71.51 - Endowment Administration
July 21, 2009 (formerly 10.51)
A. General. An endowment is a fund intended to exist in perpetuity; the principal is invested, and only the income is used for the purpose(s) designated by the donor (e.g., scholarships, research, faculty development, etc.). Gifts that are designated for endowments are invested in the Consolidated Investment Trust (C.I.T.) whenever possible.
A-1. Consolidated Investment Trust (C.I.T.). The C.I.T. was established by the Regents of the University of Idaho in July 1959 to provide a well-managed, diversified investment vehicle for endowments which benefit the University of Idaho. The C.I.T. utilizes a market-value-share method of operation to provide an equitable distribution of the income and capital gains realized each year. The realized income and capital gains are distributed for the purposes stipulated by the donor in an endowment agreement.
B. Process. Endowment Agreement. Each endowment requires a signed agreement, referred to as an Endowment Agreement or Trust Indenture. The document provides the specific guidelines for investing and administering the funds. The endowment agreement is prepared by UI staff working with the donor. Endowment agreements must be in a format approved by the Trust and Investment Office (TIO), and then must be signed by the donor, the department head or dean of the benefiting department or college, and the TIO. If a UI Foundation (UIF) endowment, the UIF Executive Director must also sign. If the endowment is created by a bequest or trust, the will or trust document serves the same purpose as the endowment agreement. [ed. 7-06]
C. Procedures. Creating a New Endowment. The TIO must establish appropriate accounts on the financial and development records of the UI and UIF before an endowment becomes operative.
C-1. Endowments. Endowments are generally established at an amount of $25,000 or more, or for lesser amounts with Development office approval of a gift development plan.
C-2. Endowment Account. A new endowment (principal) account is created in the UIF chart of accounts when the first gift for the endowment is received.
C-3. Income Distribution Account. If the endowment purposes require that a new distribution account be created (e.g., a scholarship account or a departmental operating account), that account will be set-up in the UI chart of accounts when the account becomes operational.
C-4. Gifts for Endowments. Gifts for endowments are processed in accordance with the procedures set forth in [See 71.50 ]. [ed. 7-09]
a) Holding Period. Gifts designated for new or existing endowments are held for a one year period prior to being invested in the C.I.T.; endowment gifts are not subject to the Gift Transfer Fee [See 71.50 (E-2)]. Earnings generated during the one year holding period are made available for UI Foundation purposes. [rev. 7-06]
D. Information and Reporting. The TIO provides projections to Student Financial Aid Services and other departments in early spring each year of endowment revenues available for the following fiscal year. Endowment balances and fiscal year summary information is provided to each college dean or departmental administrator following the close of the fiscal year. Individualized endowment status reports are sent to endowment donors and other interested individuals each fall after the annual UIF audit has been completed. Questions regarding endowment balances or status at any time during the year should be referred to the TIO, (111) 111-4000.