Office of the PresidentGrinnell College

Grinnell Iowa 50112-1690

641-269-3000fax 641-269-4473wwwgrinnelledu

March 28 2016

Sen Orrin G HatchSenate Committee on Finance219 Dirksen Senate Office Building Washington DC 20510-6200

Rep Kevin Brady andRep Peter J Roskam

House Committee on Ways and Means1102 Longworth HOBWashington DC 20515-0004

Dear Senator Hatch Representatives Brady and Roskam

Attached to this letter please find Grinnell Collegersquos responses to your letter of inquiry dated Feb 82016 The current document provides you with the requested information about Grinnellrsquosendowment our investment strategies and spending policies including most importantly ourcommitment to limiting the cost of a Grinnell education

I direct your attention to several key points

1) Grinnell is distinct from many national colleges and universities due to our combination of twocharacteristics First we are one of just 40 schools nationwide that admit domestic studentswithout regard for their ability to pay the full cost of their education (ldquoneed-blindrdquo) and also meet familiesrsquo full demonstrated financial need Second because a relatively large share of our endowment principal comes from strategic investment growth rather than from donationsrestricted to a specific purpose we are able to focus our resources on delivering an affordableworld-class education Earlier this week The Washington Post featured Grinnell as one of just afew schools nationally using endowments to keep college affordable to needy students1

2) As explained in our response to Question 9 Grinnellrsquos endowment contributes approximately 40percent of the more than $47 million in annual financial aid awarded to our current students Foracademic year 2015ndash16 our students received on average $38612 in need-based grants and scholarships the overwhelming majority of which came from College funds

1 Accessed 3172016 at httpswwwwashingtonpostcomnewsgrade-pointwp20160316these-colleges-expect-poor-families-to-pay-more-than-half-their-earnings-to-cover-costs

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 1

More than 87 percent of our current students receive such aid And their average indebtedness on graduation is just $15982 mdash lower than any other public or private institution in Iowa and amongthe lowest in our class nationally We believe their low debt burden is one reason why contrary to national trends Grinnellrsquos low-income and middle-class students graduate at virtually anidentical rate to their wealthier peers

3) Another way to look at the issue is through the lens of discount rate mdash the share of the averagestudentrsquos tuition and fees that is offset by institutional aid Grinnellrsquos current discount rate is 60percent In other words our average student pays just 40 percent of the list price or $18796 in tuition and fees

Note that room and board is not included in the discount rate calculation But here too theCollege limits the burden on students and families The average Grinnell student this year paid$11408 for room and board whereas the US Department of Agriculturersquos online calculatorestimates that a Midwestern family with an annual income of less than $61000 would pay at least$13000 to raise a 17-year-old child for one year

4) As part of our broad commitment to affordability Grinnell also provides additional need-based aid for study abroad internships and other transformative learning opportunities outside the classroom Very few colleges and universities nationally provide this additional layer of financialsupport for educational experiences As a result our students with financial need take part in suchprograms at roughly the same rate as their more well-off peers

5) As the enclosed analysis shows more than 55 percent of our annual operating budget comes fromendowment Grinnellrsquos sustainable management of our resources enables us provide generationafter generation of students with educational value far beyond what they are asked to pay forwithout relying on public funding or asking families to assume crippling debt

Grinnellrsquos commitment to affordability funded by our endowment reduces the financial pressure onstudents and families while increasing educational opportunities We are one of a relative few collegesand universities in the country where low-income and middle-class Americans can afford a high-quality college education of the type that makes our system the envy of the world

I hope this summary is useful Detailed answers to your questions follow We would be happy to meetwith the three of you or anyone on your committees or their staff as you assess how higher educationendowments benefit American students their families and our nation as a whole

Respectfully

Raynard S Kington MD Ph DPresident Grinnell College

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 2

ContentsResponse to13 Question13 1 4

Response to13 Question13 2 6

Response to13 Question13 3 7

Response to13 Question13 4 8

Response to13 Question13 5 10

Response to13 Question13 6 11

Response to13 Question13 7 13

Response to13 Question13 8 14

Response to13 Question13 9 15

Response to13 Question13 10 18

Response to13 Question13 11 19

Response to13 Question13 12 20

Response to13 Question13 13 21

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 3

Response to13 Question 1($ in thousands)

What categories of assets are included in your college or universityrsquos endowment

Asset Allocation(1)

Fiscal Year 2013 2014 2015CashFixed13 Income 120 100 88Marketable Equities

Domestic 325 329 300International 118 105 97

Alternative StrategiesMarketable(2) 161 188 229Non-shy‐marketable(3) 276 277 284

Other 00 01 02Total 1000 1000 1000

(1)As reported13 to13 NACUBO(2)Includes equity and credit strategies(3)Includes private equity venture capital private real13 estate and distressed strategies

For each category please indicate the amount of funds that are

a Unrestrictedb Permanently restricted by donorsc Temporarily13 restricted13 b donorsd Permanently restricted by your college or university (quasi-shy‐endowments) ande Temporarily13 restricted13 b your college13 or university

Endowment net asset restrictions

Fiscal Year 2015Temporarily Permanently

Unrestricted Restricted Restricted TotalDonor Restricted $98 $549334 $549432Board13 Designated $1238343 -shy‐ -shy‐ $1238343Total Endowment Net Assets $1238343 $98 $549334 $1787775

Fiscal Year 2014Temporarily Permanently

Unrestricted Restricted Restricted TotalDonor Restricted -shy‐ $563108 $563108Board13 Designated $1266413 -shy‐ -shy‐ $1266413Total Endowment Net Assets $1266413 -shy‐ $563108 $1829521

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 4

Fiscal Year 2013Temporarily Permanently

Unrestricted Restricted Restricted TotalDonor Restricted -shy‐ $475092 $475092Board13 Designated $1078537 -shy‐ -shy‐ $1078537Total Endowment Net Assets $1078537 -shy‐ $475092 $1553629

Note The restrictions above were set by donors and13 not reclassified according to UPMIFA rules13 Theendowment is unitized and invested as one13 pool thus cannot be13 broken down by restriction into the13 asset allocation categories above

f For each restricted asset please describe the uses for which the funds are restricted andthe amount13 of13 the fair market13 value of13 the endowment apportioned to13 each13 use How andwhy were the restrictions put into place

Endowment net asset restrictions by13 use

Fiscal Year 2013 2014 2015Restricted

General Purposes $86720 $101217 $98434Instruction $160358 $191785 $180628Academic Support $35249 $41252 $40540Student Services $49410 $59868 $58417Institutional13 Support $20094 $23449 $22802Scholarships Grants and Loans $123052 $145294 $148376Facilities Operations $208 $243 $235

Total Restricted $475092 $563108 $549432Unrestricted

General Purposes $1078537 $1266413 $1238343Total Unrestricted $1078537 $1266413 $1238343Total Endowment $1553629 $1829521 $1787775

Restrictions were established13 by donors at the time of the gift Unrestricted funds or quasi-shy‐endowment originated from unrestricted gifts that the13 Board of Trustees determined13 should13 beinvested in the endowment long-shy‐term rather13 than be expended in the year13 in which they werereceived

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 5

Response to13 Question 2($ in thousands)

Does your college or university hold any investments that are not included in the endowment If13 so what are they and what are their fair market values13 and basis How are they used to furtherthe educational purpose of13 the college or university

Fiscal Year 2013 2014 2015Basis Market Basis Market Basis Market

Annuity Funds $19508 $20686 $11920 $13542 $11859 $13290Operating $9920 $9907 $10010 $10012 $15505 $15536ReserveStrategic Reserve $18868 $18790 $17249 $17133 $15275 $15141Other $1275 $1299 $1271 $1480 $1320 $1455

Endowment assets represent13 nearly 98 percent of total College investment assets as of June 302015 The13 College13 has one13 other pool of long-shy‐term investment13 assets consisting of13 annuity fundswhich represent less than 1 percent of total investment assets The balance of the13 Collegersquosinvestment assets (less than 3 percent) are13 classified as operating and reserve13 funds pursuant to the13 Investment Policy

bull Annuity and13 life income funds represent assets transferred13 to13 the College subject to13 lifeincome interests established by13 the donor and for which the College serves as trustee TheCollege has a remainder interest in13 these assets The use of funds upo maturity is eitherrestricted by the donor13 at13 the time of13 the gift13 or13 unrestricted to be used as the Board of13 Trustees directs at that time

bull Operating funds consist of financial resources available to satisfy the Collegersquos daily cashrequirements (including capital project13 commitments) These funds are invested to providesafety of principal and maintain liquidity to match expected liabilities13

bull Reserve funds consist of financial resources that13 position the College for13 strategic agilityThese funds are also invested to provide safety of principal and13 maintain liquidity to matchexpected liabilities

bull Other investments primarily consist of agency funds resources for which the13 College13 haslittle or no discretion

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 6

Response to13 Question 3($ in thousands)

What is your endowment size as measured by total fair market value of its assets What hasbeen the13 net growth13 and net investment return13 o your endowment each13 year

Fiscal Year 2012 2013 2014 2015 9302015Endowment $1383856 $1553629 $1829521 $1787775 $1659734Net growth (1) $ $169773 $275892 ($41746) ($128041)

(1)Net growth 123 178 (23) (72)(2)Investment return 166 204 05 (62)

(1) Net growth includes endowment return gifts to endowment endowment spending and otheradditions and transfers(2) As reported13 to13 NACUBO and13 net of all fees and13 investment costsThree months of activity

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 7

Response to13 Question 4($ in thousands)

How much has your college or university spent each year to manage the endowment and howmany staff and contractors are employed to manage the endowment

Direct investment costs(1)

Fiscal Year 2013 2014 2015$ Bps $ Bps $ Bps

Internal13 staff $1473 10 $1742 10 $2015 11Custodyperformance $204 1 $301 2 $318 2Marketable equity manager fees $5676 39 $7155 42 $7204 40Other direct costs (travel software services etc) $781 5 $795 5 $831 5Total direct investment costs $8134 55 $9992 59 $10368 57

(1)As reported13 to13 NACUBOBasis points (bps) calculated as13 a of average (beginningending) endowment market value andprovided13 in13 order to13 ease comparison13 among other institutions

Staff and contractors(1)

Fiscal Year 2013 2014 2015Staff (FTE) 44 6 6

Marketable equity managers 5 5 5Alternative managers (hedge funds private equity and real 32 35 38assets)Total separate contractors 37 40 43

(1)As reported13 to13 NACUBO

For any13 fees paid to nonemployees for investment advice asset management or otherwiseplease13 provide13 detail on the13 amounts paid to whom and13 the13 fee13 arrangement

Fees by category are13 as follows

bull Cashfixed13 income is managed13 internally by investment office staffbull Marketable equity manager fees average from 75 basis points to 140 basis points annually

(calculated as a percentage of13 assets under13 management)13 and are paid directly by theendowment to the13 manager

bull Alternative investment manager fees are described13 in13 further detail below

Fees associated with alternative13 investments are13 paid within the13 respective13 investment structure13 and are13 not accumulated within the13 Collegersquos accounting system (ie not included in the13 above13 direct costs) Management fees typically range from 10 percent to 25 percent annually and are13 based13 upo either the total amount of capital committed13 to13 the investment vehicle or the amount

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 8

of capital actually invested13 by the investment vehicle These fees generally decline following theend of a fundrsquos investment period Carried13 interest (incentive fees) for the general partner of a fund13 range from 10 percent to 30 percent of net profit and13 normally include a ldquohigh13 water markrdquo In13 addition the13 Collegersquos private13 equity private13 real estate and distressed investments have13 preferredreturn provisions (typically 8 percent)

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 9

Response to13 Question 5

If your endowment is required to file a Form 990 separately from your college or universityrsquos Form990 please13 provide13 the13 endowment entity13 name(s)13 and Employment Identification Number

Not applicable

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 10

Response to13 Question 6

How does your college or university determine what percentage of the endowment will be paidout each13 year

The Collegersquos Endowment Spending Policy (copied below) specifies13 a 40 percent annual payout tobe calculated13 using the formula set forth13 in13 the policy

If any13 what has been the target endowment payout as a percentage of the endowmentrsquosbeginning13 balance13 each year If that answer differs from the13 percentage13 paid13 out please13 explainwhy

The College does not determine its payout on the basis of the endowmentrsquos beginning balance eachyear It is our practice per the board-shy‐approved Endowment Spending Policy to calculate13 the13 annualpayout o the basis of a 12-shy‐quarter moving average This is done to13 smooth13 the impact of marketvalue volatility13 over time

Please attach13 any payout policies or guidance

Grinnell College Endowment Spending Policy(Last revised at the13 Feb 22 2014 board13 meeting)

The annual endowment distribution is calculated as 40 percent of the 12-shy‐quarter movingaverage13 endowment market value13 determined annually as of the13 December 3 immediatelyprior to13 the beginning of the fiscal year

The College shall not allocate 100 percent of this distribution13 to13 the operating budget Factorsin determining the allocation include

1) Revenue balance2) Expenditure discipline3) Facility requirements (including debt service) and strategic initiatives

In the rare instance an exception to established policy is deemed prudent and necessary boththe president and13 the board13 must authorize such13 departure in13 advance and13 document the termsin the board minutes

Endowment Spending13 Policy13 Oversight and Governance(Excerpted from the Collegersquos bylaws13 as revised and restated in May 2014)

ARTICLE VI -shy‐-shy‐ DUTIES OF COMMITTEES

7 Finance Committee The Finance Committee oversees and monitors the Collegersquos annualoperating and13 ongoing capital budgets issuance and13 repayment of debt management offinancial reserves and long-shy‐range strategies toward financial sustainability To accomplishthis the Finance Committee shall receive and evaluate regular13 reports from the Colleges

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 11

Treasurer providing (a) comparisons of actualforecast revenues and expenditures tobudget accompanied13 by an13 explanation13 of variances (b) updates o the structure and13 status13 of the Collegersquos13 debt obligations( c) updates13 on the status13 of reserve funds and (d)other financial reports as requested13 by the Committee The Finance Committee shall be13 responsible for13 ensuring that13 the Board of13 Trustees receives the information necessary for13 the Board to oversee the safeguarding of13 the Collegersquos financial stability long-shy‐termeconomic health and prudent use13 of financial resources in manner consistent with themission and the stated aims and goals of academic departments administrative units andancillary programs The13 Finance13 Committee13 shall work collaboratively with other Boardcommittees in consultation with the President to make recommendations to the13 Boardregarding financial policies decisions and actions including but not limited13 to13 spending and13 endowment payout policies13 sources of income appropriate to meeting the Colleges needs13 debt capacity issuance and13 repayment and13 capital expenditures and financing

8 Investment Committee The Investment Committee shall13 be responsible for maintaining apolicy of prudent investment in13 stocks bonds real assets non-shy‐marketable securities such asprivate placements and13 limited13 partnerships and other similar financial instrumentsinterests andor securities subject to the approval13 of the Board of Trustees13 The InvestmentCommittee shall approve sub-shy‐policies under the investment policy and13 review and13 approveinvestment transactions pursuant to the approved investment13 policy and sub-shy‐policies TheInvestment Committee shall13 have the authority to delegate investment decisions to theChief Investment Officer andor independent investment managers pursuant to13 theapproved investment policy and sub-shy‐policies The Chief Investment Officer shall have theauthority to in turn delegate13 investment decisions to other officers and employees of the13 College pursuant to13 the approved13 investment policy and13 investment sub-shy‐policies TheInvestment Committee shall13 report to the Board of Trustees on the performance and assetallocation of the13 Collegersquos investment portfolio as requested by the13 Board Chair providedthat13 such investment13 report13 shall be given at13 least13 once each fiscal year The Investment13 Committee shall work collaboratively with13 the Finance Committee in13 consultation13 with13 thePresident to make13 recommendations to the13 Board of Trustees regarding the endowmentpayout policy13 debt capacity and issuance13 and capital financing

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 12

Response to13 Question 7

Does your college or university have policies regarding spending the endowment principal Hasyour college13 or university13 ever spent endowment principal13 If so under what circumstances

As stated13 in13 Note 1 of the Grinnell College audited13 financial statements the13 College13 follows the13 guidance13 in the13 Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA) and the13 Iowa Uniform Prudent Management of Institutional13 Funds Act (IUPMIFA) The Board of Trustees ofGrinnell College has interpreted IUPMIFA as requiring the preservation of the historic value of theoriginal gift absent explicit donor stipulation13 stating otherwise

The College has never spent the endowment principal unless specifically directed to do so by adonor eg time-shy‐restricted endowment contribution

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 13

13

Response to13 Question 8($ in thousands)

How much and what percentage of the endowmentrsquos beginning balance has your college oruniversity spent each13 year

Fiscal Year 2013 2014 2015 2016Beginning balance $1383856 $1553629 $1829521 $1787775Endowment spending $54400 $55800 $59243 $73818 of beginning balance spent 39 36 32 41

Expected

As noted13 in13 our response to13 Question13 6 the Collegersquos Endowment Spending Policy allows thepresident and13 the board13 to13 authorize13 exceptions from the13 established 4 percent payout when13 circumstances13 warrant Such an exception was13 authorized at the October 2015 meeting of theboard

Under the terms of the board-shy‐approved exception the13 endowment payout for the six-shy‐year period FY201 through F 202 will include an additional $9313 million per year over and13 above the standard13 4percent payout of $64513 million13 The additional payout is structured to address number of highpriority strategic initiatives

How much and what percentage of the endowmentrsquos return on investment each year has yourcollege or university spent each year

Fiscal Year 2013 2014 2015Investment return $222322 $316329 $8756Endowment spending $54400 $55800 $59243of investment return spent 245 176 6766

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 14

Response to13 Question 9($ in thousands)

What percentage of your endowment does your college or university devote to financial aid forstudent tuition

The College does not award or allocate financial aid based13 specifically o tuition Financial aid13 isawarded based on the13 comprehensive13 fee13 and other allowable13 expenses

Financial aid support to students and the13 related amount funded by the13 endowment are13 shownbelow

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Financial aid funded by endowment $16893 $17934 $18965 $20014of financial aid funded by endowment 42 40 40 42

Projected

The market value of the endowment restricted to use for13 financial aid is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid support $121998 $144054 $147164for13 studentsTotal endowment market value $1553629 $1829521 $1787775of endowment restricted13 to13 financial aid13 support for students 8 8 8

Endowment spending restricted to use for financial aid is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid support for $4174 $4266 $4651 $5134studentsTotal endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid 8 8 8 8

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aidsupport for students

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 15

The table below which uses information13 from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for financial aid support for $16893 $17934 $18965 $20014studentsEndowment spending used for other purposes $37507 $37866 $40278 $44504Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used13 for financial aid 31 32 32 31

Projected

How much for other forms of student financial aid Please specify the types13 of non-shy‐tuitionfinancial aid provided

The College provides many forms of assistance to students beyond financial aid including prizesfellowships internships and student employment

Financial aid and other student support are13 shown below

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Other student support to students $2742 $2688 $2763 $2855Total financial aid and other student support $43091 $47814 $49853 $50179Financial aid and other student support funded by $18123 $19122 $20207 $21388endowmentfinancial aid and other student support funded by 42 40 41 43endowment

Projected

The market value of the endowment restricted to use for13 financial aid and other13 student13 support13 is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid andother student supportTotal endowment market value

$126508

$1553629

$149611

$1829521

$152513

$1787775of endowment restricted to financial aid and other

student support 8 8 9

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 16

Endowment spending restricted to use for financial aid and other student support is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid and other student support $4620 $4736 $5163 $5701Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid and 8 8 9 9other student support

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid and other13 student13 support Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aid and other student support for13 students

The table below which uses information from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid and other support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for13 financial aid and $18123 $19122 $20207 $21388other student supportEndowment spending used for other purposes $36277 $36678 $39036 $43130Total endowment spending $54400 $55800 $59249 $64518of total endowment13 spending used for financial 33 34 34 33aid and other student support

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 17

Response to13 Question 10

Does your college or university have policies regarding whether it is allowed to accept fundsrestricted to a specific purpose

Grinnell College has adopted a Gift Acceptance Policy The Policy was endorsed13 by the Board13 ofTrustees Advancement Committee an Audit an Assessment Committee The policy is designed toassure13 that all gifts to or for the13 use13 of Grinnell College13 are13 structured to benefit Grinnell College13 while ensuring fidelity to donor intent Because some gift situations may be complex or13 more costlythan beneficial or13 restricted in a manner13 not13 keeping with Grinnell Collegersquos goal of13 philanthropythat13 advances the Collegersquos mission13 the policy has been13 developed13 to13 outline the procedures forassessing and accepting gifts to Grinnell College for the Collegersquos benefit

Has your college or university ever declined a donation because it was restricted to a certainpurpose If so please13 describe13 those13 specific scenarios in which your school rejected13 donation

Grinnell College has three examples of gifts declined because the donor-shy‐imposed restrictions did13 notalign with Grinnellrsquos mission and board-shy‐approved strategic priorities

1) donor approached13 Grinnell College about making a gift in13 the range of $250000ndash$500000for13 the College to use to13 purchase and13 maintain13 residential property to be13 utilized as afaith-shy‐based13 center At that time such13 a project was not a priority and13 the Collegecommunicated that the needs13 of the student body13 were already13 being met The College didnot pursue the gift

2) donor approached13 Grinnell College about the possibility of making a $1 million gift from afamily foundation to support13 experiential student13 learning in a specific area of13 psychology This area13 was not strength for the department13 and the department13 did not13 have plans to13 grow The College did13 not pursue the gift

3) donor approached13 Grinnell College near the end13 of a tax year with13 an13 interest in13 giftingland for the Collegersquos access and use The College explored the possibility but the donorrsquosproposed13 restrictions were deemed13 too13 onerous The College did13 not pursue the gift

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 18

Response to13 Question 11($ in thousands)

How much and what percentage of your college or universityrsquos endowment is invested in realproperty (not including13 REITs or other publicly-shy‐traded securities)

Fiscal Year 2013 2014 2015Endowment $1553629 $1829521 $1787775

(1)Real Estate Investments $59801 $52387 $51694 38 29 29

(1)Includes investments categorized as ldquootherrdquo13 in addition to ldquoreal estaterdquo13 on the audited financialstatements

Please list and describe your college or universityrsquos real estate holdings including real estate heldby the13 college13 or university the13 endowment and13 all related13 entities

Fiscal YearCampus Property 2013 2014 2015Land and Improvements $11771 $12533 $13406Buildings and13 Improvements $326408 $327774 $328591Construction13 in13 Process $267 $35 $390Total (Gross) $338446 $340342 $342387Accumulated13 Depreciation $108170 $116760 $125270Total (Net) $230276 $223582 $217117

Fiscal YearNon-shy‐Campus Property (1) 2013 2014 2015Limited Partnership Interests $59767 $52353 $51660Non-shy‐Campus Community Property $34 $34 $34Oil Mineral Rights (2) $3 $3 $3

(3)Other Real Estate $754 $754 $54Total Non-shy‐Campus Property $60558 $53144 $51751

(1)Includes investments categorized as ldquootherrdquo in addition to ldquoreal13 estaterdquo on the audited financial13 statements(2)Including property owned via a related entity(3)Comprised13 of property owned13 via a related13 entityNote Related entities include a C corporation 100 percent-shy‐owned13 by the College and13 annuity fundsfor13 which the College is trustee

If the college or university has made any Payments in Lieu of Taxes13 please13 provide13 the13 date13 and13 amount of the13 payment

The College has not made any Payments in Lieu of Taxes The College pays property taxes on anyproperty that is not mission-shy‐central and pays13 unrelated business13 income tax when appropriate

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 19

Response to13 Question 12

Does your college or university grant naming rights to donors based on certain donation levels Ifso please describe the naming rights13 program including how much and what percentage of anynaming rights donations your college or university has used for tuition13 assistance

Grinnell College has adopted the Fund Creation and Endowment Threshold Guidelines whicharticulate13 the13 levels at which donors can name13 variety of funds (such as student scholarshipsprofessorships and13 chairs and13 programmatic funds) Donors can permanently endow namedscholarship for a minimum of $50000 Donors13 can create an expendable scholarship meaning notendowed with the13 goal of fully spending13 annual gifts each year for $500013 per year Donors cancreate scholarships that are13 unrestricted and available13 to all students or can create13 restrictedscholarships Restrictions13 on scholarships13 vary Some donors13 restrict scholarship to those whodemonstrate financial need while others focus o academic performance major of study or thegeographic origin of the13 student

Gifts Received ($ in thousands)

Fiscal Year 2013 2014 2015 2016Named funds restricted for scholarships $986 $1591 $7511 $1237Named funds restricted for other use $843 $6603 $1928 $930Total named funds $1829 $8194 $9439 $2167

of gifts received for named funds restrictedfor13 scholarships 5391 1942

Projected

ScholarshipsOther Expenses ($ in thousands)

Fiscal Year 2013 2014

7957

2015

5708

2016Named funds restricted for13 scholarships $402313 $409613 $440813 $535713 Named funds restricted for other use $1108213 $1151513 $1245113 $1326113 Total named funds

$1510513 $1561113 $1685913 $1861813 of spending from named funds used for

scholarships 2663 2624 2615 2877

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 20

Response to13 Question 13

What conflict of interest policies does your college or university have in place to address financial13 interest in endowment investments (including potential13 conflicts of interest among and betweengoverning13 boards trustees executives internal employees tasked13 with overseeing13 the13 endowment and13 external asset managers of endowment assets)

The Collegersquos Conflict of Interest Policy was adopted on May 7 2011 and applies to each member ofthe Board of13 Trustees and each officer13 of13 the College during such personrsquos service to the College13 inthe case of13 a trustee the Conflict13 of13 Interest13 Policy applies for13 a period of13 five years following thedate of the trusteersquos completion13 of service to13 the College Under the policy a conflict of interest isdefined13 as a transaction13 in13 which13 (1) the trustee or officer (or member of hisher13 immediate family)13 is a party13 (2) the trustee or officer (or member of hisher immediate family) has a material13 economic interest or (3) the13 trustee13 or officer (or member of hisher immediate13 family) is in controlor has the power to13 control management policies of an13 entity that is a party to13 the transaction ANDeither the13 College13 is also party to or otherwise13 involved in the13 transaction or the13 involvement ofthe trustee or13 officer13 can reasonably be expected to give rise to an appearance of13 impropriety

The Conflict of Interest Policy provides for various safe harbor transactions relating toinvestments The purchase sale or holding of securities which13 are publicly traded13 by any trustee orofficer shall not constitute a conflict of interest transaction solely because the College also owns13 securities13 of the same class13 or other securities13 of the same issuer in its13 investment portfolio Alsoan investment by any trustee13 or officer in limited partnerships trusts or similar non-shy‐marketablevehicles in which the College also is an investor shall13 not constitute a conflict of interest transactionprovided13 that (1) the trusteeofficer makes hisher own13 evaluation13 of the investment merits (2) thetrusteeofficer13 does not13 utilize College resources or13 seek13 assistance from College employees inmaking the investment (3) the trusteeofficer does not ldquotrade offrdquo hisher relationship with theCollege for an13 investment allocation (4) the investment of the trusteeofficer does not lead13 to13 amaterial reduction in13 the Collegersquos investment (ldquocrowding outrdquo) and13 (5) the trusteeofficer disclosesin writing to the chief investment officer all13 material13 facts concerning the investment prior toparticipating in13 the transaction

How do you vet board membersrsquo potential conflicts13 of interest

The Conflict of Interest Policy also requires that each current member of the Board of Trustees andeach officer of the13 College13 file13 statement in July with the13 treasurer13 certifying that13 heshe has readand is familiar with the13 terms of the13 Conflict of Interest Policy and also requires that13 suchtrusteeofficer13 (1)13 disclose any possible conflicts of13 interest13 which may have arisen or13 occurred inthe fiscal year13 of the College ending June 30 or which13 may be expected13 to13 arise or occur during thefiscal year13 beginning July 1 or13 (2)13 knows of13 no such possible conflict13 of13 interest

What are your policies if a conflict arises with a member of the board of trustees

In the event of a conflict of interest under the policy prior to entering into the transaction thetrusteeofficer13 is required to fully disclose in writing to the Executive Committee of13 the Board of13 Trustees all material facts concerning the transaction and the13 extent and nature13 of hisher interestin the transaction and promptly respond to any requests for clarification or additional13 information

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 21

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22

ContentsResponse to13 Question13 1 4

Response to13 Question13 2 6

Response to13 Question13 3 7

Response to13 Question13 4 8

Response to13 Question13 5 10

Response to13 Question13 6 11

Response to13 Question13 7 13

Response to13 Question13 8 14

Response to13 Question13 9 15

Response to13 Question13 10 18

Response to13 Question13 11 19

Response to13 Question13 12 20

Response to13 Question13 13 21

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 3

Response to13 Question 1($ in thousands)

What categories of assets are included in your college or universityrsquos endowment

Asset Allocation(1)

Fiscal Year 2013 2014 2015CashFixed13 Income 120 100 88Marketable Equities

Domestic 325 329 300International 118 105 97

Alternative StrategiesMarketable(2) 161 188 229Non-shy‐marketable(3) 276 277 284

Other 00 01 02Total 1000 1000 1000

(1)As reported13 to13 NACUBO(2)Includes equity and credit strategies(3)Includes private equity venture capital private real13 estate and distressed strategies

For each category please indicate the amount of funds that are

a Unrestrictedb Permanently restricted by donorsc Temporarily13 restricted13 b donorsd Permanently restricted by your college or university (quasi-shy‐endowments) ande Temporarily13 restricted13 b your college13 or university

Endowment net asset restrictions

Fiscal Year 2015Temporarily Permanently

Unrestricted Restricted Restricted TotalDonor Restricted $98 $549334 $549432Board13 Designated $1238343 -shy‐ -shy‐ $1238343Total Endowment Net Assets $1238343 $98 $549334 $1787775

Fiscal Year 2014Temporarily Permanently

Unrestricted Restricted Restricted TotalDonor Restricted -shy‐ $563108 $563108Board13 Designated $1266413 -shy‐ -shy‐ $1266413Total Endowment Net Assets $1266413 -shy‐ $563108 $1829521

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 4

Fiscal Year 2013Temporarily Permanently

Unrestricted Restricted Restricted TotalDonor Restricted -shy‐ $475092 $475092Board13 Designated $1078537 -shy‐ -shy‐ $1078537Total Endowment Net Assets $1078537 -shy‐ $475092 $1553629

Note The restrictions above were set by donors and13 not reclassified according to UPMIFA rules13 Theendowment is unitized and invested as one13 pool thus cannot be13 broken down by restriction into the13 asset allocation categories above

f For each restricted asset please describe the uses for which the funds are restricted andthe amount13 of13 the fair market13 value of13 the endowment apportioned to13 each13 use How andwhy were the restrictions put into place

Endowment net asset restrictions by13 use

Fiscal Year 2013 2014 2015Restricted

General Purposes $86720 $101217 $98434Instruction $160358 $191785 $180628Academic Support $35249 $41252 $40540Student Services $49410 $59868 $58417Institutional13 Support $20094 $23449 $22802Scholarships Grants and Loans $123052 $145294 $148376Facilities Operations $208 $243 $235

Total Restricted $475092 $563108 $549432Unrestricted

General Purposes $1078537 $1266413 $1238343Total Unrestricted $1078537 $1266413 $1238343Total Endowment $1553629 $1829521 $1787775

Restrictions were established13 by donors at the time of the gift Unrestricted funds or quasi-shy‐endowment originated from unrestricted gifts that the13 Board of Trustees determined13 should13 beinvested in the endowment long-shy‐term rather13 than be expended in the year13 in which they werereceived

