceed the expense budget. Otherwise no department may use income-above-budgeted-income for its own use.
• If an auxiliary service is expected to exceed its expense budget without compensating income increases, then the department head must follow the same procedure as all other departments: request emergency funds.

Transfers

Funds restricted by a donor cannot be transferred between funds.
 
If the Board of Trustees has restricted certain funds, the Board of Trustees must approve a transfer of the restricted funds to other funds.

The Vice President for Finance and Business Affairs must approve the transfer of restricted funds to other funds if neither the donor nor the Board of Trustees has restricted the funds.

Budget transfers from the salary budget to the non-salary budget and vice versa are prohibited unless approved in writing by the Vice President for Finance and Business Affairs.

Hard Money versus Soft Money

A distinction must be made between recurring or “hard” revenues such as tuition and endowment income, and nonrecurring or “soft” revenues such as those received from grants, contracts or specially designated gifts. If the College relies on soft money to fund a program, it should be understood by all that this funding strategy is relatively risky.

If soft money is cut off, there may be those who will pressure the College to replace this soft money with hard money. If this is done, it would have the effect of limiting other salaries, benefits, and programs.

To avoid these unplanned and potentially harmful effects, the College must take a disciplined approach to the acceptance and use of soft money for programs that it hopes will be ongoing.

Therefore, before soft money can be used for continuing programs, the appropriate VP/Dean must see that such programs comply with the following:

• A written description of the program and a statement that it complies with these policies must be signed by a) the person who will direct the program, b) the Comptroller, and c) the appropriate Vice President or Dean. 
• No program should be undertaken, and no obligation should be made by the College before the funds are actually received.
• Programs at the College financed by hard money should not be dependent upon a program financed by soft money.
• All programs financed on soft money should be submitted for review each year by the Vice President for Finance and Business Affairs. 

In the event that soft money is cut off and cannot be replaced by soft money from other sources, and if continuity of the program is highly desired by the program director and the appropriate Vice President or Dean; the procedure to decide whether the College will begin funding with hard money is as follows:

• A budget request should be made by September to the Vice President for Finance and Business Affairs.
• In order to continue the program for up to one year (the maximum time needed to be considered for inclusion in the annual budget for the following year), a request can be made to the appropriate Vice President or Dean in February for inclusion in the year-end Renovation and Replacement allocation. Such a request can be made and approved for one year only. That is, one-time money from Renovation and Replacement can be used only one year for a program. After that year either it should be a) discontinued, b) continued by inclusion in the College operating budget, c) continued on new outside soft money, or d) continued by being endowed.

Cash Management General Information. The Comptroller has the authority to actively to manage all cash and to invest funds not needed in the short-term, using fixed income and cash equivalent securities to yield reasonable rates of return at an acceptable level of risk within prescribed maturities.

A general description of cash management operations follows:

All incoming and outgoing funds are accounted for in the Banner system and on the SunTrust Network Banker system, including capital calls, incoming and outgoing wires, and large distributions from entities like the Bellingrath Foundation. The Assistant Comptroller and the Director of Accounting work closely with the Cashier′s office as well as the Advancement office to accurately record all bank deposits.

The Cash Management Office provides a monthly report on the College’s cash to the Comptroller. Cash reports are also prepared upon request of the Comptroller and when material or unexpected fluctuations in the College’s total cash balance occur. 

The overnight repo amount, invested with our primary banking institution, and current rate of interest paid, are reported to the Comptroller each morning.

Monthly bank reconciliations are completed by the Cash Manager (Assistant Director of Accounting) and reviewed by the Director of Accounting. The Assistant Comptroller reviews bank reconciliations on a random, surprise basis. Controls and limits for wire transfers and the approval to the bank for such transfers are established by contract with the college primary banking entity. Internal audits are periodically performed to monitor adherence to these limits.

I. Purpose

Cash funds not immediately needed for operations in the current year may be invested over a longer horizon. Intermediate cash that may be invested in this program is defined as the combined college cash balance amount that exceeds the lesser of $10,000,000 or 3% of net assets.

II. Prescribed Types of Investment Securities and Limitations

The following investment grade securities may be used in the Intermediate investment program:

1. Obligations of the U. S. Government backed by full faith and credit
2. Obligations of agencies backed by the U.S. Government
3. Investment grade corporate obligations
4. Absolute Return fund of funds selected and recommended by the college’s investment advisory firm, acting as Outsourced Chief Investment Officer

III. General Limitations

1. The investments listed in II. A, B, and C will be investment grade vehicles and will have no less than a AA rating. No single investment in this category will exceed $2,000,000.
2. Investments in corporate obligations will not exceed 20% of the total investments in II. A, B, and C. No single investment in this category will exceed $2,000,000.
3. Total investment in an absolute return strategy will not exceed 15% of the total Cash Management Program.

IV. Investment Review

1. The Comptroller will distribute a monthly performance report on the activities of the Intermediate Cash Management Program to the Vice President for Finance and Business Affairs.
2. The Comptroller may request the Subcommittee on Investments to add specific investment instruments, with appropriate limitations, to Section II. A. as market characteristics change over time.

All available cash (from the current funds, restricted funds, agency funds and endowment income) will be pooled for investment purposes. All interest income will be booked originally in the current fund. The Cash Manager will compute a monthly weighted average yield on the total of cash and cash equivalent securities. The Comptroller will pay from the current fund a portion of this income to specific fund balances, depending on size and permanence of the fund balances in the accounts. The amount will be computed by multiplying the monthly weighted average yield to the monthly weighted average fund balance. For the endowment fund, the yield will be applied to the weighted average of endowment funds held within the current fund during the month.

1. Purpose
   This policy establishes the types of acceptable investments and various limits on these investments which can be purchased in the Short-term Cash Management Program administered by the Administrative Services Division.
   
   Rhodes will purchase acceptable investments which will maintain a high level of return within an acceptable level of risk.
2. Prescribed Types of Investment Securities and Limitations
   1. The following investment securities are acceptable for the Cash Management Program:
      1. U. S. Government Treasury Bills
         • No limit on amount.
         • Current maturities will not exceed 365 days.
      2. U.S. Government Treasury Notes
         • No limit on amount.
         • Current maturities will not exceed two years.
      3. Obligations of Agencies of the U.S. Government
         • No limit on amount.
         • Current maturities will not exceed 365 days.
      4. Certificates of Deposit with Shelby County financial institutions (Deposits Insured)
         • The amount of certificates of deposit from any one institution will not exceed the lesser of $500,000 or 1% of net assets.
         • Total direct obligations of any one institution including certificates of deposit, are subject to the limitations discussed in Section III.
         • Maturities will not exceed one year.
      5. Certificates of Deposit with non-local financial institutions (Deposits Insured)
         • The amount of certificates of deposit from any one institution is not to exceed the amount of federal deposit insurance.
         • The Subcommittee on Investments may approve a select list of major U.S. capital market financial institutions with which the College may invest amounts in excess of federal deposit insurance limits.
         • Total direct obligations of any one institution, including certificates of deposit, are subject to the limitations discussed in Section III.
         • Maturities will not exceed one year.
      6. Repurchase Agreements and Reverses
         • Total amount of repo′s will not exceed the greater of $25,000,000 or 5% of net assets.
         • Direct obligations of any one institution, including repo′s with more than a one day maturity are subject to the limitations discussed in Section III.  Overnight repo’s with a daily maturity are excluded from the limitations discussed in Section III.
         • Maturities will not exceed thirty days for repo′s.
         • No limitations apply to reverses.
         • Actual delivery of collateral to Depository Bank will be required on each transaction.
      7. Domestic Bankers Acceptances
         • Total amount of banker′s acceptances from any one bank will not exceed the lesser of $2,000,000 or 2% of net assets.
         • Purchases are limited to the fifty largest domestic banks (ranked according to deposits).
         • Other domestic banks may be specifically approved by the Subcommittee on Investments.
         • Total direct obligations of any one institution, including bankers′ acceptances, are subject to the limitations discussed in Section III.
         • Current maturities will not exceed six months.
      8. Commercial Paper
         • The total amount of paper which can be purchased from any one institution will not exceed $2,000,000 or 2% of net assets.
         • Paper will only be purchased that is rated by Moody′s as P-l or by Standard & Poor′s as either A-l or A-2.
         • The Subcommittee on Investments may specially approve certain institutions which will be exempted from (b) above.
         • Current maturities will not exceed thirty days.
   2. Investment in equity securities is prohibited.
   3. Deposit rankings and amount of equity as referenced above in II. A., will be determined as of the latest available audited financial statements.
3. General Limitations
   1. The College will not purchase investment securities from any one organization that will cause the total cost of all securities issued by that organization and held by the College to exceed the greater of $3,000,000 or 25% of the total cash and cash equivalents as of the beginning of the month.
   2. Total direct obligations of any one institution shall not exceed the lesser of $1,000,000 or 2% of net assets.
   3. There is no limitation on the amount of U.S. Government or Agency securities.
   4. Net assets are defined as the combined net assets in the audited financial statements for the preceding fiscal year.
4. Investment Review
   1. The Comptroller will distribute a monthly performance report on the activities of the Short-term Cash Management Program to the Vice President for Finance and Business Affairs.
   2. The Comptroller may request the Subcommittee on Investments to add specific investment instruments, with appropriate limitations, to Section II. A. as market characteristics change over time.

Solicitation By Other Charitable Institutions

Rhodes follows the practice, along with many of the charitable institutions and agencies in Memphis, that it does not redirect the charitable gifts that it receives to other charitable institutions and agencies (that also solicit funds in Memphis), nor solicit gifts from staff members of those organizations and agencies.

Gifts for annual purposes support the daily operation of the college. Unrestricted gifts of $25,000 or less go into the unrestricted designation for the Annual Fund or may be used for another restricted or capital purpose as deemed appropriate by the Vice President for Development. Unrestricted gifts above that amount go into the unrestricted capital funds designation.

Unrestricted memorial gifts will go into unrestricted designation of the Annual Fund.

Restricted memorial gifts will be used for the designated purpose.

Gifts of $10.00 or more requested by the donor to memorialize or honor a person will be recognized by one individual being memorialized or honored. A letter of notification regarding the gift will be sent to the person being honored or to a family member of the person being memorialized provided the name and address information for such a letter is available or is sent by the donor with the gift.

Permanent memorial designations that are not funded by a benefactor who designates such a memorial shall not be planned or authorized until at least one year after the death of the person to be memorialized.

Involvement of Benefactors and Solicitation of Funds

Each department is expected to involve potential supporters in the work of the department and to obtain gifts to meet the department’s needs, as outlined in the Gift Opportunities Lists. Examples are faculty chairs, faculty development funds, endowed library collections, and funds for equipment.

To maximize fund raising, build donor confidence in Rhodes, and avoid conflicts with the program approved by the Board:

Department heads must inform the Director of Advancement Services (ext. 3850) of every pledge and every gift on the day the pledge or gift is received by the department, and the designation which is to be credited with the gift or pledge.

All checks or cash must be delivered to the Development Office (Dorothy C. King Hall, 2nd floor) on the day received.

All prospects must be cleared by the Vice President for Development before solicitation.

Projects requiring special solicitations must have the approval of the Vice President for Development.

