Download invests - University of Oregon Foundation

Trustee Financial Training
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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
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1. Overview of the Foundation
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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.
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Overview
FOUNDATION
DONOR
CONTRIBUTIONS
INVESTMENT
OPERATIONS
BUDGET
DISTRIBUTIONS
UNIVERSITY
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2. Define and discuss Universitycontrolled Activities
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Overview
FOUNDATION
DONOR
CONTRIBUTIONS
INVESTMENT
OPERATIONS
BUDGET
DISTRIBUTIONS
UNIVERSITY
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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.
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University-controlled Activities
DONOR
CONTRIBUTIONS
CONTRIBUTIONS may be received in the form of:
• Cash
• Stock
• Property
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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.
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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.
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3. Track a University-controlled
Activity transaction
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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
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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
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4. Define and discuss
Foundation-controlled Activities
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Overview
FOUNDATION
DONOR
CONTRIBUTIONS
INVESTMENT
OPERATIONS
BUDGET
DISTRIBUTIONS
UNIVERSITY
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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.
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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
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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
$
$
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5. Impact on Financial Statements
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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
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Financial Statements
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Financial Statements
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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
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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
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Financial Statements
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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
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Financial Statements
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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
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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
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Financial Statements
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6. Questions?
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