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 5

Response to13 Question 2($ in thousands)

Does your college or university hold any investments that are not included in the endowment If13 so what are they and what are their fair market values13 and basis How are they used to furtherthe educational purpose of13 the college or university

Fiscal Year 2013 2014 2015Basis Market Basis Market Basis Market

Annuity Funds $19508 $20686 $11920 $13542 $11859 $13290Operating $9920 $9907 $10010 $10012 $15505 $15536ReserveStrategic Reserve $18868 $18790 $17249 $17133 $15275 $15141Other $1275 $1299 $1271 $1480 $1320 $1455

Endowment assets represent13 nearly 98 percent of total College investment assets as of June 302015 The13 College13 has one13 other pool of long-shy‐term investment13 assets consisting of13 annuity fundswhich represent less than 1 percent of total investment assets The balance of the13 Collegersquosinvestment assets (less than 3 percent) are13 classified as operating and reserve13 funds pursuant to the13 Investment Policy

bull Annuity and13 life income funds represent assets transferred13 to13 the College subject to13 lifeincome interests established by13 the donor and for which the College serves as trustee TheCollege has a remainder interest in13 these assets The use of funds upo maturity is eitherrestricted by the donor13 at13 the time of13 the gift13 or13 unrestricted to be used as the Board of13 Trustees directs at that time

bull Operating funds consist of financial resources available to satisfy the Collegersquos daily cashrequirements (including capital project13 commitments) These funds are invested to providesafety of principal and maintain liquidity to match expected liabilities13

bull Reserve funds consist of financial resources that13 position the College for13 strategic agilityThese funds are also invested to provide safety of principal and13 maintain liquidity to matchexpected liabilities

bull Other investments primarily consist of agency funds resources for which the13 College13 haslittle or no discretion

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 6

Response to13 Question 3($ in thousands)

What is your endowment size as measured by total fair market value of its assets What hasbeen the13 net growth13 and net investment return13 o your endowment each13 year

Fiscal Year 2012 2013 2014 2015 9302015Endowment $1383856 $1553629 $1829521 $1787775 $1659734Net growth (1) $ $169773 $275892 ($41746) ($128041)

(1)Net growth 123 178 (23) (72)(2)Investment return 166 204 05 (62)

(1) Net growth includes endowment return gifts to endowment endowment spending and otheradditions and transfers(2) As reported13 to13 NACUBO and13 net of all fees and13 investment costsThree months of activity

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 7

Response to13 Question 4($ in thousands)

How much has your college or university spent each year to manage the endowment and howmany staff and contractors are employed to manage the endowment

Direct investment costs(1)

Fiscal Year 2013 2014 2015$ Bps $ Bps $ Bps

Internal13 staff $1473 10 $1742 10 $2015 11Custodyperformance $204 1 $301 2 $318 2Marketable equity manager fees $5676 39 $7155 42 $7204 40Other direct costs (travel software services etc) $781 5 $795 5 $831 5Total direct investment costs $8134 55 $9992 59 $10368 57

(1)As reported13 to13 NACUBOBasis points (bps) calculated as13 a of average (beginningending) endowment market value andprovided13 in13 order to13 ease comparison13 among other institutions

Staff and contractors(1)

Fiscal Year 2013 2014 2015Staff (FTE) 44 6 6

Marketable equity managers 5 5 5Alternative managers (hedge funds private equity and real 32 35 38assets)Total separate contractors 37 40 43

(1)As reported13 to13 NACUBO

For any13 fees paid to nonemployees for investment advice asset management or otherwiseplease13 provide13 detail on the13 amounts paid to whom and13 the13 fee13 arrangement

Fees by category are13 as follows

bull Cashfixed13 income is managed13 internally by investment office staffbull Marketable equity manager fees average from 75 basis points to 140 basis points annually

(calculated as a percentage of13 assets under13 management)13 and are paid directly by theendowment to the13 manager

bull Alternative investment manager fees are described13 in13 further detail below

Fees associated with alternative13 investments are13 paid within the13 respective13 investment structure13 and are13 not accumulated within the13 Collegersquos accounting system (ie not included in the13 above13 direct costs) Management fees typically range from 10 percent to 25 percent annually and are13 based13 upo either the total amount of capital committed13 to13 the investment vehicle or the amount

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 8

of capital actually invested13 by the investment vehicle These fees generally decline following theend of a fundrsquos investment period Carried13 interest (incentive fees) for the general partner of a fund13 range from 10 percent to 30 percent of net profit and13 normally include a ldquohigh13 water markrdquo In13 addition the13 Collegersquos private13 equity private13 real estate and distressed investments have13 preferredreturn provisions (typically 8 percent)

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 9

Response to13 Question 5

If your endowment is required to file a Form 990 separately from your college or universityrsquos Form990 please13 provide13 the13 endowment entity13 name(s)13 and Employment Identification Number

Not applicable

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 10

Response to13 Question 6

How does your college or university determine what percentage of the endowment will be paidout each13 year

The Collegersquos Endowment Spending Policy (copied below) specifies13 a 40 percent annual payout tobe calculated13 using the formula set forth13 in13 the policy

If any13 what has been the target endowment payout as a percentage of the endowmentrsquosbeginning13 balance13 each year If that answer differs from the13 percentage13 paid13 out please13 explainwhy

The College does not determine its payout on the basis of the endowmentrsquos beginning balance eachyear It is our practice per the board-shy‐approved Endowment Spending Policy to calculate13 the13 annualpayout o the basis of a 12-shy‐quarter moving average This is done to13 smooth13 the impact of marketvalue volatility13 over time

Please attach13 any payout policies or guidance

Grinnell College Endowment Spending Policy(Last revised at the13 Feb 22 2014 board13 meeting)

The annual endowment distribution is calculated as 40 percent of the 12-shy‐quarter movingaverage13 endowment market value13 determined annually as of the13 December 3 immediatelyprior to13 the beginning of the fiscal year

The College shall not allocate 100 percent of this distribution13 to13 the operating budget Factorsin determining the allocation include

1) Revenue balance2) Expenditure discipline3) Facility requirements (including debt service) and strategic initiatives

In the rare instance an exception to established policy is deemed prudent and necessary boththe president and13 the board13 must authorize such13 departure in13 advance and13 document the termsin the board minutes

Endowment Spending13 Policy13 Oversight and Governance(Excerpted from the Collegersquos bylaws13 as revised and restated in May 2014)

ARTICLE VI -shy‐-shy‐ DUTIES OF COMMITTEES

7 Finance Committee The Finance Committee oversees and monitors the Collegersquos annualoperating and13 ongoing capital budgets issuance and13 repayment of debt management offinancial reserves and long-shy‐range strategies toward financial sustainability To accomplishthis the Finance Committee shall receive and evaluate regular13 reports from the Colleges

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 11

Treasurer providing (a) comparisons of actualforecast revenues and expenditures tobudget accompanied13 by an13 explanation13 of variances (b) updates o the structure and13 status13 of the Collegersquos13 debt obligations( c) updates13 on the status13 of reserve funds and (d)other financial reports as requested13 by the Committee The Finance Committee shall be13 responsible for13 ensuring that13 the Board of13 Trustees receives the information necessary for13 the Board to oversee the safeguarding of13 the Collegersquos financial stability long-shy‐termeconomic health and prudent use13 of financial resources in manner consistent with themission and the stated aims and goals of academic departments administrative units andancillary programs The13 Finance13 Committee13 shall work collaboratively with other Boardcommittees in consultation with the President to make recommendations to the13 Boardregarding financial policies decisions and actions including but not limited13 to13 spending and13 endowment payout policies13 sources of income appropriate to meeting the Colleges needs13 debt capacity issuance and13 repayment and13 capital expenditures and financing

8 Investment Committee The Investment Committee shall13 be responsible for maintaining apolicy of prudent investment in13 stocks bonds real assets non-shy‐marketable securities such asprivate placements and13 limited13 partnerships and other similar financial instrumentsinterests andor securities subject to the approval13 of the Board of Trustees13 The InvestmentCommittee shall approve sub-shy‐policies under the investment policy and13 review and13 approveinvestment transactions pursuant to the approved investment13 policy and sub-shy‐policies TheInvestment Committee shall13 have the authority to delegate investment decisions to theChief Investment Officer andor independent investment managers pursuant to13 theapproved investment policy and sub-shy‐policies The Chief Investment Officer shall have theauthority to in turn delegate13 investment decisions to other officers and employees of the13 College pursuant to13 the approved13 investment policy and13 investment sub-shy‐policies TheInvestment Committee shall13 report to the Board of Trustees on the performance and assetallocation of the13 Collegersquos investment portfolio as requested by the13 Board Chair providedthat13 such investment13 report13 shall be given at13 least13 once each fiscal year The Investment13 Committee shall work collaboratively with13 the Finance Committee in13 consultation13 with13 thePresident to make13 recommendations to the13 Board of Trustees regarding the endowmentpayout policy13 debt capacity and issuance13 and capital financing

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 12

Response to13 Question 7

Does your college or university have policies regarding spending the endowment principal Hasyour college13 or university13 ever spent endowment principal13 If so under what circumstances

As stated13 in13 Note 1 of the Grinnell College audited13 financial statements the13 College13 follows the13 guidance13 in the13 Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA) and the13 Iowa Uniform Prudent Management of Institutional13 Funds Act (IUPMIFA) The Board of Trustees ofGrinnell College has interpreted IUPMIFA as requiring the preservation of the historic value of theoriginal gift absent explicit donor stipulation13 stating otherwise

The College has never spent the endowment principal unless specifically directed to do so by adonor eg time-shy‐restricted endowment contribution

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 13

13

Response to13 Question 8($ in thousands)

How much and what percentage of the endowmentrsquos beginning balance has your college oruniversity spent each13 year

Fiscal Year 2013 2014 2015 2016Beginning balance $1383856 $1553629 $1829521 $1787775Endowment spending $54400 $55800 $59243 $73818 of beginning balance spent 39 36 32 41

Expected

As noted13 in13 our response to13 Question13 6 the Collegersquos Endowment Spending Policy allows thepresident and13 the board13 to13 authorize13 exceptions from the13 established 4 percent payout when13 circumstances13 warrant Such an exception was13 authorized at the October 2015 meeting of theboard

Under the terms of the board-shy‐approved exception the13 endowment payout for the six-shy‐year period FY201 through F 202 will include an additional $9313 million per year over and13 above the standard13 4percent payout of $64513 million13 The additional payout is structured to address number of highpriority strategic initiatives

How much and what percentage of the endowmentrsquos return on investment each year has yourcollege or university spent each year

Fiscal Year 2013 2014 2015Investment return $222322 $316329 $8756Endowment spending $54400 $55800 $59243of investment return spent 245 176 6766

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 14

Response to13 Question 9($ in thousands)

What percentage of your endowment does your college or university devote to financial aid forstudent tuition

The College does not award or allocate financial aid based13 specifically o tuition Financial aid13 isawarded based on the13 comprehensive13 fee13 and other allowable13 expenses

Financial aid support to students and the13 related amount funded by the13 endowment are13 shownbelow

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Financial aid funded by endowment $16893 $17934 $18965 $20014of financial aid funded by endowment 42 40 40 42

Projected

The market value of the endowment restricted to use for13 financial aid is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid support $121998 $144054 $147164for13 studentsTotal endowment market value $1553629 $1829521 $1787775of endowment restricted13 to13 financial aid13 support for students 8 8 8

Endowment spending restricted to use for financial aid is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid support for $4174 $4266 $4651 $5134studentsTotal endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid 8 8 8 8

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aidsupport for students

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 15

The table below which uses information13 from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for financial aid support for $16893 $17934 $18965 $20014studentsEndowment spending used for other purposes $37507 $37866 $40278 $44504Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used13 for financial aid 31 32 32 31

Projected

How much for other forms of student financial aid Please specify the types13 of non-shy‐tuitionfinancial aid provided

The College provides many forms of assistance to students beyond financial aid including prizesfellowships internships and student employment

Financial aid and other student support are13 shown below

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Other student support to students $2742 $2688 $2763 $2855Total financial aid and other student support $43091 $47814 $49853 $50179Financial aid and other student support funded by $18123 $19122 $20207 $21388endowmentfinancial aid and other student support funded by 42 40 41 43endowment

Projected

The market value of the endowment restricted to use for13 financial aid and other13 student13 support13 is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid andother student supportTotal endowment market value

$126508

$1553629

$149611

$1829521

$152513

$1787775of endowment restricted to financial aid and other

student support 8 8 9

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 16

Endowment spending restricted to use for financial aid and other student support is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid and other student support $4620 $4736 $5163 $5701Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid and 8 8 9 9other student support

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid and other13 student13 support Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aid and other student support for13 students

The table below which uses information from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid and other support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for13 financial aid and $18123 $19122 $20207 $21388other student supportEndowment spending used for other purposes $36277 $36678 $39036 $43130Total endowment spending $54400 $55800 $59249 $64518of total endowment13 spending used for financial 33 34 34 33aid and other student support

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 17

Response to13 Question 10

Does your college or university have policies regarding whether it is allowed to accept fundsrestricted to a specific purpose

Grinnell College has adopted a Gift Acceptance Policy The Policy was endorsed13 by the Board13 ofTrustees Advancement Committee an Audit an Assessment Committee The policy is designed toassure13 that all gifts to or for the13 use13 of Grinnell College13 are13 structured to benefit Grinnell College13 while ensuring fidelity to donor intent Because some gift situations may be complex or13 more costlythan beneficial or13 restricted in a manner13 not13 keeping with Grinnell Collegersquos goal of13 philanthropythat13 advances the Collegersquos mission13 the policy has been13 developed13 to13 outline the procedures forassessing and accepting gifts to Grinnell College for the Collegersquos benefit

Has your college or university ever declined a donation because it was restricted to a certainpurpose If so please13 describe13 those13 specific scenarios in which your school rejected13 donation

Grinnell College has three examples of gifts declined because the donor-shy‐imposed restrictions did13 notalign with Grinnellrsquos mission and board-shy‐approved strategic priorities

1) donor approached13 Grinnell College about making a gift in13 the range of $250000ndash$500000for13 the College to use to13 purchase and13 maintain13 residential property to be13 utilized as afaith-shy‐based13 center At that time such13 a project was not a priority and13 the Collegecommunicated that the needs13 of the student body13 were already13 being met The College didnot pursue the gift

2) donor approached13 Grinnell College about the possibility of making a $1 million gift from afamily foundation to support13 experiential student13 learning in a specific area of13 psychology This area13 was not strength for the department13 and the department13 did not13 have plans to13 grow The College did13 not pursue the gift

3) donor approached13 Grinnell College near the end13 of a tax year with13 an13 interest in13 giftingland for the Collegersquos access and use The College explored the possibility but the donorrsquosproposed13 restrictions were deemed13 too13 onerous The College did13 not pursue the gift

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 18

Response to13 Question 11($ in thousands)

How much and what percentage of your college or universityrsquos endowment is invested in realproperty (not including13 REITs or other publicly-shy‐traded securities)

Fiscal Year 2013 2014 2015Endowment $1553629 $1829521 $1787775

(1)Real Estate Investments $59801 $52387 $51694 38 29 29

(1)Includes investments categorized as ldquootherrdquo13 in addition to ldquoreal estaterdquo13 on the audited financialstatements

Please list and describe your college or universityrsquos real estate holdings including real estate heldby the13 college13 or university the13 endowment and13 all related13 entities

Fiscal YearCampus Property 2013 2014 2015Land and Improvements $11771 $12533 $13406Buildings and13 Improvements $326408 $327774 $328591Construction13 in13 Process $267 $35 $390Total (Gross) $338446 $340342 $342387Accumulated13 Depreciation $108170 $116760 $125270Total (Net) $230276 $223582 $217117

Fiscal YearNon-shy‐Campus Property (1) 2013 2014 2015Limited Partnership Interests $59767 $52353 $51660Non-shy‐Campus Community Property $34 $34 $34Oil Mineral Rights (2) $3 $3 $3

(3)Other Real Estate $754 $754 $54Total Non-shy‐Campus Property $60558 $53144 $51751

(1)Includes investments categorized as ldquootherrdquo in addition to ldquoreal13 estaterdquo on the audited financial13 statements(2)Including property owned via a related entity(3)Comprised13 of property owned13 via a related13 entityNote Related entities include a C corporation 100 percent-shy‐owned13 by the College and13 annuity fundsfor13 which the College is trustee

If the college or university has made any Payments in Lieu of Taxes13 please13 provide13 the13 date13 and13 amount of the13 payment

The College has not made any Payments in Lieu of Taxes The College pays property taxes on anyproperty that is not mission-shy‐central and pays13 unrelated business13 income tax when appropriate

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 19

Response to13 Question 12

Does your college or university grant naming rights to donors based on certain donation levels Ifso please describe the naming rights13 program including how much and what percentage of anynaming rights donations your college or university has used for tuition13 assistance

Grinnell College has adopted the Fund Creation and Endowment Threshold Guidelines whicharticulate13 the13 levels at which donors can name13 variety of funds (such as student scholarshipsprofessorships and13 chairs and13 programmatic funds) Donors can permanently endow namedscholarship for a minimum of $50000 Donors13 can create an expendable scholarship meaning notendowed with the13 goal of fully spending13 annual gifts each year for $500013 per year Donors cancreate scholarships that are13 unrestricted and available13 to all students or can create13 restrictedscholarships Restrictions13 on scholarships13 vary Some donors13 restrict scholarship to those whodemonstrate financial need while others focus o academic performance major of study or thegeographic origin of the13 student

Gifts Received ($ in thousands)

Fiscal Year 2013 2014 2015 2016Named funds restricted for scholarships $986 $1591 $7511 $1237Named funds restricted for other use $843 $6603 $1928 $930Total named funds $1829 $8194 $9439 $2167

of gifts received for named funds restrictedfor13 scholarships 5391 1942

Projected

ScholarshipsOther Expenses ($ in thousands)

Fiscal Year 2013 2014

7957

2015

5708

2016Named funds restricted for13 scholarships $402313 $409613 $440813 $535713 Named funds restricted for other use $1108213 $1151513 $1245113 $1326113 Total named funds

$1510513 $1561113 $1685913 $1861813 of spending from named funds used for

scholarships 2663 2624 2615 2877

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 20

Response to13 Question 13

What conflict of interest policies does your college or university have in place to address financial13 interest in endowment investments (including potential13 conflicts of interest among and betweengoverning13 boards trustees executives internal employees tasked13 with overseeing13 the13 endowment and13 external asset managers of endowment assets)

The Collegersquos Conflict of Interest Policy was adopted on May 7 2011 and applies to each member ofthe Board of13 Trustees and each officer13 of13 the College during such personrsquos service to the College13 inthe case of13 a trustee the Conflict13 of13 Interest13 Policy applies for13 a period of13 five years following thedate of the trusteersquos completion13 of service to13 the College Under the policy a conflict of interest isdefined13 as a transaction13 in13 which13 (1) the trustee or officer (or member of hisher13 immediate family)13 is a party13 (2) the trustee or officer (or member of hisher immediate family) has a material13 economic interest or (3) the13 trustee13 or officer (or member of hisher immediate13 family) is in controlor has the power to13 control management policies of an13 entity that is a party to13 the transaction ANDeither the13 College13 is also party to or otherwise13 involved in the13 transaction or the13 involvement ofthe trustee or13 officer13 can reasonably be expected to give rise to an appearance of13 impropriety

The Conflict of Interest Policy provides for various safe harbor transactions relating toinvestments The purchase sale or holding of securities which13 are publicly traded13 by any trustee orofficer shall not constitute a conflict of interest transaction solely because the College also owns13 securities13 of the same class13 or other securities13 of the same issuer in its13 investment portfolio Alsoan investment by any trustee13 or officer in limited partnerships trusts or similar non-shy‐marketablevehicles in which the College also is an investor shall13 not constitute a conflict of interest transactionprovided13 that (1) the trusteeofficer makes hisher own13 evaluation13 of the investment merits (2) thetrusteeofficer13 does not13 utilize College resources or13 seek13 assistance from College employees inmaking the investment (3) the trusteeofficer does not ldquotrade offrdquo hisher relationship with theCollege for an13 investment allocation (4) the investment of the trusteeofficer does not lead13 to13 amaterial reduction in13 the Collegersquos investment (ldquocrowding outrdquo) and13 (5) the trusteeofficer disclosesin writing to the chief investment officer all13 material13 facts concerning the investment prior toparticipating in13 the transaction

How do you vet board membersrsquo potential conflicts13 of interest

The Conflict of Interest Policy also requires that each current member of the Board of Trustees andeach officer of the13 College13 file13 statement in July with the13 treasurer13 certifying that13 heshe has readand is familiar with the13 terms of the13 Conflict of Interest Policy and also requires that13 suchtrusteeofficer13 (1)13 disclose any possible conflicts of13 interest13 which may have arisen or13 occurred inthe fiscal year13 of the College ending June 30 or which13 may be expected13 to13 arise or occur during thefiscal year13 beginning July 1 or13 (2)13 knows of13 no such possible conflict13 of13 interest

What are your policies if a conflict arises with a member of the board of trustees

In the event of a conflict of interest under the policy prior to entering into the transaction thetrusteeofficer13 is required to fully disclose in writing to the Executive Committee of13 the Board of13 Trustees all material facts concerning the transaction and the13 extent and nature13 of hisher interestin the transaction and promptly respond to any requests for clarification or additional13 information

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 21

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22

Response to13 Question 1($ in thousands)

What categories of assets are included in your college or universityrsquos endowment

Asset Allocation(1)

Fiscal Year 2013 2014 2015CashFixed13 Income 120 100 88Marketable Equities

Domestic 325 329 300International 118 105 97

Alternative StrategiesMarketable(2) 161 188 229Non-shy‐marketable(3) 276 277 284

Other 00 01 02Total 1000 1000 1000

(1)As reported13 to13 NACUBO(2)Includes equity and credit strategies(3)Includes private equity venture capital private real13 estate and distressed strategies

For each category please indicate the amount of funds that are

a Unrestrictedb Permanently restricted by donorsc Temporarily13 restricted13 b donorsd Permanently restricted by your college or university (quasi-shy‐endowments) ande Temporarily13 restricted13 b your college13 or university

Endowment net asset restrictions

Fiscal Year 2015Temporarily Permanently

Unrestricted Restricted Restricted TotalDonor Restricted $98 $549334 $549432Board13 Designated $1238343 -shy‐ -shy‐ $1238343Total Endowment Net Assets $1238343 $98 $549334 $1787775

Fiscal Year 2014Temporarily Permanently

Unrestricted Restricted Restricted TotalDonor Restricted -shy‐ $563108 $563108Board13 Designated $1266413 -shy‐ -shy‐ $1266413Total Endowment Net Assets $1266413 -shy‐ $563108 $1829521

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 4

Fiscal Year 2013Temporarily Permanently

Unrestricted Restricted Restricted TotalDonor Restricted -shy‐ $475092 $475092Board13 Designated $1078537 -shy‐ -shy‐ $1078537Total Endowment Net Assets $1078537 -shy‐ $475092 $1553629

Note The restrictions above were set by donors and13 not reclassified according to UPMIFA rules13 Theendowment is unitized and invested as one13 pool thus cannot be13 broken down by restriction into the13 asset allocation categories above

f For each restricted asset please describe the uses for which the funds are restricted andthe amount13 of13 the fair market13 value of13 the endowment apportioned to13 each13 use How andwhy were the restrictions put into place

Endowment net asset restrictions by13 use

Fiscal Year 2013 2014 2015Restricted

General Purposes $86720 $101217 $98434Instruction $160358 $191785 $180628Academic Support $35249 $41252 $40540Student Services $49410 $59868 $58417Institutional13 Support $20094 $23449 $22802Scholarships Grants and Loans $123052 $145294 $148376Facilities Operations $208 $243 $235

Total Restricted $475092 $563108 $549432Unrestricted

General Purposes $1078537 $1266413 $1238343Total Unrestricted $1078537 $1266413 $1238343Total Endowment $1553629 $1829521 $1787775

Restrictions were established13 by donors at the time of the gift Unrestricted funds or quasi-shy‐endowment originated from unrestricted gifts that the13 Board of Trustees determined13 should13 beinvested in the endowment long-shy‐term rather13 than be expended in the year13 in which they werereceived

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 5

Response to13 Question 2($ in thousands)

Does your college or university hold any investments that are not included in the endowment If13 so what are they and what are their fair market values13 and basis How are they used to furtherthe educational purpose of13 the college or university

Fiscal Year 2013 2014 2015Basis Market Basis Market Basis Market

Annuity Funds $19508 $20686 $11920 $13542 $11859 $13290Operating $9920 $9907 $10010 $10012 $15505 $15536ReserveStrategic Reserve $18868 $18790 $17249 $17133 $15275 $15141Other $1275 $1299 $1271 $1480 $1320 $1455

Endowment assets represent13 nearly 98 percent of total College investment assets as of June 302015 The13 College13 has one13 other pool of long-shy‐term investment13 assets consisting of13 annuity fundswhich represent less than 1 percent of total investment assets The balance of the13 Collegersquosinvestment assets (less than 3 percent) are13 classified as operating and reserve13 funds pursuant to the13 Investment Policy

bull Annuity and13 life income funds represent assets transferred13 to13 the College subject to13 lifeincome interests established by13 the donor and for which the College serves as trustee TheCollege has a remainder interest in13 these assets The use of funds upo maturity is eitherrestricted by the donor13 at13 the time of13 the gift13 or13 unrestricted to be used as the Board of13 Trustees directs at that time

bull Operating funds consist of financial resources available to satisfy the Collegersquos daily cashrequirements (including capital project13 commitments) These funds are invested to providesafety of principal and maintain liquidity to match expected liabilities13

bull Reserve funds consist of financial resources that13 position the College for13 strategic agilityThese funds are also invested to provide safety of principal and13 maintain liquidity to matchexpected liabilities

bull Other investments primarily consist of agency funds resources for which the13 College13 haslittle or no discretion

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 6

Response to13 Question 3($ in thousands)

What is your endowment size as measured by total fair market value of its assets What hasbeen the13 net growth13 and net investment return13 o your endowment each13 year

Fiscal Year 2012 2013 2014 2015 9302015Endowment $1383856 $1553629 $1829521 $1787775 $1659734Net growth (1) $ $169773 $275892 ($41746) ($128041)

(1)Net growth 123 178 (23) (72)(2)Investment return 166 204 05 (62)

(1) Net growth includes endowment return gifts to endowment endowment spending and otheradditions and transfers(2) As reported13 to13 NACUBO and13 net of all fees and13 investment costsThree months of activity

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 7

Response to13 Question 4($ in thousands)

How much has your college or university spent each year to manage the endowment and howmany staff and contractors are employed to manage the endowment

Direct investment costs(1)

Fiscal Year 2013 2014 2015$ Bps $ Bps $ Bps

Internal13 staff $1473 10 $1742 10 $2015 11Custodyperformance $204 1 $301 2 $318 2Marketable equity manager fees $5676 39 $7155 42 $7204 40Other direct costs (travel software services etc) $781 5 $795 5 $831 5Total direct investment costs $8134 55 $9992 59 $10368 57

(1)As reported13 to13 NACUBOBasis points (bps) calculated as13 a of average (beginningending) endowment market value andprovided13 in13 order to13 ease comparison13 among other institutions

Staff and contractors(1)

Fiscal Year 2013 2014 2015Staff (FTE) 44 6 6

Marketable equity managers 5 5 5Alternative managers (hedge funds private equity and real 32 35 38assets)Total separate contractors 37 40 43

(1)As reported13 to13 NACUBO

For any13 fees paid to nonemployees for investment advice asset management or otherwiseplease13 provide13 detail on the13 amounts paid to whom and13 the13 fee13 arrangement

Fees by category are13 as follows

bull Cashfixed13 income is managed13 internally by investment office staffbull Marketable equity manager fees average from 75 basis points to 140 basis points annually

(calculated as a percentage of13 assets under13 management)13 and are paid directly by theendowment to the13 manager

bull Alternative investment manager fees are described13 in13 further detail below

Fees associated with alternative13 investments are13 paid within the13 respective13 investment structure13 and are13 not accumulated within the13 Collegersquos accounting system (ie not included in the13 above13 direct costs) Management fees typically range from 10 percent to 25 percent annually and are13 based13 upo either the total amount of capital committed13 to13 the investment vehicle or the amount

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 8

of capital actually invested13 by the investment vehicle These fees generally decline following theend of a fundrsquos investment period Carried13 interest (incentive fees) for the general partner of a fund13 range from 10 percent to 30 percent of net profit and13 normally include a ldquohigh13 water markrdquo In13 addition the13 Collegersquos private13 equity private13 real estate and distressed investments have13 preferredreturn provisions (typically 8 percent)

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 9

Response to13 Question 5

If your endowment is required to file a Form 990 separately from your college or universityrsquos Form990 please13 provide13 the13 endowment entity13 name(s)13 and Employment Identification Number

Not applicable

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 10

Response to13 Question 6

How does your college or university determine what percentage of the endowment will be paidout each13 year

The Collegersquos Endowment Spending Policy (copied below) specifies13 a 40 percent annual payout tobe calculated13 using the formula set forth13 in13 the policy

If any13 what has been the target endowment payout as a percentage of the endowmentrsquosbeginning13 balance13 each year If that answer differs from the13 percentage13 paid13 out please13 explainwhy

The College does not determine its payout on the basis of the endowmentrsquos beginning balance eachyear It is our practice per the board-shy‐approved Endowment Spending Policy to calculate13 the13 annualpayout o the basis of a 12-shy‐quarter moving average This is done to13 smooth13 the impact of marketvalue volatility13 over time

Please attach13 any payout policies or guidance

Grinnell College Endowment Spending Policy(Last revised at the13 Feb 22 2014 board13 meeting)

The annual endowment distribution is calculated as 40 percent of the 12-shy‐quarter movingaverage13 endowment market value13 determined annually as of the13 December 3 immediatelyprior to13 the beginning of the fiscal year

The College shall not allocate 100 percent of this distribution13 to13 the operating budget Factorsin determining the allocation include

1) Revenue balance2) Expenditure discipline3) Facility requirements (including debt service) and strategic initiatives

In the rare instance an exception to established policy is deemed prudent and necessary boththe president and13 the board13 must authorize such13 departure in13 advance and13 document the termsin the board minutes

Endowment Spending13 Policy13 Oversight and Governance(Excerpted from the Collegersquos bylaws13 as revised and restated in May 2014)

ARTICLE VI -shy‐-shy‐ DUTIES OF COMMITTEES

7 Finance Committee The Finance Committee oversees and monitors the Collegersquos annualoperating and13 ongoing capital budgets issuance and13 repayment of debt management offinancial reserves and long-shy‐range strategies toward financial sustainability To accomplishthis the Finance Committee shall receive and evaluate regular13 reports from the Colleges

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 11

Treasurer providing (a) comparisons of actualforecast revenues and expenditures tobudget accompanied13 by an13 explanation13 of variances (b) updates o the structure and13 status13 of the Collegersquos13 debt obligations( c) updates13 on the status13 of reserve funds and (d)other financial reports as requested13 by the Committee The Finance Committee shall be13 responsible for13 ensuring that13 the Board of13 Trustees receives the information necessary for13 the Board to oversee the safeguarding of13 the Collegersquos financial stability long-shy‐termeconomic health and prudent use13 of financial resources in manner consistent with themission and the stated aims and goals of academic departments administrative units andancillary programs The13 Finance13 Committee13 shall work collaboratively with other Boardcommittees in consultation with the President to make recommendations to the13 Boardregarding financial policies decisions and actions including but not limited13 to13 spending and13 endowment payout policies13 sources of income appropriate to meeting the Colleges needs13 debt capacity issuance and13 repayment and13 capital expenditures and financing