The person requesting special solicitation must submit a proposal in final form to the Vice President for Development. The proposal should be no longer than 3 pages and should include:

• A project budget, approved by the appropriate administrative officer (head of division) and by the Vice President for Finance and Business Affairs.
• A project description approved by the appropriate administrative officer (head of division), proposed schedule for fund raising and for the project itself, persons served, and benefits to the college.
• A list of prospects to be solicited for gifts, including prospective solicitation amount.

The Vice President for Development in consultation with the President will determine the priority of the project and, upon approval, will direct the Development Office in the allocation of staff time to the project.

The following statement should appear on every deferred giving pamphlet, form, or draft of a legal document provided by the College:

“Rhodes College, through this pamphlet (or form, document, etc.) or otherwise, is not engaged in rendering legal or tax advisory services. Individuals considering estate gifts to the college should obtain the services of a financial advisor (an attorney or Certified Public Accountant or CLU).”

The Bellingrath Society is established to recognize donors whose concern for the future strength of Rhodes has led them to make significant deferred gifts to the college. It is named in honor of Walter D. Bellingrath, one of Rhodes’ most substantial benefactors, whose $22 million estate gift helped to propel the college to new levels of strength, service, and recognition. The Bellingrath Society is open to those who have made deferred commitments of at least $1 million for Rhodes and whose gifts do not qualify them for membership in the Benefactors’ Circle. These deferred commitments may include will provisions, charitable trusts and charitable gift annuities.

Members of the Bellingrath Society will have their names permanently inscribed on the Bellingrath Society wall. In addition, they will be listed in the annual donor report, and will be invited to special events.

Proposed changes in the minimum level of commitment shall be brought to the Board of Trustees for its approval.

The Benefactors’ Circle is the highest recognition afforded to supporters of Rhodes College. Open to individuals, corporations, or foundations whose commitments total $1 million or more, the Benefactors’ Circle acknowledges the leadership role of those whose gifts have helped to make Rhodes one of the world’s outstanding liberal arts colleges. The $1 million in commitments which qualify a donor for membership in the Benefactors’ Circle will be counted on the following basis:

• The value of gifts paid to Rhodes;
• The value of pledges to be paid over as many as 7 years;
• The present value (at the time of the gift) of all irrevocable deferred gifts.

Members of the Benefactors’ Circle have their names inscribed on the floor of the cloister of Southwestern Hall during a special ceremony, are listed in the annual report, and are invited to special events.

Proposed changes in the minimum level of commitment shall be brought to the full Board for approval.

This document defines how outright and deferred gift commitments will be recorded for gift counting purposes in order to measure Rhodes’ success in achieving its fundraising goals and to ensure that donors are recognized appropriately for their contributions. The policies will be effective as of October 2006 and will supersede previous gift crediting policies.

General Gift Policies:

• Cash gifts will include pledges and outright gifts for the Annual Fund, capital, endowment and any annual priority of the college.
• In order for pledges to Rhodes to be credited they must be received in writing and processed by the college. This will ensure that the donor receives proper acknowledgement, recognition and credit. No pledge without written confirmation by the donor will be recorded.
• Deferred gift commitments will be counted as follows:
  • Bequest
    • Bequest intentions will be counted at face value if the college is the direct beneficiary.
    • Bequest intentions will be counted at present value if the college is the indirect beneficiary.
  • Life Income Plans
    • Life Income Plans will be counted at face value if the beneficiary is of the donor’s generation.
    • Life Income Plans will be counted at present value if the beneficiary is of a younger generation than the donor such as a child or grandchild.
  • Life Insurance
    • Life Insurance gifts will be counted at face value if the insured is of the donor’s generation.
    • Life Insurance gifts will be counted at cash value if the insured is of a younger generation than the donor such as a child or grandchild.
    • Term life insurance will not be accepted.
• The college may accept gifts of real estate, including houses, condominiums, commercial properties, farm land, rental property, and undeveloped land after a thorough review is made by Rhodes in accordance with Gift Handling Policies. These same guidelines will be followed for deferred gifts of remainder interest in a residence or farm.
• Pledges will be counted in the full amount of the pledge commitment as soon as the donor has signed a pledge agreement. Pledges will ordinarily be expected to be paid within five years, although a schedule of payments extending beyond that point can be arranged in special circumstances.

Gift Crediting Guidelines:

The following gifts and pledges will be counted towards the campaign. IRS rules and regulations will apply in all instances. Accordingly, qualified appraisals must be obtained by the donor and provided to the college where a qualified appraisal is required by the IRS in order to substantiate a charitable tax deduction.

• Cash: Cash is credited at full value the day it is received. 
• Marketable Securities: Securities are credited at the average of the high and low of the fair market value on the date of delivery or the date the donor relinquishes control of the assets.
• Closely Held Stock: Gifts of closely held stock will be credited at the fair market value placed on it by a qualified independent appraiser as required by the IRS.
• Real Property: Gifts of real property will be credited on the date of transfer at the fair market value as determined by a qualified appraisal.
• Tangible Personal Property: Tangible personal property including works of art, jewelry, antiques, coins, stamps and other collections, automobiles, manuscripts, and books which are accepted by Rhodes College will be credited at the fair market value on the date of transfer as determined by a qualified appraisal. 
• Gifts in Kind: Non-cash donations will be credited at fair market value on the date of transfer as determined by a qualified appraisal.
• Bequests: Bequests are counted as cash only after the bequest matures and is received by Rhodes College.   Bequest intentions will be included in the campaign deferred commitment total only where the college has received signed documentation.  After the bequest matures and received by Rhodes, the amount will be subtracted from the Deferred Commitment total and added to the Cash Commitment total. 
• Charitable Gift Annuities: Charitable gift annuities will be credited at face value.
• Charitable Remainder Trusts: Charitable remainder trusts will be credited at face value if the beneficiary is of the donor’s generation.  Charitable remainder trusts will be credited at present value if the beneficiary is of a younger generation than the donor such as a child or grandchild.
• Charitable Lead Trusts: A charitable lead trust will be treated as a cash pledge, and credited at full value of all anticipated payments as stipulated in the trust document which will be received by five years after the close of the campaign. For example, a charitable lead trust created June 30, 2005, with an annual payment to Rhodes of $10,000 for ten years will be credited as a $100,000 cash pledge. 
• Life Insurance: Rhodes College must be the owner and beneficiary of any whole or universal life insurance policy given to the college. (Term life insurance will not be accepted and will not be credited in the campaign.) At the time the policy ownership is transferred to the college, all donors must confirm in writing that  they will pay in a timely manner all future premium payments, whether known or unknown at the time the gift is made. Life insurance gifts will be credited at face value if the insured is of the donor’s generation.  Life insurance gifts will be credited at present value if the insured is of a younger generation than the donor such as a child or grandchild.

GIFTS OF CASH OR SECURITIES     

A. Designated for Annual Purposes:     

1. Budget-relieving annual gifts go into the appropriate designation of the Annual Fund.

• Financial Aid/Fellowships (Scholarships) (Fund 111000, Account 520041)
• Faculty Support (Fund 111000, Account 520042)
• Campus Life (Fund 111000, Account 520043)
• Library/Technology (Fund 111000, Account 520044)
• Campus Preservation (Fund 111000, Account 520045)
• Where most needed (Fund 111000, Account 520011)

These funds are either immediately expended or invested through the college’s cash management policy. Any interest income is credited to interest income (Fund 111000, Organization 80001, Account 530011, Program 00).

2. Budget-relieving athletic gifts go into the appropriate designation of the Lynx Club (Fund 111000, Account 520011).

• Lynx Club
• Baseball
• Basketball (Men)
• Basketball (Women)
• Field Hockey
• Football
• Golf (Men)
• Golf (Women)
• Lacrosse (Men)
• Lacrosse (Women)
• Soccer (Men)
• Soccer (Women)
• Softball
• Swimming
• Tennis Track and Cross Country
• Volleyball

These funds are either immediately expended or invested through the college’s cash management policy. Any interest income is credited to interest income (Fund 111000, Organization 80001, Account 530011, Program 00).

3. Restricted annual gifts go into the designation supporting the purpose specified by the donor.  

B. Designated for Capital Purposes:     

1. Unrestricted capital gifts are recorded in Capital Funds Unrestricted (Fund 214019-60001-520116-40). Using the 60/40 ratio of endowment to capital expenditures formula and the projected needs for Board approved capital funds expenditures, the Comptroller transfers immediately the amount necessary to the Quasi Endowment (Fund 510007) if the 60/40 ratio is not met.     

2. Restricted Capital Gifts   

a. For an item in the “Capital Needs List”:   

Gifts designated “for endowment” are deposited immediately in Quasi Endowment (Fund 510006-200031-520116-40).

Gifts for professorships, fellowships or other named Funds are set up in the Endowed Funds. Each year an allocation determined by a formula mandated by the Board of Trustees is used for the endowment purpose; excess earnings and appreciation are added to principal.  

Gifts for equipment or plant improvement or other projects are expended for the project or invested until the project can begin. Interest earned is credited to interest income (Fund 111000, Organization 80001, Account 530011, Program 00) or towards the project as decided by the Vice President for Finance and Business Affairs.   

No interest income will be accumulated in a particular fund account unless: 1) the gift is $10,000 or more, 2) there is a request from the donor or donors for the interest to be credited to the account, and 3) granting the request may encourage additional future gifts.   

b. For an item not designated as an institutional priority or listed in “The Gift Opportunities List” the President recommends to the Board to accept or not accept. Accepted gifts are treated as in B.2.a.   

C. Undesignated Gifts:   

1. $25,000 or under is treated as a gift “Designated for Annual Purposes”: follow A.1, unless otherwise deemed appropriate by the Vice President for Development.   

2. Over $25,000 is treated as a gift “Designated for Capital Purposes”: follow B.1.   

GIFTS OF REAL ESTATE  

When gifts of real estate are offered to Rhodes, there must be an on-site inspection and environmental survey prepared before the gift can be accepted by the Vice President for Finance and Business Affairs.   

If the gift of real estate is accompanied by a valid appraisal, it is entered on the college books at that value (in the case of multiple valuations, the average). Absent a valid valuation, it is entered at a value of $1.00. A development officer works with the donor to determine the purpose of the gift.   

If the value of the gift is to be added to the endowment as a restricted designation, the designation is set up, and the gift is acknowledged at the time the gift is made, but the income to the college does not begin until the property is sold and converted to cash. While the sale price does effect the size of the account and the cash flow, it does not change the amount credited to the donor by Rhodes. The amount credited to the donor is determined by a valid appraisal at the time of the gift. According to IRS regulations, the gift acknowledgment to the donor describes the property, but does not include a dollar amount. 

The President upon the recommendation of the Vice President for Finance and Business Affairs recommends to the Investment Committee whether to sell or hold gifts of real estate. A list of all property held will be prepared by the Vice President for Finance and Business Affairs and submitted to the Investment Committee periodically. 

If the real estate is sold the income flows through the “Gifts of Cash or Securities” and expenses are deducted from the gross proceeds. 

If the real estate is held the property is booked at appraised value in the assets of the Current, Restricted, or Endowment fund. 

