Board of Trustees Introduction August 13, 2010

A G E N D A Board of Trustees (BOT) Purpose Authority SWE Endowment Fund Inc. (SWE-EFI) Endowment Basics Purpose History Policies Financials Contingency Reserve Fund (CRF) History/Purpose Policies Financials How we interact within SWE How to find more info

BOT Purpose & Authority Two key purposes: Manage the assets in SWE-EFI Authority: SWE-EFI Bylaws & Articles of Incorporation Manage the assets in SWE-CRF Authority: CRF Fund Document (owned by the SWE Senate) Note: The BOT is not in SWE’s bylaws

SWE Endowment Fund, Inc. (SWE-EFI) BOT is elected by the membership National Ballot Nominating Committee involvement 6 members total 3 year terms 2 positions elected each year BOT elects its own officers to 1-year terms – Chair – Secretary – Treasurer

FY11 Board of Trustees Marge Inden, Chair, Baltimore-Washington Term ends FY11 Angela Nickels, Treasurer, Southwest Texas Term ends FY12 Kathryn Cunningham, Secretary, Chicago Regional Term ends FY13 Carolyn Phillips, Past Chair, Houston Area Term ends FY11 Florence Hudson, New York Term ends FY13 Michele Fitzpatrick, New England Shoreline Term ends FY12

SWE Endowment Fund, Inc SWE-EFI Headquarters Account Scholarship Account Awards Account

Endowment Basics Endowment: Long-term assets held to generate a permanent stream of income Principal is not spent Spending can come from income, dividends, and capital gains May include restricted and unrestricted funds Restrictions may only be made by the donor Examples of endowments: College & University endowments Private endowments, such as the Ford Foundation Charitable endowments, such as SWE-EFI

Investment Policy Statement Guides long-term operation of the endowment. Defines: Balance between risk and return (asset allocation) Balance between current income and growth Asset allocation targets & ranges Permissible and prohibited asset classes Targets for total return Benchmarks used to measure investment managers’ performance

SWE-EFI Investment & Spending Policy Funds pay 4% of the opening balance annually for Scholarships, Awards, and HQ Minimum payment is interest & dividends less expenses Over the long term, we anticipate growing income Income can drop if markets perform poorly Consistent with endowing a scholarship at $1,000/year with a $25,000 gift Total return: (Payout %) + (Expense %) + (Inflation %)

History HQ Account Established in 1956 as the Headquarters Fund Original purpose: To provide support for HQ Income (less expenses) paid out to SWE Life member donations go to the fund Bequests are received on occasion

History Scholarship Account Originally established in 1956 to award the Gilbreth Scholarship (only) Now awards ~60 scholarships with value of $139,000 (FY11) Section/Region/MAL Endowed Scholarship program established FY03 with BOD approval Includes named scholarships from: Living Donors Bequests Section/Region/MAL groups (can be locally selected)

Endowed Scholarship Program Open to all: Sections, Regions, Individuals, Estates, etc. Local or national selection of winners $25,000 gift to endow a $1,000 scholarship in perpetuity One year’s time between the gift and the first scholarship award Increases are at BOT discretion Funds are pooled Gifts are irrevocable Once endowed, any amount may be added

Awards Account History Awards Account Prior to SWE-EFI, the BOT Managed: Rodney D. Chipp Fund Resnik Challenger Medal Fund Motorola Foundation Multicultural Fund SWE had also accepted an endowed gift for: Boeing Multicultural Fund Above accounts were consolidated into a single Awards Account under SWE-EFI

Awards Account (cont.) The Annual Awards Subsidy covers: Chipp Award Motorola Award(s) or Program(s) – minimum $1500 Boeing Awards – minimum $1000 Resnik Challenger Medal (when given) Any other awards of SWE’s choice SWE reports annually to the BOT on how the funds were used

SWE-EFI Fund Balances *Pre-SWE-EFI **unaudited Year end, in $k FY04 * FY05 * FY06FY07FY08FY09FY10 ** Awards Headquarters1,4211,6361,6371,8641,6301,3881,510 Scholarship2,5153,0983,5383,8323,7313,3854,030 TOTAL4,3105,1315,2826,1455,8005,1425,940

Year in $K FY04*FY05*FY06FY07FY08FY09FY10FY11* TOTAL SCHOLARSHIPS SECTION /REGION SCHOLARSHIPS HQ SUBSIDY AWARDS SUBSIDY SWE-EFI Subsidies *Pre-SWE-EFI **estimate

Contingency Reserve Fund

History of Contingency Reserve Established 1982 by the CSR Principal purpose: emergencies that would “threaten the existence” of SWE Spending was also permitted for capital projects until FY08 Income – 5% of conference overage Was higher prior to FY08 “Base Level” of 110% of General Operating Expense is defined If CRF exceeds Base Level, things change

Contingency Reserve Fund BOT manages assets at the pleasure of the Senate Currently less equity exposure than SWE-EFI accounts $625K withdrawn in FY10 Senate requested funds to be paid back within 5 years

Operating Expense & CRF Balance TOTAL EXPENSE

How we interact Where to find documents Where to find us

How BOT interacts within SWE With the membership Membership elects Trustees Annual report given at Membership Meeting With the Board of Directors As the “sole member” of SWE-EFI Annual meeting held yearly With the Senate As requested, especially on CRF issues With the Scholarship Committee Close working relationship, esp. on endowed scholarships

How BOT interacts within SWE With the Audit Committee SWE BOD selects Auditor, at recommendation of Audit Committee CRF is audited as part of SWE’s books SWE-EFI is audited separately and then consolidated with SWE With the Finance Committee Treasurer typically meets with committee annually Committee keeps us apprised of their activities With the Nominating Committee Identify suitable skills for BOT candidates Provide feedback for evaluations

Reference Documents All documents are on “BOT Shared” Contingency Reserve Fund Document SWE-EFI Articles of Incorporation & Bylaws SWE-EFI Transfer Document SWE BOT Policies Conflict of Interest Whistleblower Gift Acceptance (joint w/SWE) Scholarship Endowment Pledge Form FAQ on Endowed Scholarships Audits

Contact Info Chair, Marge Inden Treasurer, Angela Nickels Scholarship Liaison, Michele Fitzpatrick

Questions?