8 Investment Committee The Investment Committee shall13 be responsible for maintaining apolicy of prudent investment in13 stocks bonds real assets non-shy‐marketable securities such asprivate placements and13 limited13 partnerships and other similar financial instrumentsinterests andor securities subject to the approval13 of the Board of Trustees13 The InvestmentCommittee shall approve sub-shy‐policies under the investment policy and13 review and13 approveinvestment transactions pursuant to the approved investment13 policy and sub-shy‐policies TheInvestment Committee shall13 have the authority to delegate investment decisions to theChief Investment Officer andor independent investment managers pursuant to13 theapproved investment policy and sub-shy‐policies The Chief Investment Officer shall have theauthority to in turn delegate13 investment decisions to other officers and employees of the13 College pursuant to13 the approved13 investment policy and13 investment sub-shy‐policies TheInvestment Committee shall13 report to the Board of Trustees on the performance and assetallocation of the13 Collegersquos investment portfolio as requested by the13 Board Chair providedthat13 such investment13 report13 shall be given at13 least13 once each fiscal year The Investment13 Committee shall work collaboratively with13 the Finance Committee in13 consultation13 with13 thePresident to make13 recommendations to the13 Board of Trustees regarding the endowmentpayout policy13 debt capacity and issuance13 and capital financing

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 12

Response to13 Question 7

Does your college or university have policies regarding spending the endowment principal Hasyour college13 or university13 ever spent endowment principal13 If so under what circumstances

As stated13 in13 Note 1 of the Grinnell College audited13 financial statements the13 College13 follows the13 guidance13 in the13 Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA) and the13 Iowa Uniform Prudent Management of Institutional13 Funds Act (IUPMIFA) The Board of Trustees ofGrinnell College has interpreted IUPMIFA as requiring the preservation of the historic value of theoriginal gift absent explicit donor stipulation13 stating otherwise

The College has never spent the endowment principal unless specifically directed to do so by adonor eg time-shy‐restricted endowment contribution

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 13

13

Response to13 Question 8($ in thousands)

How much and what percentage of the endowmentrsquos beginning balance has your college oruniversity spent each13 year

Fiscal Year 2013 2014 2015 2016Beginning balance $1383856 $1553629 $1829521 $1787775Endowment spending $54400 $55800 $59243 $73818 of beginning balance spent 39 36 32 41

Expected

As noted13 in13 our response to13 Question13 6 the Collegersquos Endowment Spending Policy allows thepresident and13 the board13 to13 authorize13 exceptions from the13 established 4 percent payout when13 circumstances13 warrant Such an exception was13 authorized at the October 2015 meeting of theboard

Under the terms of the board-shy‐approved exception the13 endowment payout for the six-shy‐year period FY201 through F 202 will include an additional $9313 million per year over and13 above the standard13 4percent payout of $64513 million13 The additional payout is structured to address number of highpriority strategic initiatives

How much and what percentage of the endowmentrsquos return on investment each year has yourcollege or university spent each year

Fiscal Year 2013 2014 2015Investment return $222322 $316329 $8756Endowment spending $54400 $55800 $59243of investment return spent 245 176 6766

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 14

Response to13 Question 9($ in thousands)

What percentage of your endowment does your college or university devote to financial aid forstudent tuition

The College does not award or allocate financial aid based13 specifically o tuition Financial aid13 isawarded based on the13 comprehensive13 fee13 and other allowable13 expenses

Financial aid support to students and the13 related amount funded by the13 endowment are13 shownbelow

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Financial aid funded by endowment $16893 $17934 $18965 $20014of financial aid funded by endowment 42 40 40 42

Projected

The market value of the endowment restricted to use for13 financial aid is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid support $121998 $144054 $147164for13 studentsTotal endowment market value $1553629 $1829521 $1787775of endowment restricted13 to13 financial aid13 support for students 8 8 8

Endowment spending restricted to use for financial aid is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid support for $4174 $4266 $4651 $5134studentsTotal endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid 8 8 8 8

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aidsupport for students

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 15

The table below which uses information13 from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for financial aid support for $16893 $17934 $18965 $20014studentsEndowment spending used for other purposes $37507 $37866 $40278 $44504Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used13 for financial aid 31 32 32 31

Projected

How much for other forms of student financial aid Please specify the types13 of non-shy‐tuitionfinancial aid provided

The College provides many forms of assistance to students beyond financial aid including prizesfellowships internships and student employment

Financial aid and other student support are13 shown below

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Other student support to students $2742 $2688 $2763 $2855Total financial aid and other student support $43091 $47814 $49853 $50179Financial aid and other student support funded by $18123 $19122 $20207 $21388endowmentfinancial aid and other student support funded by 42 40 41 43endowment

Projected

The market value of the endowment restricted to use for13 financial aid and other13 student13 support13 is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid andother student supportTotal endowment market value

$126508

$1553629

$149611

$1829521

$152513

$1787775of endowment restricted to financial aid and other

student support 8 8 9

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 16

Endowment spending restricted to use for financial aid and other student support is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid and other student support $4620 $4736 $5163 $5701Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid and 8 8 9 9other student support

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid and other13 student13 support Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aid and other student support for13 students

The table below which uses information from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid and other support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for13 financial aid and $18123 $19122 $20207 $21388other student supportEndowment spending used for other purposes $36277 $36678 $39036 $43130Total endowment spending $54400 $55800 $59249 $64518of total endowment13 spending used for financial 33 34 34 33aid and other student support

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 17

Response to13 Question 10

Does your college or university have policies regarding whether it is allowed to accept fundsrestricted to a specific purpose

Grinnell College has adopted a Gift Acceptance Policy The Policy was endorsed13 by the Board13 ofTrustees Advancement Committee an Audit an Assessment Committee The policy is designed toassure13 that all gifts to or for the13 use13 of Grinnell College13 are13 structured to benefit Grinnell College13 while ensuring fidelity to donor intent Because some gift situations may be complex or13 more costlythan beneficial or13 restricted in a manner13 not13 keeping with Grinnell Collegersquos goal of13 philanthropythat13 advances the Collegersquos mission13 the policy has been13 developed13 to13 outline the procedures forassessing and accepting gifts to Grinnell College for the Collegersquos benefit

Has your college or university ever declined a donation because it was restricted to a certainpurpose If so please13 describe13 those13 specific scenarios in which your school rejected13 donation

Grinnell College has three examples of gifts declined because the donor-shy‐imposed restrictions did13 notalign with Grinnellrsquos mission and board-shy‐approved strategic priorities

1) donor approached13 Grinnell College about making a gift in13 the range of $250000ndash$500000for13 the College to use to13 purchase and13 maintain13 residential property to be13 utilized as afaith-shy‐based13 center At that time such13 a project was not a priority and13 the Collegecommunicated that the needs13 of the student body13 were already13 being met The College didnot pursue the gift

2) donor approached13 Grinnell College about the possibility of making a $1 million gift from afamily foundation to support13 experiential student13 learning in a specific area of13 psychology This area13 was not strength for the department13 and the department13 did not13 have plans to13 grow The College did13 not pursue the gift

3) donor approached13 Grinnell College near the end13 of a tax year with13 an13 interest in13 giftingland for the Collegersquos access and use The College explored the possibility but the donorrsquosproposed13 restrictions were deemed13 too13 onerous The College did13 not pursue the gift

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 18

Response to13 Question 11($ in thousands)

How much and what percentage of your college or universityrsquos endowment is invested in realproperty (not including13 REITs or other publicly-shy‐traded securities)

Fiscal Year 2013 2014 2015Endowment $1553629 $1829521 $1787775

(1)Real Estate Investments $59801 $52387 $51694 38 29 29

(1)Includes investments categorized as ldquootherrdquo13 in addition to ldquoreal estaterdquo13 on the audited financialstatements

Please list and describe your college or universityrsquos real estate holdings including real estate heldby the13 college13 or university the13 endowment and13 all related13 entities

Fiscal YearCampus Property 2013 2014 2015Land and Improvements $11771 $12533 $13406Buildings and13 Improvements $326408 $327774 $328591Construction13 in13 Process $267 $35 $390Total (Gross) $338446 $340342 $342387Accumulated13 Depreciation $108170 $116760 $125270Total (Net) $230276 $223582 $217117

Fiscal YearNon-shy‐Campus Property (1) 2013 2014 2015Limited Partnership Interests $59767 $52353 $51660Non-shy‐Campus Community Property $34 $34 $34Oil Mineral Rights (2) $3 $3 $3

(3)Other Real Estate $754 $754 $54Total Non-shy‐Campus Property $60558 $53144 $51751

(1)Includes investments categorized as ldquootherrdquo in addition to ldquoreal13 estaterdquo on the audited financial13 statements(2)Including property owned via a related entity(3)Comprised13 of property owned13 via a related13 entityNote Related entities include a C corporation 100 percent-shy‐owned13 by the College and13 annuity fundsfor13 which the College is trustee

If the college or university has made any Payments in Lieu of Taxes13 please13 provide13 the13 date13 and13 amount of the13 payment

The College has not made any Payments in Lieu of Taxes The College pays property taxes on anyproperty that is not mission-shy‐central and pays13 unrelated business13 income tax when appropriate

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 19

Response to13 Question 12

Does your college or university grant naming rights to donors based on certain donation levels Ifso please describe the naming rights13 program including how much and what percentage of anynaming rights donations your college or university has used for tuition13 assistance

Grinnell College has adopted the Fund Creation and Endowment Threshold Guidelines whicharticulate13 the13 levels at which donors can name13 variety of funds (such as student scholarshipsprofessorships and13 chairs and13 programmatic funds) Donors can permanently endow namedscholarship for a minimum of $50000 Donors13 can create an expendable scholarship meaning notendowed with the13 goal of fully spending13 annual gifts each year for $500013 per year Donors cancreate scholarships that are13 unrestricted and available13 to all students or can create13 restrictedscholarships Restrictions13 on scholarships13 vary Some donors13 restrict scholarship to those whodemonstrate financial need while others focus o academic performance major of study or thegeographic origin of the13 student

Gifts Received ($ in thousands)

Fiscal Year 2013 2014 2015 2016Named funds restricted for scholarships $986 $1591 $7511 $1237Named funds restricted for other use $843 $6603 $1928 $930Total named funds $1829 $8194 $9439 $2167

of gifts received for named funds restrictedfor13 scholarships 5391 1942

Projected

ScholarshipsOther Expenses ($ in thousands)

Fiscal Year 2013 2014

7957

2015

5708

2016Named funds restricted for13 scholarships $402313 $409613 $440813 $535713 Named funds restricted for other use $1108213 $1151513 $1245113 $1326113 Total named funds

$1510513 $1561113 $1685913 $1861813 of spending from named funds used for

scholarships 2663 2624 2615 2877

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 20

Response to13 Question 13

What conflict of interest policies does your college or university have in place to address financial13 interest in endowment investments (including potential13 conflicts of interest among and betweengoverning13 boards trustees executives internal employees tasked13 with overseeing13 the13 endowment and13 external asset managers of endowment assets)

The Collegersquos Conflict of Interest Policy was adopted on May 7 2011 and applies to each member ofthe Board of13 Trustees and each officer13 of13 the College during such personrsquos service to the College13 inthe case of13 a trustee the Conflict13 of13 Interest13 Policy applies for13 a period of13 five years following thedate of the trusteersquos completion13 of service to13 the College Under the policy a conflict of interest isdefined13 as a transaction13 in13 which13 (1) the trustee or officer (or member of hisher13 immediate family)13 is a party13 (2) the trustee or officer (or member of hisher immediate family) has a material13 economic interest or (3) the13 trustee13 or officer (or member of hisher immediate13 family) is in controlor has the power to13 control management policies of an13 entity that is a party to13 the transaction ANDeither the13 College13 is also party to or otherwise13 involved in the13 transaction or the13 involvement ofthe trustee or13 officer13 can reasonably be expected to give rise to an appearance of13 impropriety

The Conflict of Interest Policy provides for various safe harbor transactions relating toinvestments The purchase sale or holding of securities which13 are publicly traded13 by any trustee orofficer shall not constitute a conflict of interest transaction solely because the College also owns13 securities13 of the same class13 or other securities13 of the same issuer in its13 investment portfolio Alsoan investment by any trustee13 or officer in limited partnerships trusts or similar non-shy‐marketablevehicles in which the College also is an investor shall13 not constitute a conflict of interest transactionprovided13 that (1) the trusteeofficer makes hisher own13 evaluation13 of the investment merits (2) thetrusteeofficer13 does not13 utilize College resources or13 seek13 assistance from College employees inmaking the investment (3) the trusteeofficer does not ldquotrade offrdquo hisher relationship with theCollege for an13 investment allocation (4) the investment of the trusteeofficer does not lead13 to13 amaterial reduction in13 the Collegersquos investment (ldquocrowding outrdquo) and13 (5) the trusteeofficer disclosesin writing to the chief investment officer all13 material13 facts concerning the investment prior toparticipating in13 the transaction

How do you vet board membersrsquo potential conflicts13 of interest

The Conflict of Interest Policy also requires that each current member of the Board of Trustees andeach officer of the13 College13 file13 statement in July with the13 treasurer13 certifying that13 heshe has readand is familiar with the13 terms of the13 Conflict of Interest Policy and also requires that13 suchtrusteeofficer13 (1)13 disclose any possible conflicts of13 interest13 which may have arisen or13 occurred inthe fiscal year13 of the College ending June 30 or which13 may be expected13 to13 arise or occur during thefiscal year13 beginning July 1 or13 (2)13 knows of13 no such possible conflict13 of13 interest

What are your policies if a conflict arises with a member of the board of trustees

In the event of a conflict of interest under the policy prior to entering into the transaction thetrusteeofficer13 is required to fully disclose in writing to the Executive Committee of13 the Board of13 Trustees all material facts concerning the transaction and the13 extent and nature13 of hisher interestin the transaction and promptly respond to any requests for clarification or additional13 information

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 21

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22

Fiscal Year 2013Temporarily Permanently

Unrestricted Restricted Restricted TotalDonor Restricted -shy‐ $475092 $475092Board13 Designated $1078537 -shy‐ -shy‐ $1078537Total Endowment Net Assets $1078537 -shy‐ $475092 $1553629

Note The restrictions above were set by donors and13 not reclassified according to UPMIFA rules13 Theendowment is unitized and invested as one13 pool thus cannot be13 broken down by restriction into the13 asset allocation categories above

f For each restricted asset please describe the uses for which the funds are restricted andthe amount13 of13 the fair market13 value of13 the endowment apportioned to13 each13 use How andwhy were the restrictions put into place

Endowment net asset restrictions by13 use

Fiscal Year 2013 2014 2015Restricted

General Purposes $86720 $101217 $98434Instruction $160358 $191785 $180628Academic Support $35249 $41252 $40540Student Services $49410 $59868 $58417Institutional13 Support $20094 $23449 $22802Scholarships Grants and Loans $123052 $145294 $148376Facilities Operations $208 $243 $235

Total Restricted $475092 $563108 $549432Unrestricted

General Purposes $1078537 $1266413 $1238343Total Unrestricted $1078537 $1266413 $1238343Total Endowment $1553629 $1829521 $1787775

Restrictions were established13 by donors at the time of the gift Unrestricted funds or quasi-shy‐endowment originated from unrestricted gifts that the13 Board of Trustees determined13 should13 beinvested in the endowment long-shy‐term rather13 than be expended in the year13 in which they werereceived

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 5

Response to13 Question 2($ in thousands)

Does your college or university hold any investments that are not included in the endowment If13 so what are they and what are their fair market values13 and basis How are they used to furtherthe educational purpose of13 the college or university

Fiscal Year 2013 2014 2015Basis Market Basis Market Basis Market

Annuity Funds $19508 $20686 $11920 $13542 $11859 $13290Operating $9920 $9907 $10010 $10012 $15505 $15536ReserveStrategic Reserve $18868 $18790 $17249 $17133 $15275 $15141Other $1275 $1299 $1271 $1480 $1320 $1455

Endowment assets represent13 nearly 98 percent of total College investment assets as of June 302015 The13 College13 has one13 other pool of long-shy‐term investment13 assets consisting of13 annuity fundswhich represent less than 1 percent of total investment assets The balance of the13 Collegersquosinvestment assets (less than 3 percent) are13 classified as operating and reserve13 funds pursuant to the13 Investment Policy

bull Annuity and13 life income funds represent assets transferred13 to13 the College subject to13 lifeincome interests established by13 the donor and for which the College serves as trustee TheCollege has a remainder interest in13 these assets The use of funds upo maturity is eitherrestricted by the donor13 at13 the time of13 the gift13 or13 unrestricted to be used as the Board of13 Trustees directs at that time

bull Operating funds consist of financial resources available to satisfy the Collegersquos daily cashrequirements (including capital project13 commitments) These funds are invested to providesafety of principal and maintain liquidity to match expected liabilities13

bull Reserve funds consist of financial resources that13 position the College for13 strategic agilityThese funds are also invested to provide safety of principal and13 maintain liquidity to matchexpected liabilities

bull Other investments primarily consist of agency funds resources for which the13 College13 haslittle or no discretion

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 6

Response to13 Question 3($ in thousands)

What is your endowment size as measured by total fair market value of its assets What hasbeen the13 net growth13 and net investment return13 o your endowment each13 year

Fiscal Year 2012 2013 2014 2015 9302015Endowment $1383856 $1553629 $1829521 $1787775 $1659734Net growth (1) $ $169773 $275892 ($41746) ($128041)

(1)Net growth 123 178 (23) (72)(2)Investment return 166 204 05 (62)

(1) Net growth includes endowment return gifts to endowment endowment spending and otheradditions and transfers(2) As reported13 to13 NACUBO and13 net of all fees and13 investment costsThree months of activity

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 7

Response to13 Question 4($ in thousands)

How much has your college or university spent each year to manage the endowment and howmany staff and contractors are employed to manage the endowment

Direct investment costs(1)

Fiscal Year 2013 2014 2015$ Bps $ Bps $ Bps

Internal13 staff $1473 10 $1742 10 $2015 11Custodyperformance $204 1 $301 2 $318 2Marketable equity manager fees $5676 39 $7155 42 $7204 40Other direct costs (travel software services etc) $781 5 $795 5 $831 5Total direct investment costs $8134 55 $9992 59 $10368 57

(1)As reported13 to13 NACUBOBasis points (bps) calculated as13 a of average (beginningending) endowment market value andprovided13 in13 order to13 ease comparison13 among other institutions

Staff and contractors(1)

Fiscal Year 2013 2014 2015Staff (FTE) 44 6 6

Marketable equity managers 5 5 5Alternative managers (hedge funds private equity and real 32 35 38assets)Total separate contractors 37 40 43

(1)As reported13 to13 NACUBO

For any13 fees paid to nonemployees for investment advice asset management or otherwiseplease13 provide13 detail on the13 amounts paid to whom and13 the13 fee13 arrangement

Fees by category are13 as follows

bull Cashfixed13 income is managed13 internally by investment office staffbull Marketable equity manager fees average from 75 basis points to 140 basis points annually

(calculated as a percentage of13 assets under13 management)13 and are paid directly by theendowment to the13 manager

bull Alternative investment manager fees are described13 in13 further detail below

Fees associated with alternative13 investments are13 paid within the13 respective13 investment structure13 and are13 not accumulated within the13 Collegersquos accounting system (ie not included in the13 above13 direct costs) Management fees typically range from 10 percent to 25 percent annually and are13 based13 upo either the total amount of capital committed13 to13 the investment vehicle or the amount

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 8

of capital actually invested13 by the investment vehicle These fees generally decline following theend of a fundrsquos investment period Carried13 interest (incentive fees) for the general partner of a fund13 range from 10 percent to 30 percent of net profit and13 normally include a ldquohigh13 water markrdquo In13 addition the13 Collegersquos private13 equity private13 real estate and distressed investments have13 preferredreturn provisions (typically 8 percent)

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 9

Response to13 Question 5

If your endowment is required to file a Form 990 separately from your college or universityrsquos Form990 please13 provide13 the13 endowment entity13 name(s)13 and Employment Identification Number

Not applicable

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 10

Response to13 Question 6

How does your college or university determine what percentage of the endowment will be paidout each13 year

The Collegersquos Endowment Spending Policy (copied below) specifies13 a 40 percent annual payout tobe calculated13 using the formula set forth13 in13 the policy

If any13 what has been the target endowment payout as a percentage of the endowmentrsquosbeginning13 balance13 each year If that answer differs from the13 percentage13 paid13 out please13 explainwhy

The College does not determine its payout on the basis of the endowmentrsquos beginning balance eachyear It is our practice per the board-shy‐approved Endowment Spending Policy to calculate13 the13 annualpayout o the basis of a 12-shy‐quarter moving average This is done to13 smooth13 the impact of marketvalue volatility13 over time

Please attach13 any payout policies or guidance

Grinnell College Endowment Spending Policy(Last revised at the13 Feb 22 2014 board13 meeting)

The annual endowment distribution is calculated as 40 percent of the 12-shy‐quarter movingaverage13 endowment market value13 determined annually as of the13 December 3 immediatelyprior to13 the beginning of the fiscal year

The College shall not allocate 100 percent of this distribution13 to13 the operating budget Factorsin determining the allocation include

1) Revenue balance2) Expenditure discipline3) Facility requirements (including debt service) and strategic initiatives

In the rare instance an exception to established policy is deemed prudent and necessary boththe president and13 the board13 must authorize such13 departure in13 advance and13 document the termsin the board minutes

Endowment Spending13 Policy13 Oversight and Governance(Excerpted from the Collegersquos bylaws13 as revised and restated in May 2014)

ARTICLE VI -shy‐-shy‐ DUTIES OF COMMITTEES

7 Finance Committee The Finance Committee oversees and monitors the Collegersquos annualoperating and13 ongoing capital budgets issuance and13 repayment of debt management offinancial reserves and long-shy‐range strategies toward financial sustainability To accomplishthis the Finance Committee shall receive and evaluate regular13 reports from the Colleges

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 11

Treasurer providing (a) comparisons of actualforecast revenues and expenditures tobudget accompanied13 by an13 explanation13 of variances (b) updates o the structure and13 status13 of the Collegersquos13 debt obligations( c) updates13 on the status13 of reserve funds and (d)other financial reports as requested13 by the Committee The Finance Committee shall be13 responsible for13 ensuring that13 the Board of13 Trustees receives the information necessary for13 the Board to oversee the safeguarding of13 the Collegersquos financial stability long-shy‐termeconomic health and prudent use13 of financial resources in manner consistent with themission and the stated aims and goals of academic departments administrative units andancillary programs The13 Finance13 Committee13 shall work collaboratively with other Boardcommittees in consultation with the President to make recommendations to the13 Boardregarding financial policies decisions and actions including but not limited13 to13 spending and13 endowment payout policies13 sources of income appropriate to meeting the Colleges needs13 debt capacity issuance and13 repayment and13 capital expenditures and financing

8 Investment Committee The Investment Committee shall13 be responsible for maintaining apolicy of prudent investment in13 stocks bonds real assets non-shy‐marketable securities such asprivate placements and13 limited13 partnerships and other similar financial instrumentsinterests andor securities subject to the approval13 of the Board of Trustees13 The InvestmentCommittee shall approve sub-shy‐policies under the investment policy and13 review and13 approveinvestment transactions pursuant to the approved investment13 policy and sub-shy‐policies TheInvestment Committee shall13 have the authority to delegate investment decisions to theChief Investment Officer andor independent investment managers pursuant to13 theapproved investment policy and sub-shy‐policies The Chief Investment Officer shall have theauthority to in turn delegate13 investment decisions to other officers and employees of the13 College pursuant to13 the approved13 investment policy and13 investment sub-shy‐policies TheInvestment Committee shall13 report to the Board of Trustees on the performance and assetallocation of the13 Collegersquos investment portfolio as requested by the13 Board Chair providedthat13 such investment13 report13 shall be given at13 least13 once each fiscal year The Investment13 Committee shall work collaboratively with13 the Finance Committee in13 consultation13 with13 thePresident to make13 recommendations to the13 Board of Trustees regarding the endowmentpayout policy13 debt capacity and issuance13 and capital financing

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 12

Response to13 Question 7

Does your college or university have policies regarding spending the endowment principal Hasyour college13 or university13 ever spent endowment principal13 If so under what circumstances

As stated13 in13 Note 1 of the Grinnell College audited13 financial statements the13 College13 follows the13 guidance13 in the13 Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA) and the13 Iowa Uniform Prudent Management of Institutional13 Funds Act (IUPMIFA) The Board of Trustees ofGrinnell College has interpreted IUPMIFA as requiring the preservation of the historic value of theoriginal gift absent explicit donor stipulation13 stating otherwise

The College has never spent the endowment principal unless specifically directed to do so by adonor eg time-shy‐restricted endowment contribution

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 13

13

Response to13 Question 8($ in thousands)

How much and what percentage of the endowmentrsquos beginning balance has your college oruniversity spent each13 year

Fiscal Year 2013 2014 2015 2016Beginning balance $1383856 $1553629 $1829521 $1787775Endowment spending $54400 $55800 $59243 $73818 of beginning balance spent 39 36 32 41

Expected

As noted13 in13 our response to13 Question13 6 the Collegersquos Endowment Spending Policy allows thepresident and13 the board13 to13 authorize13 exceptions from the13 established 4 percent payout when13 circumstances13 warrant Such an exception was13 authorized at the October 2015 meeting of theboard

Under the terms of the board-shy‐approved exception the13 endowment payout for the six-shy‐year period FY201 through F 202 will include an additional $9313 million per year over and13 above the standard13 4percent payout of $64513 million13 The additional payout is structured to address number of highpriority strategic initiatives

How much and what percentage of the endowmentrsquos return on investment each year has yourcollege or university spent each year

Fiscal Year 2013 2014 2015Investment return $222322 $316329 $8756Endowment spending $54400 $55800 $59243of investment return spent 245 176 6766

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 14

Response to13 Question 9($ in thousands)

What percentage of your endowment does your college or university devote to financial aid forstudent tuition

The College does not award or allocate financial aid based13 specifically o tuition Financial aid13 isawarded based on the13 comprehensive13 fee13 and other allowable13 expenses

Financial aid support to students and the13 related amount funded by the13 endowment are13 shownbelow

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Financial aid funded by endowment $16893 $17934 $18965 $20014of financial aid funded by endowment 42 40 40 42

Projected

The market value of the endowment restricted to use for13 financial aid is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid support $121998 $144054 $147164for13 studentsTotal endowment market value $1553629 $1829521 $1787775of endowment restricted13 to13 financial aid13 support for students 8 8 8

Endowment spending restricted to use for financial aid is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid support for $4174 $4266 $4651 $5134studentsTotal endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid 8 8 8 8

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aidsupport for students

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 15

The table below which uses information13 from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for financial aid support for $16893 $17934 $18965 $20014studentsEndowment spending used for other purposes $37507 $37866 $40278 $44504Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used13 for financial aid 31 32 32 31

Projected

How much for other forms of student financial aid Please specify the types13 of non-shy‐tuitionfinancial aid provided

The College provides many forms of assistance to students beyond financial aid including prizesfellowships internships and student employment

Financial aid and other student support are13 shown below

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Other student support to students $2742 $2688 $2763 $2855Total financial aid and other student support $43091 $47814 $49853 $50179Financial aid and other student support funded by $18123 $19122 $20207 $21388endowmentfinancial aid and other student support funded by 42 40 41 43endowment

Projected

The market value of the endowment restricted to use for13 financial aid and other13 student13 support13 is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid andother student supportTotal endowment market value

$126508

$1553629

$149611

$1829521

$152513

$1787775of endowment restricted to financial aid and other

student support 8 8 9

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 16

Endowment spending restricted to use for financial aid and other student support is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid and other student support $4620 $4736 $5163 $5701Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid and 8 8 9 9other student support

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid and other13 student13 support Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aid and other student support for13 students

The table below which uses information from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid and other support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for13 financial aid and $18123 $19122 $20207 $21388other student supportEndowment spending used for other purposes $36277 $36678 $39036 $43130Total endowment spending $54400 $55800 $59249 $64518of total endowment13 spending used for financial 33 34 34 33aid and other student support

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 17

Response to13 Question 10

Does your college or university have policies regarding whether it is allowed to accept fundsrestricted to a specific purpose

Grinnell College has adopted a Gift Acceptance Policy The Policy was endorsed13 by the Board13 ofTrustees Advancement Committee an Audit an Assessment Committee The policy is designed toassure13 that all gifts to or for the13 use13 of Grinnell College13 are13 structured to benefit Grinnell College13 while ensuring fidelity to donor intent Because some gift situations may be complex or13 more costlythan beneficial or13 restricted in a manner13 not13 keeping with Grinnell Collegersquos goal of13 philanthropythat13 advances the Collegersquos mission13 the policy has been13 developed13 to13 outline the procedures forassessing and accepting gifts to Grinnell College for the Collegersquos benefit

Has your college or university ever declined a donation because it was restricted to a certainpurpose If so please13 describe13 those13 specific scenarios in which your school rejected13 donation

Grinnell College has three examples of gifts declined because the donor-shy‐imposed restrictions did13 notalign with Grinnellrsquos mission and board-shy‐approved strategic priorities

1) donor approached13 Grinnell College about making a gift in13 the range of $250000ndash$500000for13 the College to use to13 purchase and13 maintain13 residential property to be13 utilized as afaith-shy‐based13 center At that time such13 a project was not a priority and13 the Collegecommunicated that the needs13 of the student body13 were already13 being met The College didnot pursue the gift

2) donor approached13 Grinnell College about the possibility of making a $1 million gift from afamily foundation to support13 experiential student13 learning in a specific area of13 psychology This area13 was not strength for the department13 and the department13 did not13 have plans to13 grow The College did13 not pursue the gift

3) donor approached13 Grinnell College near the end13 of a tax year with13 an13 interest in13 giftingland for the Collegersquos access and use The College explored the possibility but the donorrsquosproposed13 restrictions were deemed13 too13 onerous The College did13 not pursue the gift

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 18

Response to13 Question 11($ in thousands)

How much and what percentage of your college or universityrsquos endowment is invested in realproperty (not including13 REITs or other publicly-shy‐traded securities)

Fiscal Year 2013 2014 2015Endowment $1553629 $1829521 $1787775

(1)Real Estate Investments $59801 $52387 $51694 38 29 29

(1)Includes investments categorized as ldquootherrdquo13 in addition to ldquoreal estaterdquo13 on the audited financialstatements

Please list and describe your college or universityrsquos real estate holdings including real estate heldby the13 college13 or university the13 endowment and13 all related13 entities

Fiscal YearCampus Property 2013 2014 2015Land and Improvements $11771 $12533 $13406Buildings and13 Improvements $326408 $327774 $328591Construction13 in13 Process $267 $35 $390Total (Gross) $338446 $340342 $342387Accumulated13 Depreciation $108170 $116760 $125270Total (Net) $230276 $223582 $217117

Fiscal YearNon-shy‐Campus Property (1) 2013 2014 2015Limited Partnership Interests $59767 $52353 $51660Non-shy‐Campus Community Property $34 $34 $34Oil Mineral Rights (2) $3 $3 $3

(3)Other Real Estate $754 $754 $54Total Non-shy‐Campus Property $60558 $53144 $51751

(1)Includes investments categorized as ldquootherrdquo in addition to ldquoreal13 estaterdquo on the audited financial13 statements(2)Including property owned via a related entity(3)Comprised13 of property owned13 via a related13 entityNote Related entities include a C corporation 100 percent-shy‐owned13 by the College and13 annuity fundsfor13 which the College is trustee