If the rental, lease or other income is undesignated the funds are credited to the appropriate current fund account: Fund 111000, Organization 80001, Account 560020, Program 00 Royalties or Fund 111000, Organization 80001, Account 560016, Program 00 Miscellaneous Income. 

If the rental, lease or other income is designated the funds flow to the appropriate account or project. 

GIFTS OF TANGIBLE PROPERTY 

The President upon the recommendation of the Vice President for Finance and Business Affairs recommends whether to hold or sell all individual gifts of tangible property (furniture, jewelry, art work, equipment, books, etc.) valued at $5,000 and over to the Investment Committee of the Board. The President will decide the disposition of gifts valued up to $5,000 and will report those decisions to the Investment Committee at the January Board meeting. 

If the property is sold the income flows through the “gifts of cash or securities” and expenses are deducted from the gross proceeds. 

If the property is held the item will be appropriately booked at appraised value in and added to the college’s inventory system. 

GIFTS OF LIFE INSURANCE 

Rhodes College must be the owner and beneficiary of any whole or universal life insurance policy given to the college. (Term life insurance will not be accepted and will not be credited in the campaign.) At the time the policy ownership is transferred to the college, all donors must confirm in writing that they will pay in a timely manner all future premium payments, whether known or unknown at the time the gift is made. 

The President upon the recommendation of the Vice President for Development recommends to the Finance Committee whether to keep the policy in force or to surrender the policy. 

If the policy is surrendered, proceeds are treated as “Gifts of Cash or Securities. 

If the policy is kept in force, and the donor does not make gifts to support premium payments, the Investment Committee, upon recommendation of the President, should decide if the premiums should be paid and if so, how they should be paid. (Note: see section below on “Accepting Gift” about the expenditure for purpose of gift). At termination of the policy, proceeds are treated as a gift “Designated for Capital Purposes.” 

GIFTS OF STOCK IN CLOSELY HELD CORPORATIONS, THE VALUE OF WHICH CANNOT BE DETERMINED, OR FOR WHICH THERE IS NOT A READY MARKET 

The college is grateful for such gifts and shall acknowledge receipt immediately and thank the donor. The college will record these at $1.00 until such time as the stock is sold or a professional appraisal acceptable to the Investment Committee of the college is received. 

The valuation of such gifts on the books of the college shall normally occur only in the fiscal year in which the gift is sold, except in the case of an acceptable professional appraisal. 

The Comptroller will prepare a list of all closely held securities to include in the quarterly report of securities on hand. This report will list the changing value of the security and the asset account into which it has been booked. 

The Comptroller shall seek at least twice a year—in May and December—to find a market for such stocks and dispose of them, subject to the approval of the Investment Committee. 

The Comptroller shall consult with the Vice President for Development about donor sensitivity before attempting to sell the stock. 

ACCEPTANCE AND VALUATION OF NON-CASH GIFTS 

The date of acceptance and valuation of any non-cash gift to the college shall be the date the donor has unconditionally parted with dominion and control over the property; delivery directly to Rhodes is not required as long as the donor has relinquished all control over the property. Thus, delivery to a third party who agrees to act as Rhodes’ agent in accepting the property is effective when delivery is made to the agent, but delivery to a third party acting as the donor’s agent is not effective until that agent delivers the property to Rhodes or Rhodes’ agent. 

ACCEPTANCE OF GIFT ANNUITIES AND CHARITABLE REMAINDER TRUSTS 

The minimum acceptable principal amount accepted for a gift annuity is $10,000. The minimum for a charitable remainder trust for which the college will act as trustee is $50,000. 

For gift annuities, the rates offered the annuitant will not exceed the most recently published rates of the American Council on Gift Annuities. Gift annuities will be accepted only when the annuitant is 55 years or older. Deferred gift annuities will be accepted for annuitants younger than 55 depending upon the beginning date of the annuity payment. 

Payout rates offered on charitable remainder trusts will be based on negotiated rates acceptable to the donor, the Vice President for Development and the Vice President for Finance and Business Affairs. There is no minimum age requirement on charitable remainder trusts. 

Payment of annuities and trusts will begin three months after receipt of gift. The payments will be scheduled only at quarter-end dates. 

INTERNAL HANDLING OF GIFTS 

All cash or checks are processed by the Development Office and then go immediately to Rhodes Express. Gifts of securities, real estate, other tangible property, life insurance, etc. will be received by the Development or Comptroller’s offices. These offices will notify other interested offices and will complete the appropriate Gift Receipt form (Securities, Real Estate, Personal Property). In the case of securities the Comptroller’s office will follow the Policy for Handling Contributed Securities and as required the Policy Regarding Gifts of Stock in Closely Held Corporations. 

IRS FORMS RELATED TO GIFTS 

If Rhodes receives from a donor a contribution of property other than cash or publicly-traded securities and the deduction associated with the property is more than $5,000, the donor will need to present Internal Revenue Service Form 8283 to Rhodes for its signature. If Rhodes disposes of this “charitable deduction property” within three years of the date of the donor’s contribution, the Comptroller will report, in a timely manner, such disposition to the Internal Revenue Service on IRS Form 8282. Rhodes will furnish the donor with a copy of the completed IRS Form 8282. 

ACCEPTING GIFTS 

The final determination for acceptance of gifts to the college is the responsibility of the Board, on recommendation of the President. 

Unless there are actual returns such as dividends, rent or lease income, no expenditure for the purpose of the gift will be made without the approval of the Board of Trustees until the gift is liquidated or income from the gift is earned. 

GIFTS TO THE COLLEGE OF A NON-PERMANENT NATURE 

While Rhodes makes every effort to maintain its campus and furnishings to the highest standard, donors of gifts that will deteriorate in time should be told that the college does not guarantee the replacement of such items. These may include garden benches, rugs, and other materials, the durability and appearance of which may erode with passing years. When deterioration sets in, gifts may be replaced by the original donor or by others who wish to make such a contribution to the college. 

GIFTS TO ANNUAL BUDGET AND DESIGNATED CAPITAL GIFTS 

To minimize the likelihood of donors dictating the budget priorities of the college, to retain budgeting responsibilities with the administration, as charged in the college Bylaws (VII, 1.6), and to maintain flexibility in budgeting among all departments and divisions of the college; all restricted gifts (gifts designated by the donor) will be reckoned as budget-relieving at the college-wide level rather than at the departmental or divisional level.

 

The Ralph C. Hon Society recognizes individuals who make Rhodes a beneficiary of their estate plans, including will provisions, charitable gift annuities and charitable remainder trusts. The names of each member of the society will be listed in the Honor Roll of Donors and members will be invited to special events on campus.

All members who document their gifts will receive special recognition and their names will be included in The Ralph C. Hon Society plaque.

When the donor’s estate plans mature, the donor will be recognized permanently through the naming of a room, an endowment or other means, according to the donor’s wishes.  

A gift of $10,000 or more will create and name an endowed student award; $50,000 or more will create and name an endowed faculty award. Income from endowed awards will be used to pay all the costs of the award and to support the work of the department in which the award is given.

To protect the importance of the awards, the following regulations and guidelines will be used:

• The total number of awards currently presented is adequate. However, the college will add awards if they are fully endowed and are in areas not covered by present awards. Each department should attempt to replace departmentally-funded awards with fully endowed awards.
• Already established departmental student awards which include a stipend shall be a minimum of $100. Until endowments support these awards, they may be funded from the departments’ non-salary budgets.
• All awards should be accompanied by an appropriate framed plaque funded by the endowed award or by the department.
• Criteria and selection of award winners are the responsibility of the participating department with the approval of the Vice President for Academic Affairs.
• Named awards are listed each year in the college Catalogue.

The Board of Trustees has authorized the creation of named endowment funds for such purposes as academic programs, fellowships, scholarships, library collections, awards, etc. The minimum amounts required to guarantee the effectiveness of such gifts are outlined in this Handbook and in the Gift Opportunities List, available in the Development Office.

Upon approval by the Vice President for Development and the President, a named endowment may be created to recognize an initial gift of less than the minimum if there is the expectation that future gifts will build the endowment to the required level.

A gift of $10,000 or more will create and name an endowed library collection in the area of the donor’s choosing. Named collections are listed in the college Catalogue and in a brochure describing support for the Paul Barret, Jr. Library.

Endowed faculty positions enable the college to attract and keep teacher-scholars of the highest caliber. Minimum requirements for creating endowed faculty positions (or chairs) are:

A gift of $50,000 or more will create and name an endowed scholarship.

Named endowed scholarships are listed each year by the Finance Office. Files containing, among other information, the name of the fund and the current annual distribution, are provided by the Finance Office to the Director of Financial Aid and the Director of Advancement Services by September 15. A list of one-time annual scholarships is provided by the Director of Advancement Services to the Assistant Director of Financial Aid by September 15.

By September 30, the Director of Advancement Services sends to the Assistant Director of Financial Aid the list of sponsors or interested parties to whom it would be appropriate for a student recipient to write a letter of thanks.

By October 31, the Assistant Director of Financial Aid matches student recipients to named scholarship and provides the information to the Director of Advancement Services.

By November 30, the Stewardship Officer asks student recipients to write letters of thanks to their sponsors and send copies to the Development Office for sponsor files. At the same time, the Stewardship Officer sends information to the appropriate sponsors identifying the student recipient for their scholarship and providing the endowed fund balance, if applicable.

The Development staff may provide occasions when the sponsors and recipients of named scholarships may meet. The Offices of Admissions and Financial Aid may assist in these meetings.

Additional assignments, the need for which is usually initiated by either the Development Office or the Finance Office, are made by the Assistant Director of Financial Aid after the original assignment each year. The appropriate administrative offices are also notified.

Named scholarships are listed in the College Catalogue.

The Development office will work with donors to arrange appropriate recognition for gifts and will depend on the scale and purpose of the gift. Any public recognition will be discussed and approved by the donors and if they prefer to remain anonymous, their wishes will be honored.

1. Establishing Names for Buildings, Endowments and Programs. Authority to name buildings, facilities and parts of facilities, endowment funds and programs rests with the Board of Trustees upon recommendation from the President. Naming authority has been granted for the following naming opportunities under item 4 and 5 of this document. No advance approval for determining names is implied in this policy.

2. Procedures for Naming a Building or Portion of a Building. When it appears that a contribution to the college will result in a request to name a building or portion of a building for a donor or other individual, the Vice President for Development should be notified. A profile of the donor, the area of interest with any proposed stipulations, and information about how the gift will be paid should be provided. The Vice President for Development will discuss the potential naming with the President and other appropriate College officials.

3. Contribution Guidelines for Buildings, Facilities and Programs. In order for a building, facility or program to be named based upon a contribution the following will normally be met:

a. The amount of the gift will comply with the guidelines following;

b. The gift must be in irrevocable form, e.g., trust, contract for will, or to be paid over a period of five years (longer if necessary in special circumstances) based upon a signed commitment (A deferred gift is not normally acceptable for a facility where construction is dependent upon the gift.);

c. The person for whom the name is assigned has some reasonable connection to the facility or program being so designated.

d. Unless the gift is required to construct the facility to be named, the gift should be used to establish a program endowment restricted to an appropriate department or program closely associated with the facility.

e. If a program or department is to be named, a restricted program endowment supporting that program/department normally will be established.

