University of Toledo Foundation ENDOWMENT SPENDING POLICY Board of Trustees Approval – December 17, 2009.

Slides:



Advertisements
Similar presentations
A PHILOSOPHICAL APPROACH TO BUDGETING
Advertisements

University of Florida Foundation
Updated February Endowment Accounting Growing Our Future.
ENDOWMENT SPENDING POLICY Effective for FY
Solving the Puzzle of Endowments Presented by Treasury Services team members: Jane Johansen, Director Sonja Austin, Financial Reporting and Outreach Analyst.
Presented by Barbara Carroll & Judith Davenport 3/23/09 1.
I Endowment Funds Training and Workshop April 22, 2014.
Budget Office June Participants Understanding Of:  Endowment Definition  Types of Endowment Funds  Terms and Definitions  Income Cost Center.
Lori Redfearn Assistant Vice Chancellor, Advancement Services.
Budgeting at Penn and within Vice Provost for University Life (VPUL) My View: William Turner June,
Grants and Contracts Changes, Changes, and more Changes... What would this University be without Changes? Heather L. Paulsen.
Topics Background FAS Endowment of Not-for-Profit Organizations
The Impact of the1% Development Office Fee on Academic Senate Grants Presented to the Committee on Academic Planning and Budget May 17, 2007.
McGraw-Hill/Irwin©2007, The McGraw-Hill Companies, All Rights Reserved Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter.
Uniform Prudent Management of Institutional Funds Act (UPMIFA) Presented by CSU and KPMG LLP.
FUND 310 Chartstrings Building a Restricted Gift Chartstring.
Review FAS and Auxiliary Organization Supplemental Template Presented by: Lily Wang, CO AUDIT.
Gifts & Endowments ABA Presentation April 21, 2004.
Fund Accounting Jim Corkill Accounting Services & Controls November 2011.
An Educational Computer Based Training Program CBTCBT.
Intro to UF Foundation & ODAA University of Florida Foundation David Christie, CPA, CGMA, CITP Controller, UF Foundation
1 Information Session on Underwater Endowments Overview Finance Advisory Council Meeting February 17 and 25, 2009.
Endowment Payout Process Posted July Confidential Stanford University Confidential Stanford University Endowment Payout Process Tutorial Segments.
You are part of the Rotary Family Be a part of it forever.
CCIA Spring 2014 Conference Foundations: Common Observations & Other NFP Topics Heather McGee Senior Manager May 9, 2014.
Your Agency’s Fiscal Health and Controls. What are the objectives of Internal Controls? To prevent loss or theft of assets To minimize opportunities for.
UPMIFA, PPA, and Other Letters A Spelling Bee for Charitable Funds November 9, 2007 Ben Blanton Katy Ruhl © 2007 Baker & Daniels.
THE FINANCES OF THE ROTARY FOUNDATION FISCAL RRFC INSTITUTE March 2007.
1 UPMIFA AFP Presentation MariBen Ramsey Vice President and General Counsel Austin Community Foundation April 8, 2010.
University of Georgia External Affairs Division Office of Financial Services Spending Budgets Arch Foundation for the University of Georgia The University.
Govt. Reporting - 1 GOVERNMENTAL REPORTING City Council Budgetary Hearing.
THE FINANCES OF THE ROTARY FOUNDATION FISCAL Permanent Fund Committee 12 February 2007.
FUND 320 Chartstrings Building Endowment Chartstrings.
BUDGET WORKSHOP February 24, AGENDA Board Policies & Administrative Procedures Components of Budgets Chart of Accounts Budget Development Budget.
1  Spring Budget Process (SBP) Timeline  Benefits  Suggestions  Budgeting in Finance Budget Development –Revenue –Labor –Non Labor –Transfers  Chart.
TUITION & FEE PROCESS GUIDELINE Draft Policy Review Draft Policy Review Financial Area Representatives April 21, 2008 Draft Policy Review Draft Policy.
Chapter 11 College and University – Private Institutions
Budget Presentation December 7, Why Talk about the Budget? 1. Demystify the process 2. Engage and get the participation of others in the budget.
Indiana University Foundation Policies & Procedures Sheila Decker, Executive Director, Administration CATS Meeting September 22, 2004.
Endowment Reporting Finance Director Presentation April 17, 2012 Presented by: Jennifer Hinkle with Renee Fitzmorris.
Merit Program  Overview – General Information  Employee Eligibility  Merit Allocation Pools & Funding  Merit Awards, Process, Rules  Draft.
NORTH AMERICAN ROTARY EMERGENCY DISASTER INITIATIVE DECEMBER 14 – 15, 2007 FRANK BRADSHAW, PDG, D6200.
Fund Accounting Jim Corkill Business & Financial Services November 2014.
University Funding 101 Operating Funds February 12,
Institutional Trust Funds East Carolina University Financial Services, MS E. 10 th St. 2 nd Floor Sherrilyn Johnson, Financial Director - Institutional.
Fiscal Officers Development Series February 12, 2009 John T. Keith, Assistant Vice President, Office of Gift Planning Sheila N. Decker, Assistant Vice.
Board of Trustees Introduction August 13, A G E N D A Board of Trustees (BOT) Purpose Authority SWE Endowment Fund Inc. (SWE-EFI) Endowment Basics.
SWE-EFI Board of Trustees Annual Meeting with SWE Nov 2008.
Clemson University Foundation Review of Restricted Funds 1.
Donations Philippa Woods HOFFRA. Donation Income Recognition The accounting treatment for each type of donation is as follows: Unrestricted Donation Income.
1 Fund AccountingNovember 17, 2015 Fund Accounting Jim Corkill | Controller Business and Financial Services Controller’s Office.
The Catholic University of America
Are You Prepared for Upcoming Changes in Financial Reporting?
Planned Giving Council Donor giving: the Good, the Bad and the in Perpetuity Kay Walther September 28, 2017 Blazek & Vetterling.
John Carroll University Faculty Forum
How to Run a Major Gift and Endowment Program
Regulating Endowments under UPMIFA
Reading Endowment Fund Financial Statements
Fiscal Management.
New Nonprofit Reporting Standard
Legal Aspects of fund Management
The Simple Secrets (and Guide) to Drafting Endowment Policies
Legal Aspects of Fund Management
Legal Aspects of Fund Management Fund Management Legal Issues
Legal Aspects of Fund Management
ALAMEDA HEALTH SYSTEM FOUNDATION Financial Investment FY
RRFC FREQUENTLY ASKED QUESTIONS
Budget Presentation December 7, 2006.
Budgeting and Financial Management
5/28/2019 Understanding the University Budget Joan King Associate Vice President Chief Budget Officer July 26, 2018.
Presentation transcript:

University of Toledo Foundation ENDOWMENT SPENDING POLICY Board of Trustees Approval – December 17, 2009

UTF Endowment Spending Policy Why? Why? To address Ohio’s adoption of the Uniform Prudent Management of Institutional Funds Act (UPMIFA). To address Ohio’s adoption of the Uniform Prudent Management of Institutional Funds Act (UPMIFA). To determine a set of standards and spending rules for UTF endowment funds. To determine a set of standards and spending rules for UTF endowment funds.

Ohio UPMIFA Requires institutions to act in good faith, with the care that an ordinary prudent person would exercise under similar circumstances. Requires institutions to act in good faith, with the care that an ordinary prudent person would exercise under similar circumstances. Factors to consider for management: Factors to consider for management: 1. Duration and preservation 2. Purpose of institution 3. Economic conditions 4. Inflation and deflation 5. Investment return 6. Investment policy 7. Other resources of the institution

Donor IntentTakes Precedence Donor intent specifically expressed in a fund agreement takes precedence over UPMIFA and UTF endowment spending policies. Donor intent specifically expressed in a fund agreement takes precedence over UPMIFA and UTF endowment spending policies.

Endowment Components – Basic Example Permanently Restricted (Original gifts) Permanently Restricted (Original gifts) Quasi – Temporarily Restricted (Net of accumulated earnings and spending) Quasi – Temporarily Restricted (Net of accumulated earnings and spending) Spendable Account (Net available for spending in current year) Spendable Account (Net available for spending in current year) Increase Decrease Increase Decrease Fund TypeIncreasesDecreases Permanently restrictedNew gifts Quasi – temporarily restrictedInvestment Gains Spendable Roll-back Investment Losses Allocation to spendable for current year budget Spendable accountAllocation to spendable for current year budget Expenses (Spending) Spendable Roll-back