If the college or university has made any Payments in Lieu of Taxes13 please13 provide13 the13 date13 and13 amount of the13 payment

The College has not made any Payments in Lieu of Taxes The College pays property taxes on anyproperty that is not mission-shy‐central and pays13 unrelated business13 income tax when appropriate

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 19

Response to13 Question 12

Does your college or university grant naming rights to donors based on certain donation levels Ifso please describe the naming rights13 program including how much and what percentage of anynaming rights donations your college or university has used for tuition13 assistance

Grinnell College has adopted the Fund Creation and Endowment Threshold Guidelines whicharticulate13 the13 levels at which donors can name13 variety of funds (such as student scholarshipsprofessorships and13 chairs and13 programmatic funds) Donors can permanently endow namedscholarship for a minimum of $50000 Donors13 can create an expendable scholarship meaning notendowed with the13 goal of fully spending13 annual gifts each year for $500013 per year Donors cancreate scholarships that are13 unrestricted and available13 to all students or can create13 restrictedscholarships Restrictions13 on scholarships13 vary Some donors13 restrict scholarship to those whodemonstrate financial need while others focus o academic performance major of study or thegeographic origin of the13 student

Gifts Received ($ in thousands)

Fiscal Year 2013 2014 2015 2016Named funds restricted for scholarships $986 $1591 $7511 $1237Named funds restricted for other use $843 $6603 $1928 $930Total named funds $1829 $8194 $9439 $2167

of gifts received for named funds restrictedfor13 scholarships 5391 1942

Projected

ScholarshipsOther Expenses ($ in thousands)

Fiscal Year 2013 2014

7957

2015

5708

2016Named funds restricted for13 scholarships $402313 $409613 $440813 $535713 Named funds restricted for other use $1108213 $1151513 $1245113 $1326113 Total named funds

$1510513 $1561113 $1685913 $1861813 of spending from named funds used for

scholarships 2663 2624 2615 2877

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 20

Response to13 Question 13

What conflict of interest policies does your college or university have in place to address financial13 interest in endowment investments (including potential13 conflicts of interest among and betweengoverning13 boards trustees executives internal employees tasked13 with overseeing13 the13 endowment and13 external asset managers of endowment assets)

The Collegersquos Conflict of Interest Policy was adopted on May 7 2011 and applies to each member ofthe Board of13 Trustees and each officer13 of13 the College during such personrsquos service to the College13 inthe case of13 a trustee the Conflict13 of13 Interest13 Policy applies for13 a period of13 five years following thedate of the trusteersquos completion13 of service to13 the College Under the policy a conflict of interest isdefined13 as a transaction13 in13 which13 (1) the trustee or officer (or member of hisher13 immediate family)13 is a party13 (2) the trustee or officer (or member of hisher immediate family) has a material13 economic interest or (3) the13 trustee13 or officer (or member of hisher immediate13 family) is in controlor has the power to13 control management policies of an13 entity that is a party to13 the transaction ANDeither the13 College13 is also party to or otherwise13 involved in the13 transaction or the13 involvement ofthe trustee or13 officer13 can reasonably be expected to give rise to an appearance of13 impropriety

The Conflict of Interest Policy provides for various safe harbor transactions relating toinvestments The purchase sale or holding of securities which13 are publicly traded13 by any trustee orofficer shall not constitute a conflict of interest transaction solely because the College also owns13 securities13 of the same class13 or other securities13 of the same issuer in its13 investment portfolio Alsoan investment by any trustee13 or officer in limited partnerships trusts or similar non-shy‐marketablevehicles in which the College also is an investor shall13 not constitute a conflict of interest transactionprovided13 that (1) the trusteeofficer makes hisher own13 evaluation13 of the investment merits (2) thetrusteeofficer13 does not13 utilize College resources or13 seek13 assistance from College employees inmaking the investment (3) the trusteeofficer does not ldquotrade offrdquo hisher relationship with theCollege for an13 investment allocation (4) the investment of the trusteeofficer does not lead13 to13 amaterial reduction in13 the Collegersquos investment (ldquocrowding outrdquo) and13 (5) the trusteeofficer disclosesin writing to the chief investment officer all13 material13 facts concerning the investment prior toparticipating in13 the transaction

How do you vet board membersrsquo potential conflicts13 of interest

The Conflict of Interest Policy also requires that each current member of the Board of Trustees andeach officer of the13 College13 file13 statement in July with the13 treasurer13 certifying that13 heshe has readand is familiar with the13 terms of the13 Conflict of Interest Policy and also requires that13 suchtrusteeofficer13 (1)13 disclose any possible conflicts of13 interest13 which may have arisen or13 occurred inthe fiscal year13 of the College ending June 30 or which13 may be expected13 to13 arise or occur during thefiscal year13 beginning July 1 or13 (2)13 knows of13 no such possible conflict13 of13 interest

What are your policies if a conflict arises with a member of the board of trustees

In the event of a conflict of interest under the policy prior to entering into the transaction thetrusteeofficer13 is required to fully disclose in writing to the Executive Committee of13 the Board of13 Trustees all material facts concerning the transaction and the13 extent and nature13 of hisher interestin the transaction and promptly respond to any requests for clarification or additional13 information

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 21

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22

Response to13 Question 2($ in thousands)

Does your college or university hold any investments that are not included in the endowment If13 so what are they and what are their fair market values13 and basis How are they used to furtherthe educational purpose of13 the college or university

Fiscal Year 2013 2014 2015Basis Market Basis Market Basis Market

Annuity Funds $19508 $20686 $11920 $13542 $11859 $13290Operating $9920 $9907 $10010 $10012 $15505 $15536ReserveStrategic Reserve $18868 $18790 $17249 $17133 $15275 $15141Other $1275 $1299 $1271 $1480 $1320 $1455

Endowment assets represent13 nearly 98 percent of total College investment assets as of June 302015 The13 College13 has one13 other pool of long-shy‐term investment13 assets consisting of13 annuity fundswhich represent less than 1 percent of total investment assets The balance of the13 Collegersquosinvestment assets (less than 3 percent) are13 classified as operating and reserve13 funds pursuant to the13 Investment Policy

bull Annuity and13 life income funds represent assets transferred13 to13 the College subject to13 lifeincome interests established by13 the donor and for which the College serves as trustee TheCollege has a remainder interest in13 these assets The use of funds upo maturity is eitherrestricted by the donor13 at13 the time of13 the gift13 or13 unrestricted to be used as the Board of13 Trustees directs at that time

bull Operating funds consist of financial resources available to satisfy the Collegersquos daily cashrequirements (including capital project13 commitments) These funds are invested to providesafety of principal and maintain liquidity to match expected liabilities13

bull Reserve funds consist of financial resources that13 position the College for13 strategic agilityThese funds are also invested to provide safety of principal and13 maintain liquidity to matchexpected liabilities

bull Other investments primarily consist of agency funds resources for which the13 College13 haslittle or no discretion

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 6

Response to13 Question 3($ in thousands)

What is your endowment size as measured by total fair market value of its assets What hasbeen the13 net growth13 and net investment return13 o your endowment each13 year

Fiscal Year 2012 2013 2014 2015 9302015Endowment $1383856 $1553629 $1829521 $1787775 $1659734Net growth (1) $ $169773 $275892 ($41746) ($128041)

(1)Net growth 123 178 (23) (72)(2)Investment return 166 204 05 (62)

(1) Net growth includes endowment return gifts to endowment endowment spending and otheradditions and transfers(2) As reported13 to13 NACUBO and13 net of all fees and13 investment costsThree months of activity

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 7

Response to13 Question 4($ in thousands)

How much has your college or university spent each year to manage the endowment and howmany staff and contractors are employed to manage the endowment

Direct investment costs(1)

Fiscal Year 2013 2014 2015$ Bps $ Bps $ Bps

Internal13 staff $1473 10 $1742 10 $2015 11Custodyperformance $204 1 $301 2 $318 2Marketable equity manager fees $5676 39 $7155 42 $7204 40Other direct costs (travel software services etc) $781 5 $795 5 $831 5Total direct investment costs $8134 55 $9992 59 $10368 57

(1)As reported13 to13 NACUBOBasis points (bps) calculated as13 a of average (beginningending) endowment market value andprovided13 in13 order to13 ease comparison13 among other institutions

Staff and contractors(1)

Fiscal Year 2013 2014 2015Staff (FTE) 44 6 6

Marketable equity managers 5 5 5Alternative managers (hedge funds private equity and real 32 35 38assets)Total separate contractors 37 40 43

(1)As reported13 to13 NACUBO

For any13 fees paid to nonemployees for investment advice asset management or otherwiseplease13 provide13 detail on the13 amounts paid to whom and13 the13 fee13 arrangement

Fees by category are13 as follows

bull Cashfixed13 income is managed13 internally by investment office staffbull Marketable equity manager fees average from 75 basis points to 140 basis points annually

(calculated as a percentage of13 assets under13 management)13 and are paid directly by theendowment to the13 manager

bull Alternative investment manager fees are described13 in13 further detail below

Fees associated with alternative13 investments are13 paid within the13 respective13 investment structure13 and are13 not accumulated within the13 Collegersquos accounting system (ie not included in the13 above13 direct costs) Management fees typically range from 10 percent to 25 percent annually and are13 based13 upo either the total amount of capital committed13 to13 the investment vehicle or the amount

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 8

of capital actually invested13 by the investment vehicle These fees generally decline following theend of a fundrsquos investment period Carried13 interest (incentive fees) for the general partner of a fund13 range from 10 percent to 30 percent of net profit and13 normally include a ldquohigh13 water markrdquo In13 addition the13 Collegersquos private13 equity private13 real estate and distressed investments have13 preferredreturn provisions (typically 8 percent)

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 9

Response to13 Question 5

If your endowment is required to file a Form 990 separately from your college or universityrsquos Form990 please13 provide13 the13 endowment entity13 name(s)13 and Employment Identification Number

Not applicable

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 10

Response to13 Question 6

How does your college or university determine what percentage of the endowment will be paidout each13 year

The Collegersquos Endowment Spending Policy (copied below) specifies13 a 40 percent annual payout tobe calculated13 using the formula set forth13 in13 the policy

If any13 what has been the target endowment payout as a percentage of the endowmentrsquosbeginning13 balance13 each year If that answer differs from the13 percentage13 paid13 out please13 explainwhy

The College does not determine its payout on the basis of the endowmentrsquos beginning balance eachyear It is our practice per the board-shy‐approved Endowment Spending Policy to calculate13 the13 annualpayout o the basis of a 12-shy‐quarter moving average This is done to13 smooth13 the impact of marketvalue volatility13 over time

Please attach13 any payout policies or guidance

Grinnell College Endowment Spending Policy(Last revised at the13 Feb 22 2014 board13 meeting)

The annual endowment distribution is calculated as 40 percent of the 12-shy‐quarter movingaverage13 endowment market value13 determined annually as of the13 December 3 immediatelyprior to13 the beginning of the fiscal year

The College shall not allocate 100 percent of this distribution13 to13 the operating budget Factorsin determining the allocation include

1) Revenue balance2) Expenditure discipline3) Facility requirements (including debt service) and strategic initiatives

In the rare instance an exception to established policy is deemed prudent and necessary boththe president and13 the board13 must authorize such13 departure in13 advance and13 document the termsin the board minutes

Endowment Spending13 Policy13 Oversight and Governance(Excerpted from the Collegersquos bylaws13 as revised and restated in May 2014)

ARTICLE VI -shy‐-shy‐ DUTIES OF COMMITTEES

7 Finance Committee The Finance Committee oversees and monitors the Collegersquos annualoperating and13 ongoing capital budgets issuance and13 repayment of debt management offinancial reserves and long-shy‐range strategies toward financial sustainability To accomplishthis the Finance Committee shall receive and evaluate regular13 reports from the Colleges

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 11

Treasurer providing (a) comparisons of actualforecast revenues and expenditures tobudget accompanied13 by an13 explanation13 of variances (b) updates o the structure and13 status13 of the Collegersquos13 debt obligations( c) updates13 on the status13 of reserve funds and (d)other financial reports as requested13 by the Committee The Finance Committee shall be13 responsible for13 ensuring that13 the Board of13 Trustees receives the information necessary for13 the Board to oversee the safeguarding of13 the Collegersquos financial stability long-shy‐termeconomic health and prudent use13 of financial resources in manner consistent with themission and the stated aims and goals of academic departments administrative units andancillary programs The13 Finance13 Committee13 shall work collaboratively with other Boardcommittees in consultation with the President to make recommendations to the13 Boardregarding financial policies decisions and actions including but not limited13 to13 spending and13 endowment payout policies13 sources of income appropriate to meeting the Colleges needs13 debt capacity issuance and13 repayment and13 capital expenditures and financing

8 Investment Committee The Investment Committee shall13 be responsible for maintaining apolicy of prudent investment in13 stocks bonds real assets non-shy‐marketable securities such asprivate placements and13 limited13 partnerships and other similar financial instrumentsinterests andor securities subject to the approval13 of the Board of Trustees13 The InvestmentCommittee shall approve sub-shy‐policies under the investment policy and13 review and13 approveinvestment transactions pursuant to the approved investment13 policy and sub-shy‐policies TheInvestment Committee shall13 have the authority to delegate investment decisions to theChief Investment Officer andor independent investment managers pursuant to13 theapproved investment policy and sub-shy‐policies The Chief Investment Officer shall have theauthority to in turn delegate13 investment decisions to other officers and employees of the13 College pursuant to13 the approved13 investment policy and13 investment sub-shy‐policies TheInvestment Committee shall13 report to the Board of Trustees on the performance and assetallocation of the13 Collegersquos investment portfolio as requested by the13 Board Chair providedthat13 such investment13 report13 shall be given at13 least13 once each fiscal year The Investment13 Committee shall work collaboratively with13 the Finance Committee in13 consultation13 with13 thePresident to make13 recommendations to the13 Board of Trustees regarding the endowmentpayout policy13 debt capacity and issuance13 and capital financing

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 12

Response to13 Question 7

Does your college or university have policies regarding spending the endowment principal Hasyour college13 or university13 ever spent endowment principal13 If so under what circumstances

As stated13 in13 Note 1 of the Grinnell College audited13 financial statements the13 College13 follows the13 guidance13 in the13 Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA) and the13 Iowa Uniform Prudent Management of Institutional13 Funds Act (IUPMIFA) The Board of Trustees ofGrinnell College has interpreted IUPMIFA as requiring the preservation of the historic value of theoriginal gift absent explicit donor stipulation13 stating otherwise

The College has never spent the endowment principal unless specifically directed to do so by adonor eg time-shy‐restricted endowment contribution

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 13

13

Response to13 Question 8($ in thousands)

How much and what percentage of the endowmentrsquos beginning balance has your college oruniversity spent each13 year

Fiscal Year 2013 2014 2015 2016Beginning balance $1383856 $1553629 $1829521 $1787775Endowment spending $54400 $55800 $59243 $73818 of beginning balance spent 39 36 32 41

Expected

As noted13 in13 our response to13 Question13 6 the Collegersquos Endowment Spending Policy allows thepresident and13 the board13 to13 authorize13 exceptions from the13 established 4 percent payout when13 circumstances13 warrant Such an exception was13 authorized at the October 2015 meeting of theboard

Under the terms of the board-shy‐approved exception the13 endowment payout for the six-shy‐year period FY201 through F 202 will include an additional $9313 million per year over and13 above the standard13 4percent payout of $64513 million13 The additional payout is structured to address number of highpriority strategic initiatives

How much and what percentage of the endowmentrsquos return on investment each year has yourcollege or university spent each year

Fiscal Year 2013 2014 2015Investment return $222322 $316329 $8756Endowment spending $54400 $55800 $59243of investment return spent 245 176 6766

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 14

Response to13 Question 9($ in thousands)

What percentage of your endowment does your college or university devote to financial aid forstudent tuition

The College does not award or allocate financial aid based13 specifically o tuition Financial aid13 isawarded based on the13 comprehensive13 fee13 and other allowable13 expenses

Financial aid support to students and the13 related amount funded by the13 endowment are13 shownbelow

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Financial aid funded by endowment $16893 $17934 $18965 $20014of financial aid funded by endowment 42 40 40 42

Projected

The market value of the endowment restricted to use for13 financial aid is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid support $121998 $144054 $147164for13 studentsTotal endowment market value $1553629 $1829521 $1787775of endowment restricted13 to13 financial aid13 support for students 8 8 8

Endowment spending restricted to use for financial aid is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid support for $4174 $4266 $4651 $5134studentsTotal endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid 8 8 8 8

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aidsupport for students

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 15

The table below which uses information13 from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for financial aid support for $16893 $17934 $18965 $20014studentsEndowment spending used for other purposes $37507 $37866 $40278 $44504Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used13 for financial aid 31 32 32 31

Projected

How much for other forms of student financial aid Please specify the types13 of non-shy‐tuitionfinancial aid provided

The College provides many forms of assistance to students beyond financial aid including prizesfellowships internships and student employment

Financial aid and other student support are13 shown below

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Other student support to students $2742 $2688 $2763 $2855Total financial aid and other student support $43091 $47814 $49853 $50179Financial aid and other student support funded by $18123 $19122 $20207 $21388endowmentfinancial aid and other student support funded by 42 40 41 43endowment

Projected

The market value of the endowment restricted to use for13 financial aid and other13 student13 support13 is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid andother student supportTotal endowment market value

$126508

$1553629

$149611

$1829521

$152513

$1787775of endowment restricted to financial aid and other

student support 8 8 9

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 16

Endowment spending restricted to use for financial aid and other student support is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid and other student support $4620 $4736 $5163 $5701Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid and 8 8 9 9other student support

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid and other13 student13 support Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aid and other student support for13 students

The table below which uses information from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid and other support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for13 financial aid and $18123 $19122 $20207 $21388other student supportEndowment spending used for other purposes $36277 $36678 $39036 $43130Total endowment spending $54400 $55800 $59249 $64518of total endowment13 spending used for financial 33 34 34 33aid and other student support

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 17

Response to13 Question 10

Does your college or university have policies regarding whether it is allowed to accept fundsrestricted to a specific purpose

Grinnell College has adopted a Gift Acceptance Policy The Policy was endorsed13 by the Board13 ofTrustees Advancement Committee an Audit an Assessment Committee The policy is designed toassure13 that all gifts to or for the13 use13 of Grinnell College13 are13 structured to benefit Grinnell College13 while ensuring fidelity to donor intent Because some gift situations may be complex or13 more costlythan beneficial or13 restricted in a manner13 not13 keeping with Grinnell Collegersquos goal of13 philanthropythat13 advances the Collegersquos mission13 the policy has been13 developed13 to13 outline the procedures forassessing and accepting gifts to Grinnell College for the Collegersquos benefit

Has your college or university ever declined a donation because it was restricted to a certainpurpose If so please13 describe13 those13 specific scenarios in which your school rejected13 donation

Grinnell College has three examples of gifts declined because the donor-shy‐imposed restrictions did13 notalign with Grinnellrsquos mission and board-shy‐approved strategic priorities

1) donor approached13 Grinnell College about making a gift in13 the range of $250000ndash$500000for13 the College to use to13 purchase and13 maintain13 residential property to be13 utilized as afaith-shy‐based13 center At that time such13 a project was not a priority and13 the Collegecommunicated that the needs13 of the student body13 were already13 being met The College didnot pursue the gift

2) donor approached13 Grinnell College about the possibility of making a $1 million gift from afamily foundation to support13 experiential student13 learning in a specific area of13 psychology This area13 was not strength for the department13 and the department13 did not13 have plans to13 grow The College did13 not pursue the gift

3) donor approached13 Grinnell College near the end13 of a tax year with13 an13 interest in13 giftingland for the Collegersquos access and use The College explored the possibility but the donorrsquosproposed13 restrictions were deemed13 too13 onerous The College did13 not pursue the gift

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 18

Response to13 Question 11($ in thousands)

How much and what percentage of your college or universityrsquos endowment is invested in realproperty (not including13 REITs or other publicly-shy‐traded securities)

Fiscal Year 2013 2014 2015Endowment $1553629 $1829521 $1787775

(1)Real Estate Investments $59801 $52387 $51694 38 29 29

(1)Includes investments categorized as ldquootherrdquo13 in addition to ldquoreal estaterdquo13 on the audited financialstatements

Please list and describe your college or universityrsquos real estate holdings including real estate heldby the13 college13 or university the13 endowment and13 all related13 entities

Fiscal YearCampus Property 2013 2014 2015Land and Improvements $11771 $12533 $13406Buildings and13 Improvements $326408 $327774 $328591Construction13 in13 Process $267 $35 $390Total (Gross) $338446 $340342 $342387Accumulated13 Depreciation $108170 $116760 $125270Total (Net) $230276 $223582 $217117

Fiscal YearNon-shy‐Campus Property (1) 2013 2014 2015Limited Partnership Interests $59767 $52353 $51660Non-shy‐Campus Community Property $34 $34 $34Oil Mineral Rights (2) $3 $3 $3

(3)Other Real Estate $754 $754 $54Total Non-shy‐Campus Property $60558 $53144 $51751

(1)Includes investments categorized as ldquootherrdquo in addition to ldquoreal13 estaterdquo on the audited financial13 statements(2)Including property owned via a related entity(3)Comprised13 of property owned13 via a related13 entityNote Related entities include a C corporation 100 percent-shy‐owned13 by the College and13 annuity fundsfor13 which the College is trustee

If the college or university has made any Payments in Lieu of Taxes13 please13 provide13 the13 date13 and13 amount of the13 payment

The College has not made any Payments in Lieu of Taxes The College pays property taxes on anyproperty that is not mission-shy‐central and pays13 unrelated business13 income tax when appropriate

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 19

Response to13 Question 12

Does your college or university grant naming rights to donors based on certain donation levels Ifso please describe the naming rights13 program including how much and what percentage of anynaming rights donations your college or university has used for tuition13 assistance

Grinnell College has adopted the Fund Creation and Endowment Threshold Guidelines whicharticulate13 the13 levels at which donors can name13 variety of funds (such as student scholarshipsprofessorships and13 chairs and13 programmatic funds) Donors can permanently endow namedscholarship for a minimum of $50000 Donors13 can create an expendable scholarship meaning notendowed with the13 goal of fully spending13 annual gifts each year for $500013 per year Donors cancreate scholarships that are13 unrestricted and available13 to all students or can create13 restrictedscholarships Restrictions13 on scholarships13 vary Some donors13 restrict scholarship to those whodemonstrate financial need while others focus o academic performance major of study or thegeographic origin of the13 student

Gifts Received ($ in thousands)

Fiscal Year 2013 2014 2015 2016Named funds restricted for scholarships $986 $1591 $7511 $1237Named funds restricted for other use $843 $6603 $1928 $930Total named funds $1829 $8194 $9439 $2167

of gifts received for named funds restrictedfor13 scholarships 5391 1942

Projected

ScholarshipsOther Expenses ($ in thousands)

Fiscal Year 2013 2014

7957

2015

5708

2016Named funds restricted for13 scholarships $402313 $409613 $440813 $535713 Named funds restricted for other use $1108213 $1151513 $1245113 $1326113 Total named funds

$1510513 $1561113 $1685913 $1861813 of spending from named funds used for

scholarships 2663 2624 2615 2877

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 20

Response to13 Question 13

What conflict of interest policies does your college or university have in place to address financial13 interest in endowment investments (including potential13 conflicts of interest among and betweengoverning13 boards trustees executives internal employees tasked13 with overseeing13 the13 endowment and13 external asset managers of endowment assets)

The Collegersquos Conflict of Interest Policy was adopted on May 7 2011 and applies to each member ofthe Board of13 Trustees and each officer13 of13 the College during such personrsquos service to the College13 inthe case of13 a trustee the Conflict13 of13 Interest13 Policy applies for13 a period of13 five years following thedate of the trusteersquos completion13 of service to13 the College Under the policy a conflict of interest isdefined13 as a transaction13 in13 which13 (1) the trustee or officer (or member of hisher13 immediate family)13 is a party13 (2) the trustee or officer (or member of hisher immediate family) has a material13 economic interest or (3) the13 trustee13 or officer (or member of hisher immediate13 family) is in controlor has the power to13 control management policies of an13 entity that is a party to13 the transaction ANDeither the13 College13 is also party to or otherwise13 involved in the13 transaction or the13 involvement ofthe trustee or13 officer13 can reasonably be expected to give rise to an appearance of13 impropriety

The Conflict of Interest Policy provides for various safe harbor transactions relating toinvestments The purchase sale or holding of securities which13 are publicly traded13 by any trustee orofficer shall not constitute a conflict of interest transaction solely because the College also owns13 securities13 of the same class13 or other securities13 of the same issuer in its13 investment portfolio Alsoan investment by any trustee13 or officer in limited partnerships trusts or similar non-shy‐marketablevehicles in which the College also is an investor shall13 not constitute a conflict of interest transactionprovided13 that (1) the trusteeofficer makes hisher own13 evaluation13 of the investment merits (2) thetrusteeofficer13 does not13 utilize College resources or13 seek13 assistance from College employees inmaking the investment (3) the trusteeofficer does not ldquotrade offrdquo hisher relationship with theCollege for an13 investment allocation (4) the investment of the trusteeofficer does not lead13 to13 amaterial reduction in13 the Collegersquos investment (ldquocrowding outrdquo) and13 (5) the trusteeofficer disclosesin writing to the chief investment officer all13 material13 facts concerning the investment prior toparticipating in13 the transaction

How do you vet board membersrsquo potential conflicts13 of interest

The Conflict of Interest Policy also requires that each current member of the Board of Trustees andeach officer of the13 College13 file13 statement in July with the13 treasurer13 certifying that13 heshe has readand is familiar with the13 terms of the13 Conflict of Interest Policy and also requires that13 suchtrusteeofficer13 (1)13 disclose any possible conflicts of13 interest13 which may have arisen or13 occurred inthe fiscal year13 of the College ending June 30 or which13 may be expected13 to13 arise or occur during thefiscal year13 beginning July 1 or13 (2)13 knows of13 no such possible conflict13 of13 interest

What are your policies if a conflict arises with a member of the board of trustees

In the event of a conflict of interest under the policy prior to entering into the transaction thetrusteeofficer13 is required to fully disclose in writing to the Executive Committee of13 the Board of13 Trustees all material facts concerning the transaction and the13 extent and nature13 of hisher interestin the transaction and promptly respond to any requests for clarification or additional13 information

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 21

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22

Response to13 Question 3($ in thousands)

What is your endowment size as measured by total fair market value of its assets What hasbeen the13 net growth13 and net investment return13 o your endowment each13 year

Fiscal Year 2012 2013 2014 2015 9302015Endowment $1383856 $1553629 $1829521 $1787775 $1659734Net growth (1) $ $169773 $275892 ($41746) ($128041)

(1)Net growth 123 178 (23) (72)(2)Investment return 166 204 05 (62)

(1) Net growth includes endowment return gifts to endowment endowment spending and otheradditions and transfers(2) As reported13 to13 NACUBO and13 net of all fees and13 investment costsThree months of activity

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 7

Response to13 Question 4($ in thousands)

How much has your college or university spent each year to manage the endowment and howmany staff and contractors are employed to manage the endowment

Direct investment costs(1)

Fiscal Year 2013 2014 2015$ Bps $ Bps $ Bps

Internal13 staff $1473 10 $1742 10 $2015 11Custodyperformance $204 1 $301 2 $318 2Marketable equity manager fees $5676 39 $7155 42 $7204 40Other direct costs (travel software services etc) $781 5 $795 5 $831 5Total direct investment costs $8134 55 $9992 59 $10368 57

(1)As reported13 to13 NACUBOBasis points (bps) calculated as13 a of average (beginningending) endowment market value andprovided13 in13 order to13 ease comparison13 among other institutions

Staff and contractors(1)

Fiscal Year 2013 2014 2015Staff (FTE) 44 6 6

Marketable equity managers 5 5 5Alternative managers (hedge funds private equity and real 32 35 38assets)Total separate contractors 37 40 43

(1)As reported13 to13 NACUBO

For any13 fees paid to nonemployees for investment advice asset management or otherwiseplease13 provide13 detail on the13 amounts paid to whom and13 the13 fee13 arrangement

Fees by category are13 as follows

bull Cashfixed13 income is managed13 internally by investment office staffbull Marketable equity manager fees average from 75 basis points to 140 basis points annually

(calculated as a percentage of13 assets under13 management)13 and are paid directly by theendowment to the13 manager

bull Alternative investment manager fees are described13 in13 further detail below

Fees associated with alternative13 investments are13 paid within the13 respective13 investment structure13 and are13 not accumulated within the13 Collegersquos accounting system (ie not included in the13 above13 direct costs) Management fees typically range from 10 percent to 25 percent annually and are13 based13 upo either the total amount of capital committed13 to13 the investment vehicle or the amount

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 8

of capital actually invested13 by the investment vehicle These fees generally decline following theend of a fundrsquos investment period Carried13 interest (incentive fees) for the general partner of a fund13 range from 10 percent to 30 percent of net profit and13 normally include a ldquohigh13 water markrdquo In13 addition the13 Collegersquos private13 equity private13 real estate and distressed investments have13 preferredreturn provisions (typically 8 percent)

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 9

Response to13 Question 5

If your endowment is required to file a Form 990 separately from your college or universityrsquos Form990 please13 provide13 the13 endowment entity13 name(s)13 and Employment Identification Number

Not applicable

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 10

Response to13 Question 6

How does your college or university determine what percentage of the endowment will be paidout each13 year

The Collegersquos Endowment Spending Policy (copied below) specifies13 a 40 percent annual payout tobe calculated13 using the formula set forth13 in13 the policy

If any13 what has been the target endowment payout as a percentage of the endowmentrsquosbeginning13 balance13 each year If that answer differs from the13 percentage13 paid13 out please13 explainwhy

The College does not determine its payout on the basis of the endowmentrsquos beginning balance eachyear It is our practice per the board-shy‐approved Endowment Spending Policy to calculate13 the13 annualpayout o the basis of a 12-shy‐quarter moving average This is done to13 smooth13 the impact of marketvalue volatility13 over time

Please attach13 any payout policies or guidance

Grinnell College Endowment Spending Policy(Last revised at the13 Feb 22 2014 board13 meeting)

The annual endowment distribution is calculated as 40 percent of the 12-shy‐quarter movingaverage13 endowment market value13 determined annually as of the13 December 3 immediatelyprior to13 the beginning of the fiscal year

The College shall not allocate 100 percent of this distribution13 to13 the operating budget Factorsin determining the allocation include

1) Revenue balance2) Expenditure discipline3) Facility requirements (including debt service) and strategic initiatives

In the rare instance an exception to established policy is deemed prudent and necessary boththe president and13 the board13 must authorize such13 departure in13 advance and13 document the termsin the board minutes

Endowment Spending13 Policy13 Oversight and Governance(Excerpted from the Collegersquos bylaws13 as revised and restated in May 2014)

ARTICLE VI -shy‐-shy‐ DUTIES OF COMMITTEES

7 Finance Committee The Finance Committee oversees and monitors the Collegersquos annualoperating and13 ongoing capital budgets issuance and13 repayment of debt management offinancial reserves and long-shy‐range strategies toward financial sustainability To accomplishthis the Finance Committee shall receive and evaluate regular13 reports from the Colleges