The following amounts are suggested to establish a naming opportunity for a building, facility or program:

4. Named Endowment Funds

To establish an endowment, a formal written agreement between the donor and Rhodes College must be executed which details the purposes and objectives of the endowment fund. In establishing a named endowment fund, the principal must be sufficient to meet the stated objectives of the endowment agreement.

The Rhodes College Board of Trustees has authorized the creation of named endowment funds for such purposes including academic programs, scholarships, library collections, lectureships, awards, etc. The college will establish a named endowment fund when the minimum level of endowment is achieved.

STATEMENT OF INVESTMENT POLICY AND INVESTMENT OBJECTIVES

Introduction

This statement of investment policies and objectives is hereby set forth in order that:

1. The Board of Trustees and the Subcommittee on Investments shall have clearly defined investment policies and objectives as set forth herein.
2. Assets of the Rhodes College Endowment shall be invested most productively and should experience long-term growth. The primary investment objective of the College is to maximize the financial return over the long term within an acceptable level of risk.
3. The Sub-Committee on Investments shall engage an Investment Advisory Firm (outsourced Chief Investment Officer) to manage College Endowment Assets and shall monitor its performance.
4. There will be a basis for evaluation of the investment performance of the Investment Advisory Firm over a full market cycle.

The Rhodes College Endowment exists exclusively for the benefit of Rhodes College and is an important vehicle for developing and accepting private gifts to the College that will benefit future generations of students. The primary investment objective of the College is to maximize the financial return over the long term within an acceptable level of risk. Such a policy is mandated by prevailing law, tradition, and the legal concept of fiduciary responsibility for funds given to the College. A major function of the Endowment is to manage endowment gifts and to make distributions for the various projects, programs, scholarships, and other areas of interest for which the gifts were designated. To a substantial degree, the College’s ability to achieve its educational mission is dependent upon the performance of the investment portfolio.

The Board of Trustees of the College has delegated to the Subcommittee on Investments the responsibility for management of the total endowment fund assets of the College

The Subcommittee on Investments shall discharge its duties solely in the interest of the Rhodes College Endowment and for the exclusive purpose of meeting the College’s financial needs.  These duties shall be discharged with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. Such a policy is mandated by prevailing law, tradition, and the legal concept of fiduciary responsibility for funds given to a college. In addition, the Subcommittee will conduct a thorough review of any person or entity providing services to the Endowment to avoid any potential conflicts of interest.

The Subcommittee on Investments is charged with the responsibility of determining the appropriate asset allocation and investment strategies for the Endowment. The duties of the Subcommittee include but are not limited to the following:

• Develop investment objectives and performance measurement standards for the Endowment and to review such objectives, standards, and investment allocations on an annual basis;
• Select investment advisory firm custodians and other service providers as  required by the Subcommittee;
• Monitor adherence to this Policy and evaluate performance based on stated objectives;
• Hold meetings at least semi-annually with Investment Advisory Firm for the purpose of review of performance reports;
• Evaluate performance of Investment Advisory Firm,  investment managers, custodian and other service providers;
• Any specific investment vehicles chosen by the Subcommittee must have appropriate investment characteristics and be managed by organizations that, by their record and experience, have demonstrated their exercise of fiduciary responsibility and their investment expertise;
• Recommend overall endowment investment objectives and policies to the Board of Trustees;
• Recommend and periodically appraise the performance of the Investment Advisory Firm to carry out the duties of Outsourced Chief Investment Officer;
• Monitor the growth of the Rhodes endowment and investment rate of return versus peer institutions and the best performing colleges and universities subset in the annual NACUBO Endowment Study;
• Monitor the recommended model asset allocation of the Investment Advisory Firm on a quarterly basis;
• Decide on retention or sale of real estate given to the College, provided the real estate is not used by the College and is not part of the campus of the College;
• Make recommendations to the Committee on Finance and the Board of Trustees on all aspects of endowment investment management, as needed.

The Subcommittee on Investments may retain the services of investment and financial industry professionals to assist in the management of Endowment assets.  The Subcommittee may hire investment managers, investment advisory firms, bank custodians, attorneys, accountants and/or other professionals as needed.  All entities retained by the Subcommittee will discharge their duties solely in the interest of the Rhodes College Endowment and for the exclusive purpose of meeting the College’s financial needs.  Each firm will be provided a copy of these goals and objectives and will be required to operate within the guidelines.

The Subcommittee is authorized to engage the services of an Investment Advisory Firm, as defined under the Investment Advisors Act of 1940, to assist the Subcommittee in complying with their fiduciary responsibilities and to provide the specialized research and expertise to meet investment objectives and guidelines. Accordingly, the Subcommittee requires the Investment Advisory Firm to adhere to the "prudent man rule" and such other federal or state laws as may be applicable, or which may be applicable in the future. The duties of the Investment Advisory Firm include, but are not limited to the following:

• Develop and monitor an asset allocation model consistent with the long-term investment objectives of the College; monitor endowment allocation and meet with College staff periodically to evaluate the need for rebalancing endowment portfolio;
• Exercise complete investment discretion within the guidelines and objectives stated herein. Such discretion includes decisions to buy, hold, or sell securities / funds in amounts and proportions reflective of the Investment Advisory Firm’s allocation model and compatible with the objectives of the Fund assets;
• Elect both traditional and non-traditional investment strategies for implementation of asset allocation model;
• Conduct screenings of investment managers and keep College staff and Subcommittee on Investments apprised of changes in composition of or allocation to investment managers;
• Act as primary contact with investment managers;
• Monitor adherence with Investment Policy Statement as stated herein and make recommendations to Subcommittee on Investments when changes become necessary or opportunities for enhancement exist;
• Measure investment performance based on relevant benchmarks and databases and prepare monthly performance updates and quarterly performance evaluation reports;
• Provide the College Finance Office Staff and Subcommittee on Investments with timely information on the investment environment, industry trends, and other pertinent information regarding the security markets;
• Hold meetings at least semi-annually with Subcommittee and College Finance Office Staff for the purpose of review of performance reports and asset allocation;
• Inform the Subcommittee regarding all significant matters pertaining to the investment of the assets. The Subcommittee should be kept apprised of major changes in investment strategy, portfolio structure, market value of the assets, and other matters affecting the investment of assets.
• Make adjustments to allocations and/or changes to or additions of managers or investments;
• Rhodes may select to place the Endowment with a registered broker/dealer or bank that will serve as the custodian for funds and securities held in the Endowment. At no time will the Investment Advisory Firm have custody of College funds or securities, however, for all funds invested in the Investment Advisory Firm’s proprietary fund of funds, the Investment Advisory Firm’s affiliate will have custody of College funds through investments in affiliate’s funds.
• In preparing reports and recommendations for Rhodes, the Investment Advisory Firm may rely upon any valuation provided by Rhodes’ qualified custodian, the manager or operator of any limited partnership, limited liability company or other pooled investment vehicle and shall not be required independently to investigate the propriety of any such valuation.  The College understands that quarterly valuations of private investment vehicles are generally unaudited and not independently valued, but reflect judgment by the manager or operator of the pooled investment vehicle.
• Immediately inform the Subcommittee on Investments of any change in the firm’s ownership, including, but not limited to, merger, sale, partial sale, purchase, change in affiliation, or departure of principal or managing director.
• Vote all proxies for the exclusive benefit of the Endowment Fund and maintain accurate voting records.

• Monitor adherence to the Rhodes College Endowment Statement of Investment Policy and Investment Objectives;
• Review and circulate all performance reports provided by the Investment Advisory Firm;
• Monitor endowment allocation and meet with the Investment Advisory Firm periodically to evaluate the need for rebalancing the endowment portfolio, and take such measures as are required to effect rebalancing within approved guidelines;
• Communicate with the Subcommittee on Investments Chair on investment matters including, but not limited to, establishment of Subcommittee meetings,  scheduling of portfolio reviews or manager searches, and results of periodic due diligence meetings with existing investment managers;
• Prepare annually and circulate comparative reports on the education endowment universe and peer institutions, including performance, allocation data, and other pertinent information;
• Advise Chair of Subcommittee on availability of endowment cash for investment.  Meet with Investment Advisory Firm as to recommendations for investments of such funds within the guidelines and present such recommendations to Subcommittee Chair;
• Administer the Board-approved endowment spending policy and maintain donor covenants as prescribed by all binding agreements.

The college employs a constant growth endowment spending policy based upon a corridor approach. Under the College’s spending rate policy, the amount of endowment fund investments appropriated to support current operations is increased by 4% from the previous year provided that the resulting amount does not exceed 5.5% of the average market value of endowment assets for the three prior fiscal years and is not less than 4.5% of the average market value of endowment assets for the three prior fiscal years, calculated as of June 30th each year. Funds must be invested at least one year before receiving an allocation.

The investment objectives of the Rhodes College Endowment will be to attain a total return that provides for preservation of principal and long-term growth in real terms.  Since the Endowment’s Spending Policy is based on total return, current income is not the primary consideration.

The primary investment objective of the College is to maximize the financial return over the long term within an acceptable level of risk. This measure shall be the inflation rate as measured by the Higher Education Price Index, plus a 4% premium return.

The secondary investment objective of the fund is to constrain the volatility of the total fund through a program of broad diversification.  In practice, the fund should have a standard deviation of less than 10 over rolling three and five year time frames. Central to the achievement of this goal is the concept of investing in asset classes and investment strategies that demonstrate relatively low correlation to one another. These correlations and their impact on total fund volatility will be reviewed from time to time by the Subcommittee on Investments to determine the effectiveness of the diversification program.

The investment strategy to be followed in pursuit of the achievement of the Endowment Fund’s investment objectives is determined by the Investment Advisory Firm. This shall be done by using their proprietary asset allocation model. 

Model Allocation Target

Asset Class / Strategy

Approximate Allocation

Growth Oriented Strategies:

U.S. Equities

17.5%

International Equities

12.5%

Global Hedged Equity

15.0%

Private Equity/Venture Capital

15.0%

Emerging Markets Equity

7.5%

Low Volatility Strategies:

U.S. Fixed Income

 7.5%

Absolute Return Strategies

 15.0%

Private Market Real

 10.0%

The Investment Advisory firm (Outsourced CIO) may modify their model allocation from time to time at their discretion. The Investment Advisory Firm will keep the Subcommittee and Staff apprised of variances from the model allocation targets and informed of anticipated changes in the model.
  
It is also understood that, initially, the Private Equity and Private Real Estate allocations may not be funded to the target levels. The investment strategy of these alternative investments is to fund the allocation when opportunities are deemed appropriate. The reason for including alternative investment strategies in the approved asset allocation is to increase the overall diversification of the Endowment and reduce the volatility of the total portfolio due to the relatively low correlation between the non-traditional strategies and traditional strategies (U.S. Stocks, International Stocks, and U.S. Bonds). 

These performance standards provide a framework with which the Subcommittee on Investments can measure investment performance. The Subcommittee’s preference will be to view managers through a full market cycle (cyclical peak to trough) rather than an arbitrary time frame. However, absent adequate cyclical data, the committee will utilize three-year and five-year time frames for analysis. The private investments in real estate and private equity will be judged over a ten-year time frame that is more consistent with the longer run cycle of these investments.

