University of Florida Foundation David Christie, CPA, CGMA, CITP Controller, UF Foundation dchristie@uff.ufl.edu 392-5475

Agenda About UF Foundation How to (website, forms, policies) Gifts Received FAS Overview Endowment Basics UFICO Investments

About Us Mission: raise/manage private donations for UF Fundraising, Fund Management, Alumni Affairs UF Foundation/ODAA 501(c)3 not-for-profit, DSO of UF Gifts - cash, securities, real property, art work, etc… Issue gift receipts Maintain UF external constituents database Donors, gifts, prospects, etc. $1.389B Endowment as of September 30, 2013 * Various groups responsible for managing the investments of UFF

Return on Investment (FY 2013) Fundraising Commitments $250M Operating Expenses $29M Return on Investment $9 * Various groups responsible for managing the investments of UFF

www.uff.ufl.edu The Foundation (About us) Financials (Endowment and Assets, Investment Returns, UFICO) Forms & Documents (Policies for Fundraising and source of fund management, Forms for transacting business with the UF Foundation)

Forms & Documents

Contact Information by Department

Expenditures - Professorships and Chairs Policy 5.11 Until fully endowed, cannot be awarded. Until filled, spendable income may only be spent on recruitment. Once filled, spendable dollars may be used for salary, or a salary supplement: for the holder and for those individuals directly associated with the holder’s scholarly work. * Various groups responsible for managing the investments of UFF

Expenditures - Professorships and Chairs (cont.) Spendable income may also be used, for example, to: recruit a professor renovate office or laboratory pay for his or her travel, subscriptions, equipment, or secretary support graduate students working directly with holder make grants to other faculty members for scholarly work directly associated with the holder’s scholarly work. If the dean determines there are adequate funds, with written permission from Provost, a professorship may have multiple occupants, provided it is not prohibited by the gift agreement. * Various groups responsible for managing the investments of UFF

Gifts Received Unique Source of Funds (SOF) for most gifts Track revenues/expenditures for each SOF Each SOF assigned a fund administrator Responsible for compliance with donor restrictions Determined by Dean or VP Total Commitments, VSE, GAAP VSE = Voluntary Support of Education * Various groups responsible for managing the investments of UFF

Foundation Accounting System (FAS) Purpose is to make information accessible to fund administrators and other users Unique Source of funds for gifts Fund balance, gifts, expenditures, etc. Confidential and not for public use (Policy 1.03, FL Statute 1004.28) Donor Restrictions (Long Description, Detail Purpose, Restrictions) * Various groups responsible for managing the investments of UFF

FAS Log-in https://fasweb.uff.ufl.edu/FAS/login_prompt.asp Link from Business Center log-in screen

FAS Reports Fund Listing - Listing of accessible funds. Fund Detail - Detail fund information for a specified fund. Available Balance - Amount available to spend from a fund. Balance Sheet - Displays assets, liabilities, and fund balance for a fund through a specified period. Income Statement - Displays fund revenues and expenses within a range of specified periods for a fiscal year. Year to Date Trial Balance - List of all accounts and balances for a fund through a specified period. Endowment Summary - Displays summaries, through a specified period, of both the endowment principal and spendable funds, balance sheet, income statement, spending base, estimated annual transfers, and available balance.

Endowment Spending Policy Policy is set by the Finance Committee Two funds are created for a new endowment Principal Fund Gift proceeds Investment earnings distributions Provides quarterly transfer to Spendable Fund Spendable Fund Receives the quarterly transfers from Principal Fund Pays 2.5% UFF gift fee

Endowment Spending Policy (cont.) Spending Rate 4% annually of Spending Base: Endowment Purpose 1.2% annually of Spending Base: UFF Overhead Fee Spending base is maintained at a ratio of between 85% and 95% of market value Goal is to provide stable income stream Spending base is adjusted if the ratio falls outside the 85 – 95% range Evaluated quarterly

UFICO University of Florida Investment Corporation (UFICO) UFICO Board DSO Created by Board of Trustees July 1, 2004 Oversee UFF Investments, other DSO’s UFICO Board Provide counsel to Board of Trustees Oversight of all UFF Investments Approve broad asset allocations, policy Review/approve portfolio changes * Committee of 7: 3 Board members & 4 special appointees * Policy out on intranet

Endowment Investments Target return after inflation 5.2%, preserve purchasing power Over 2,800 endowments pooled together Investment Schedule Month Received Invested December, January, February April 1st March, April, May July 1st June, July, August October 1st September, October, November January 1st

Non-endowed Options Cash – no risk, no returns, no fees (default) Moderate Pool – target return of 1.6%, 6 month lock-in, $50K min. initial investment, $5K min. subsequent Long-term Pool – target return of 6% to 8%, 12 month lock-in, $50K min. initial investment, $5K min. subsequent

Spending Base Example Returns * Market Value Spending Base Ratio SB/MV SB Adjustment Quarterly Transfer Gift received April 13, 2012 100,000 N/A Invested July 1, 2012 90,000 90.0% Value at September 30, 2012 4.0% 104,000 86.5% None = 90,000 x 1% = 900 Value at December 31, 2012 3.4% 107,500 83.7% Required SB adjustment 1,375 91,375 85.0% As adjusted Value at March 31, 2013 -4.2% 103,000 88.7% = 91,375 x 1% = 914 Value at June 30, 2013 -8.9% 93,800 97.4% (2,265) 89,110 95.0% Value at September 30, 2013 1.8% 95,500 93.3% = 89,110 x 1% = 891 * Returns are net of fees and spending transfers

Questions? David Christie, CPA, CGMA, CITP Controller, UF Foundation dchristie@uff.ufl.edu 392-5475