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 11

Treasurer providing (a) comparisons of actualforecast revenues and expenditures tobudget accompanied13 by an13 explanation13 of variances (b) updates o the structure and13 status13 of the Collegersquos13 debt obligations( c) updates13 on the status13 of reserve funds and (d)other financial reports as requested13 by the Committee The Finance Committee shall be13 responsible for13 ensuring that13 the Board of13 Trustees receives the information necessary for13 the Board to oversee the safeguarding of13 the Collegersquos financial stability long-shy‐termeconomic health and prudent use13 of financial resources in manner consistent with themission and the stated aims and goals of academic departments administrative units andancillary programs The13 Finance13 Committee13 shall work collaboratively with other Boardcommittees in consultation with the President to make recommendations to the13 Boardregarding financial policies decisions and actions including but not limited13 to13 spending and13 endowment payout policies13 sources of income appropriate to meeting the Colleges needs13 debt capacity issuance and13 repayment and13 capital expenditures and financing

8 Investment Committee The Investment Committee shall13 be responsible for maintaining apolicy of prudent investment in13 stocks bonds real assets non-shy‐marketable securities such asprivate placements and13 limited13 partnerships and other similar financial instrumentsinterests andor securities subject to the approval13 of the Board of Trustees13 The InvestmentCommittee shall approve sub-shy‐policies under the investment policy and13 review and13 approveinvestment transactions pursuant to the approved investment13 policy and sub-shy‐policies TheInvestment Committee shall13 have the authority to delegate investment decisions to theChief Investment Officer andor independent investment managers pursuant to13 theapproved investment policy and sub-shy‐policies The Chief Investment Officer shall have theauthority to in turn delegate13 investment decisions to other officers and employees of the13 College pursuant to13 the approved13 investment policy and13 investment sub-shy‐policies TheInvestment Committee shall13 report to the Board of Trustees on the performance and assetallocation of the13 Collegersquos investment portfolio as requested by the13 Board Chair providedthat13 such investment13 report13 shall be given at13 least13 once each fiscal year The Investment13 Committee shall work collaboratively with13 the Finance Committee in13 consultation13 with13 thePresident to make13 recommendations to the13 Board of Trustees regarding the endowmentpayout policy13 debt capacity and issuance13 and capital financing

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 12

Response to13 Question 7

Does your college or university have policies regarding spending the endowment principal Hasyour college13 or university13 ever spent endowment principal13 If so under what circumstances

As stated13 in13 Note 1 of the Grinnell College audited13 financial statements the13 College13 follows the13 guidance13 in the13 Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA) and the13 Iowa Uniform Prudent Management of Institutional13 Funds Act (IUPMIFA) The Board of Trustees ofGrinnell College has interpreted IUPMIFA as requiring the preservation of the historic value of theoriginal gift absent explicit donor stipulation13 stating otherwise

The College has never spent the endowment principal unless specifically directed to do so by adonor eg time-shy‐restricted endowment contribution

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 13

13

Response to13 Question 8($ in thousands)

How much and what percentage of the endowmentrsquos beginning balance has your college oruniversity spent each13 year

Fiscal Year 2013 2014 2015 2016Beginning balance $1383856 $1553629 $1829521 $1787775Endowment spending $54400 $55800 $59243 $73818 of beginning balance spent 39 36 32 41

Expected

As noted13 in13 our response to13 Question13 6 the Collegersquos Endowment Spending Policy allows thepresident and13 the board13 to13 authorize13 exceptions from the13 established 4 percent payout when13 circumstances13 warrant Such an exception was13 authorized at the October 2015 meeting of theboard

Under the terms of the board-shy‐approved exception the13 endowment payout for the six-shy‐year period FY201 through F 202 will include an additional $9313 million per year over and13 above the standard13 4percent payout of $64513 million13 The additional payout is structured to address number of highpriority strategic initiatives

How much and what percentage of the endowmentrsquos return on investment each year has yourcollege or university spent each year

Fiscal Year 2013 2014 2015Investment return $222322 $316329 $8756Endowment spending $54400 $55800 $59243of investment return spent 245 176 6766

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 14

Response to13 Question 9($ in thousands)

What percentage of your endowment does your college or university devote to financial aid forstudent tuition

The College does not award or allocate financial aid based13 specifically o tuition Financial aid13 isawarded based on the13 comprehensive13 fee13 and other allowable13 expenses

Financial aid support to students and the13 related amount funded by the13 endowment are13 shownbelow

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Financial aid funded by endowment $16893 $17934 $18965 $20014of financial aid funded by endowment 42 40 40 42

Projected

The market value of the endowment restricted to use for13 financial aid is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid support $121998 $144054 $147164for13 studentsTotal endowment market value $1553629 $1829521 $1787775of endowment restricted13 to13 financial aid13 support for students 8 8 8

Endowment spending restricted to use for financial aid is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid support for $4174 $4266 $4651 $5134studentsTotal endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid 8 8 8 8

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aidsupport for students

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 15

The table below which uses information13 from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for financial aid support for $16893 $17934 $18965 $20014studentsEndowment spending used for other purposes $37507 $37866 $40278 $44504Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used13 for financial aid 31 32 32 31

Projected

How much for other forms of student financial aid Please specify the types13 of non-shy‐tuitionfinancial aid provided

The College provides many forms of assistance to students beyond financial aid including prizesfellowships internships and student employment

Financial aid and other student support are13 shown below

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Other student support to students $2742 $2688 $2763 $2855Total financial aid and other student support $43091 $47814 $49853 $50179Financial aid and other student support funded by $18123 $19122 $20207 $21388endowmentfinancial aid and other student support funded by 42 40 41 43endowment

Projected

The market value of the endowment restricted to use for13 financial aid and other13 student13 support13 is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid andother student supportTotal endowment market value

$126508

$1553629

$149611

$1829521

$152513

$1787775of endowment restricted to financial aid and other

student support 8 8 9

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 16

Endowment spending restricted to use for financial aid and other student support is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid and other student support $4620 $4736 $5163 $5701Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid and 8 8 9 9other student support

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid and other13 student13 support Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aid and other student support for13 students

The table below which uses information from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid and other support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for13 financial aid and $18123 $19122 $20207 $21388other student supportEndowment spending used for other purposes $36277 $36678 $39036 $43130Total endowment spending $54400 $55800 $59249 $64518of total endowment13 spending used for financial 33 34 34 33aid and other student support

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 17

Response to13 Question 10

Does your college or university have policies regarding whether it is allowed to accept fundsrestricted to a specific purpose

Grinnell College has adopted a Gift Acceptance Policy The Policy was endorsed13 by the Board13 ofTrustees Advancement Committee an Audit an Assessment Committee The policy is designed toassure13 that all gifts to or for the13 use13 of Grinnell College13 are13 structured to benefit Grinnell College13 while ensuring fidelity to donor intent Because some gift situations may be complex or13 more costlythan beneficial or13 restricted in a manner13 not13 keeping with Grinnell Collegersquos goal of13 philanthropythat13 advances the Collegersquos mission13 the policy has been13 developed13 to13 outline the procedures forassessing and accepting gifts to Grinnell College for the Collegersquos benefit

Has your college or university ever declined a donation because it was restricted to a certainpurpose If so please13 describe13 those13 specific scenarios in which your school rejected13 donation

Grinnell College has three examples of gifts declined because the donor-shy‐imposed restrictions did13 notalign with Grinnellrsquos mission and board-shy‐approved strategic priorities

1) donor approached13 Grinnell College about making a gift in13 the range of $250000ndash$500000for13 the College to use to13 purchase and13 maintain13 residential property to be13 utilized as afaith-shy‐based13 center At that time such13 a project was not a priority and13 the Collegecommunicated that the needs13 of the student body13 were already13 being met The College didnot pursue the gift

2) donor approached13 Grinnell College about the possibility of making a $1 million gift from afamily foundation to support13 experiential student13 learning in a specific area of13 psychology This area13 was not strength for the department13 and the department13 did not13 have plans to13 grow The College did13 not pursue the gift

3) donor approached13 Grinnell College near the end13 of a tax year with13 an13 interest in13 giftingland for the Collegersquos access and use The College explored the possibility but the donorrsquosproposed13 restrictions were deemed13 too13 onerous The College did13 not pursue the gift

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 18

Response to13 Question 11($ in thousands)

How much and what percentage of your college or universityrsquos endowment is invested in realproperty (not including13 REITs or other publicly-shy‐traded securities)

Fiscal Year 2013 2014 2015Endowment $1553629 $1829521 $1787775

(1)Real Estate Investments $59801 $52387 $51694 38 29 29

(1)Includes investments categorized as ldquootherrdquo13 in addition to ldquoreal estaterdquo13 on the audited financialstatements

Please list and describe your college or universityrsquos real estate holdings including real estate heldby the13 college13 or university the13 endowment and13 all related13 entities

Fiscal YearCampus Property 2013 2014 2015Land and Improvements $11771 $12533 $13406Buildings and13 Improvements $326408 $327774 $328591Construction13 in13 Process $267 $35 $390Total (Gross) $338446 $340342 $342387Accumulated13 Depreciation $108170 $116760 $125270Total (Net) $230276 $223582 $217117

Fiscal YearNon-shy‐Campus Property (1) 2013 2014 2015Limited Partnership Interests $59767 $52353 $51660Non-shy‐Campus Community Property $34 $34 $34Oil Mineral Rights (2) $3 $3 $3

(3)Other Real Estate $754 $754 $54Total Non-shy‐Campus Property $60558 $53144 $51751

(1)Includes investments categorized as ldquootherrdquo in addition to ldquoreal13 estaterdquo on the audited financial13 statements(2)Including property owned via a related entity(3)Comprised13 of property owned13 via a related13 entityNote Related entities include a C corporation 100 percent-shy‐owned13 by the College and13 annuity fundsfor13 which the College is trustee

If the college or university has made any Payments in Lieu of Taxes13 please13 provide13 the13 date13 and13 amount of the13 payment

The College has not made any Payments in Lieu of Taxes The College pays property taxes on anyproperty that is not mission-shy‐central and pays13 unrelated business13 income tax when appropriate

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 19

Response to13 Question 12

Does your college or university grant naming rights to donors based on certain donation levels Ifso please describe the naming rights13 program including how much and what percentage of anynaming rights donations your college or university has used for tuition13 assistance

Grinnell College has adopted the Fund Creation and Endowment Threshold Guidelines whicharticulate13 the13 levels at which donors can name13 variety of funds (such as student scholarshipsprofessorships and13 chairs and13 programmatic funds) Donors can permanently endow namedscholarship for a minimum of $50000 Donors13 can create an expendable scholarship meaning notendowed with the13 goal of fully spending13 annual gifts each year for $500013 per year Donors cancreate scholarships that are13 unrestricted and available13 to all students or can create13 restrictedscholarships Restrictions13 on scholarships13 vary Some donors13 restrict scholarship to those whodemonstrate financial need while others focus o academic performance major of study or thegeographic origin of the13 student

Gifts Received ($ in thousands)

Fiscal Year 2013 2014 2015 2016Named funds restricted for scholarships $986 $1591 $7511 $1237Named funds restricted for other use $843 $6603 $1928 $930Total named funds $1829 $8194 $9439 $2167

of gifts received for named funds restrictedfor13 scholarships 5391 1942

Projected

ScholarshipsOther Expenses ($ in thousands)

Fiscal Year 2013 2014

7957

2015

5708

2016Named funds restricted for13 scholarships $402313 $409613 $440813 $535713 Named funds restricted for other use $1108213 $1151513 $1245113 $1326113 Total named funds

$1510513 $1561113 $1685913 $1861813 of spending from named funds used for

scholarships 2663 2624 2615 2877

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 20

Response to13 Question 13

What conflict of interest policies does your college or university have in place to address financial13 interest in endowment investments (including potential13 conflicts of interest among and betweengoverning13 boards trustees executives internal employees tasked13 with overseeing13 the13 endowment and13 external asset managers of endowment assets)

The Collegersquos Conflict of Interest Policy was adopted on May 7 2011 and applies to each member ofthe Board of13 Trustees and each officer13 of13 the College during such personrsquos service to the College13 inthe case of13 a trustee the Conflict13 of13 Interest13 Policy applies for13 a period of13 five years following thedate of the trusteersquos completion13 of service to13 the College Under the policy a conflict of interest isdefined13 as a transaction13 in13 which13 (1) the trustee or officer (or member of hisher13 immediate family)13 is a party13 (2) the trustee or officer (or member of hisher immediate family) has a material13 economic interest or (3) the13 trustee13 or officer (or member of hisher immediate13 family) is in controlor has the power to13 control management policies of an13 entity that is a party to13 the transaction ANDeither the13 College13 is also party to or otherwise13 involved in the13 transaction or the13 involvement ofthe trustee or13 officer13 can reasonably be expected to give rise to an appearance of13 impropriety

The Conflict of Interest Policy provides for various safe harbor transactions relating toinvestments The purchase sale or holding of securities which13 are publicly traded13 by any trustee orofficer shall not constitute a conflict of interest transaction solely because the College also owns13 securities13 of the same class13 or other securities13 of the same issuer in its13 investment portfolio Alsoan investment by any trustee13 or officer in limited partnerships trusts or similar non-shy‐marketablevehicles in which the College also is an investor shall13 not constitute a conflict of interest transactionprovided13 that (1) the trusteeofficer makes hisher own13 evaluation13 of the investment merits (2) thetrusteeofficer13 does not13 utilize College resources or13 seek13 assistance from College employees inmaking the investment (3) the trusteeofficer does not ldquotrade offrdquo hisher relationship with theCollege for an13 investment allocation (4) the investment of the trusteeofficer does not lead13 to13 amaterial reduction in13 the Collegersquos investment (ldquocrowding outrdquo) and13 (5) the trusteeofficer disclosesin writing to the chief investment officer all13 material13 facts concerning the investment prior toparticipating in13 the transaction

How do you vet board membersrsquo potential conflicts13 of interest

The Conflict of Interest Policy also requires that each current member of the Board of Trustees andeach officer of the13 College13 file13 statement in July with the13 treasurer13 certifying that13 heshe has readand is familiar with the13 terms of the13 Conflict of Interest Policy and also requires that13 suchtrusteeofficer13 (1)13 disclose any possible conflicts of13 interest13 which may have arisen or13 occurred inthe fiscal year13 of the College ending June 30 or which13 may be expected13 to13 arise or occur during thefiscal year13 beginning July 1 or13 (2)13 knows of13 no such possible conflict13 of13 interest

What are your policies if a conflict arises with a member of the board of trustees

In the event of a conflict of interest under the policy prior to entering into the transaction thetrusteeofficer13 is required to fully disclose in writing to the Executive Committee of13 the Board of13 Trustees all material facts concerning the transaction and the13 extent and nature13 of hisher interestin the transaction and promptly respond to any requests for clarification or additional13 information

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 21

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22

Response to13 Question 4($ in thousands)

How much has your college or university spent each year to manage the endowment and howmany staff and contractors are employed to manage the endowment

Direct investment costs(1)

Fiscal Year 2013 2014 2015$ Bps $ Bps $ Bps

Internal13 staff $1473 10 $1742 10 $2015 11Custodyperformance $204 1 $301 2 $318 2Marketable equity manager fees $5676 39 $7155 42 $7204 40Other direct costs (travel software services etc) $781 5 $795 5 $831 5Total direct investment costs $8134 55 $9992 59 $10368 57

(1)As reported13 to13 NACUBOBasis points (bps) calculated as13 a of average (beginningending) endowment market value andprovided13 in13 order to13 ease comparison13 among other institutions

Staff and contractors(1)

Fiscal Year 2013 2014 2015Staff (FTE) 44 6 6

Marketable equity managers 5 5 5Alternative managers (hedge funds private equity and real 32 35 38assets)Total separate contractors 37 40 43

(1)As reported13 to13 NACUBO

For any13 fees paid to nonemployees for investment advice asset management or otherwiseplease13 provide13 detail on the13 amounts paid to whom and13 the13 fee13 arrangement

Fees by category are13 as follows

bull Cashfixed13 income is managed13 internally by investment office staffbull Marketable equity manager fees average from 75 basis points to 140 basis points annually

(calculated as a percentage of13 assets under13 management)13 and are paid directly by theendowment to the13 manager

bull Alternative investment manager fees are described13 in13 further detail below

Fees associated with alternative13 investments are13 paid within the13 respective13 investment structure13 and are13 not accumulated within the13 Collegersquos accounting system (ie not included in the13 above13 direct costs) Management fees typically range from 10 percent to 25 percent annually and are13 based13 upo either the total amount of capital committed13 to13 the investment vehicle or the amount

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 8

of capital actually invested13 by the investment vehicle These fees generally decline following theend of a fundrsquos investment period Carried13 interest (incentive fees) for the general partner of a fund13 range from 10 percent to 30 percent of net profit and13 normally include a ldquohigh13 water markrdquo In13 addition the13 Collegersquos private13 equity private13 real estate and distressed investments have13 preferredreturn provisions (typically 8 percent)

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 9

Response to13 Question 5

If your endowment is required to file a Form 990 separately from your college or universityrsquos Form990 please13 provide13 the13 endowment entity13 name(s)13 and Employment Identification Number

Not applicable

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 10

Response to13 Question 6

How does your college or university determine what percentage of the endowment will be paidout each13 year

The Collegersquos Endowment Spending Policy (copied below) specifies13 a 40 percent annual payout tobe calculated13 using the formula set forth13 in13 the policy

If any13 what has been the target endowment payout as a percentage of the endowmentrsquosbeginning13 balance13 each year If that answer differs from the13 percentage13 paid13 out please13 explainwhy

The College does not determine its payout on the basis of the endowmentrsquos beginning balance eachyear It is our practice per the board-shy‐approved Endowment Spending Policy to calculate13 the13 annualpayout o the basis of a 12-shy‐quarter moving average This is done to13 smooth13 the impact of marketvalue volatility13 over time

Please attach13 any payout policies or guidance

Grinnell College Endowment Spending Policy(Last revised at the13 Feb 22 2014 board13 meeting)

The annual endowment distribution is calculated as 40 percent of the 12-shy‐quarter movingaverage13 endowment market value13 determined annually as of the13 December 3 immediatelyprior to13 the beginning of the fiscal year

The College shall not allocate 100 percent of this distribution13 to13 the operating budget Factorsin determining the allocation include

1) Revenue balance2) Expenditure discipline3) Facility requirements (including debt service) and strategic initiatives

In the rare instance an exception to established policy is deemed prudent and necessary boththe president and13 the board13 must authorize such13 departure in13 advance and13 document the termsin the board minutes

Endowment Spending13 Policy13 Oversight and Governance(Excerpted from the Collegersquos bylaws13 as revised and restated in May 2014)

ARTICLE VI -shy‐-shy‐ DUTIES OF COMMITTEES

7 Finance Committee The Finance Committee oversees and monitors the Collegersquos annualoperating and13 ongoing capital budgets issuance and13 repayment of debt management offinancial reserves and long-shy‐range strategies toward financial sustainability To accomplishthis the Finance Committee shall receive and evaluate regular13 reports from the Colleges

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 11

Treasurer providing (a) comparisons of actualforecast revenues and expenditures tobudget accompanied13 by an13 explanation13 of variances (b) updates o the structure and13 status13 of the Collegersquos13 debt obligations( c) updates13 on the status13 of reserve funds and (d)other financial reports as requested13 by the Committee The Finance Committee shall be13 responsible for13 ensuring that13 the Board of13 Trustees receives the information necessary for13 the Board to oversee the safeguarding of13 the Collegersquos financial stability long-shy‐termeconomic health and prudent use13 of financial resources in manner consistent with themission and the stated aims and goals of academic departments administrative units andancillary programs The13 Finance13 Committee13 shall work collaboratively with other Boardcommittees in consultation with the President to make recommendations to the13 Boardregarding financial policies decisions and actions including but not limited13 to13 spending and13 endowment payout policies13 sources of income appropriate to meeting the Colleges needs13 debt capacity issuance and13 repayment and13 capital expenditures and financing

8 Investment Committee The Investment Committee shall13 be responsible for maintaining apolicy of prudent investment in13 stocks bonds real assets non-shy‐marketable securities such asprivate placements and13 limited13 partnerships and other similar financial instrumentsinterests andor securities subject to the approval13 of the Board of Trustees13 The InvestmentCommittee shall approve sub-shy‐policies under the investment policy and13 review and13 approveinvestment transactions pursuant to the approved investment13 policy and sub-shy‐policies TheInvestment Committee shall13 have the authority to delegate investment decisions to theChief Investment Officer andor independent investment managers pursuant to13 theapproved investment policy and sub-shy‐policies The Chief Investment Officer shall have theauthority to in turn delegate13 investment decisions to other officers and employees of the13 College pursuant to13 the approved13 investment policy and13 investment sub-shy‐policies TheInvestment Committee shall13 report to the Board of Trustees on the performance and assetallocation of the13 Collegersquos investment portfolio as requested by the13 Board Chair providedthat13 such investment13 report13 shall be given at13 least13 once each fiscal year The Investment13 Committee shall work collaboratively with13 the Finance Committee in13 consultation13 with13 thePresident to make13 recommendations to the13 Board of Trustees regarding the endowmentpayout policy13 debt capacity and issuance13 and capital financing

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 12

Response to13 Question 7

Does your college or university have policies regarding spending the endowment principal Hasyour college13 or university13 ever spent endowment principal13 If so under what circumstances

As stated13 in13 Note 1 of the Grinnell College audited13 financial statements the13 College13 follows the13 guidance13 in the13 Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA) and the13 Iowa Uniform Prudent Management of Institutional13 Funds Act (IUPMIFA) The Board of Trustees ofGrinnell College has interpreted IUPMIFA as requiring the preservation of the historic value of theoriginal gift absent explicit donor stipulation13 stating otherwise

The College has never spent the endowment principal unless specifically directed to do so by adonor eg time-shy‐restricted endowment contribution

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 13

13

Response to13 Question 8($ in thousands)

How much and what percentage of the endowmentrsquos beginning balance has your college oruniversity spent each13 year

Fiscal Year 2013 2014 2015 2016Beginning balance $1383856 $1553629 $1829521 $1787775Endowment spending $54400 $55800 $59243 $73818 of beginning balance spent 39 36 32 41

Expected

As noted13 in13 our response to13 Question13 6 the Collegersquos Endowment Spending Policy allows thepresident and13 the board13 to13 authorize13 exceptions from the13 established 4 percent payout when13 circumstances13 warrant Such an exception was13 authorized at the October 2015 meeting of theboard

Under the terms of the board-shy‐approved exception the13 endowment payout for the six-shy‐year period FY201 through F 202 will include an additional $9313 million per year over and13 above the standard13 4percent payout of $64513 million13 The additional payout is structured to address number of highpriority strategic initiatives

How much and what percentage of the endowmentrsquos return on investment each year has yourcollege or university spent each year

Fiscal Year 2013 2014 2015Investment return $222322 $316329 $8756Endowment spending $54400 $55800 $59243of investment return spent 245 176 6766

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 14

Response to13 Question 9($ in thousands)

What percentage of your endowment does your college or university devote to financial aid forstudent tuition

The College does not award or allocate financial aid based13 specifically o tuition Financial aid13 isawarded based on the13 comprehensive13 fee13 and other allowable13 expenses

Financial aid support to students and the13 related amount funded by the13 endowment are13 shownbelow

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Financial aid funded by endowment $16893 $17934 $18965 $20014of financial aid funded by endowment 42 40 40 42

Projected

The market value of the endowment restricted to use for13 financial aid is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid support $121998 $144054 $147164for13 studentsTotal endowment market value $1553629 $1829521 $1787775of endowment restricted13 to13 financial aid13 support for students 8 8 8

Endowment spending restricted to use for financial aid is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid support for $4174 $4266 $4651 $5134studentsTotal endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid 8 8 8 8

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aidsupport for students

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 15

The table below which uses information13 from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for financial aid support for $16893 $17934 $18965 $20014studentsEndowment spending used for other purposes $37507 $37866 $40278 $44504Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used13 for financial aid 31 32 32 31

Projected

How much for other forms of student financial aid Please specify the types13 of non-shy‐tuitionfinancial aid provided

The College provides many forms of assistance to students beyond financial aid including prizesfellowships internships and student employment

Financial aid and other student support are13 shown below

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Other student support to students $2742 $2688 $2763 $2855Total financial aid and other student support $43091 $47814 $49853 $50179Financial aid and other student support funded by $18123 $19122 $20207 $21388endowmentfinancial aid and other student support funded by 42 40 41 43endowment

Projected

The market value of the endowment restricted to use for13 financial aid and other13 student13 support13 is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid andother student supportTotal endowment market value

$126508

$1553629

$149611

$1829521

$152513

$1787775of endowment restricted to financial aid and other

student support 8 8 9

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 16

Endowment spending restricted to use for financial aid and other student support is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid and other student support $4620 $4736 $5163 $5701Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid and 8 8 9 9other student support

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid and other13 student13 support Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aid and other student support for13 students

The table below which uses information from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid and other support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for13 financial aid and $18123 $19122 $20207 $21388other student supportEndowment spending used for other purposes $36277 $36678 $39036 $43130Total endowment spending $54400 $55800 $59249 $64518of total endowment13 spending used for financial 33 34 34 33aid and other student support

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 17

Response to13 Question 10

Does your college or university have policies regarding whether it is allowed to accept fundsrestricted to a specific purpose

Grinnell College has adopted a Gift Acceptance Policy The Policy was endorsed13 by the Board13 ofTrustees Advancement Committee an Audit an Assessment Committee The policy is designed toassure13 that all gifts to or for the13 use13 of Grinnell College13 are13 structured to benefit Grinnell College13 while ensuring fidelity to donor intent Because some gift situations may be complex or13 more costlythan beneficial or13 restricted in a manner13 not13 keeping with Grinnell Collegersquos goal of13 philanthropythat13 advances the Collegersquos mission13 the policy has been13 developed13 to13 outline the procedures forassessing and accepting gifts to Grinnell College for the Collegersquos benefit

Has your college or university ever declined a donation because it was restricted to a certainpurpose If so please13 describe13 those13 specific scenarios in which your school rejected13 donation

Grinnell College has three examples of gifts declined because the donor-shy‐imposed restrictions did13 notalign with Grinnellrsquos mission and board-shy‐approved strategic priorities

1) donor approached13 Grinnell College about making a gift in13 the range of $250000ndash$500000for13 the College to use to13 purchase and13 maintain13 residential property to be13 utilized as afaith-shy‐based13 center At that time such13 a project was not a priority and13 the Collegecommunicated that the needs13 of the student body13 were already13 being met The College didnot pursue the gift

2) donor approached13 Grinnell College about the possibility of making a $1 million gift from afamily foundation to support13 experiential student13 learning in a specific area of13 psychology This area13 was not strength for the department13 and the department13 did not13 have plans to13 grow The College did13 not pursue the gift

3) donor approached13 Grinnell College near the end13 of a tax year with13 an13 interest in13 giftingland for the Collegersquos access and use The College explored the possibility but the donorrsquosproposed13 restrictions were deemed13 too13 onerous The College did13 not pursue the gift

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 18

Response to13 Question 11($ in thousands)

How much and what percentage of your college or universityrsquos endowment is invested in realproperty (not including13 REITs or other publicly-shy‐traded securities)

Fiscal Year 2013 2014 2015Endowment $1553629 $1829521 $1787775

(1)Real Estate Investments $59801 $52387 $51694 38 29 29

(1)Includes investments categorized as ldquootherrdquo13 in addition to ldquoreal estaterdquo13 on the audited financialstatements

Please list and describe your college or universityrsquos real estate holdings including real estate heldby the13 college13 or university the13 endowment and13 all related13 entities

Fiscal YearCampus Property 2013 2014 2015Land and Improvements $11771 $12533 $13406Buildings and13 Improvements $326408 $327774 $328591Construction13 in13 Process $267 $35 $390Total (Gross) $338446 $340342 $342387Accumulated13 Depreciation $108170 $116760 $125270Total (Net) $230276 $223582 $217117

Fiscal YearNon-shy‐Campus Property (1) 2013 2014 2015Limited Partnership Interests $59767 $52353 $51660Non-shy‐Campus Community Property $34 $34 $34Oil Mineral Rights (2) $3 $3 $3

(3)Other Real Estate $754 $754 $54Total Non-shy‐Campus Property $60558 $53144 $51751

(1)Includes investments categorized as ldquootherrdquo in addition to ldquoreal13 estaterdquo on the audited financial13 statements(2)Including property owned via a related entity(3)Comprised13 of property owned13 via a related13 entityNote Related entities include a C corporation 100 percent-shy‐owned13 by the College and13 annuity fundsfor13 which the College is trustee

If the college or university has made any Payments in Lieu of Taxes13 please13 provide13 the13 date13 and13 amount of the13 payment

The College has not made any Payments in Lieu of Taxes The College pays property taxes on anyproperty that is not mission-shy‐central and pays13 unrelated business13 income tax when appropriate

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 19

Response to13 Question 12

Does your college or university grant naming rights to donors based on certain donation levels Ifso please describe the naming rights13 program including how much and what percentage of anynaming rights donations your college or university has used for tuition13 assistance

Grinnell College has adopted the Fund Creation and Endowment Threshold Guidelines whicharticulate13 the13 levels at which donors can name13 variety of funds (such as student scholarshipsprofessorships and13 chairs and13 programmatic funds) Donors can permanently endow namedscholarship for a minimum of $50000 Donors13 can create an expendable scholarship meaning notendowed with the13 goal of fully spending13 annual gifts each year for $500013 per year Donors cancreate scholarships that are13 unrestricted and available13 to all students or can create13 restrictedscholarships Restrictions13 on scholarships13 vary Some donors13 restrict scholarship to those whodemonstrate financial need while others focus o academic performance major of study or thegeographic origin of the13 student

Gifts Received ($ in thousands)

Fiscal Year 2013 2014 2015 2016Named funds restricted for scholarships $986 $1591 $7511 $1237Named funds restricted for other use $843 $6603 $1928 $930Total named funds $1829 $8194 $9439 $2167

of gifts received for named funds restrictedfor13 scholarships 5391 1942

Projected

ScholarshipsOther Expenses ($ in thousands)

Fiscal Year 2013 2014

7957

2015

5708

2016Named funds restricted for13 scholarships $402313 $409613 $440813 $535713 Named funds restricted for other use $1108213 $1151513 $1245113 $1326113 Total named funds

$1510513 $1561113 $1685913 $1861813 of spending from named funds used for

scholarships 2663 2624 2615 2877

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 20

Response to13 Question 13

What conflict of interest policies does your college or university have in place to address financial13 interest in endowment investments (including potential13 conflicts of interest among and betweengoverning13 boards trustees executives internal employees tasked13 with overseeing13 the13 endowment and13 external asset managers of endowment assets)

The Collegersquos Conflict of Interest Policy was adopted on May 7 2011 and applies to each member ofthe Board of13 Trustees and each officer13 of13 the College during such personrsquos service to the College13 inthe case of13 a trustee the Conflict13 of13 Interest13 Policy applies for13 a period of13 five years following thedate of the trusteersquos completion13 of service to13 the College Under the policy a conflict of interest isdefined13 as a transaction13 in13 which13 (1) the trustee or officer (or member of hisher13 immediate family)13 is a party13 (2) the trustee or officer (or member of hisher immediate family) has a material13 economic interest or (3) the13 trustee13 or officer (or member of hisher immediate13 family) is in controlor has the power to13 control management policies of an13 entity that is a party to13 the transaction ANDeither the13 College13 is also party to or otherwise13 involved in the13 transaction or the13 involvement ofthe trustee or13 officer13 can reasonably be expected to give rise to an appearance of13 impropriety