Total Fund

The investment objectives of the fund represent long term expectations and will be evaluated over three (3) year, five (5) year and inception time periods. Performance goals are defined in "real" (in excess of inflation) rates of return and relative rates of return.

1. Total Fund investments should earn over time an annualized real rate of return (over inflation as measured by the Higher Education Price Index) of at least 4% (HEPI + 4%).
2. On a relative rate of return basis, each fund segment and manager should exceed the performance of its respective market index over full market cycles.
3. Performance of the Total Fund and its investment managers will be measured against a peer group of similar funds and is expected to be in the top one-third over full market cycles.

U.S. Large Capitalization Equities

Performance is expected to exceed the S&P 500 index after all management fees.

The investment manager is expected to rank in the top third of the Morningstar universe of investment managers following a core large capitalization equity style over a full market cycle.

The investment manager’s volatility of returns, as measured by the standard deviation of monthly returns, should not exceed the S&P 500 index by 25%.

U.S. Small Capitalization Equities

Performance is expected to exceed the Russell 2000 Index after all management fees.

The investment manager is expected to rank in the top third of the Morningstar universe of investment managers following a small capitalization equity style over a full market cycle.

The investment manager’s volatility of returns, as measured by the standard deviation of monthly returns, should not exceed the Russell 2000 Index by 25%.

International Equities

Performance is expected to exceed the MSCI EAFE index after all management fees.

The investment manager is expected to rank in the top third of the Morningstar universe of investment managers following an international equity style over a full market cycle.

The investment manager’s volatility of returns, as measured by the standard deviation of monthly returns, should not exceed the MSCI EAFE index by 25%.

Global Hedge Equity

Performance is expected to exceed the MSCI World index after all management fees.

The investment manager is expected to rank in the top third in the Hedge Fund Research Institute Fund of Funds universe over a full market cycle.

The investment manager’s volatility of returns, as measured by the standard deviation of monthly returns, should not exceed the MSCI World index by more than 25%.

Absolute Return Strategies

Performance is expected to exceed both Treasury bills+5% and the Lehman Bros. Aggregate Index +3% after all management fees.

The investment manager’s volatility of returns, as measured by the standard deviation of monthly returns, should not exceed the Lehman Bros. Aggregate Index over a full market cycle.

U.S. Bonds

Performance is expected to exceed the Lehman Bros. Aggregate Index after all management fees.

The investment manager is expected to rank in the top third of the Morningstar universe of investment managers following an intermediate duration fixed income style over a full market cycle.

The duration of the investment manager’s portfolio should not exceed the duration of the Lehman Bros. Aggregate Index by more than 20%.

Private Equity

Over ten-year rolling time periods, performance is expected to exceed the S&P 500 index by 3% after all management fees with lower portfolio volatility because of diversification away from the public securities market (not marked to market on a regular basis).

Private Real Estate

Over ten-year rolling time periods, performance is expected to exceed the NCREIF index by 3% after all management fees with lower portfolio volatility because of diversification away from the public securities (not marked to market on a regular basis).

The above listed rates of return and risk targets will be monitored and evaluated for each manager over three-year and five-year rolling periods. Any strategy or manager falling outside their respective return and/or risk ranges will be reviewed by the Committee for appropriate action.

**** Both private equity and real estate are difficult to measure during interim periods. We would expect our manager/programs to rank in the top half of similar vehicles (private equity, real estate, and venture capital).

The Subcommittee on Investments recognizes that proxy voting is a fiduciary responsibility and requires that proxies be voted based on those factors that would enhance the value of the Endowment′s investments. The Committee delegates their authority to vote proxies to the investment managers employed by the College and instructs the investment managers to maintain accurate voting records and to vote proxies for the exclusive benefit of the Endowment. If the Endowment has not retained investment managers or has assets not in the control of an investment manager, then the Trustees shall vote all proxies for the exclusive benefit of the Endowment.

The Bellingrath-Morse Foundation. The College is in an unusual position in that the control of the investment of a substantial part of the College’s total endowment is held in trust by others. The largest and most significant amount is managed by the Bellingrath-Morse Foundation. For this reason, the College works closely with the Bellingrath-Morse Foundation to maximize the benefit to the College within the limits of the various agreements with the Foundation.

The investment strategy of the Bellingrath-Morse Foundation has an impact on the Subcommittee on Investments decisions on investment strategy. Therefore, every effort is made to communicate to the Board of Trustees Subcommittee on Investments shifts in the Bellingrath investment strategy.

Investment Objectives and Policies-Overall Endowment. The primary investment objective of the College is to maximize the financial return over the long term within an acceptable level of risk. Such a policy is mandated by prevailing law, tradition, and the legal concept of fiduciary responsibility for funds given to a college. To a substantial degree, the College’s ability to achieve its educational mission is dependent upon the performance of the investment portfolio.

Selection and Retention of Securities or Investments. Maximum financial return over the long run is the primary criterion underlying all decisions to “buy” or “sell.” A decision “not to buy” for other than financial reasons will be made only in cases where the Subcommittee on Investments determines that such investments would clearly contravene moral or social values. It is difficult to be specific about criteria for such a decision. However, in line with this policy, the Subcommittee on Investments would not invest in companies which, in their judgment, definitely cause social harm by violating existing laws relating to such basic human rights as health, safety or freedom. The Subcommittee on Investments would also not invest in companies whose basic policies do not subscribe to contemporary social values and responsibilities.

Consistent with the same criterion, the College will not buy securities for purposes which are not primarily financial. Securities, therefore, will not be bought primarily for the purpose of influencing a company’s attitude toward moral or social values, or solely to achieve an objective which seems socially desirable.

A decision to sell for other than financial reasons will be considered if, in the opinion of the Subcommittee on Investments, the exercise of rights of ownership, i.e., vote and petition to management, will not, within a reasonable period of time, succeed in changing a company’s attitude toward a moral or social problem which the Subcommittee on Investments believes requires a different policy by management.

Equipment records. Equipment records shall be maintained that include the following information.

• A description of the equipment.
• Source of the equipment, including the College’s internal account number and the federal award number.
• Acquisition date and cost.
• Vendor name.
• Location of the equipment.

Physical Inventory. A physical inventory of equipment shall be taken and the results reconciled with the equipment records at least once every two years. Any differences between quantities determined by the physical inspection and those shown in the accounting records shall be investigated to determine the causes of the difference.

Security and maintenance of equipment. When the equipment is not in use, the room that it is located in shall remain locked.  Equipment shall be stored in locations with appropriate climate control.  The equipment should be inspected at least annually and any normal routine maintenance shall be performed on a timely basis.

Interfund Balances Between Current Fund and Endowment Fund

Cash receipts from gifts for endowment, income on endowment investments, and other sources of cash designated for endowment are normally deposited into the bank account in the current funds. This gives rise to non-interest earning interfund balances. At the end of each month, the Finance Office will review the balance of endowment funds invested in the short-term cash management pool of the College to determine if any of these funds should be reallocated to the College’s Endowment investments or, conversely, to ascertain if any funds should be transferred from Endowment investments to reimburse the cash management pool.

Interest income will be paid monthly to endowment funds invested in the cash management pool at the average monthly rate of the Rhodes Fund shares. Earnings will be computed on the simple average of the beginning balance and the adjusted ending balance.

Handling Contributed Securities

Regarding unrestricted security donations, the broker should be informed of the contribution at the time the security is received by the Finance Office and instructed to liquidate the investment at the Comptroller’s discretion; however, it should be understood that this would anticipate liquidation within a relatively short period of time subject only to the broker’s ability to execute orders in a favorable manner.

The Assistant Director of Accounting shall maintain a list of all securities on hand in the Finance Office along with all securities contributed during the fiscal year, the market value of the securities at the date of receipt, and the income realized from securities liquidated during the fiscal year. A copy of this summarization should be furnished to the President, and to the chair of the Investment Committee to keep them informed of the securities currently being held in the Finance Office as well as the proceeds from liquidated securities. All investment certificates received in the Finance Office that are not sold in a relatively short timeframe should be placed in the College’s lockbox that is held at a local bank as soon as possible. 

Funds received from liquidation of these securities should be deposited in the appropriate accounts in accordance with the College’s policy on cash management.

Petty Cash and Bursar’s Office Funds

Petty Cash funds enable offices and department to offer services to pay cash for minor expenditures. All offices or departments requiring a petty cash fund must contact the Bursar’s Office. All requests for petty cash will be signed by the department chair or manager. These requests will be kept on file in the Bursar’s Office.

Department’s Petty Cash Fund. Funds are disbursed through a Bursar’s voucher and charged to the petty cash Fund 111000, Account 110011. Departments will be held financially responsible for their funds. To keep each fund active, as purchases are made, a bursar’s voucher must be completed with receipts attached and presented to the Bursar’s Office for replenishment of the fund (See Internal Audit below).

Bursar’s Office Fund. Check Cashing Service: Checks are cashed for students, faculty, and staff with a limit of $100 per check. Checks are totaled and deposited daily to Fund 111000, Account 110011 “checks for cash.”

Vouchers. Bursar’s vouchers are used to reimburse departments for cash purchases of $100 or less. Vouchers are used by departments instead of establishing a petty cash fund in cases where purchases are infrequent. Vouchers must be approved by the department chair. Account numbers and receipts must be attached.

Audit. Surprise cash counts of the Bursar’s Office will be conducted by the Comptroller at least once each year. Surprise audits of department petty cash funds will also be conducted approximately once each year. The audit will include not only petty cash funds but checks receipted on miscellaneous and students receipts as appropriate. Auxiliary enterprises which handle cash receipts from programs for the general public should consult with the Comptroller about proper record keeping and cash handling.

Transferring Budgeted Funds to Restricted Fund Balances

Generally accepted accounting principles do not allow the College to transfer money from current fund budgeted income and expense accounts. Similarly, such transfers of money cannot be made out of appropriated or restricted fund balances into current fund budgeted income and expense accounts. Also, gifts may not be made from departmental budgets (such as memorials) and transferred to the College Annual Fund, restricted accounts, or the Endowment.

Appropriated and restricted fund balances can be set up or increased only in the following ways:

• An outside gift to the College restricted for a specific purpose.
• Transfers from other restricted or appropriated fund balances set up previously.
• Transfers from the current fund unrestricted and unappropriated fund balance (the net excess of all prior years revenues over expenses less transfers; i.e. year end surplus).

Appropriated and restricted fund balances can be decreased in the following ways:

• Charging invoices and other expenses which are for the designated purpose of the account directly against the appropriated or restricted fund balance.
• Transfers to other appropriated or restricted fund balances.

Departments which realize that they have incorrectly charged an invoice against one of their current fund budgeted expense accounts should send a memo directly to the Accounting Manager similar to the model below:

• On (date), I incorrectly charged invoice (number) paid to (vendor name) in the amount of $(amount) to account (account number and name). This entire invoice (or part of this invoice in the amount of $ amount) should be charged against account (account number and name). Please correct this error.
     Signed
     Department Head

Financial Information and Controls Review

It is a standard function of the Finance office to conduct periodic reviews of financial information and related controls. Financial information includes the College’s trial balance, quarterly financial statements, annual financial statements, and any selected financial data and ratios that the Finance office may distribute, both internally and externally. All financial statements and data should be reviewed and any values or results that are materially different from expectations should be investigated and resolved prior to the release of the information.

