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Transcript
Trustee Financial Training 1 Trustee Financial Training Agenda: 1. Overview of the Foundation 2. Define and discuss University-controlled Activities 3. Track a University-controlled Activity transaction 4. Define and discuss Foundation-controlled Activities 5. Impact on Financial Statements 6. Questions 2 1. Overview of the Foundation 3 Overview The purpose and mission of the Foundation are, acting on its own or through affiliates, to support and assist the University of Oregon in its activities by management and administration of Foundation assets representing privately donated funds, by leading advocacy for the University, and by developing, financing, constructing, acquiring and operating facilities for or on behalf of the University. 4 Overview FOUNDATION DONOR CONTRIBUTIONS INVESTMENT OPERATIONS BUDGET DISTRIBUTIONS UNIVERSITY 5 2. Define and discuss Universitycontrolled Activities 6 Overview FOUNDATION DONOR CONTRIBUTIONS INVESTMENT OPERATIONS BUDGET DISTRIBUTIONS UNIVERSITY 7 University-controlled Activities The Foundation receives CONTRIBUTIONS from private gifts and INVESTS those funds for the University of Oregon. DISTRIBUTIONS are made available for University spending, according to the donor’s purpose for the gift: to fund student scholarships, faculty support, academic programs, or capital projects. 8 University-controlled Activities DONOR CONTRIBUTIONS CONTRIBUTIONS may be received in the form of: • Cash • Stock • Property 9 University-controlled Activities INVESTMENT INVESTMENTS are managed based on the purpose or nature of the asset: • The General Investment Program (GIP) includes endowment distributions and gifts that are available for current spending. • The Willamette Investment Pool (WIP) primarily includes endowed assets intended to exist in perpetuity. • Deferred assets (trusts and gift annuities) available at maturity. • Legacy and Intermediate funds available for current spending, managed individually to match cash flow needs. 10 University-controlled Activities DISTRIBUTIONS UNIVERSITY The Board has authorized DISTRIBUTIONS (monies available for spending) from endowment assets at a rate that maintains, in perpetuity, the investment earning power of the endowment. Currently, this rate approximates 4% of the endowment’s market value on December 31. 11 3. Track a University-controlled Activity transaction 12 University-controlled Activity Transaction: Endowment CONTRIBUTIONS CONTRIBUTION made to an endowment • $25,000 check (minimum to establish) INVESTMENT DISTRIBUTIONS Initial investment DISTRIBUTION calculated • $25,000 into WIP • based on market value • made available for spending quarterly WIP earnings • initial earnings pay gift fee • earnings then accrue to endowment market value Available for spending • University makes a request for funds based on endowment purpose and value of accrued distributions 13 University-controlled Activity Transaction: Restricted Current CONTRIBUTIONS CONTRIBUTION made to a restricted current fund • $1,000 check (minimum to establish) INVESTMENT DISTRIBUTIONS Initial investment • $1,000 into GIP GIP earnings • earnings are revenue to the Foundation Available for spending • University makes a request for funds based on purpose and total value of fund 14 4. Define and discuss Foundation-controlled Activities 15 Overview FOUNDATION DONOR CONTRIBUTIONS INVESTMENT OPERATIONS BUDGET DISTRIBUTIONS UNIVERSITY 16 Foundation-controlled Activities The Foundation BUDGET is supported by investment income from and management fees on assets under management. Additionally, the Foundation receives Unrestricted CONTRIBUTIONS of private gifts and INVESTS those funds for Foundation-controlled Activities. 17 Foundation-controlled Activities Unrestricted CONTRIBUTIONS CONTRIBUTIONS INVESTMENT Revenue sources: Revenue sources: • unrestricted Foundation endowment gifts • all earnings from GIP • unrestricted Foundation current use gifts • gifts of property • administrative fees on all endowments and trusts based on market value OPERATIONS BUDGET Budget includes: • revenues from CONTRIBUTION and INVESTMENT sources • expenses, primarily payroll, as approved by the Trustees • distributions from Foundation unrestricted endowments • distributions from trusts where Foundation is beneficiary 18 Foundation-controlled Activities Operations Budget 2009-2010 (amounts are stated in thousands of dollars) 2009-10 Revenues Unrestricted Foundation gifts $ Trust distributions GIP earnings Administrative fees Endowment distributions TOTAL Revenues $ 500 166 544 3,662 142 5,014 Expenses Payroll Other TOTAL Expenses 3,617 1,379 4,996 $ $ 19 5. Impact on Financial Statements 20 21 Financial Statements INVESTMENT INVESTMENTS representing both University-controlled and Foundation-controlled assets are presented (i) on the Statement of Position by type of investment and (ii) in Footnote 4 by management strategy. Statement of Position • Marketable securities • Limited partnerships • Land and buildings • Money market and CDs Footnote 4 • GIP • WIP • Trust and gift annuities • Other investments 22 Financial Statements 23 Financial Statements 24 Financial Statements UR for current-use (Foundation) CONTRIBUTIONS INVESTMENT earnings from endowments (Foundation) DISTRIBUTIONS PR TR for current-use (University) CONTRIBUTIONS INVESTMENT earnings CONTRIBUTIONS to an endowment (Foundation or University) from endowments (University) DISTRIBUTIONS SPENDING 25 Financial Statements CONTRIBUTIONS CONTRIBUTIONS are revenues on the Statement of Activities and include: University-controlled and Foundation-controlled Activities • Outright gifts (endowed and currently spendable) • Pledges • Deferred gifts 26 Financial Statements 27 Financial Statements INVESTMENT INVESTMENTS generate revenues on the Statement of Activities and include: Foundation-controlled Activities • Investment income from GIP • Assessments on endowment and trusts University-controlled Activities • Investment income from WIP and individual investments • Changes in values of deferred gifts 28 Financial Statements 29 Financial Statements DISTRIBUTIONS DISTRIBUTIONS are presented as expenses on the Statement of Activities by purpose: University-controlled Activities • Academic program support • Facilities and equipment • Student aid • University administrative support 30 31 Financial Statements OPERATIONS BUDGET Foundation expenses are presented on the Statement of Activities by purpose: Foundation-controlled Activities • University allocations • Budgeted payroll and other operating expenses 32 Financial Statements 33 6. Questions? 34