The Conflict of Interest Policy provides for various safe harbor transactions relating toinvestments The purchase sale or holding of securities which13 are publicly traded13 by any trustee orofficer shall not constitute a conflict of interest transaction solely because the College also owns13 securities13 of the same class13 or other securities13 of the same issuer in its13 investment portfolio Alsoan investment by any trustee13 or officer in limited partnerships trusts or similar non-shy‐marketablevehicles in which the College also is an investor shall13 not constitute a conflict of interest transactionprovided13 that (1) the trusteeofficer makes hisher own13 evaluation13 of the investment merits (2) thetrusteeofficer13 does not13 utilize College resources or13 seek13 assistance from College employees inmaking the investment (3) the trusteeofficer does not ldquotrade offrdquo hisher relationship with theCollege for an13 investment allocation (4) the investment of the trusteeofficer does not lead13 to13 amaterial reduction in13 the Collegersquos investment (ldquocrowding outrdquo) and13 (5) the trusteeofficer disclosesin writing to the chief investment officer all13 material13 facts concerning the investment prior toparticipating in13 the transaction

How do you vet board membersrsquo potential conflicts13 of interest

The Conflict of Interest Policy also requires that each current member of the Board of Trustees andeach officer of the13 College13 file13 statement in July with the13 treasurer13 certifying that13 heshe has readand is familiar with the13 terms of the13 Conflict of Interest Policy and also requires that13 suchtrusteeofficer13 (1)13 disclose any possible conflicts of13 interest13 which may have arisen or13 occurred inthe fiscal year13 of the College ending June 30 or which13 may be expected13 to13 arise or occur during thefiscal year13 beginning July 1 or13 (2)13 knows of13 no such possible conflict13 of13 interest

What are your policies if a conflict arises with a member of the board of trustees

In the event of a conflict of interest under the policy prior to entering into the transaction thetrusteeofficer13 is required to fully disclose in writing to the Executive Committee of13 the Board of13 Trustees all material facts concerning the transaction and the13 extent and nature13 of hisher interestin the transaction and promptly respond to any requests for clarification or additional13 information

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 21

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22

of capital actually invested13 by the investment vehicle These fees generally decline following theend of a fundrsquos investment period Carried13 interest (incentive fees) for the general partner of a fund13 range from 10 percent to 30 percent of net profit and13 normally include a ldquohigh13 water markrdquo In13 addition the13 Collegersquos private13 equity private13 real estate and distressed investments have13 preferredreturn provisions (typically 8 percent)

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 9

Response to13 Question 5

If your endowment is required to file a Form 990 separately from your college or universityrsquos Form990 please13 provide13 the13 endowment entity13 name(s)13 and Employment Identification Number

Not applicable

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 10

Response to13 Question 6

How does your college or university determine what percentage of the endowment will be paidout each13 year

The Collegersquos Endowment Spending Policy (copied below) specifies13 a 40 percent annual payout tobe calculated13 using the formula set forth13 in13 the policy

If any13 what has been the target endowment payout as a percentage of the endowmentrsquosbeginning13 balance13 each year If that answer differs from the13 percentage13 paid13 out please13 explainwhy

The College does not determine its payout on the basis of the endowmentrsquos beginning balance eachyear It is our practice per the board-shy‐approved Endowment Spending Policy to calculate13 the13 annualpayout o the basis of a 12-shy‐quarter moving average This is done to13 smooth13 the impact of marketvalue volatility13 over time

Please attach13 any payout policies or guidance

Grinnell College Endowment Spending Policy(Last revised at the13 Feb 22 2014 board13 meeting)

The annual endowment distribution is calculated as 40 percent of the 12-shy‐quarter movingaverage13 endowment market value13 determined annually as of the13 December 3 immediatelyprior to13 the beginning of the fiscal year

The College shall not allocate 100 percent of this distribution13 to13 the operating budget Factorsin determining the allocation include

1) Revenue balance2) Expenditure discipline3) Facility requirements (including debt service) and strategic initiatives

In the rare instance an exception to established policy is deemed prudent and necessary boththe president and13 the board13 must authorize such13 departure in13 advance and13 document the termsin the board minutes

Endowment Spending13 Policy13 Oversight and Governance(Excerpted from the Collegersquos bylaws13 as revised and restated in May 2014)

ARTICLE VI -shy‐-shy‐ DUTIES OF COMMITTEES

7 Finance Committee The Finance Committee oversees and monitors the Collegersquos annualoperating and13 ongoing capital budgets issuance and13 repayment of debt management offinancial reserves and long-shy‐range strategies toward financial sustainability To accomplishthis the Finance Committee shall receive and evaluate regular13 reports from the Colleges

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 11

Treasurer providing (a) comparisons of actualforecast revenues and expenditures tobudget accompanied13 by an13 explanation13 of variances (b) updates o the structure and13 status13 of the Collegersquos13 debt obligations( c) updates13 on the status13 of reserve funds and (d)other financial reports as requested13 by the Committee The Finance Committee shall be13 responsible for13 ensuring that13 the Board of13 Trustees receives the information necessary for13 the Board to oversee the safeguarding of13 the Collegersquos financial stability long-shy‐termeconomic health and prudent use13 of financial resources in manner consistent with themission and the stated aims and goals of academic departments administrative units andancillary programs The13 Finance13 Committee13 shall work collaboratively with other Boardcommittees in consultation with the President to make recommendations to the13 Boardregarding financial policies decisions and actions including but not limited13 to13 spending and13 endowment payout policies13 sources of income appropriate to meeting the Colleges needs13 debt capacity issuance and13 repayment and13 capital expenditures and financing

8 Investment Committee The Investment Committee shall13 be responsible for maintaining apolicy of prudent investment in13 stocks bonds real assets non-shy‐marketable securities such asprivate placements and13 limited13 partnerships and other similar financial instrumentsinterests andor securities subject to the approval13 of the Board of Trustees13 The InvestmentCommittee shall approve sub-shy‐policies under the investment policy and13 review and13 approveinvestment transactions pursuant to the approved investment13 policy and sub-shy‐policies TheInvestment Committee shall13 have the authority to delegate investment decisions to theChief Investment Officer andor independent investment managers pursuant to13 theapproved investment policy and sub-shy‐policies The Chief Investment Officer shall have theauthority to in turn delegate13 investment decisions to other officers and employees of the13 College pursuant to13 the approved13 investment policy and13 investment sub-shy‐policies TheInvestment Committee shall13 report to the Board of Trustees on the performance and assetallocation of the13 Collegersquos investment portfolio as requested by the13 Board Chair providedthat13 such investment13 report13 shall be given at13 least13 once each fiscal year The Investment13 Committee shall work collaboratively with13 the Finance Committee in13 consultation13 with13 thePresident to make13 recommendations to the13 Board of Trustees regarding the endowmentpayout policy13 debt capacity and issuance13 and capital financing

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 12

Response to13 Question 7

Does your college or university have policies regarding spending the endowment principal Hasyour college13 or university13 ever spent endowment principal13 If so under what circumstances

As stated13 in13 Note 1 of the Grinnell College audited13 financial statements the13 College13 follows the13 guidance13 in the13 Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA) and the13 Iowa Uniform Prudent Management of Institutional13 Funds Act (IUPMIFA) The Board of Trustees ofGrinnell College has interpreted IUPMIFA as requiring the preservation of the historic value of theoriginal gift absent explicit donor stipulation13 stating otherwise

The College has never spent the endowment principal unless specifically directed to do so by adonor eg time-shy‐restricted endowment contribution

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 13

13

Response to13 Question 8($ in thousands)

How much and what percentage of the endowmentrsquos beginning balance has your college oruniversity spent each13 year

Fiscal Year 2013 2014 2015 2016Beginning balance $1383856 $1553629 $1829521 $1787775Endowment spending $54400 $55800 $59243 $73818 of beginning balance spent 39 36 32 41

Expected

As noted13 in13 our response to13 Question13 6 the Collegersquos Endowment Spending Policy allows thepresident and13 the board13 to13 authorize13 exceptions from the13 established 4 percent payout when13 circumstances13 warrant Such an exception was13 authorized at the October 2015 meeting of theboard

Under the terms of the board-shy‐approved exception the13 endowment payout for the six-shy‐year period FY201 through F 202 will include an additional $9313 million per year over and13 above the standard13 4percent payout of $64513 million13 The additional payout is structured to address number of highpriority strategic initiatives

How much and what percentage of the endowmentrsquos return on investment each year has yourcollege or university spent each year

Fiscal Year 2013 2014 2015Investment return $222322 $316329 $8756Endowment spending $54400 $55800 $59243of investment return spent 245 176 6766

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 14

Response to13 Question 9($ in thousands)

What percentage of your endowment does your college or university devote to financial aid forstudent tuition

The College does not award or allocate financial aid based13 specifically o tuition Financial aid13 isawarded based on the13 comprehensive13 fee13 and other allowable13 expenses

Financial aid support to students and the13 related amount funded by the13 endowment are13 shownbelow

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Financial aid funded by endowment $16893 $17934 $18965 $20014of financial aid funded by endowment 42 40 40 42

Projected

The market value of the endowment restricted to use for13 financial aid is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid support $121998 $144054 $147164for13 studentsTotal endowment market value $1553629 $1829521 $1787775of endowment restricted13 to13 financial aid13 support for students 8 8 8

Endowment spending restricted to use for financial aid is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid support for $4174 $4266 $4651 $5134studentsTotal endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid 8 8 8 8

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aidsupport for students

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 15

The table below which uses information13 from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for financial aid support for $16893 $17934 $18965 $20014studentsEndowment spending used for other purposes $37507 $37866 $40278 $44504Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used13 for financial aid 31 32 32 31

Projected

How much for other forms of student financial aid Please specify the types13 of non-shy‐tuitionfinancial aid provided

The College provides many forms of assistance to students beyond financial aid including prizesfellowships internships and student employment

Financial aid and other student support are13 shown below

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Other student support to students $2742 $2688 $2763 $2855Total financial aid and other student support $43091 $47814 $49853 $50179Financial aid and other student support funded by $18123 $19122 $20207 $21388endowmentfinancial aid and other student support funded by 42 40 41 43endowment

Projected

The market value of the endowment restricted to use for13 financial aid and other13 student13 support13 is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid andother student supportTotal endowment market value

$126508

$1553629

$149611

$1829521

$152513

$1787775of endowment restricted to financial aid and other

student support 8 8 9

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 16

Endowment spending restricted to use for financial aid and other student support is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid and other student support $4620 $4736 $5163 $5701Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid and 8 8 9 9other student support

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid and other13 student13 support Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aid and other student support for13 students

The table below which uses information from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid and other support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for13 financial aid and $18123 $19122 $20207 $21388other student supportEndowment spending used for other purposes $36277 $36678 $39036 $43130Total endowment spending $54400 $55800 $59249 $64518of total endowment13 spending used for financial 33 34 34 33aid and other student support

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 17

Response to13 Question 10

Does your college or university have policies regarding whether it is allowed to accept fundsrestricted to a specific purpose

Grinnell College has adopted a Gift Acceptance Policy The Policy was endorsed13 by the Board13 ofTrustees Advancement Committee an Audit an Assessment Committee The policy is designed toassure13 that all gifts to or for the13 use13 of Grinnell College13 are13 structured to benefit Grinnell College13 while ensuring fidelity to donor intent Because some gift situations may be complex or13 more costlythan beneficial or13 restricted in a manner13 not13 keeping with Grinnell Collegersquos goal of13 philanthropythat13 advances the Collegersquos mission13 the policy has been13 developed13 to13 outline the procedures forassessing and accepting gifts to Grinnell College for the Collegersquos benefit

Has your college or university ever declined a donation because it was restricted to a certainpurpose If so please13 describe13 those13 specific scenarios in which your school rejected13 donation

Grinnell College has three examples of gifts declined because the donor-shy‐imposed restrictions did13 notalign with Grinnellrsquos mission and board-shy‐approved strategic priorities

1) donor approached13 Grinnell College about making a gift in13 the range of $250000ndash$500000for13 the College to use to13 purchase and13 maintain13 residential property to be13 utilized as afaith-shy‐based13 center At that time such13 a project was not a priority and13 the Collegecommunicated that the needs13 of the student body13 were already13 being met The College didnot pursue the gift

2) donor approached13 Grinnell College about the possibility of making a $1 million gift from afamily foundation to support13 experiential student13 learning in a specific area of13 psychology This area13 was not strength for the department13 and the department13 did not13 have plans to13 grow The College did13 not pursue the gift

3) donor approached13 Grinnell College near the end13 of a tax year with13 an13 interest in13 giftingland for the Collegersquos access and use The College explored the possibility but the donorrsquosproposed13 restrictions were deemed13 too13 onerous The College did13 not pursue the gift

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 18

Response to13 Question 11($ in thousands)

How much and what percentage of your college or universityrsquos endowment is invested in realproperty (not including13 REITs or other publicly-shy‐traded securities)

Fiscal Year 2013 2014 2015Endowment $1553629 $1829521 $1787775

(1)Real Estate Investments $59801 $52387 $51694 38 29 29

(1)Includes investments categorized as ldquootherrdquo13 in addition to ldquoreal estaterdquo13 on the audited financialstatements

Please list and describe your college or universityrsquos real estate holdings including real estate heldby the13 college13 or university the13 endowment and13 all related13 entities

Fiscal YearCampus Property 2013 2014 2015Land and Improvements $11771 $12533 $13406Buildings and13 Improvements $326408 $327774 $328591Construction13 in13 Process $267 $35 $390Total (Gross) $338446 $340342 $342387Accumulated13 Depreciation $108170 $116760 $125270Total (Net) $230276 $223582 $217117

Fiscal YearNon-shy‐Campus Property (1) 2013 2014 2015Limited Partnership Interests $59767 $52353 $51660Non-shy‐Campus Community Property $34 $34 $34Oil Mineral Rights (2) $3 $3 $3

(3)Other Real Estate $754 $754 $54Total Non-shy‐Campus Property $60558 $53144 $51751

(1)Includes investments categorized as ldquootherrdquo in addition to ldquoreal13 estaterdquo on the audited financial13 statements(2)Including property owned via a related entity(3)Comprised13 of property owned13 via a related13 entityNote Related entities include a C corporation 100 percent-shy‐owned13 by the College and13 annuity fundsfor13 which the College is trustee

If the college or university has made any Payments in Lieu of Taxes13 please13 provide13 the13 date13 and13 amount of the13 payment

The College has not made any Payments in Lieu of Taxes The College pays property taxes on anyproperty that is not mission-shy‐central and pays13 unrelated business13 income tax when appropriate

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 19

Response to13 Question 12

Does your college or university grant naming rights to donors based on certain donation levels Ifso please describe the naming rights13 program including how much and what percentage of anynaming rights donations your college or university has used for tuition13 assistance

Grinnell College has adopted the Fund Creation and Endowment Threshold Guidelines whicharticulate13 the13 levels at which donors can name13 variety of funds (such as student scholarshipsprofessorships and13 chairs and13 programmatic funds) Donors can permanently endow namedscholarship for a minimum of $50000 Donors13 can create an expendable scholarship meaning notendowed with the13 goal of fully spending13 annual gifts each year for $500013 per year Donors cancreate scholarships that are13 unrestricted and available13 to all students or can create13 restrictedscholarships Restrictions13 on scholarships13 vary Some donors13 restrict scholarship to those whodemonstrate financial need while others focus o academic performance major of study or thegeographic origin of the13 student

Gifts Received ($ in thousands)

Fiscal Year 2013 2014 2015 2016Named funds restricted for scholarships $986 $1591 $7511 $1237Named funds restricted for other use $843 $6603 $1928 $930Total named funds $1829 $8194 $9439 $2167

of gifts received for named funds restrictedfor13 scholarships 5391 1942

Projected

ScholarshipsOther Expenses ($ in thousands)

Fiscal Year 2013 2014

7957

2015

5708

2016Named funds restricted for13 scholarships $402313 $409613 $440813 $535713 Named funds restricted for other use $1108213 $1151513 $1245113 $1326113 Total named funds

$1510513 $1561113 $1685913 $1861813 of spending from named funds used for

scholarships 2663 2624 2615 2877

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 20

Response to13 Question 13

What conflict of interest policies does your college or university have in place to address financial13 interest in endowment investments (including potential13 conflicts of interest among and betweengoverning13 boards trustees executives internal employees tasked13 with overseeing13 the13 endowment and13 external asset managers of endowment assets)

The Collegersquos Conflict of Interest Policy was adopted on May 7 2011 and applies to each member ofthe Board of13 Trustees and each officer13 of13 the College during such personrsquos service to the College13 inthe case of13 a trustee the Conflict13 of13 Interest13 Policy applies for13 a period of13 five years following thedate of the trusteersquos completion13 of service to13 the College Under the policy a conflict of interest isdefined13 as a transaction13 in13 which13 (1) the trustee or officer (or member of hisher13 immediate family)13 is a party13 (2) the trustee or officer (or member of hisher immediate family) has a material13 economic interest or (3) the13 trustee13 or officer (or member of hisher immediate13 family) is in controlor has the power to13 control management policies of an13 entity that is a party to13 the transaction ANDeither the13 College13 is also party to or otherwise13 involved in the13 transaction or the13 involvement ofthe trustee or13 officer13 can reasonably be expected to give rise to an appearance of13 impropriety

The Conflict of Interest Policy provides for various safe harbor transactions relating toinvestments The purchase sale or holding of securities which13 are publicly traded13 by any trustee orofficer shall not constitute a conflict of interest transaction solely because the College also owns13 securities13 of the same class13 or other securities13 of the same issuer in its13 investment portfolio Alsoan investment by any trustee13 or officer in limited partnerships trusts or similar non-shy‐marketablevehicles in which the College also is an investor shall13 not constitute a conflict of interest transactionprovided13 that (1) the trusteeofficer makes hisher own13 evaluation13 of the investment merits (2) thetrusteeofficer13 does not13 utilize College resources or13 seek13 assistance from College employees inmaking the investment (3) the trusteeofficer does not ldquotrade offrdquo hisher relationship with theCollege for an13 investment allocation (4) the investment of the trusteeofficer does not lead13 to13 amaterial reduction in13 the Collegersquos investment (ldquocrowding outrdquo) and13 (5) the trusteeofficer disclosesin writing to the chief investment officer all13 material13 facts concerning the investment prior toparticipating in13 the transaction

How do you vet board membersrsquo potential conflicts13 of interest

The Conflict of Interest Policy also requires that each current member of the Board of Trustees andeach officer of the13 College13 file13 statement in July with the13 treasurer13 certifying that13 heshe has readand is familiar with the13 terms of the13 Conflict of Interest Policy and also requires that13 suchtrusteeofficer13 (1)13 disclose any possible conflicts of13 interest13 which may have arisen or13 occurred inthe fiscal year13 of the College ending June 30 or which13 may be expected13 to13 arise or occur during thefiscal year13 beginning July 1 or13 (2)13 knows of13 no such possible conflict13 of13 interest

What are your policies if a conflict arises with a member of the board of trustees

In the event of a conflict of interest under the policy prior to entering into the transaction thetrusteeofficer13 is required to fully disclose in writing to the Executive Committee of13 the Board of13 Trustees all material facts concerning the transaction and the13 extent and nature13 of hisher interestin the transaction and promptly respond to any requests for clarification or additional13 information

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 21

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22

Response to13 Question 5

If your endowment is required to file a Form 990 separately from your college or universityrsquos Form990 please13 provide13 the13 endowment entity13 name(s)13 and Employment Identification Number

Not applicable

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 10

Response to13 Question 6

How does your college or university determine what percentage of the endowment will be paidout each13 year

The Collegersquos Endowment Spending Policy (copied below) specifies13 a 40 percent annual payout tobe calculated13 using the formula set forth13 in13 the policy

If any13 what has been the target endowment payout as a percentage of the endowmentrsquosbeginning13 balance13 each year If that answer differs from the13 percentage13 paid13 out please13 explainwhy

The College does not determine its payout on the basis of the endowmentrsquos beginning balance eachyear It is our practice per the board-shy‐approved Endowment Spending Policy to calculate13 the13 annualpayout o the basis of a 12-shy‐quarter moving average This is done to13 smooth13 the impact of marketvalue volatility13 over time

Please attach13 any payout policies or guidance

Grinnell College Endowment Spending Policy(Last revised at the13 Feb 22 2014 board13 meeting)

The annual endowment distribution is calculated as 40 percent of the 12-shy‐quarter movingaverage13 endowment market value13 determined annually as of the13 December 3 immediatelyprior to13 the beginning of the fiscal year

The College shall not allocate 100 percent of this distribution13 to13 the operating budget Factorsin determining the allocation include

1) Revenue balance2) Expenditure discipline3) Facility requirements (including debt service) and strategic initiatives

In the rare instance an exception to established policy is deemed prudent and necessary boththe president and13 the board13 must authorize such13 departure in13 advance and13 document the termsin the board minutes

Endowment Spending13 Policy13 Oversight and Governance(Excerpted from the Collegersquos bylaws13 as revised and restated in May 2014)

ARTICLE VI -shy‐-shy‐ DUTIES OF COMMITTEES

7 Finance Committee The Finance Committee oversees and monitors the Collegersquos annualoperating and13 ongoing capital budgets issuance and13 repayment of debt management offinancial reserves and long-shy‐range strategies toward financial sustainability To accomplishthis the Finance Committee shall receive and evaluate regular13 reports from the Colleges

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 11

Treasurer providing (a) comparisons of actualforecast revenues and expenditures tobudget accompanied13 by an13 explanation13 of variances (b) updates o the structure and13 status13 of the Collegersquos13 debt obligations( c) updates13 on the status13 of reserve funds and (d)other financial reports as requested13 by the Committee The Finance Committee shall be13 responsible for13 ensuring that13 the Board of13 Trustees receives the information necessary for13 the Board to oversee the safeguarding of13 the Collegersquos financial stability long-shy‐termeconomic health and prudent use13 of financial resources in manner consistent with themission and the stated aims and goals of academic departments administrative units andancillary programs The13 Finance13 Committee13 shall work collaboratively with other Boardcommittees in consultation with the President to make recommendations to the13 Boardregarding financial policies decisions and actions including but not limited13 to13 spending and13 endowment payout policies13 sources of income appropriate to meeting the Colleges needs13 debt capacity issuance and13 repayment and13 capital expenditures and financing

8 Investment Committee The Investment Committee shall13 be responsible for maintaining apolicy of prudent investment in13 stocks bonds real assets non-shy‐marketable securities such asprivate placements and13 limited13 partnerships and other similar financial instrumentsinterests andor securities subject to the approval13 of the Board of Trustees13 The InvestmentCommittee shall approve sub-shy‐policies under the investment policy and13 review and13 approveinvestment transactions pursuant to the approved investment13 policy and sub-shy‐policies TheInvestment Committee shall13 have the authority to delegate investment decisions to theChief Investment Officer andor independent investment managers pursuant to13 theapproved investment policy and sub-shy‐policies The Chief Investment Officer shall have theauthority to in turn delegate13 investment decisions to other officers and employees of the13 College pursuant to13 the approved13 investment policy and13 investment sub-shy‐policies TheInvestment Committee shall13 report to the Board of Trustees on the performance and assetallocation of the13 Collegersquos investment portfolio as requested by the13 Board Chair providedthat13 such investment13 report13 shall be given at13 least13 once each fiscal year The Investment13 Committee shall work collaboratively with13 the Finance Committee in13 consultation13 with13 thePresident to make13 recommendations to the13 Board of Trustees regarding the endowmentpayout policy13 debt capacity and issuance13 and capital financing

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 12

Response to13 Question 7

Does your college or university have policies regarding spending the endowment principal Hasyour college13 or university13 ever spent endowment principal13 If so under what circumstances

As stated13 in13 Note 1 of the Grinnell College audited13 financial statements the13 College13 follows the13 guidance13 in the13 Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA) and the13 Iowa Uniform Prudent Management of Institutional13 Funds Act (IUPMIFA) The Board of Trustees ofGrinnell College has interpreted IUPMIFA as requiring the preservation of the historic value of theoriginal gift absent explicit donor stipulation13 stating otherwise

The College has never spent the endowment principal unless specifically directed to do so by adonor eg time-shy‐restricted endowment contribution

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 13

13

Response to13 Question 8($ in thousands)

How much and what percentage of the endowmentrsquos beginning balance has your college oruniversity spent each13 year

Fiscal Year 2013 2014 2015 2016Beginning balance $1383856 $1553629 $1829521 $1787775Endowment spending $54400 $55800 $59243 $73818 of beginning balance spent 39 36 32 41

Expected

As noted13 in13 our response to13 Question13 6 the Collegersquos Endowment Spending Policy allows thepresident and13 the board13 to13 authorize13 exceptions from the13 established 4 percent payout when13 circumstances13 warrant Such an exception was13 authorized at the October 2015 meeting of theboard

Under the terms of the board-shy‐approved exception the13 endowment payout for the six-shy‐year period FY201 through F 202 will include an additional $9313 million per year over and13 above the standard13 4percent payout of $64513 million13 The additional payout is structured to address number of highpriority strategic initiatives

How much and what percentage of the endowmentrsquos return on investment each year has yourcollege or university spent each year

Fiscal Year 2013 2014 2015Investment return $222322 $316329 $8756Endowment spending $54400 $55800 $59243of investment return spent 245 176 6766

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 14

Response to13 Question 9($ in thousands)

What percentage of your endowment does your college or university devote to financial aid forstudent tuition

The College does not award or allocate financial aid based13 specifically o tuition Financial aid13 isawarded based on the13 comprehensive13 fee13 and other allowable13 expenses

Financial aid support to students and the13 related amount funded by the13 endowment are13 shownbelow

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Financial aid funded by endowment $16893 $17934 $18965 $20014of financial aid funded by endowment 42 40 40 42

Projected

The market value of the endowment restricted to use for13 financial aid is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid support $121998 $144054 $147164for13 studentsTotal endowment market value $1553629 $1829521 $1787775of endowment restricted13 to13 financial aid13 support for students 8 8 8

Endowment spending restricted to use for financial aid is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid support for $4174 $4266 $4651 $5134studentsTotal endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid 8 8 8 8

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aidsupport for students

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 15

The table below which uses information13 from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for financial aid support for $16893 $17934 $18965 $20014studentsEndowment spending used for other purposes $37507 $37866 $40278 $44504Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used13 for financial aid 31 32 32 31

Projected

How much for other forms of student financial aid Please specify the types13 of non-shy‐tuitionfinancial aid provided

The College provides many forms of assistance to students beyond financial aid including prizesfellowships internships and student employment

Financial aid and other student support are13 shown below

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Other student support to students $2742 $2688 $2763 $2855Total financial aid and other student support $43091 $47814 $49853 $50179Financial aid and other student support funded by $18123 $19122 $20207 $21388endowmentfinancial aid and other student support funded by 42 40 41 43endowment

Projected

The market value of the endowment restricted to use for13 financial aid and other13 student13 support13 is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid andother student supportTotal endowment market value

$126508

$1553629

$149611

$1829521

$152513

$1787775of endowment restricted to financial aid and other

student support 8 8 9

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 16

Endowment spending restricted to use for financial aid and other student support is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid and other student support $4620 $4736 $5163 $5701Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid and 8 8 9 9other student support

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid and other13 student13 support Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aid and other student support for13 students

The table below which uses information from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid and other support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for13 financial aid and $18123 $19122 $20207 $21388other student supportEndowment spending used for other purposes $36277 $36678 $39036 $43130Total endowment spending $54400 $55800 $59249 $64518of total endowment13 spending used for financial 33 34 34 33aid and other student support

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 17

Response to13 Question 10

Does your college or university have policies regarding whether it is allowed to accept fundsrestricted to a specific purpose

Grinnell College has adopted a Gift Acceptance Policy The Policy was endorsed13 by the Board13 ofTrustees Advancement Committee an Audit an Assessment Committee The policy is designed toassure13 that all gifts to or for the13 use13 of Grinnell College13 are13 structured to benefit Grinnell College13 while ensuring fidelity to donor intent Because some gift situations may be complex or13 more costlythan beneficial or13 restricted in a manner13 not13 keeping with Grinnell Collegersquos goal of13 philanthropythat13 advances the Collegersquos mission13 the policy has been13 developed13 to13 outline the procedures forassessing and accepting gifts to Grinnell College for the Collegersquos benefit

Has your college or university ever declined a donation because it was restricted to a certainpurpose If so please13 describe13 those13 specific scenarios in which your school rejected13 donation

Grinnell College has three examples of gifts declined because the donor-shy‐imposed restrictions did13 notalign with Grinnellrsquos mission and board-shy‐approved strategic priorities

1) donor approached13 Grinnell College about making a gift in13 the range of $250000ndash$500000for13 the College to use to13 purchase and13 maintain13 residential property to be13 utilized as afaith-shy‐based13 center At that time such13 a project was not a priority and13 the Collegecommunicated that the needs13 of the student body13 were already13 being met The College didnot pursue the gift

2) donor approached13 Grinnell College about the possibility of making a $1 million gift from afamily foundation to support13 experiential student13 learning in a specific area of13 psychology This area13 was not strength for the department13 and the department13 did not13 have plans to13 grow The College did13 not pursue the gift

3) donor approached13 Grinnell College near the end13 of a tax year with13 an13 interest in13 giftingland for the Collegersquos access and use The College explored the possibility but the donorrsquosproposed13 restrictions were deemed13 too13 onerous The College did13 not pursue the gift

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 18

Response to13 Question 11($ in thousands)

How much and what percentage of your college or universityrsquos endowment is invested in realproperty (not including13 REITs or other publicly-shy‐traded securities)

Fiscal Year 2013 2014 2015Endowment $1553629 $1829521 $1787775

(1)Real Estate Investments $59801 $52387 $51694 38 29 29

(1)Includes investments categorized as ldquootherrdquo13 in addition to ldquoreal estaterdquo13 on the audited financialstatements

Please list and describe your college or universityrsquos real estate holdings including real estate heldby the13 college13 or university the13 endowment and13 all related13 entities

Fiscal YearCampus Property 2013 2014 2015Land and Improvements $11771 $12533 $13406Buildings and13 Improvements $326408 $327774 $328591Construction13 in13 Process $267 $35 $390Total (Gross) $338446 $340342 $342387Accumulated13 Depreciation $108170 $116760 $125270Total (Net) $230276 $223582 $217117

Fiscal YearNon-shy‐Campus Property (1) 2013 2014 2015Limited Partnership Interests $59767 $52353 $51660Non-shy‐Campus Community Property $34 $34 $34Oil Mineral Rights (2) $3 $3 $3

(3)Other Real Estate $754 $754 $54Total Non-shy‐Campus Property $60558 $53144 $51751

(1)Includes investments categorized as ldquootherrdquo in addition to ldquoreal13 estaterdquo on the audited financial13 statements(2)Including property owned via a related entity(3)Comprised13 of property owned13 via a related13 entityNote Related entities include a C corporation 100 percent-shy‐owned13 by the College and13 annuity fundsfor13 which the College is trustee

If the college or university has made any Payments in Lieu of Taxes13 please13 provide13 the13 date13 and13 amount of the13 payment

The College has not made any Payments in Lieu of Taxes The College pays property taxes on anyproperty that is not mission-shy‐central and pays13 unrelated business13 income tax when appropriate

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 19

Response to13 Question 12

Does your college or university grant naming rights to donors based on certain donation levels Ifso please describe the naming rights13 program including how much and what percentage of anynaming rights donations your college or university has used for tuition13 assistance

Grinnell College has adopted the Fund Creation and Endowment Threshold Guidelines whicharticulate13 the13 levels at which donors can name13 variety of funds (such as student scholarshipsprofessorships and13 chairs and13 programmatic funds) Donors can permanently endow namedscholarship for a minimum of $50000 Donors13 can create an expendable scholarship meaning notendowed with the13 goal of fully spending13 annual gifts each year for $500013 per year Donors cancreate scholarships that are13 unrestricted and available13 to all students or can create13 restrictedscholarships Restrictions13 on scholarships13 vary Some donors13 restrict scholarship to those whodemonstrate financial need while others focus o academic performance major of study or thegeographic origin of the13 student

