Gifts By and to the State

Gifts By the State

Article XVI, Section 6 of the State Constitution, prohibits the state or any of its political subdivisions from making gifts to private parties. It states that the Legislature shall have no power to:

  • Give or lend the credit of the state or any political subdivision or to pledge the credit for payment of liabilities.
  • Make any gift of any public money or thing of value.

Gifts To the State

Statutory Provisions

Government Code 11005 – Provides that the Director of Finance shall approve every gift to the state of personal property or real property unless the Legislature specifically provides that approval is not required. (Various departments have been specifically authorized by the Legislature to receive personal or real property without Department of Finance (Finance) approval.) This approval requirement does not apply to unconditional gifts of money. (Note: Many departments overlook their own authority to accept unconditional gifts of money.)

Government Code 11005.1 – Provides that the Director of Finance may accept on behalf of the state any gift of real or personal property whenever such gift is deemed to be in the best interest of the state.

Government Code 16302 – Provides that if a donor designates a monetary gift to the state for the benefit of a fund or appropriation, the donation shall be credited accordingly. Provides that a monetary gift not designated for any specific fund or appropriation shall be credited to the State School Fund. Although the law limits this designation to a fund or appropriation, donors have designated the purpose or program to benefit from a donation and the state has credited the money accordingly.

Government Code 8647 – Provides for the state and any political subdivision to accept from the federal government services, equipment, supplies, materials or funds by way of gift, grant or loan, for purposes of the mitigation of the effects of an emergency. A state department, acting with the consent of the Governor and through its governing body, may accept such offer but must adhere to the terms and rules of the offer of the federal agency presenting such offer.

DOF Process

Requests for acceptance of gifts of either personal property or real property (Government Code Sections 11005 and 11005.1) must be approved by the Director. This acceptance has been delegated to the Chief Operating Officer.

In processing a gift donation request, Finance staff should obtain the following information:

  • Description of the gift.
  • What is the value of the gift? (It may also be advisable to request an assessment by an independent estimator for gifts with high value.)
  • What will be the estimated costs to the Department by the acceptance of the gift (including needed repairs, matching costs accessories, periodic/regular maintenance, etc.)?
  • Why should the state accept the gift? Present advantages and disadvantages of acceptance of the gift.
  • What are the donor’s wishes or instructions concerning the use of the gift and disposition of residue balance, if any?
  • Donor’s name and address.

Prepare the staff recommendation for acceptance or rejection of the gift, using the significant points learned.

Attached is a copy of Form DF-581 (Request for Approval of Gift) which may be used by departments to request Finance approval to accept an offer of a gift. The form can also be used by the Finance budget unit to make a recommendation to the Capitol Office (delegation for approval is to the Chief Operating Officer) on acceptance of the gift. In lieu of the form, Finance may request departments to submit their requests in whatever format deemed appropriate. The recommendation to the Capitol Office may also be via letter or other appropriate format. For monetary gifts sent to Finance, the Fiscal Systems and Consulting Unit will process the paperwork and deposit the money into the State Treasury as prescribed in Government Code 16302. If another state department receives a monetary gift, they need to deposit the money into the State Treasury as prescribed in Government Code 16302.

Department of General Services (DGS)

When a state agency wishes to accept a gift of real property, DGS’s Real Estate Services Division must also approve the proposed gift. See SAM Section 8634.

DF-581 Gift Form in PDF Format