Underwater Endowments Endowments are considered “underwater” when the total fund value is below the original gift value of the fund. Endowments are considered “underwater” when the total fund value is below the original gift value of the fund. Example: Example:

Original Gift Value (OGV) Limit Spending will cease when the fund is under- water. Spending will cease when the fund is under- water. UTF will review funds annually. If fund is underwater, no spending will be permitted for next fiscal year. UTF will review funds annually. If fund is underwater, no spending will be permitted for next fiscal year. If underwater, the spendable balance will be rolled-back (re-invested in the pooled investments) to the Quasi balance to accelerate recovery of the fund. If underwater, the spendable balance will be rolled-back (re-invested in the pooled investments) to the Quasi balance to accelerate recovery of the fund.

Exceptions to OGV Limit – Continue to spend while underwater 1. Guaranteed renewable (multi-year) scholarships and awards. 2. Endowed chair and professorship funds under contractual agreements. (please communicate to the Foundation any time UTF funds are included in a contractual agreement) 3. Endowed chair and professorship funds restricted specifically for salary and benefits of a base-budgeted position. (not that common) 4. Donor authorization in fund agreement or other written documentation.

Exceptions – Stop-Loss Threshold Stop-loss threshold – the limit a fund value will be allowed to go below original gift value before spending ceases. Stop-loss threshold – the limit a fund value will be allowed to go below original gift value before spending ceases. UTF has established a stop-loss threshold of 80% of OGV for the exception funds. UTF has established a stop-loss threshold of 80% of OGV for the exception funds. The stop-loss provides a balance between supporting our commitments and prudent management of funds. The stop-loss provides a balance between supporting our commitments and prudent management of funds.

Stop-Loss Example Year 1 – Original Gift $1,000,000 Year 1 – Original Gift $1,000,000 Year 2 – FMV of Fund $900,000 Year 2 – FMV of Fund $900,000 (Spending available for year 2) Year 3 - FMV of Fund $770,000 Year 3 - FMV of Fund $770,000 (No spending available for year 3) (No spending available for year 3) Year 4 – FMV of Fund $790,000 Year 4 – FMV of Fund $790,000 (No spending available for year 4) Year 5 – FMV of Fund $810,000 Year 5 – FMV of Fund $810,000 (Spending available up to $10,000) NOTE: STOP-LOSS = $800,000

Spending From New Endowments Spending will commence on a newly established endowment after at least a 12-month waiting period. Spending will commence on a newly established endowment after at least a 12-month waiting period. Spending will commence during the first Fall or Spring semester after the 12-month period. Spending will commence during the first Fall or Spring semester after the 12-month period. Why? Why? Immediate spending puts the fund in an underwater position. Immediate spending puts the fund in an underwater position. Endowments are set-up to spend from earnings; need 12-month period to accumulate earnings. Endowments are set-up to spend from earnings; need 12-month period to accumulate earnings.

Spendable Balance Carry-forward If fund is not underwater, you can carry-over your spendable balance to next year. If fund is not underwater, you can carry-over your spendable balance to next year. Spendable Balance Justification Form needs to be completed to request the carry-over. Spendable Balance Justification Form needs to be completed to request the carry-over. Form is located on UTF website under frequently used forms. Form is located on UTF website under frequently used forms. Why? Why? Spendable balance is supposed be used for current year. Spendable balance is supposed be used for current year. Spendable balance is not invested in investment pool and therefore, not earning any income to maximize fund values. Spendable balance is not invested in investment pool and therefore, not earning any income to maximize fund values.

UTF – Other Matters Fund Raising and Accounting Software Conversion Fund Raising and Accounting Software Conversion Planned go-live date of 7/1/10. Planned go-live date of 7/1/10. Training sessions expected to occur in June. Training sessions expected to occur in June. Fund number change only slightly. Number will begin with a 1 (endowed) or 2 (non-endowed) followed by the current number’s last six digits. Fund number change only slightly. Number will begin with a 1 (endowed) or 2 (non-endowed) followed by the current number’s last six digits. On-demand reporting expected to be available. On-demand reporting expected to be available. Disbursement policy – slight additions Disbursement policy – slight additions Draft policies in process Draft policies in process Gifts In-Kind Gifts In-Kind Gifts, Grants, Contracts Gifts, Grants, Contracts

University of Toledo Foundation Questions?