The College’s trial balance should be reviewed periodically during each fiscal year. All balances that vary significantly from expectations should be investigated. Additionally, the trial balance should be reviewed for deficit fund balances in appropriated and restricted funds, and a resolution should be determined for any deficit balances.

Wire transfers/ACH reviews should be conducted to ensure that all wires/ACHs were for an appropriate business purpose and had the proper approvals.  At random times during the year, a second level review should be performed on the College’s monthly bank reconciliations.

In addition to the recurring procedures described above, other areas may be examined as circumstances dictate and as resources allow. 

The college, as a Tennessee not-for-profit educational corporation, shall indemnify any person who at any time heretofore has been, is, or is threatened to be made, a named defendant or respondent in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that said person is or was a trustee, director or officer of the corporation, or while a trustee, director or officer of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, member or agent of any other entity, or is or was an heir, executor, administrator or personal representative of a trustee, director or officer of the corporation, against judgments, penalties, fines, amounts paid in settlement, and reasonable expenses, including attorney’s fees actually incurred as a result of such action, suit or proceeding, or any appeal therefrom, to the fullest extent permitted for officers and directors by the statutes of the State of Tennessee which apply to the indemnification of officers and directors, including any amendments thereto.

Such indemnification provided for herein shall be made only if it is determined, in the manner set forth in the Tennessee statutes which apply to the indemnification of officers and directors, that:

Whether the suit or proceeding is civil or criminal, such trustee, director or officer of the corporation acted in good faith for a purpose which he or she reasonably believed to be in the best interest of the corporation;

In the case of any criminal proceeding, such trustee, director or officer of the corporation had no reasonable cause to believe his or her conduct was unlawful.

Also, the corporation may indemnify any employee or agent of the corporation to the extent permitted and in the manner provided herein for trustees, directors and officers, if such indemnity is authorized by the Board of Trustees.

The corporation may purchase and maintain insurance on behalf of any person who is or was a trustee, director, officer, employee or agent of the corporation against any liability asserted against them and incurred by them in such capacity or arising out of his or her status as such, whether or not the corporation would have the power to indemnify him or her against such liability hereunder.

Ownership of Inventions: The rights of ownership to all Inventions which result from College Activities shall be the property of the College; provided, however, that:

• Within the ninety (90) days next following disclosure of an Invention to the College under the preceding Section on Disclosure of Intellectual Property (or such further period of time as may be agreed upon by the Inventor and the Vice President for Academic Affairs), the Vice President for Academic Affairs shall determine, and advise the Inventor in writing, whether such rights shall be retained by the College, conditionally retained by the College or shall be released to the inventor; and
• The rights of ownership to every Invention conceived by any Staff member while engaged in other than College Activities shall be the property of that person.

Ownership of Copyrightable Works: The rights of ownership to all copyrightable works prepared while the Staff member is engaged in College Activities shall be the property of the College; provided however that:

• Within the ninety (90) days following disclosure of College copyrightable Work to the College under the preceding Section on Disclosure of Intellectual Property (or such further period of time as may be agreed upon by the Author and the Vice President for Academic Affairs, the Vice President for Academic Affairs shall determine, and advise the Author, in writing, whether such rights shall be retained by the College, conditionally retained by the College or shall be released to the Author; and
• Copyrightable works prepared by a Staff member while engaged in activities other than College activities shall be the property of the Author. 

Ownership of Tangible Results of Research: All Tangible Results of Research shall be the property of the College.

Basic Objective: Rhodes College is a college of liberal arts whose mission is to maintain a community of inquiry, discourse, and experiment in which it is clear that scholarship and teaching are parts of a single enterprise. In the course of education there is an expansion of knowledge and understanding, whether in the arts, social sciences, natural sciences or humanities. Among the activities in the study and expansion of knowledge and understanding are the creation of works in the literary, dramatic, musical and visual arts; and of research in the social and physical sciences potentially producing innovation and technology. The intellectual endeavors and activities of Rhodes faculty, staff, or students may result in products of a tangible nature for which the College and the faculty, staff, or student may deem it advantageous to enter these products into commerce. These products may be the subject of a patent application or a copyrightable work or other tangible material and are known collectively as “Intellectual Property.” 
 
It is the policy of Rhodes College to encourage, support and recognize the contributions of the faculty, and the student body where significant works are created. Likewise it is a policy of the College to honor the legal rights of authors and inventors, as well as the funding entities supporting varied works. In order to recognize the potentially overlapping rights in the complex support structure for the College’s activities, the college has issued this policy on Intellectual Property for the guidance of all participating in the mission of the College. This policy is intended to:

• provide an incentive to creative intellectual effort and the advancement of knowledge
• insure that the respective interests of the College, and supporting sponsor (if any) are considered and protected through the development of fair contracts and procedures;
• assist the Staff and the College to realize tangible benefits from Intellectual Property, and advance and encourage further research within the College with whatever funds accrue to the College from Intellectual Property resulting from College research.

• “College” shall mean Rhodes College.
• “Staff” shall mean any member of the faculty, administration, staff, student body, postdoctoral fellow, or visiting scientist, whether or not they receive all or any part of their salary or other compensation from the College.
• “Inventor” shall mean any Staff member who shall conceive or reduce to practice an invention while engaged in College activities.
• “Author” shall mean any Staff member who prepares any College copyrightable work.
• “Contributor” shall mean any Staff member who shall have contributed substantially to the existence of any item of Intellectual Property.
• “College Activities” shall mean activities engaged in by a member of the Staff by: (a) written assignment of the College administration; (b) contractual agreement with the College or any sponsor; (c) material use of facilities (other than its libraries), or other resources of the College.
• “Intellectual Property” shall mean inventions, College copyrightable works, and tangible results of research.
• “Invention” shall mean “…any new and useful process, machine, manufacture or composition of matter or any new and useful improvement thereof…” as defined under the Patent Laws of the United States.
• “College Copyrightable Work” shall mean copyrightable works owned by the College.
• “Tangible Results of Research” shall mean a physical embodiment of the research effort, including physical embodiments of any invention, or College Copyrightable Work which results from College Activities by any member of the Staff. Such Tangible Results of Research shall include, but not be limited to antibodies, cell lines, new microorganisms, plant lines or progeny thereof; recombinant or other biological materials; integrated circuit chips, computer software, engineering prototypes and drawings, chemical compounds; devices; machines; and models.
• “Sponsor” shall mean any individual or organization that by written agreement with the College shall finance in whole or part any College Activities.
• “New Revenue” or “Annual New Royalty” are defined as revenues received from the licensing and developing of an Intellectual Property after deduction of all costs reasonably attributable to the protection and distribution of such Intellectual Property, including any reasonable expense of patent or copyright prosecution, maintenance, interference proceedings, litigation, marketing or other dissemination and licensing. Net revenues from the following sources are subject to distribution:  option fees; up-front licensing fees; licensing payments; milestone payments; or proceeds from the sale of stock or other equity in the licensee company.

Coverage: These policies shall apply as a condition of appointment or employment by the College to every member of the Staff who during the period of their appointment or employment by the College shall: (a) conceive or first reduce to practice actually or constructively, any Invention; (b) prepare any College Copyrightable Work; or (c) contribute substantially to the existence of any Tangible Result of Research.

Disclosure of Intellectual Property: Every Staff member shall, in writing and in reasonable detail, give the Vice President for Academic Affairs prompt notice of any: (a) Invention; (b) College Copyrightable Work; or (c) Tangible Result of Research which he or she shall desire to have patented, copyrighted or made available to the investigators or the public by commercial or other means, or shall believe or have reason to believe is patentable, copyrightable, or of value to other investigators or the public, or otherwise of commercial value.

Sponsorship of Intellectual Property: The rights of ownership to each item of Intellectual Property produced during activities conducted pursuant to any agreement between the College and any Sponsor shall be determined in accordance with such agreement; however, it shall be the policy of the College to retain title to Intellectual Property whenever possible under state or federal law. Any agreement with a Sponsor pertaining to the ownership of Intellectual Property and assignment thereof shall be made between the College and the Sponsor in advance of the research or other activity that produces the Intellectual Property.

Disagreements: The President shall appoint a Committee on Intellectual Property composed of both faculty members and administrative officers (the Vice President for Academic Affairs shall serve ex officio). The creator of any Intellectual Property that is or might be covered under this Policy (see above for Patents) cannot be a voting member of this Committee. This Committee shall be the body to whom appeals may be made. Whenever legal protection for Intellectual Property is anticipated all persons engaged in such creative activity are encouraged to keep regular notebooks and records, preferably in the form of bound notebooks that are regularly signed and dated by the Inventor(s) as well as periodically signed by one or more witnesses.

Seeking a Patent or Copyright: Whenever the Vice President for Academic Affairs shall determine to seek the patenting or copyrighting of any Invention or College Copyrightable Work, the College shall, without expense to the Inventor or Author provide such professional services as it shall deem to be necessary or desirable for such purpose, and which may include the services of an independent patent organization. The Inventor or Author is obligated to cooperate fully in such effort, including his or her execution of all necessary or desirable agreements, applications, and other forms and instruments. If, at any time subsequently, the College shall terminate its effort to seek such patent or copyright, it shall promptly give written notice thereof to the Inventor or Author who thereupon to the extent allowed by law or any sponsorship agreement shall be free at his or her expense to develop, license, and otherwise use the Invention, patent application, patent or copyright. In this event the Inventor or Author shall receive all benefits of any development, licensing or other use of the Invention, patent application, patent or copyright except that the College shall be entitled to recovery of associated costs.

Transfer or Sale of Tangible Results of Research: Tangible Results of Research may not be transferred or sold to any party outside the College before: (a) a disclosure of the Tangible Results of Research has been submitted to the Vice President for Academic Affairs and (b) the Contributor(s) has been notified by the Vice President for Academic Affairs of any required conditions of such transfer or sale. Such notification shall be made within thirty (30) days following the disclosure of Tangible Results of Research.

Promotion and Licensing: In interpreting and applying these policies, the College shall, by such means as it shall deem to be most effective and appropriate in each case, act to bring to the public all Intellectual Property to which the College has rights of ownership in whole or part. Such means may include, but shall not be limited to, agreements for the development, patenting, copyrighting, promotion, licensing, printing, distributing or manufacturing of any Intellectual Property; and in every case the College shall advise the Inventor, Author, or contributor of the terms of any such proposed agreement. No agreements will be entered into by the College without the review of all Inventors, Authors or contributors. Any disagreement between the College and the Inventor(s), Author(s) or contributor(s) concerning a proposed agreement will be resolved in a timely fashion by the Committee on Intellectual Property.

Proceeds from Distribution of Intellectual Property:

1. Invention Proceeds. Subsequent to the College’s recovery of funds that were invested in patenting, marketing or developing Intellectual Property, the Contributor(s) and the College will share in the net revenue received from the Contributor’s Intellectual Property(ies) owned by and licensed from the College. The Contributor(s) will receive 50% of the net revenues, and the College will receive 50%. It is understood that one-half of the College’s portion will be for the primary purpose of advancing and encouraging further research and intellectual property development within Rhodes College.