Gifts Received ($ in thousands)

Fiscal Year 2013 2014 2015 2016Named funds restricted for scholarships $986 $1591 $7511 $1237Named funds restricted for other use $843 $6603 $1928 $930Total named funds $1829 $8194 $9439 $2167

of gifts received for named funds restrictedfor13 scholarships 5391 1942

Projected

ScholarshipsOther Expenses ($ in thousands)

Fiscal Year 2013 2014

7957

2015

5708

2016Named funds restricted for13 scholarships $402313 $409613 $440813 $535713 Named funds restricted for other use $1108213 $1151513 $1245113 $1326113 Total named funds

$1510513 $1561113 $1685913 $1861813 of spending from named funds used for

scholarships 2663 2624 2615 2877

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 20

Response to13 Question 13

What conflict of interest policies does your college or university have in place to address financial13 interest in endowment investments (including potential13 conflicts of interest among and betweengoverning13 boards trustees executives internal employees tasked13 with overseeing13 the13 endowment and13 external asset managers of endowment assets)

The Collegersquos Conflict of Interest Policy was adopted on May 7 2011 and applies to each member ofthe Board of13 Trustees and each officer13 of13 the College during such personrsquos service to the College13 inthe case of13 a trustee the Conflict13 of13 Interest13 Policy applies for13 a period of13 five years following thedate of the trusteersquos completion13 of service to13 the College Under the policy a conflict of interest isdefined13 as a transaction13 in13 which13 (1) the trustee or officer (or member of hisher13 immediate family)13 is a party13 (2) the trustee or officer (or member of hisher immediate family) has a material13 economic interest or (3) the13 trustee13 or officer (or member of hisher immediate13 family) is in controlor has the power to13 control management policies of an13 entity that is a party to13 the transaction ANDeither the13 College13 is also party to or otherwise13 involved in the13 transaction or the13 involvement ofthe trustee or13 officer13 can reasonably be expected to give rise to an appearance of13 impropriety

The Conflict of Interest Policy provides for various safe harbor transactions relating toinvestments The purchase sale or holding of securities which13 are publicly traded13 by any trustee orofficer shall not constitute a conflict of interest transaction solely because the College also owns13 securities13 of the same class13 or other securities13 of the same issuer in its13 investment portfolio Alsoan investment by any trustee13 or officer in limited partnerships trusts or similar non-shy‐marketablevehicles in which the College also is an investor shall13 not constitute a conflict of interest transactionprovided13 that (1) the trusteeofficer makes hisher own13 evaluation13 of the investment merits (2) thetrusteeofficer13 does not13 utilize College resources or13 seek13 assistance from College employees inmaking the investment (3) the trusteeofficer does not ldquotrade offrdquo hisher relationship with theCollege for an13 investment allocation (4) the investment of the trusteeofficer does not lead13 to13 amaterial reduction in13 the Collegersquos investment (ldquocrowding outrdquo) and13 (5) the trusteeofficer disclosesin writing to the chief investment officer all13 material13 facts concerning the investment prior toparticipating in13 the transaction

How do you vet board membersrsquo potential conflicts13 of interest

The Conflict of Interest Policy also requires that each current member of the Board of Trustees andeach officer of the13 College13 file13 statement in July with the13 treasurer13 certifying that13 heshe has readand is familiar with the13 terms of the13 Conflict of Interest Policy and also requires that13 suchtrusteeofficer13 (1)13 disclose any possible conflicts of13 interest13 which may have arisen or13 occurred inthe fiscal year13 of the College ending June 30 or which13 may be expected13 to13 arise or occur during thefiscal year13 beginning July 1 or13 (2)13 knows of13 no such possible conflict13 of13 interest

What are your policies if a conflict arises with a member of the board of trustees

In the event of a conflict of interest under the policy prior to entering into the transaction thetrusteeofficer13 is required to fully disclose in writing to the Executive Committee of13 the Board of13 Trustees all material facts concerning the transaction and the13 extent and nature13 of hisher interestin the transaction and promptly respond to any requests for clarification or additional13 information

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 21

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22

Response to13 Question 6

How does your college or university determine what percentage of the endowment will be paidout each13 year

The Collegersquos Endowment Spending Policy (copied below) specifies13 a 40 percent annual payout tobe calculated13 using the formula set forth13 in13 the policy

If any13 what has been the target endowment payout as a percentage of the endowmentrsquosbeginning13 balance13 each year If that answer differs from the13 percentage13 paid13 out please13 explainwhy

The College does not determine its payout on the basis of the endowmentrsquos beginning balance eachyear It is our practice per the board-shy‐approved Endowment Spending Policy to calculate13 the13 annualpayout o the basis of a 12-shy‐quarter moving average This is done to13 smooth13 the impact of marketvalue volatility13 over time

Please attach13 any payout policies or guidance

Grinnell College Endowment Spending Policy(Last revised at the13 Feb 22 2014 board13 meeting)

The annual endowment distribution is calculated as 40 percent of the 12-shy‐quarter movingaverage13 endowment market value13 determined annually as of the13 December 3 immediatelyprior to13 the beginning of the fiscal year

The College shall not allocate 100 percent of this distribution13 to13 the operating budget Factorsin determining the allocation include

1) Revenue balance2) Expenditure discipline3) Facility requirements (including debt service) and strategic initiatives

In the rare instance an exception to established policy is deemed prudent and necessary boththe president and13 the board13 must authorize such13 departure in13 advance and13 document the termsin the board minutes

Endowment Spending13 Policy13 Oversight and Governance(Excerpted from the Collegersquos bylaws13 as revised and restated in May 2014)

ARTICLE VI -shy‐-shy‐ DUTIES OF COMMITTEES

7 Finance Committee The Finance Committee oversees and monitors the Collegersquos annualoperating and13 ongoing capital budgets issuance and13 repayment of debt management offinancial reserves and long-shy‐range strategies toward financial sustainability To accomplishthis the Finance Committee shall receive and evaluate regular13 reports from the Colleges

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 11

Treasurer providing (a) comparisons of actualforecast revenues and expenditures tobudget accompanied13 by an13 explanation13 of variances (b) updates o the structure and13 status13 of the Collegersquos13 debt obligations( c) updates13 on the status13 of reserve funds and (d)other financial reports as requested13 by the Committee The Finance Committee shall be13 responsible for13 ensuring that13 the Board of13 Trustees receives the information necessary for13 the Board to oversee the safeguarding of13 the Collegersquos financial stability long-shy‐termeconomic health and prudent use13 of financial resources in manner consistent with themission and the stated aims and goals of academic departments administrative units andancillary programs The13 Finance13 Committee13 shall work collaboratively with other Boardcommittees in consultation with the President to make recommendations to the13 Boardregarding financial policies decisions and actions including but not limited13 to13 spending and13 endowment payout policies13 sources of income appropriate to meeting the Colleges needs13 debt capacity issuance and13 repayment and13 capital expenditures and financing

8 Investment Committee The Investment Committee shall13 be responsible for maintaining apolicy of prudent investment in13 stocks bonds real assets non-shy‐marketable securities such asprivate placements and13 limited13 partnerships and other similar financial instrumentsinterests andor securities subject to the approval13 of the Board of Trustees13 The InvestmentCommittee shall approve sub-shy‐policies under the investment policy and13 review and13 approveinvestment transactions pursuant to the approved investment13 policy and sub-shy‐policies TheInvestment Committee shall13 have the authority to delegate investment decisions to theChief Investment Officer andor independent investment managers pursuant to13 theapproved investment policy and sub-shy‐policies The Chief Investment Officer shall have theauthority to in turn delegate13 investment decisions to other officers and employees of the13 College pursuant to13 the approved13 investment policy and13 investment sub-shy‐policies TheInvestment Committee shall13 report to the Board of Trustees on the performance and assetallocation of the13 Collegersquos investment portfolio as requested by the13 Board Chair providedthat13 such investment13 report13 shall be given at13 least13 once each fiscal year The Investment13 Committee shall work collaboratively with13 the Finance Committee in13 consultation13 with13 thePresident to make13 recommendations to the13 Board of Trustees regarding the endowmentpayout policy13 debt capacity and issuance13 and capital financing

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 12

Response to13 Question 7

Does your college or university have policies regarding spending the endowment principal Hasyour college13 or university13 ever spent endowment principal13 If so under what circumstances

As stated13 in13 Note 1 of the Grinnell College audited13 financial statements the13 College13 follows the13 guidance13 in the13 Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA) and the13 Iowa Uniform Prudent Management of Institutional13 Funds Act (IUPMIFA) The Board of Trustees ofGrinnell College has interpreted IUPMIFA as requiring the preservation of the historic value of theoriginal gift absent explicit donor stipulation13 stating otherwise

The College has never spent the endowment principal unless specifically directed to do so by adonor eg time-shy‐restricted endowment contribution

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 13

13

Response to13 Question 8($ in thousands)

How much and what percentage of the endowmentrsquos beginning balance has your college oruniversity spent each13 year

Fiscal Year 2013 2014 2015 2016Beginning balance $1383856 $1553629 $1829521 $1787775Endowment spending $54400 $55800 $59243 $73818 of beginning balance spent 39 36 32 41

Expected

As noted13 in13 our response to13 Question13 6 the Collegersquos Endowment Spending Policy allows thepresident and13 the board13 to13 authorize13 exceptions from the13 established 4 percent payout when13 circumstances13 warrant Such an exception was13 authorized at the October 2015 meeting of theboard

Under the terms of the board-shy‐approved exception the13 endowment payout for the six-shy‐year period FY201 through F 202 will include an additional $9313 million per year over and13 above the standard13 4percent payout of $64513 million13 The additional payout is structured to address number of highpriority strategic initiatives

How much and what percentage of the endowmentrsquos return on investment each year has yourcollege or university spent each year

Fiscal Year 2013 2014 2015Investment return $222322 $316329 $8756Endowment spending $54400 $55800 $59243of investment return spent 245 176 6766

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 14

Response to13 Question 9($ in thousands)

What percentage of your endowment does your college or university devote to financial aid forstudent tuition

The College does not award or allocate financial aid based13 specifically o tuition Financial aid13 isawarded based on the13 comprehensive13 fee13 and other allowable13 expenses

Financial aid support to students and the13 related amount funded by the13 endowment are13 shownbelow

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Financial aid funded by endowment $16893 $17934 $18965 $20014of financial aid funded by endowment 42 40 40 42

Projected

The market value of the endowment restricted to use for13 financial aid is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid support $121998 $144054 $147164for13 studentsTotal endowment market value $1553629 $1829521 $1787775of endowment restricted13 to13 financial aid13 support for students 8 8 8

Endowment spending restricted to use for financial aid is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid support for $4174 $4266 $4651 $5134studentsTotal endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid 8 8 8 8

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aidsupport for students

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 15

The table below which uses information13 from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for financial aid support for $16893 $17934 $18965 $20014studentsEndowment spending used for other purposes $37507 $37866 $40278 $44504Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used13 for financial aid 31 32 32 31

Projected

How much for other forms of student financial aid Please specify the types13 of non-shy‐tuitionfinancial aid provided

The College provides many forms of assistance to students beyond financial aid including prizesfellowships internships and student employment

Financial aid and other student support are13 shown below

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Other student support to students $2742 $2688 $2763 $2855Total financial aid and other student support $43091 $47814 $49853 $50179Financial aid and other student support funded by $18123 $19122 $20207 $21388endowmentfinancial aid and other student support funded by 42 40 41 43endowment

Projected

The market value of the endowment restricted to use for13 financial aid and other13 student13 support13 is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid andother student supportTotal endowment market value

$126508

$1553629

$149611

$1829521

$152513

$1787775of endowment restricted to financial aid and other

student support 8 8 9

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 16

Endowment spending restricted to use for financial aid and other student support is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid and other student support $4620 $4736 $5163 $5701Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid and 8 8 9 9other student support

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid and other13 student13 support Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aid and other student support for13 students

The table below which uses information from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid and other support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for13 financial aid and $18123 $19122 $20207 $21388other student supportEndowment spending used for other purposes $36277 $36678 $39036 $43130Total endowment spending $54400 $55800 $59249 $64518of total endowment13 spending used for financial 33 34 34 33aid and other student support

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 17

Response to13 Question 10

Does your college or university have policies regarding whether it is allowed to accept fundsrestricted to a specific purpose

Grinnell College has adopted a Gift Acceptance Policy The Policy was endorsed13 by the Board13 ofTrustees Advancement Committee an Audit an Assessment Committee The policy is designed toassure13 that all gifts to or for the13 use13 of Grinnell College13 are13 structured to benefit Grinnell College13 while ensuring fidelity to donor intent Because some gift situations may be complex or13 more costlythan beneficial or13 restricted in a manner13 not13 keeping with Grinnell Collegersquos goal of13 philanthropythat13 advances the Collegersquos mission13 the policy has been13 developed13 to13 outline the procedures forassessing and accepting gifts to Grinnell College for the Collegersquos benefit

Has your college or university ever declined a donation because it was restricted to a certainpurpose If so please13 describe13 those13 specific scenarios in which your school rejected13 donation

Grinnell College has three examples of gifts declined because the donor-shy‐imposed restrictions did13 notalign with Grinnellrsquos mission and board-shy‐approved strategic priorities

1) donor approached13 Grinnell College about making a gift in13 the range of $250000ndash$500000for13 the College to use to13 purchase and13 maintain13 residential property to be13 utilized as afaith-shy‐based13 center At that time such13 a project was not a priority and13 the Collegecommunicated that the needs13 of the student body13 were already13 being met The College didnot pursue the gift

2) donor approached13 Grinnell College about the possibility of making a $1 million gift from afamily foundation to support13 experiential student13 learning in a specific area of13 psychology This area13 was not strength for the department13 and the department13 did not13 have plans to13 grow The College did13 not pursue the gift

3) donor approached13 Grinnell College near the end13 of a tax year with13 an13 interest in13 giftingland for the Collegersquos access and use The College explored the possibility but the donorrsquosproposed13 restrictions were deemed13 too13 onerous The College did13 not pursue the gift

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 18

Response to13 Question 11($ in thousands)

How much and what percentage of your college or universityrsquos endowment is invested in realproperty (not including13 REITs or other publicly-shy‐traded securities)

Fiscal Year 2013 2014 2015Endowment $1553629 $1829521 $1787775

(1)Real Estate Investments $59801 $52387 $51694 38 29 29

(1)Includes investments categorized as ldquootherrdquo13 in addition to ldquoreal estaterdquo13 on the audited financialstatements

Please list and describe your college or universityrsquos real estate holdings including real estate heldby the13 college13 or university the13 endowment and13 all related13 entities

Fiscal YearCampus Property 2013 2014 2015Land and Improvements $11771 $12533 $13406Buildings and13 Improvements $326408 $327774 $328591Construction13 in13 Process $267 $35 $390Total (Gross) $338446 $340342 $342387Accumulated13 Depreciation $108170 $116760 $125270Total (Net) $230276 $223582 $217117

Fiscal YearNon-shy‐Campus Property (1) 2013 2014 2015Limited Partnership Interests $59767 $52353 $51660Non-shy‐Campus Community Property $34 $34 $34Oil Mineral Rights (2) $3 $3 $3

(3)Other Real Estate $754 $754 $54Total Non-shy‐Campus Property $60558 $53144 $51751

(1)Includes investments categorized as ldquootherrdquo in addition to ldquoreal13 estaterdquo on the audited financial13 statements(2)Including property owned via a related entity(3)Comprised13 of property owned13 via a related13 entityNote Related entities include a C corporation 100 percent-shy‐owned13 by the College and13 annuity fundsfor13 which the College is trustee

If the college or university has made any Payments in Lieu of Taxes13 please13 provide13 the13 date13 and13 amount of the13 payment

The College has not made any Payments in Lieu of Taxes The College pays property taxes on anyproperty that is not mission-shy‐central and pays13 unrelated business13 income tax when appropriate

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 19

Response to13 Question 12

Does your college or university grant naming rights to donors based on certain donation levels Ifso please describe the naming rights13 program including how much and what percentage of anynaming rights donations your college or university has used for tuition13 assistance

Grinnell College has adopted the Fund Creation and Endowment Threshold Guidelines whicharticulate13 the13 levels at which donors can name13 variety of funds (such as student scholarshipsprofessorships and13 chairs and13 programmatic funds) Donors can permanently endow namedscholarship for a minimum of $50000 Donors13 can create an expendable scholarship meaning notendowed with the13 goal of fully spending13 annual gifts each year for $500013 per year Donors cancreate scholarships that are13 unrestricted and available13 to all students or can create13 restrictedscholarships Restrictions13 on scholarships13 vary Some donors13 restrict scholarship to those whodemonstrate financial need while others focus o academic performance major of study or thegeographic origin of the13 student

Gifts Received ($ in thousands)

Fiscal Year 2013 2014 2015 2016Named funds restricted for scholarships $986 $1591 $7511 $1237Named funds restricted for other use $843 $6603 $1928 $930Total named funds $1829 $8194 $9439 $2167

of gifts received for named funds restrictedfor13 scholarships 5391 1942

Projected

ScholarshipsOther Expenses ($ in thousands)

Fiscal Year 2013 2014

7957

2015

5708

2016Named funds restricted for13 scholarships $402313 $409613 $440813 $535713 Named funds restricted for other use $1108213 $1151513 $1245113 $1326113 Total named funds

$1510513 $1561113 $1685913 $1861813 of spending from named funds used for

scholarships 2663 2624 2615 2877

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 20

Response to13 Question 13

What conflict of interest policies does your college or university have in place to address financial13 interest in endowment investments (including potential13 conflicts of interest among and betweengoverning13 boards trustees executives internal employees tasked13 with overseeing13 the13 endowment and13 external asset managers of endowment assets)

The Collegersquos Conflict of Interest Policy was adopted on May 7 2011 and applies to each member ofthe Board of13 Trustees and each officer13 of13 the College during such personrsquos service to the College13 inthe case of13 a trustee the Conflict13 of13 Interest13 Policy applies for13 a period of13 five years following thedate of the trusteersquos completion13 of service to13 the College Under the policy a conflict of interest isdefined13 as a transaction13 in13 which13 (1) the trustee or officer (or member of hisher13 immediate family)13 is a party13 (2) the trustee or officer (or member of hisher immediate family) has a material13 economic interest or (3) the13 trustee13 or officer (or member of hisher immediate13 family) is in controlor has the power to13 control management policies of an13 entity that is a party to13 the transaction ANDeither the13 College13 is also party to or otherwise13 involved in the13 transaction or the13 involvement ofthe trustee or13 officer13 can reasonably be expected to give rise to an appearance of13 impropriety

The Conflict of Interest Policy provides for various safe harbor transactions relating toinvestments The purchase sale or holding of securities which13 are publicly traded13 by any trustee orofficer shall not constitute a conflict of interest transaction solely because the College also owns13 securities13 of the same class13 or other securities13 of the same issuer in its13 investment portfolio Alsoan investment by any trustee13 or officer in limited partnerships trusts or similar non-shy‐marketablevehicles in which the College also is an investor shall13 not constitute a conflict of interest transactionprovided13 that (1) the trusteeofficer makes hisher own13 evaluation13 of the investment merits (2) thetrusteeofficer13 does not13 utilize College resources or13 seek13 assistance from College employees inmaking the investment (3) the trusteeofficer does not ldquotrade offrdquo hisher relationship with theCollege for an13 investment allocation (4) the investment of the trusteeofficer does not lead13 to13 amaterial reduction in13 the Collegersquos investment (ldquocrowding outrdquo) and13 (5) the trusteeofficer disclosesin writing to the chief investment officer all13 material13 facts concerning the investment prior toparticipating in13 the transaction

How do you vet board membersrsquo potential conflicts13 of interest

The Conflict of Interest Policy also requires that each current member of the Board of Trustees andeach officer of the13 College13 file13 statement in July with the13 treasurer13 certifying that13 heshe has readand is familiar with the13 terms of the13 Conflict of Interest Policy and also requires that13 suchtrusteeofficer13 (1)13 disclose any possible conflicts of13 interest13 which may have arisen or13 occurred inthe fiscal year13 of the College ending June 30 or which13 may be expected13 to13 arise or occur during thefiscal year13 beginning July 1 or13 (2)13 knows of13 no such possible conflict13 of13 interest

What are your policies if a conflict arises with a member of the board of trustees

In the event of a conflict of interest under the policy prior to entering into the transaction thetrusteeofficer13 is required to fully disclose in writing to the Executive Committee of13 the Board of13 Trustees all material facts concerning the transaction and the13 extent and nature13 of hisher interestin the transaction and promptly respond to any requests for clarification or additional13 information

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 21

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22

Treasurer providing (a) comparisons of actualforecast revenues and expenditures tobudget accompanied13 by an13 explanation13 of variances (b) updates o the structure and13 status13 of the Collegersquos13 debt obligations( c) updates13 on the status13 of reserve funds and (d)other financial reports as requested13 by the Committee The Finance Committee shall be13 responsible for13 ensuring that13 the Board of13 Trustees receives the information necessary for13 the Board to oversee the safeguarding of13 the Collegersquos financial stability long-shy‐termeconomic health and prudent use13 of financial resources in manner consistent with themission and the stated aims and goals of academic departments administrative units andancillary programs The13 Finance13 Committee13 shall work collaboratively with other Boardcommittees in consultation with the President to make recommendations to the13 Boardregarding financial policies decisions and actions including but not limited13 to13 spending and13 endowment payout policies13 sources of income appropriate to meeting the Colleges needs13 debt capacity issuance and13 repayment and13 capital expenditures and financing

8 Investment Committee The Investment Committee shall13 be responsible for maintaining apolicy of prudent investment in13 stocks bonds real assets non-shy‐marketable securities such asprivate placements and13 limited13 partnerships and other similar financial instrumentsinterests andor securities subject to the approval13 of the Board of Trustees13 The InvestmentCommittee shall approve sub-shy‐policies under the investment policy and13 review and13 approveinvestment transactions pursuant to the approved investment13 policy and sub-shy‐policies TheInvestment Committee shall13 have the authority to delegate investment decisions to theChief Investment Officer andor independent investment managers pursuant to13 theapproved investment policy and sub-shy‐policies The Chief Investment Officer shall have theauthority to in turn delegate13 investment decisions to other officers and employees of the13 College pursuant to13 the approved13 investment policy and13 investment sub-shy‐policies TheInvestment Committee shall13 report to the Board of Trustees on the performance and assetallocation of the13 Collegersquos investment portfolio as requested by the13 Board Chair providedthat13 such investment13 report13 shall be given at13 least13 once each fiscal year The Investment13 Committee shall work collaboratively with13 the Finance Committee in13 consultation13 with13 thePresident to make13 recommendations to the13 Board of Trustees regarding the endowmentpayout policy13 debt capacity and issuance13 and capital financing

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 12

Response to13 Question 7

Does your college or university have policies regarding spending the endowment principal Hasyour college13 or university13 ever spent endowment principal13 If so under what circumstances

As stated13 in13 Note 1 of the Grinnell College audited13 financial statements the13 College13 follows the13 guidance13 in the13 Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA) and the13 Iowa Uniform Prudent Management of Institutional13 Funds Act (IUPMIFA) The Board of Trustees ofGrinnell College has interpreted IUPMIFA as requiring the preservation of the historic value of theoriginal gift absent explicit donor stipulation13 stating otherwise

The College has never spent the endowment principal unless specifically directed to do so by adonor eg time-shy‐restricted endowment contribution

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 13

13

Response to13 Question 8($ in thousands)

How much and what percentage of the endowmentrsquos beginning balance has your college oruniversity spent each13 year

Fiscal Year 2013 2014 2015 2016Beginning balance $1383856 $1553629 $1829521 $1787775Endowment spending $54400 $55800 $59243 $73818 of beginning balance spent 39 36 32 41

Expected

As noted13 in13 our response to13 Question13 6 the Collegersquos Endowment Spending Policy allows thepresident and13 the board13 to13 authorize13 exceptions from the13 established 4 percent payout when13 circumstances13 warrant Such an exception was13 authorized at the October 2015 meeting of theboard

Under the terms of the board-shy‐approved exception the13 endowment payout for the six-shy‐year period FY201 through F 202 will include an additional $9313 million per year over and13 above the standard13 4percent payout of $64513 million13 The additional payout is structured to address number of highpriority strategic initiatives

How much and what percentage of the endowmentrsquos return on investment each year has yourcollege or university spent each year

Fiscal Year 2013 2014 2015Investment return $222322 $316329 $8756Endowment spending $54400 $55800 $59243of investment return spent 245 176 6766

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 14

Response to13 Question 9($ in thousands)

What percentage of your endowment does your college or university devote to financial aid forstudent tuition

The College does not award or allocate financial aid based13 specifically o tuition Financial aid13 isawarded based on the13 comprehensive13 fee13 and other allowable13 expenses

Financial aid support to students and the13 related amount funded by the13 endowment are13 shownbelow

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Financial aid funded by endowment $16893 $17934 $18965 $20014of financial aid funded by endowment 42 40 40 42

Projected

The market value of the endowment restricted to use for13 financial aid is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid support $121998 $144054 $147164for13 studentsTotal endowment market value $1553629 $1829521 $1787775of endowment restricted13 to13 financial aid13 support for students 8 8 8

Endowment spending restricted to use for financial aid is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid support for $4174 $4266 $4651 $5134studentsTotal endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid 8 8 8 8

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aidsupport for students

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 15

The table below which uses information13 from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for financial aid support for $16893 $17934 $18965 $20014studentsEndowment spending used for other purposes $37507 $37866 $40278 $44504Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used13 for financial aid 31 32 32 31

Projected

How much for other forms of student financial aid Please specify the types13 of non-shy‐tuitionfinancial aid provided

The College provides many forms of assistance to students beyond financial aid including prizesfellowships internships and student employment

Financial aid and other student support are13 shown below

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Other student support to students $2742 $2688 $2763 $2855Total financial aid and other student support $43091 $47814 $49853 $50179Financial aid and other student support funded by $18123 $19122 $20207 $21388endowmentfinancial aid and other student support funded by 42 40 41 43endowment

Projected

The market value of the endowment restricted to use for13 financial aid and other13 student13 support13 is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid andother student supportTotal endowment market value

$126508

$1553629

$149611

$1829521

$152513

$1787775of endowment restricted to financial aid and other

student support 8 8 9

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 16

Endowment spending restricted to use for financial aid and other student support is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid and other student support $4620 $4736 $5163 $5701Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid and 8 8 9 9other student support

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid and other13 student13 support Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aid and other student support for13 students

The table below which uses information from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid and other support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for13 financial aid and $18123 $19122 $20207 $21388other student supportEndowment spending used for other purposes $36277 $36678 $39036 $43130Total endowment spending $54400 $55800 $59249 $64518of total endowment13 spending used for financial 33 34 34 33aid and other student support

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 17

Response to13 Question 10

Does your college or university have policies regarding whether it is allowed to accept fundsrestricted to a specific purpose

Grinnell College has adopted a Gift Acceptance Policy The Policy was endorsed13 by the Board13 ofTrustees Advancement Committee an Audit an Assessment Committee The policy is designed toassure13 that all gifts to or for the13 use13 of Grinnell College13 are13 structured to benefit Grinnell College13 while ensuring fidelity to donor intent Because some gift situations may be complex or13 more costlythan beneficial or13 restricted in a manner13 not13 keeping with Grinnell Collegersquos goal of13 philanthropythat13 advances the Collegersquos mission13 the policy has been13 developed13 to13 outline the procedures forassessing and accepting gifts to Grinnell College for the Collegersquos benefit

Has your college or university ever declined a donation because it was restricted to a certainpurpose If so please13 describe13 those13 specific scenarios in which your school rejected13 donation

Grinnell College has three examples of gifts declined because the donor-shy‐imposed restrictions did13 notalign with Grinnellrsquos mission and board-shy‐approved strategic priorities

1) donor approached13 Grinnell College about making a gift in13 the range of $250000ndash$500000for13 the College to use to13 purchase and13 maintain13 residential property to be13 utilized as afaith-shy‐based13 center At that time such13 a project was not a priority and13 the Collegecommunicated that the needs13 of the student body13 were already13 being met The College didnot pursue the gift

2) donor approached13 Grinnell College about the possibility of making a $1 million gift from afamily foundation to support13 experiential student13 learning in a specific area of13 psychology This area13 was not strength for the department13 and the department13 did not13 have plans to13 grow The College did13 not pursue the gift

3) donor approached13 Grinnell College near the end13 of a tax year with13 an13 interest in13 giftingland for the Collegersquos access and use The College explored the possibility but the donorrsquosproposed13 restrictions were deemed13 too13 onerous The College did13 not pursue the gift

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 18

Response to13 Question 11($ in thousands)

How much and what percentage of your college or universityrsquos endowment is invested in realproperty (not including13 REITs or other publicly-shy‐traded securities)

Fiscal Year 2013 2014 2015Endowment $1553629 $1829521 $1787775

(1)Real Estate Investments $59801 $52387 $51694 38 29 29

(1)Includes investments categorized as ldquootherrdquo13 in addition to ldquoreal estaterdquo13 on the audited financialstatements

Please list and describe your college or universityrsquos real estate holdings including real estate heldby the13 college13 or university the13 endowment and13 all related13 entities

Fiscal YearCampus Property 2013 2014 2015Land and Improvements $11771 $12533 $13406Buildings and13 Improvements $326408 $327774 $328591Construction13 in13 Process $267 $35 $390Total (Gross) $338446 $340342 $342387Accumulated13 Depreciation $108170 $116760 $125270Total (Net) $230276 $223582 $217117

Fiscal YearNon-shy‐Campus Property (1) 2013 2014 2015Limited Partnership Interests $59767 $52353 $51660Non-shy‐Campus Community Property $34 $34 $34Oil Mineral Rights (2) $3 $3 $3

(3)Other Real Estate $754 $754 $54Total Non-shy‐Campus Property $60558 $53144 $51751

(1)Includes investments categorized as ldquootherrdquo in addition to ldquoreal13 estaterdquo on the audited financial13 statements(2)Including property owned via a related entity(3)Comprised13 of property owned13 via a related13 entityNote Related entities include a C corporation 100 percent-shy‐owned13 by the College and13 annuity fundsfor13 which the College is trustee

If the college or university has made any Payments in Lieu of Taxes13 please13 provide13 the13 date13 and13 amount of the13 payment

The College has not made any Payments in Lieu of Taxes The College pays property taxes on anyproperty that is not mission-shy‐central and pays13 unrelated business13 income tax when appropriate

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 19

Response to13 Question 12

Does your college or university grant naming rights to donors based on certain donation levels Ifso please describe the naming rights13 program including how much and what percentage of anynaming rights donations your college or university has used for tuition13 assistance

Grinnell College has adopted the Fund Creation and Endowment Threshold Guidelines whicharticulate13 the13 levels at which donors can name13 variety of funds (such as student scholarshipsprofessorships and13 chairs and13 programmatic funds) Donors can permanently endow namedscholarship for a minimum of $50000 Donors13 can create an expendable scholarship meaning notendowed with the13 goal of fully spending13 annual gifts each year for $500013 per year Donors cancreate scholarships that are13 unrestricted and available13 to all students or can create13 restrictedscholarships Restrictions13 on scholarships13 vary Some donors13 restrict scholarship to those whodemonstrate financial need while others focus o academic performance major of study or thegeographic origin of the13 student

