Depositing of Revenue for the Sale of Goods and Services at the IU Foundation
Associate Vice President and University Controller
Office of Financial Management Services
Payments made to IUF by IU can only be made when goods or services have been provided to the university by IUF. Therefore, revenues generated with university resources through the sale of goods or services cannot be deposited or transferred to IUF. This includes program income generated through sponsored research.
To create guidelines for when funds generated through the sale of a good or service (sometimes coded as "other income") can be deposited or transferred to the Indiana University Foundation (IUF) from Indiana University (IU). The IUF was established to provide IU with services that include fundraising, money management and spending flexibility with gift dollars. Funds received by IUF that do not relate to these core services jeopardize the foundation's tax-exempt status.
Revenues generated using university resources through the sale of goods or services must be deposited in an IU account. Funds necessary for expenditures related to revenue generating activities that are unallowable expenditures by university policy may be transferred to the Foundation with documentation. This transfer is allowable if revenues for the activity exceeded activity expenditures (according to Indiana University Financial Institutional Policy I-50).
The process for the documentation is as follows:
University Resources: Include use of IU facilities and equipment, faculty and staff time, and funds consumed for the revenue-generating project.
Unallowable Expenditures: Are expenditures that through IU financial policy have been identified as unallowable with university resources. It is understood that most of these expenditures are legitimate business expenses, which is why reasonable unallowable expenditures related to the revenue generating activity can be covered out of the IUF with a transfer from the university.