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University of Ottawa University of Ottawa Endowment Fund 2011-2012 Report www.financialresources.uOttawa.ca Endowment fund facts and figures Endowment (fiscal year ending April 30) 20072008- 20082009- 20092010- 20102011 Endowment allocation by faculty or service TEACHING AND LEARNING SUPPORT SERVICE $72,596 20112012 GRADUATE AND POSTDOCTORAL STUDIES $3,480,503 ENGINEERING $5,392,954 CIVIL LAW $1,535,918 COMMON LAW $14,744,276 FINANCIAL AID $19,737,931 SPORTS $8,048,580 GENERAL $1,908,389 TELFER SCHOOL OF MANAGEMENT $30,508,689 SOCIAL SCIENCES $13,486,190 ARTS $22,153,005 SCIENCE $8,162,780 MEDICINE $46,436,287 HEALTH SCIENCES $7,205,793 $141M $129M $164M $178M EDUCATION $957,823 $184M At the end of the 2011-2012 fiscal year, the value of the University of Ottawa endowment fund was $184 million. Investment returns for period ending March 31, 2012 The Finance and Treasury Committee of the University of Ottawa oversees the management of the endowment fund. This includes evaluating performance relative to established goals, monitoring compliance with policies and procedures and making recommendations in these areas. Investment returns are calculated for the period ending March 31 and are used to establish the spending rate for the following fiscal year. The current asset mix for the endowment fund (April 30, 2012) • Equities 56% • Fixed income 27% • Alternatives 17% Total Total endowment fund return 1 year 4 years 10 years 5.56% 3.73% 4.62% Financial report definitions Endowment fund A fund established through the transfer of money, investment product or property. The capital is maintained and invested in perpetuity over a long-term period while the annual interest generated is either reinvested or spent as per donor requests. Donations received Total amount of charitable investments made by benefactor to a fund, program or initiative. Matching funds Monies made available through programs established by provincial or federal governments, the University of Ottawa, donors or corporations. Matching funds leverage the donor’s endowed investments and its impact on programs or initiatives requested by the donor. Investment income earned The return received or the loss incurred by investors on their investment portfolios, including interest, dividends and realized and unrealized capital gains or losses. Balance of endowment fund The amount of money remaining in an endowment fund at a given date, after all past remittances, payments and withdrawals have been accounted for. It can be positive (an asset) or negative (a liability). Amount available for distribution (or transfer for distribution) Expendable net income or retained earnings generated by an endowment fund that may be directed towards a specified program or initiative. The distribution amount represents an annual percentage as determined by the Administrative Committee of the University of Ottawa. Income transferred for distribution Income transferred from the endowment fund to the distribution fund as determined by the Administrative Committee of the University of Ottawa . Financial Report – Questions and Answers What are the criteria used by the Canadian Association of University Business Officers (CAUBO) in their University Investment Survey, and what other institutions are ranked with the University of Ottawa? The CAUBO survey compiles investment performance data and other metrics, such as asset allocation and spending policy, from participating Canadian universities. The University of Ottawa’s endowment fund performance is ranked against that of a peer group of 23 Canadian university endowment funds valued at more than $100 million. If I create an endowed scholarship in this academic year, when could funds be transferred for distribution? If the economy does well, the University will be able to award a scholarship in 2013-2014 (for donations received before April 30, 2012). Still, the University cannot predict investment performance and, thus, exactly when funds can be transferred for distribution. The University’s investment strategy is to achieve capital growth and stable income over the long term, so returns can be volatile from one year to the next. How do you determine how much income is transferred to the distribution fund? The University’s endowment funds are regulated by Policy 111 – Non-Expendable Endowment Funds. The amount available for distribution is either 4.0% of the original donated capital (increased by inflation every year) or the investment income after expenses, whichever is the lesser. Income is not transferred should the fund value be below the original capital. How is investment income allocated to individual endowed funds? Every year, the University adds (subtracts) the investment income after fees and expenses. Investment income includes interest and dividends, as well as realized and unrealized capital gains or losses. Fees and expenses include investment management fees, custodial and professional fees, and internal administration costs.