In the case of multiple Inventors, the Inventors’ share will be distributed among the Inventors in accordance with a written agreement signed by all Inventors; or, if there is no such agreement, all Inventors will receive an equal share.

If inventorship is shared among College Inventors and inventors at one or more other institutions, the College will negotiate with the one or more other institutions concerning exclusive licenses and distribution of revenues. College net revenues from such agreements will be distributed to inventors at the College using the distribution formulae discussed above.

2. Copyright Proceeds. These will follow the same distribution and stipulations as Inventions listed above.

3. Tangible Results of Research Proceeds. To the extent allowed by law, where any Tangible Result of Research is not within the scope of the claims of a patent, patent application, or copyright, each Contributor shall share in any net revenue or annual net revenue to the same extent a Contributor shares in proceeds listed above for Inventions and Copyrights.

Sponsors: Other Organizations. If and when any conflict shall arise between these Policies and any condition or conditions of (a) any proposed grant from or contract with any organization offering to act as a Sponsor or (b) the patent, copyright or intellectual property policies and procedures of any other organization to which any joint appointment or any affiliation or consulting agreement is made, such conflict shall be referred to the Committee on Intellectual Property. Following consideration of the conflict the Committee shall recommend a course of action to the College administration. It is incumbent on the College to take all reasonable steps, including but not limited to appropriate legal action, to protect and advocate issues on its behalf and those of the Inventor, Author or Contributor in the event of a conflict with a Sponsor.

Release of Rights of Ownership. The Office of Academic Affairs, for reasons and upon terms deemed to be satisfactory by its office, release on behalf of the College at any time any Invention, patent, patent application, College Copyrightable Work, copyright or right of ownership to Tangible Results of Research to its Inventor, Author or Contributor. 

Copyright: Within higher education, it has been the prevailing academic practice to treat the faculty member as the copyright owner of works that are created independently and at the faculty member’s own initiative for traditional academic purposes. Examples include, but are not limited to, class notes and syllabi, books and articles, works of fiction and nonfiction, poems and dramatic works, musical and choreographic works, pictorial, graphic, and sculptural works, computer programs, computer-generated works, and educational software (commonly known as “courseware”). This practice has been followed for the most part, regardless of the physical medium in which these “traditional academic works” appear, that is, whether on paper or in audiovisual or electronic form. This practice should also ordinarily apply to the development of courseware for use in programs of distance education. Situations do arise, however, in which the College may fairly claim ownership of, or an interest in, copyright in works created by faculty members. Three general kinds of projects fall into this category: special works created in circumstances that may properly be regarded as “made for hire,” negotiated contractual transfers, and joint works” as described in the Copyright Act.

1. Works Made for Hire. Although traditional academic work that is copyrightable – such as lecture notes and courseware, books, and articles – cannot normally be treated as works made for hire, some works created by College faculty members do properly fall within that category, allowing the institution to claim copyright ownership. Works created as a specific requirement of employment or as an assigned institutional duty that may, for example, be included in a written job description or an employment agreement, may be fairly deemed works made for hire. Even absent such prior written specification, ownership will vest with the college or university in those cases in which it provides the specific authorization or supervision for the preparation of the work. Examples are reports prepared by a member of the Office of Academic Affairs or by the chair or members of a faculty committee, or college promotional brochures prepared by a director of admissions. The Copyright Act also defines as a “work made for hire” certain works that are commissioned from one who is not an employee but an “independent contractor.” The institution will own the copyright in such a commissioned work when the author is not a College employee, or when the author is such a faculty member but the work to be created falls outside the normal scope of that person’s employment duties (such as a professor of art history commissioned by the institution under special contract to write a catalog for a campus art gallery). In such situations, for the work-made-for-hire doctrine to apply there must be a written agreement so stating and signed by both parties; the work must also fall within a limited number of statutory categories, which include instructional texts, examinations, and contributions to a collective work.
2. Contractual Transfers. In situations in which the copyright ownership is held by the faculty member, it is possible for the individual to transfer the entire copyright, or a more limited license, to the College or to a third party. As already noted, under the Copyright Act, a transfer of all of the copyright or of an exclusive right must be reflected in a signed document in order to be valid. When, for example, a work is prepared pursuant to a program of “sponsored research” accompanied by a monetary grant from a third party, a contract signed by the faculty member providing that copyright will be owned by the College will be enforceable. Similarly, the College may reasonably request that the faculty member – when entering into an agreement granting the copyright or publishing rights to a third party – make efforts to reserve to the institution the right to use the work in its internally administered programs of teaching, research, and public service on a perpetual, royalty-free, nonexclusive basis.
3.  Joint Works. Under certain circumstances, two or more persons may share copyright ownership of a work, notably when it is a “joint work.” The most familiar example of a joint work is a book or article written, fully collaboratively, by two academic colleagues. Each is said to be a “co-owner” of the copyright, with each having all the usual rights of the copyright owner provided that any income from such uses is shared with the other. In rare situations it may be proper to treat a work as a product of the joint authorship of the faculty member and the College, so that both have a shared interest in the copyright. Whoever owns the copyright, the College may reasonably require reimbursement for any unusual financial or technical support. (“Unusual financial or technical support” is defined as follows: Extensive un-reimbursed use of major College laboratory, studio, or computational facilities, or human resources. The use of these facilities must be important to the creation of the intellectual property; merely incidental use of a facility does not constitute substantial use, or does extensive use of a facility commonly available to all faculty or professional staff (such as libraries and offices), nor does extensive use of a specialized facility for routine tasks. Use will be considered “unusual” and facilities will be considered “major” if similar use facilities would cost the creator more than $5,000 (five thousand dollars) in constant 1984 dollars if purchased or leased in the public marketplace. Creators wishing to reimburse the College for the use of its facilities must make arrangements to do so before the level of facilities usage for a particular intellectual property becomes substantial as defined.) That reimbursement might take the form of future royalties or a nonexclusive, royalty-free license to use the work for internal educational and administrative purposes. This means that the course developer and the College must reach an understanding about the conditions of portability and commercialization of faculty work developed using substantial College resources. Ordinarily, such an understanding will be recorded in a written agreement between the course developer and the College on a course-by-course basis.

Overview. Visitors to the College may receive an honorarium payment for services performed or reimbursement of expenses incurred during their visit. The following sections explain the procedures for requesting these types of payments and the documentation required before payment can be made.

Section I. Honorarium Payments to U.S. Citizens

Required Documentation. To ensure that requests for payment can be processed efficiently, please assist us by providing the following information for all prospective honorarium recipients:

1. A check request form which includes the following:

• Full legal name;
• Complete mailing address;
• Social security number (SSN);
• Description of services performed;
• Account Index code or Fund, Org, Acct, and Program number
• Amount of payment

2. Accompanying the check request, please also provide:

• Letter of invitation, or copy of news release for the event;
• Completed W-9 form, Request for Taxpayer Identification Number and Certification.

Taxation and Reporting. Payments for personal services are taxable income and must be reported to the IRS on form 1099-Misc. If the recipient is paid a cumulative total of $600 or more during a calendar year, he/she will receive a 1099-Misc by January 31 of the following year to be used when filing their personal tax return.

Section II. Honorarium Payments to International Visitors

If payment is to be made to an individual who is not a citizen of the U.S., additional information is required to ensure that we comply with immigration and tax laws. It is recommended that this information gathering process commence upon invitation of the international visitor since immigration rules dictate what non-immigrant visa status is required for eligibility of payment.

In November 1998, Congress passed the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA) granting academic institutions the authority to pay honoraria and associated expenses to visitors holding a specific non-immigrant status who are engaging in “usual academic activities.” The ACWIA defines “usual academic activities” to include lecturing, teaching, consulting, conducting research, attending meetings, symposia or seminars, and sharing knowledge. Performances or readings meet this definition if the event is free and open to the public and/or students.

The following criteria, or B honorarium rules, must be met for an honorarium payment to be made:

• The visitor must enter the U.S. with B visa status. The immigration categories below meet this criterion:
  • B-1, Visitor for Business
  • B-2, Visitor for Pleasure
  • VWB, Visa Waiver for Business
  • VWT, Visa Waiver as a Tourist
  • Canadian entering without inspection
• The academic activity the visitor is engaging in may not exceed nine days.
• Other honoraria or associated expense reimbursements may not have been accepted from more than five institutions or organizations in the previous six-month period.

Required Documentation. In addition to the documentation listed in Section I, please provide the following information when payment is requested:

• Completed W-8BEN, Certificate of Foreign Status form;
• Foreign Visitor Compliance Statement;
• Individual Taxpayer Identification Number (ITIN)

Taxation and Reporting. Payments for personal services to a foreign individual are subject to 30% federal withholding under Internal Revenue Code Section 1441 unless a tax treaty exemption is available. The income, any withheld taxes, or treaty benefits enjoyed are reportable on form 1042-S, Foreign Persons U.S. Source Income Subject to Withholding. The honorarium recipient will receive a 1042-S form from Rhodes by March 15 of the following year to be used for filing their personal 1040NR tax return.

• Tax Treaty Benefits. To claim a reduced rate or exemption from the applicable 30% withholding, the following is required:
  • The individual must be a resident for tax purposes of a recognized treaty country and meet the requirements specific to the treaty articles and;
  • The individual must have a U.S. Social Security Number or Individual Taxpayer Identification Number (ITIN)
  • The individual must complete form 8233, Exemption from Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual.

Please note that without a SSN or ITIN, we are required to withhold 30% from the gross payment amount without exception.

Section III. Reimbursements of Expenses

Required Documentation. Expense reimbursements for both citizens and non-citizens are not taxable or reportable as income as long as the accountable plan rules are met by providing receipts to substantiate the expenses. When requesting an expense reimbursement for an individual, please provide the original receipts for any item over $25 for items such as:

• travel expenses,
• lodging expenses,
• transportation expenses,
• meals,
• or other incidentals.

These receipts should accompany the check request form with the individual’s information as listed in Section I. The recipient’s SSN or ITIN is not required for this type of payment since it is not considered income for personal services.

General Policy. Purchasing for the College is a function of the Administrative Services division and administered by the Purchasing Manager. The Purchasing Office has responsibility for procuring virtually all equipment and supplies as well as contracting for certain services for the College. The Purchasing Office provides assistance to all College departments in satisfying their requirements at the lowest possible cost consistent with quantity, quality, and delivery requirements.

The Purchasing Office is authorized to negotiate the purchase of materials, equipment, supplies, and services (see exceptions below). Selection of sources and vendors is normally the responsibility of the Purchasing Office by use of the Standard Purchase Order. Suggestions for sources by departments are welcomed and will be considered whenever economically feasible. Orders or commitments by the departments should be accompanied by a purchase order approved by the Purchasing Office. Purchases considered exceptions to the above are divided into the following categories.

Category A. Category A exceptions are purchases made through independent order systems maintained by certain departments. Departments allowed to maintain standard purchase orders are to contact the Purchasing Office. Purchasing will log out purchase orders by number to the department. Departments who maintain standard purchase orders must return the yellow and pink copies to the Purchasing Office whenever a purchase order has been placed by one of these departments.

Exceptions to Category A:

• Library books
• Physical Plant supplies and equipment
• Special purchases by the President’s Office
• Computer equipment and software
• Scientific supplies, equipment, and teaching supplies and materials.
• Contracts for outside printing, typesetting, camera and art work arranged by the Communications Office.
• Transportation and travel, other than athletic charter service.

Category B. Category B exceptions are purchases of items selected on a regular basis by individual departments without the assistance of the Purchasing Office. These purchases should, however, be processed through and approved by the Purchasing Office by issuance of standard purchase orders.

Exceptions to Category B:

• The Meeman Center bookstore books
• Special materials used in teaching and administration such as periodicals, books, testing programs, memberships, grants and films.
• Contracts for computer maintenance and license agreements negotiated by Information Technology Services.

If a department wants independently to place standard purchase orders, the department head must contact the Purchasing Office for approval and proper training.

No College employee is authorized to purchase, in the name of the College, items for personal use. No employee is authorized to submit a request or approve a purchase order for items for personal use, nor may petty cash funds be used for such purposes. This stipulation shall apply regardless of payment of normal sales and other taxes by the employee, directly to the vendor or to the vendor through the College. The expense to the College of such transactions is prohibitive.

Exempt from this rule is the inclusion on maintenance contracts of personally owned typewriters used on campus primarily for teaching or administrative purposes. The contractor must be aware of any personally owned machines on the contract and must know that the machine owner is paying for service through the College.

The special ordering of books by employees through the Bookstore is also allowed. Any other personal purchases must be approved by the Vice President for Finance and Business Affairs.

Some vendors who sell to the College will extend a courtesy discount to College employees. Any transaction between employees and these vendors must be made on a private basis. The employee must pay tax as not doing so endangers the College’s tax exempt status.

The Purchasing Office may give general advice regarding personal purchases but cannot make in-depth studies or detailed inquiries on behalf of employees.

Year End Purchases. If an item is to be paid from the current fiscal year’s operating (departmental) budget, that item must be received on campus by June 30th and the invoice must be dated prior to or on June 30th. Ample notice must be given to the Purchasing Office to insure a June 30th delivery. This applies to all types of purchases made by any department, even office supplies. Keep in mind some items can take weeks or months to ship. No purchases can be made after June 1, without the permission of the Vice President for Finance and Business Affairs.

Unauthorized Purchases. No individual has the authority to enter into purchase contracts, or in any way obligate the College for a purchase unless specifically authorized by the Vice President for Finance and Business Affairs, the President, the appropriate Dean or the Purchasing Office. An individual making an unauthorized purchase may encounter a personal obligation to pay the vendor. Firms ordinarily doing business with the College are aware of this policy and are advised that all purchases chargeable to the College must be authorized by an official College purchase order signed by the Purchasing Office. Exclusive of the petty cash and check request procedures, the College will not reimburse employees for the cost of any such purchases on behalf of the College unless previous arrangements have been made and the Purchasing Office notified.

Standard Purchase Requests. To obtain materials with a value greater than $1000, departments should anticipate requirements as far in advance as possible to insure that enough lead time is provided for adequate research, solicitation of bids, and delivery time. The department should clearly state if it is authorizing the purchase of the needed item(s) or if the department first wants price quotations and detailed information on the item(s) before the purchase is made.

Requests for goods to be purchased through Purchasing should include:

• an accurate description of articles needed
• estimated cost of items (or spending limit the department wishes to place on the purchase)
• if price quote is needed before order is placed, please inform the Purchasing Office
• suggested sources, if any known or preferred
• account number to which the purchase will be charged
• delivery instructions: when, where (department, building and room number), and to whom.
• signature of individual responsible for the department’s budget.

The Purchasing Office will then proceed with an investigation of sources for the needed items. In most cases the Purchasing Office will confer with the requesting department regarding information obtained, samples, and prices. Purchasing decisions are generally made as a result of these discussions and approval to issue purchase orders is often verbal.

In some cases the department may wish to examine catalog and price materials themselves to determine requirements. The Purchasing Office maintains product information files, and departments may use them provided they are returned promptly. The Purchasing Office is also available to locate sources and obtain product information on any items not included in these files.

Standard Purchase Orders. The purchase order is the instrument by which most College supplies, equipment, and services are procured. It is the seller’s authority to ship and to invoice for the goods specified on the order, and it is the buyer’s commitment for the value of the goods ordered. It a legal document which expresses the College’s part of a contract of sale. Once accepted, establishing an agreement, it is a legally binding contract.

Procedure. A five-part purchase order is issued by the Purchasing Office for items which are not listed under Check Request Payment Method. Essential information required on a purchase order includes:

• Purchase order number
• Bid number (if applicable)
• Date of order
• Name and address of vendor
• General instructions (e.g. marking of shipments, shipping address)
• F.O.B. (point at which vendor’s responsibility of freight charges terminates)
• Shipping instructions (e.g. destination, carrier, and traffic routing to be specified)
• Cash discount terms
• Quantity and description of material ordered
• Price, both unit and extended
• Desired delivery date (on or before)
• Other special terms and conditions as may be necessary for clarification of the order
• Account number to be charged
• Purchasing Office staff member’s signature or an authorized member of a department 
• Whether the order is an original order or confirmation only
• Name of the person with whom the order was placed

The Purchasing Office will fax purchase orders for departments if the department asks. Most vendors will take a verbal P.O. #, but a hard copy should be sent to the company to prevent any misunderstandings and to assure correct pricing. The green and gold copies of purchase orders will be returned to the department chair. The green copy is the department’s file copy which can be used to record shipment receipt dates, quantity received or backordered, amounts of money approved for payment, date invoice approval form is sent to the Finance Office, and vendor’s invoice information. The gold copy should be attached to the vendor’s invoice with approval for payment form and submitted to the Finance Office.

Changes. Any change in a purchase order after the order is placed alters the contract with the vendor. Please notify Purchasing and the vendor so the purchase order can be promptly updated.

Bidding Procedure. When time permits and the estimated cost of items is large enough, requests for written quotations will be sent. Quotations are solicited from the widest practical selection of vendors with proven performance in the areas of price, service, quality, and delivery. These factors, as well as product availability, proximity, and technical competence, will be considered in the award of bids.

Verbal Rush Orders. Verbal orders (usually an emergency or an item which can only be ordered through one source—also see under General Policy, Category B) should be kept to a minimum but a purchase order number may be obtained from the Purchasing Office when it becomes necessary for a department to place a verbal order via the telephone or a visiting sales representative. To initiate a verbal transaction the authorized person in the department must contact Purchasing with the vendor name, amount of money to be spent, account to be charged, and description of items needed. A purchase order number will be issued at the discretion of the Purchasing Office. Proper planning eliminates many rush transactions but real emergencies will be handled as expeditiously as possible.

Delivery. The College receives goods shipped in many ways; i.e. by truck (common carrier), U.S. Postal Service, United Parcel Service, FedEx, local company-owned vehicles, etc. Since the College does not have a central receiving area, many people are involved in receipt of goods. Large orders for one department are generally delivered directly to that department, and it is imperative that departments specify delivery location in detail. (Example: “Ship to Rhodes College, Attention Purchasing Dept., Physical Plant Building.”)

Items delivered by mail, FedEx or UPS are distributed through mail services. It is imperative that ordering departments instruct vendors to ship to the attention of a department and appropriate person. Departments are notified of receipt and should make arrangements to pick up their orders promptly as space is limited.

Items that are part of a large order for several departments are handled by Purchasing. When the invoice arrives for a multi-department order, the charges are approved by the Purchasing Office. Departments will have already been asked to provide correct account numbers. Copies of the invoice approval form will be forwarded to the departments.
 
Receiving: When material received is not acceptable (i.e., defective, damaged, not as ordered, or not ordered at all) notify the Purchasing Office immediately. Purchasing will assist the departments with filing a claim or with return or exchanges of incorrectly shipped items as long as the department has followed the proper procedures in receiving the items. Departments will be required to complete the appropriate forms from freight companies. Here are a few tips to aid you in receiving goods:

• Except in the case of UPS and U.S. Postal Service deliveries, which are handled through the mailroom, you’ll always be asked to sign something to show you’ve received the goods. Be sure that the number of cartons or packages you sign for is indeed the number the deliverer has brought in. Note any shortages or overages on the delivery ticket. Many items delivered by freight lines are received at the Physical Plant Building, but some freight deliveries go directly to the building.
• If cartons are damaged, be sure to note it on the ticket you sign. It’s wise to go ahead and open the carton(s) to see if the damage has affected the contents. Get the driver to sign the delivery ticket (all copies).
• Never refuse a shipment because it is damaged. Always leave the cartons exactly where they were delivered (otherwise, the freight company can claim we damaged it by moving it after delivery). Don’t throw away anything until the claim has been settled.
• Never throw away packaging materials until you’re satisfied that the contents are undamaged and complete. Check packing slips against what’s actually in the cartons.
• If you’re uncomfortable about receiving a shipment and need help, contact Purchasing who will be happy to assist you.
• Report damages, shortages, etc. to Purchasing so we can help you get the order straightened out.

Correspondence. Correspondence concerning quotations, orders, delivery, loss, or damage, returns, i.e., any communication related to any purchase or proposed purchase, should be handled by the Purchasing Office. If departments communicate directly with vendors, the Purchasing Office should be notified. This simplifies the routing of any responses received by Purchasing from the vendor, particularly when the department or purchase order number is not mentioned in the vendor’s correspondence.

Any information regarding a student other than what is called “directory information” is considered, by law, classified and may not be released to a third party without the written consent of the student. This policy means that the Registrar’s Office must have a written request for a transcript to be sent out and that a professor does not have an automatic right of access to a student’s transcript, academic record, or permanent file. If the professor is determined to have “legitimate educational interest” in the record, an exception can be made. In most cases, a staff member of the Registrar’s Office will ask why the record is needed. The request may be denied if, in the opinion of the staff member, the rationale for the request is not sound.
 
On the other hand, a professor may inspect the record and file of an advisee or a student in the professor’s class in order to determine why the student is performing poorly. A professor may also review the record of a student in order to help prepare recommendations that have been requested by the student. Most of these records are available online on the Web for Faculty via BannerWeb. Requests for additional information about students should be made to the Registrar’s Office following the guidelines stated above.

Many advisors maintain a file for each of their advisees containing information regarding the advisee, including grades (midterm and final), copies of petitions, probation or suspension letters, and readmission letters. This folder may be maintained while the student is enrolled, but it should be discarded or destroyed when the student graduates or withdraws from the College. If the student changes advisors, the folder should be forwarded in person to the new advisor.

Again, this folder is confidential and should be treated according to the same guidelines as those stated above for the permanent record maintained in the Registrar’s Office. According to federal laws, the student may have access to any information kept in such a folder maintained by the advisor.

Any information of this type should be treated as confidential and should be kept in a secure place, being released to or discussed with only the student involved. In the same way, information available online should also be treated as confidential as it is covered by the federal law dealing with confidential records (commonly known as FERPA). (See the Privacy Act in the Student Handbook, for the Rhodes policy in relation to the federal legislation in this area.)