Gifts Received ($ in thousands)

Fiscal Year 2013 2014 2015 2016Named funds restricted for scholarships $986 $1591 $7511 $1237Named funds restricted for other use $843 $6603 $1928 $930Total named funds $1829 $8194 $9439 $2167

of gifts received for named funds restrictedfor13 scholarships 5391 1942

Projected

ScholarshipsOther Expenses ($ in thousands)

Fiscal Year 2013 2014

7957

2015

5708

2016Named funds restricted for13 scholarships $402313 $409613 $440813 $535713 Named funds restricted for other use $1108213 $1151513 $1245113 $1326113 Total named funds

$1510513 $1561113 $1685913 $1861813 of spending from named funds used for

scholarships 2663 2624 2615 2877

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 20

Response to13 Question 13

What conflict of interest policies does your college or university have in place to address financial13 interest in endowment investments (including potential13 conflicts of interest among and betweengoverning13 boards trustees executives internal employees tasked13 with overseeing13 the13 endowment and13 external asset managers of endowment assets)

The Collegersquos Conflict of Interest Policy was adopted on May 7 2011 and applies to each member ofthe Board of13 Trustees and each officer13 of13 the College during such personrsquos service to the College13 inthe case of13 a trustee the Conflict13 of13 Interest13 Policy applies for13 a period of13 five years following thedate of the trusteersquos completion13 of service to13 the College Under the policy a conflict of interest isdefined13 as a transaction13 in13 which13 (1) the trustee or officer (or member of hisher13 immediate family)13 is a party13 (2) the trustee or officer (or member of hisher immediate family) has a material13 economic interest or (3) the13 trustee13 or officer (or member of hisher immediate13 family) is in controlor has the power to13 control management policies of an13 entity that is a party to13 the transaction ANDeither the13 College13 is also party to or otherwise13 involved in the13 transaction or the13 involvement ofthe trustee or13 officer13 can reasonably be expected to give rise to an appearance of13 impropriety

The Conflict of Interest Policy provides for various safe harbor transactions relating toinvestments The purchase sale or holding of securities which13 are publicly traded13 by any trustee orofficer shall not constitute a conflict of interest transaction solely because the College also owns13 securities13 of the same class13 or other securities13 of the same issuer in its13 investment portfolio Alsoan investment by any trustee13 or officer in limited partnerships trusts or similar non-shy‐marketablevehicles in which the College also is an investor shall13 not constitute a conflict of interest transactionprovided13 that (1) the trusteeofficer makes hisher own13 evaluation13 of the investment merits (2) thetrusteeofficer13 does not13 utilize College resources or13 seek13 assistance from College employees inmaking the investment (3) the trusteeofficer does not ldquotrade offrdquo hisher relationship with theCollege for an13 investment allocation (4) the investment of the trusteeofficer does not lead13 to13 amaterial reduction in13 the Collegersquos investment (ldquocrowding outrdquo) and13 (5) the trusteeofficer disclosesin writing to the chief investment officer all13 material13 facts concerning the investment prior toparticipating in13 the transaction

How do you vet board membersrsquo potential conflicts13 of interest

The Conflict of Interest Policy also requires that each current member of the Board of Trustees andeach officer of the13 College13 file13 statement in July with the13 treasurer13 certifying that13 heshe has readand is familiar with the13 terms of the13 Conflict of Interest Policy and also requires that13 suchtrusteeofficer13 (1)13 disclose any possible conflicts of13 interest13 which may have arisen or13 occurred inthe fiscal year13 of the College ending June 30 or which13 may be expected13 to13 arise or occur during thefiscal year13 beginning July 1 or13 (2)13 knows of13 no such possible conflict13 of13 interest

What are your policies if a conflict arises with a member of the board of trustees

In the event of a conflict of interest under the policy prior to entering into the transaction thetrusteeofficer13 is required to fully disclose in writing to the Executive Committee of13 the Board of13 Trustees all material facts concerning the transaction and the13 extent and nature13 of hisher interestin the transaction and promptly respond to any requests for clarification or additional13 information

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 21

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22

Response to13 Question 7

Does your college or university have policies regarding spending the endowment principal Hasyour college13 or university13 ever spent endowment principal13 If so under what circumstances

As stated13 in13 Note 1 of the Grinnell College audited13 financial statements the13 College13 follows the13 guidance13 in the13 Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA) and the13 Iowa Uniform Prudent Management of Institutional13 Funds Act (IUPMIFA) The Board of Trustees ofGrinnell College has interpreted IUPMIFA as requiring the preservation of the historic value of theoriginal gift absent explicit donor stipulation13 stating otherwise

The College has never spent the endowment principal unless specifically directed to do so by adonor eg time-shy‐restricted endowment contribution

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 13

13

Response to13 Question 8($ in thousands)

How much and what percentage of the endowmentrsquos beginning balance has your college oruniversity spent each13 year

Fiscal Year 2013 2014 2015 2016Beginning balance $1383856 $1553629 $1829521 $1787775Endowment spending $54400 $55800 $59243 $73818 of beginning balance spent 39 36 32 41

Expected

As noted13 in13 our response to13 Question13 6 the Collegersquos Endowment Spending Policy allows thepresident and13 the board13 to13 authorize13 exceptions from the13 established 4 percent payout when13 circumstances13 warrant Such an exception was13 authorized at the October 2015 meeting of theboard

Under the terms of the board-shy‐approved exception the13 endowment payout for the six-shy‐year period FY201 through F 202 will include an additional $9313 million per year over and13 above the standard13 4percent payout of $64513 million13 The additional payout is structured to address number of highpriority strategic initiatives

How much and what percentage of the endowmentrsquos return on investment each year has yourcollege or university spent each year

Fiscal Year 2013 2014 2015Investment return $222322 $316329 $8756Endowment spending $54400 $55800 $59243of investment return spent 245 176 6766

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 14

Response to13 Question 9($ in thousands)

What percentage of your endowment does your college or university devote to financial aid forstudent tuition

The College does not award or allocate financial aid based13 specifically o tuition Financial aid13 isawarded based on the13 comprehensive13 fee13 and other allowable13 expenses

Financial aid support to students and the13 related amount funded by the13 endowment are13 shownbelow

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Financial aid funded by endowment $16893 $17934 $18965 $20014of financial aid funded by endowment 42 40 40 42

Projected

The market value of the endowment restricted to use for13 financial aid is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid support $121998 $144054 $147164for13 studentsTotal endowment market value $1553629 $1829521 $1787775of endowment restricted13 to13 financial aid13 support for students 8 8 8

Endowment spending restricted to use for financial aid is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid support for $4174 $4266 $4651 $5134studentsTotal endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid 8 8 8 8

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aidsupport for students

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 15

The table below which uses information13 from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for financial aid support for $16893 $17934 $18965 $20014studentsEndowment spending used for other purposes $37507 $37866 $40278 $44504Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used13 for financial aid 31 32 32 31

Projected

How much for other forms of student financial aid Please specify the types13 of non-shy‐tuitionfinancial aid provided

The College provides many forms of assistance to students beyond financial aid including prizesfellowships internships and student employment

Financial aid and other student support are13 shown below

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Other student support to students $2742 $2688 $2763 $2855Total financial aid and other student support $43091 $47814 $49853 $50179Financial aid and other student support funded by $18123 $19122 $20207 $21388endowmentfinancial aid and other student support funded by 42 40 41 43endowment

Projected

The market value of the endowment restricted to use for13 financial aid and other13 student13 support13 is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid andother student supportTotal endowment market value

$126508

$1553629

$149611

$1829521

$152513

$1787775of endowment restricted to financial aid and other

student support 8 8 9

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 16

Endowment spending restricted to use for financial aid and other student support is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid and other student support $4620 $4736 $5163 $5701Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid and 8 8 9 9other student support

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid and other13 student13 support Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aid and other student support for13 students

The table below which uses information from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid and other support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for13 financial aid and $18123 $19122 $20207 $21388other student supportEndowment spending used for other purposes $36277 $36678 $39036 $43130Total endowment spending $54400 $55800 $59249 $64518of total endowment13 spending used for financial 33 34 34 33aid and other student support

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 17

Response to13 Question 10

Does your college or university have policies regarding whether it is allowed to accept fundsrestricted to a specific purpose

Grinnell College has adopted a Gift Acceptance Policy The Policy was endorsed13 by the Board13 ofTrustees Advancement Committee an Audit an Assessment Committee The policy is designed toassure13 that all gifts to or for the13 use13 of Grinnell College13 are13 structured to benefit Grinnell College13 while ensuring fidelity to donor intent Because some gift situations may be complex or13 more costlythan beneficial or13 restricted in a manner13 not13 keeping with Grinnell Collegersquos goal of13 philanthropythat13 advances the Collegersquos mission13 the policy has been13 developed13 to13 outline the procedures forassessing and accepting gifts to Grinnell College for the Collegersquos benefit

Has your college or university ever declined a donation because it was restricted to a certainpurpose If so please13 describe13 those13 specific scenarios in which your school rejected13 donation

Grinnell College has three examples of gifts declined because the donor-shy‐imposed restrictions did13 notalign with Grinnellrsquos mission and board-shy‐approved strategic priorities

1) donor approached13 Grinnell College about making a gift in13 the range of $250000ndash$500000for13 the College to use to13 purchase and13 maintain13 residential property to be13 utilized as afaith-shy‐based13 center At that time such13 a project was not a priority and13 the Collegecommunicated that the needs13 of the student body13 were already13 being met The College didnot pursue the gift

2) donor approached13 Grinnell College about the possibility of making a $1 million gift from afamily foundation to support13 experiential student13 learning in a specific area of13 psychology This area13 was not strength for the department13 and the department13 did not13 have plans to13 grow The College did13 not pursue the gift

3) donor approached13 Grinnell College near the end13 of a tax year with13 an13 interest in13 giftingland for the Collegersquos access and use The College explored the possibility but the donorrsquosproposed13 restrictions were deemed13 too13 onerous The College did13 not pursue the gift

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 18

Response to13 Question 11($ in thousands)

How much and what percentage of your college or universityrsquos endowment is invested in realproperty (not including13 REITs or other publicly-shy‐traded securities)

Fiscal Year 2013 2014 2015Endowment $1553629 $1829521 $1787775

(1)Real Estate Investments $59801 $52387 $51694 38 29 29

(1)Includes investments categorized as ldquootherrdquo13 in addition to ldquoreal estaterdquo13 on the audited financialstatements

Please list and describe your college or universityrsquos real estate holdings including real estate heldby the13 college13 or university the13 endowment and13 all related13 entities

Fiscal YearCampus Property 2013 2014 2015Land and Improvements $11771 $12533 $13406Buildings and13 Improvements $326408 $327774 $328591Construction13 in13 Process $267 $35 $390Total (Gross) $338446 $340342 $342387Accumulated13 Depreciation $108170 $116760 $125270Total (Net) $230276 $223582 $217117

Fiscal YearNon-shy‐Campus Property (1) 2013 2014 2015Limited Partnership Interests $59767 $52353 $51660Non-shy‐Campus Community Property $34 $34 $34Oil Mineral Rights (2) $3 $3 $3

(3)Other Real Estate $754 $754 $54Total Non-shy‐Campus Property $60558 $53144 $51751

(1)Includes investments categorized as ldquootherrdquo in addition to ldquoreal13 estaterdquo on the audited financial13 statements(2)Including property owned via a related entity(3)Comprised13 of property owned13 via a related13 entityNote Related entities include a C corporation 100 percent-shy‐owned13 by the College and13 annuity fundsfor13 which the College is trustee

If the college or university has made any Payments in Lieu of Taxes13 please13 provide13 the13 date13 and13 amount of the13 payment

The College has not made any Payments in Lieu of Taxes The College pays property taxes on anyproperty that is not mission-shy‐central and pays13 unrelated business13 income tax when appropriate

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 19

Response to13 Question 12

Does your college or university grant naming rights to donors based on certain donation levels Ifso please describe the naming rights13 program including how much and what percentage of anynaming rights donations your college or university has used for tuition13 assistance

Grinnell College has adopted the Fund Creation and Endowment Threshold Guidelines whicharticulate13 the13 levels at which donors can name13 variety of funds (such as student scholarshipsprofessorships and13 chairs and13 programmatic funds) Donors can permanently endow namedscholarship for a minimum of $50000 Donors13 can create an expendable scholarship meaning notendowed with the13 goal of fully spending13 annual gifts each year for $500013 per year Donors cancreate scholarships that are13 unrestricted and available13 to all students or can create13 restrictedscholarships Restrictions13 on scholarships13 vary Some donors13 restrict scholarship to those whodemonstrate financial need while others focus o academic performance major of study or thegeographic origin of the13 student

Gifts Received ($ in thousands)

Fiscal Year 2013 2014 2015 2016Named funds restricted for scholarships $986 $1591 $7511 $1237Named funds restricted for other use $843 $6603 $1928 $930Total named funds $1829 $8194 $9439 $2167

of gifts received for named funds restrictedfor13 scholarships 5391 1942

Projected

ScholarshipsOther Expenses ($ in thousands)

Fiscal Year 2013 2014

7957

2015

5708

2016Named funds restricted for13 scholarships $402313 $409613 $440813 $535713 Named funds restricted for other use $1108213 $1151513 $1245113 $1326113 Total named funds

$1510513 $1561113 $1685913 $1861813 of spending from named funds used for

scholarships 2663 2624 2615 2877

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 20

Response to13 Question 13

What conflict of interest policies does your college or university have in place to address financial13 interest in endowment investments (including potential13 conflicts of interest among and betweengoverning13 boards trustees executives internal employees tasked13 with overseeing13 the13 endowment and13 external asset managers of endowment assets)

The Collegersquos Conflict of Interest Policy was adopted on May 7 2011 and applies to each member ofthe Board of13 Trustees and each officer13 of13 the College during such personrsquos service to the College13 inthe case of13 a trustee the Conflict13 of13 Interest13 Policy applies for13 a period of13 five years following thedate of the trusteersquos completion13 of service to13 the College Under the policy a conflict of interest isdefined13 as a transaction13 in13 which13 (1) the trustee or officer (or member of hisher13 immediate family)13 is a party13 (2) the trustee or officer (or member of hisher immediate family) has a material13 economic interest or (3) the13 trustee13 or officer (or member of hisher immediate13 family) is in controlor has the power to13 control management policies of an13 entity that is a party to13 the transaction ANDeither the13 College13 is also party to or otherwise13 involved in the13 transaction or the13 involvement ofthe trustee or13 officer13 can reasonably be expected to give rise to an appearance of13 impropriety

The Conflict of Interest Policy provides for various safe harbor transactions relating toinvestments The purchase sale or holding of securities which13 are publicly traded13 by any trustee orofficer shall not constitute a conflict of interest transaction solely because the College also owns13 securities13 of the same class13 or other securities13 of the same issuer in its13 investment portfolio Alsoan investment by any trustee13 or officer in limited partnerships trusts or similar non-shy‐marketablevehicles in which the College also is an investor shall13 not constitute a conflict of interest transactionprovided13 that (1) the trusteeofficer makes hisher own13 evaluation13 of the investment merits (2) thetrusteeofficer13 does not13 utilize College resources or13 seek13 assistance from College employees inmaking the investment (3) the trusteeofficer does not ldquotrade offrdquo hisher relationship with theCollege for an13 investment allocation (4) the investment of the trusteeofficer does not lead13 to13 amaterial reduction in13 the Collegersquos investment (ldquocrowding outrdquo) and13 (5) the trusteeofficer disclosesin writing to the chief investment officer all13 material13 facts concerning the investment prior toparticipating in13 the transaction

How do you vet board membersrsquo potential conflicts13 of interest

The Conflict of Interest Policy also requires that each current member of the Board of Trustees andeach officer of the13 College13 file13 statement in July with the13 treasurer13 certifying that13 heshe has readand is familiar with the13 terms of the13 Conflict of Interest Policy and also requires that13 suchtrusteeofficer13 (1)13 disclose any possible conflicts of13 interest13 which may have arisen or13 occurred inthe fiscal year13 of the College ending June 30 or which13 may be expected13 to13 arise or occur during thefiscal year13 beginning July 1 or13 (2)13 knows of13 no such possible conflict13 of13 interest

What are your policies if a conflict arises with a member of the board of trustees

In the event of a conflict of interest under the policy prior to entering into the transaction thetrusteeofficer13 is required to fully disclose in writing to the Executive Committee of13 the Board of13 Trustees all material facts concerning the transaction and the13 extent and nature13 of hisher interestin the transaction and promptly respond to any requests for clarification or additional13 information

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 21

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22

13

Response to13 Question 8($ in thousands)

How much and what percentage of the endowmentrsquos beginning balance has your college oruniversity spent each13 year

Fiscal Year 2013 2014 2015 2016Beginning balance $1383856 $1553629 $1829521 $1787775Endowment spending $54400 $55800 $59243 $73818 of beginning balance spent 39 36 32 41

Expected

As noted13 in13 our response to13 Question13 6 the Collegersquos Endowment Spending Policy allows thepresident and13 the board13 to13 authorize13 exceptions from the13 established 4 percent payout when13 circumstances13 warrant Such an exception was13 authorized at the October 2015 meeting of theboard

Under the terms of the board-shy‐approved exception the13 endowment payout for the six-shy‐year period FY201 through F 202 will include an additional $9313 million per year over and13 above the standard13 4percent payout of $64513 million13 The additional payout is structured to address number of highpriority strategic initiatives

How much and what percentage of the endowmentrsquos return on investment each year has yourcollege or university spent each year

Fiscal Year 2013 2014 2015Investment return $222322 $316329 $8756Endowment spending $54400 $55800 $59243of investment return spent 245 176 6766

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 14

Response to13 Question 9($ in thousands)

What percentage of your endowment does your college or university devote to financial aid forstudent tuition

The College does not award or allocate financial aid based13 specifically o tuition Financial aid13 isawarded based on the13 comprehensive13 fee13 and other allowable13 expenses

Financial aid support to students and the13 related amount funded by the13 endowment are13 shownbelow

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Financial aid funded by endowment $16893 $17934 $18965 $20014of financial aid funded by endowment 42 40 40 42

Projected

The market value of the endowment restricted to use for13 financial aid is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid support $121998 $144054 $147164for13 studentsTotal endowment market value $1553629 $1829521 $1787775of endowment restricted13 to13 financial aid13 support for students 8 8 8

Endowment spending restricted to use for financial aid is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid support for $4174 $4266 $4651 $5134studentsTotal endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid 8 8 8 8

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aidsupport for students

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 15

The table below which uses information13 from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for financial aid support for $16893 $17934 $18965 $20014studentsEndowment spending used for other purposes $37507 $37866 $40278 $44504Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used13 for financial aid 31 32 32 31

Projected

How much for other forms of student financial aid Please specify the types13 of non-shy‐tuitionfinancial aid provided

The College provides many forms of assistance to students beyond financial aid including prizesfellowships internships and student employment

Financial aid and other student support are13 shown below

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Other student support to students $2742 $2688 $2763 $2855Total financial aid and other student support $43091 $47814 $49853 $50179Financial aid and other student support funded by $18123 $19122 $20207 $21388endowmentfinancial aid and other student support funded by 42 40 41 43endowment

Projected

The market value of the endowment restricted to use for13 financial aid and other13 student13 support13 is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid andother student supportTotal endowment market value

$126508

$1553629

$149611

$1829521

$152513

$1787775of endowment restricted to financial aid and other

student support 8 8 9

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 16

Endowment spending restricted to use for financial aid and other student support is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid and other student support $4620 $4736 $5163 $5701Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid and 8 8 9 9other student support

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid and other13 student13 support Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aid and other student support for13 students

The table below which uses information from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid and other support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for13 financial aid and $18123 $19122 $20207 $21388other student supportEndowment spending used for other purposes $36277 $36678 $39036 $43130Total endowment spending $54400 $55800 $59249 $64518of total endowment13 spending used for financial 33 34 34 33aid and other student support

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 17

Response to13 Question 10

Does your college or university have policies regarding whether it is allowed to accept fundsrestricted to a specific purpose

Grinnell College has adopted a Gift Acceptance Policy The Policy was endorsed13 by the Board13 ofTrustees Advancement Committee an Audit an Assessment Committee The policy is designed toassure13 that all gifts to or for the13 use13 of Grinnell College13 are13 structured to benefit Grinnell College13 while ensuring fidelity to donor intent Because some gift situations may be complex or13 more costlythan beneficial or13 restricted in a manner13 not13 keeping with Grinnell Collegersquos goal of13 philanthropythat13 advances the Collegersquos mission13 the policy has been13 developed13 to13 outline the procedures forassessing and accepting gifts to Grinnell College for the Collegersquos benefit

Has your college or university ever declined a donation because it was restricted to a certainpurpose If so please13 describe13 those13 specific scenarios in which your school rejected13 donation

Grinnell College has three examples of gifts declined because the donor-shy‐imposed restrictions did13 notalign with Grinnellrsquos mission and board-shy‐approved strategic priorities

1) donor approached13 Grinnell College about making a gift in13 the range of $250000ndash$500000for13 the College to use to13 purchase and13 maintain13 residential property to be13 utilized as afaith-shy‐based13 center At that time such13 a project was not a priority and13 the Collegecommunicated that the needs13 of the student body13 were already13 being met The College didnot pursue the gift

2) donor approached13 Grinnell College about the possibility of making a $1 million gift from afamily foundation to support13 experiential student13 learning in a specific area of13 psychology This area13 was not strength for the department13 and the department13 did not13 have plans to13 grow The College did13 not pursue the gift

3) donor approached13 Grinnell College near the end13 of a tax year with13 an13 interest in13 giftingland for the Collegersquos access and use The College explored the possibility but the donorrsquosproposed13 restrictions were deemed13 too13 onerous The College did13 not pursue the gift

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 18

Response to13 Question 11($ in thousands)

How much and what percentage of your college or universityrsquos endowment is invested in realproperty (not including13 REITs or other publicly-shy‐traded securities)

Fiscal Year 2013 2014 2015Endowment $1553629 $1829521 $1787775

(1)Real Estate Investments $59801 $52387 $51694 38 29 29

(1)Includes investments categorized as ldquootherrdquo13 in addition to ldquoreal estaterdquo13 on the audited financialstatements

Please list and describe your college or universityrsquos real estate holdings including real estate heldby the13 college13 or university the13 endowment and13 all related13 entities

Fiscal YearCampus Property 2013 2014 2015Land and Improvements $11771 $12533 $13406Buildings and13 Improvements $326408 $327774 $328591Construction13 in13 Process $267 $35 $390Total (Gross) $338446 $340342 $342387Accumulated13 Depreciation $108170 $116760 $125270Total (Net) $230276 $223582 $217117

Fiscal YearNon-shy‐Campus Property (1) 2013 2014 2015Limited Partnership Interests $59767 $52353 $51660Non-shy‐Campus Community Property $34 $34 $34Oil Mineral Rights (2) $3 $3 $3

(3)Other Real Estate $754 $754 $54Total Non-shy‐Campus Property $60558 $53144 $51751

(1)Includes investments categorized as ldquootherrdquo in addition to ldquoreal13 estaterdquo on the audited financial13 statements(2)Including property owned via a related entity(3)Comprised13 of property owned13 via a related13 entityNote Related entities include a C corporation 100 percent-shy‐owned13 by the College and13 annuity fundsfor13 which the College is trustee

If the college or university has made any Payments in Lieu of Taxes13 please13 provide13 the13 date13 and13 amount of the13 payment

The College has not made any Payments in Lieu of Taxes The College pays property taxes on anyproperty that is not mission-shy‐central and pays13 unrelated business13 income tax when appropriate

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 19

Response to13 Question 12

Does your college or university grant naming rights to donors based on certain donation levels Ifso please describe the naming rights13 program including how much and what percentage of anynaming rights donations your college or university has used for tuition13 assistance

Grinnell College has adopted the Fund Creation and Endowment Threshold Guidelines whicharticulate13 the13 levels at which donors can name13 variety of funds (such as student scholarshipsprofessorships and13 chairs and13 programmatic funds) Donors can permanently endow namedscholarship for a minimum of $50000 Donors13 can create an expendable scholarship meaning notendowed with the13 goal of fully spending13 annual gifts each year for $500013 per year Donors cancreate scholarships that are13 unrestricted and available13 to all students or can create13 restrictedscholarships Restrictions13 on scholarships13 vary Some donors13 restrict scholarship to those whodemonstrate financial need while others focus o academic performance major of study or thegeographic origin of the13 student

Gifts Received ($ in thousands)

Fiscal Year 2013 2014 2015 2016Named funds restricted for scholarships $986 $1591 $7511 $1237Named funds restricted for other use $843 $6603 $1928 $930Total named funds $1829 $8194 $9439 $2167

of gifts received for named funds restrictedfor13 scholarships 5391 1942

Projected

ScholarshipsOther Expenses ($ in thousands)

Fiscal Year 2013 2014

7957

2015

5708

2016Named funds restricted for13 scholarships $402313 $409613 $440813 $535713 Named funds restricted for other use $1108213 $1151513 $1245113 $1326113 Total named funds

$1510513 $1561113 $1685913 $1861813 of spending from named funds used for

scholarships 2663 2624 2615 2877

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 20

Response to13 Question 13

What conflict of interest policies does your college or university have in place to address financial13 interest in endowment investments (including potential13 conflicts of interest among and betweengoverning13 boards trustees executives internal employees tasked13 with overseeing13 the13 endowment and13 external asset managers of endowment assets)

The Collegersquos Conflict of Interest Policy was adopted on May 7 2011 and applies to each member ofthe Board of13 Trustees and each officer13 of13 the College during such personrsquos service to the College13 inthe case of13 a trustee the Conflict13 of13 Interest13 Policy applies for13 a period of13 five years following thedate of the trusteersquos completion13 of service to13 the College Under the policy a conflict of interest isdefined13 as a transaction13 in13 which13 (1) the trustee or officer (or member of hisher13 immediate family)13 is a party13 (2) the trustee or officer (or member of hisher immediate family) has a material13 economic interest or (3) the13 trustee13 or officer (or member of hisher immediate13 family) is in controlor has the power to13 control management policies of an13 entity that is a party to13 the transaction ANDeither the13 College13 is also party to or otherwise13 involved in the13 transaction or the13 involvement ofthe trustee or13 officer13 can reasonably be expected to give rise to an appearance of13 impropriety

The Conflict of Interest Policy provides for various safe harbor transactions relating toinvestments The purchase sale or holding of securities which13 are publicly traded13 by any trustee orofficer shall not constitute a conflict of interest transaction solely because the College also owns13 securities13 of the same class13 or other securities13 of the same issuer in its13 investment portfolio Alsoan investment by any trustee13 or officer in limited partnerships trusts or similar non-shy‐marketablevehicles in which the College also is an investor shall13 not constitute a conflict of interest transactionprovided13 that (1) the trusteeofficer makes hisher own13 evaluation13 of the investment merits (2) thetrusteeofficer13 does not13 utilize College resources or13 seek13 assistance from College employees inmaking the investment (3) the trusteeofficer does not ldquotrade offrdquo hisher relationship with theCollege for an13 investment allocation (4) the investment of the trusteeofficer does not lead13 to13 amaterial reduction in13 the Collegersquos investment (ldquocrowding outrdquo) and13 (5) the trusteeofficer disclosesin writing to the chief investment officer all13 material13 facts concerning the investment prior toparticipating in13 the transaction

How do you vet board membersrsquo potential conflicts13 of interest

The Conflict of Interest Policy also requires that each current member of the Board of Trustees andeach officer of the13 College13 file13 statement in July with the13 treasurer13 certifying that13 heshe has readand is familiar with the13 terms of the13 Conflict of Interest Policy and also requires that13 suchtrusteeofficer13 (1)13 disclose any possible conflicts of13 interest13 which may have arisen or13 occurred inthe fiscal year13 of the College ending June 30 or which13 may be expected13 to13 arise or occur during thefiscal year13 beginning July 1 or13 (2)13 knows of13 no such possible conflict13 of13 interest

What are your policies if a conflict arises with a member of the board of trustees

In the event of a conflict of interest under the policy prior to entering into the transaction thetrusteeofficer13 is required to fully disclose in writing to the Executive Committee of13 the Board of13 Trustees all material facts concerning the transaction and the13 extent and nature13 of hisher interestin the transaction and promptly respond to any requests for clarification or additional13 information

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 21

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22

Response to13 Question 9($ in thousands)

What percentage of your endowment does your college or university devote to financial aid forstudent tuition

The College does not award or allocate financial aid based13 specifically o tuition Financial aid13 isawarded based on the13 comprehensive13 fee13 and other allowable13 expenses

Financial aid support to students and the13 related amount funded by the13 endowment are13 shownbelow

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Financial aid funded by endowment $16893 $17934 $18965 $20014of financial aid funded by endowment 42 40 40 42

Projected

The market value of the endowment restricted to use for13 financial aid is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid support $121998 $144054 $147164for13 studentsTotal endowment market value $1553629 $1829521 $1787775of endowment restricted13 to13 financial aid13 support for students 8 8 8

Endowment spending restricted to use for financial aid is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid support for $4174 $4266 $4651 $5134studentsTotal endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid 8 8 8 8

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aidsupport for students

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 15

The table below which uses information13 from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for financial aid support for $16893 $17934 $18965 $20014studentsEndowment spending used for other purposes $37507 $37866 $40278 $44504Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used13 for financial aid 31 32 32 31

Projected

How much for other forms of student financial aid Please specify the types13 of non-shy‐tuitionfinancial aid provided

The College provides many forms of assistance to students beyond financial aid including prizesfellowships internships and student employment

Financial aid and other student support are13 shown below

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Other student support to students $2742 $2688 $2763 $2855Total financial aid and other student support $43091 $47814 $49853 $50179Financial aid and other student support funded by $18123 $19122 $20207 $21388endowmentfinancial aid and other student support funded by 42 40 41 43endowment

Projected

The market value of the endowment restricted to use for13 financial aid and other13 student13 support13 is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid andother student supportTotal endowment market value

$126508

$1553629

$149611

$1829521

$152513

$1787775of endowment restricted to financial aid and other

student support 8 8 9

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 16

Endowment spending restricted to use for financial aid and other student support is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid and other student support $4620 $4736 $5163 $5701Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid and 8 8 9 9other student support

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid and other13 student13 support Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aid and other student support for13 students

The table below which uses information from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid and other support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for13 financial aid and $18123 $19122 $20207 $21388other student supportEndowment spending used for other purposes $36277 $36678 $39036 $43130Total endowment spending $54400 $55800 $59249 $64518of total endowment13 spending used for financial 33 34 34 33aid and other student support

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 17

Response to13 Question 10

Does your college or university have policies regarding whether it is allowed to accept fundsrestricted to a specific purpose

Grinnell College has adopted a Gift Acceptance Policy The Policy was endorsed13 by the Board13 ofTrustees Advancement Committee an Audit an Assessment Committee The policy is designed toassure13 that all gifts to or for the13 use13 of Grinnell College13 are13 structured to benefit Grinnell College13 while ensuring fidelity to donor intent Because some gift situations may be complex or13 more costlythan beneficial or13 restricted in a manner13 not13 keeping with Grinnell Collegersquos goal of13 philanthropythat13 advances the Collegersquos mission13 the policy has been13 developed13 to13 outline the procedures forassessing and accepting gifts to Grinnell College for the Collegersquos benefit

Has your college or university ever declined a donation because it was restricted to a certainpurpose If so please13 describe13 those13 specific scenarios in which your school rejected13 donation

Grinnell College has three examples of gifts declined because the donor-shy‐imposed restrictions did13 notalign with Grinnellrsquos mission and board-shy‐approved strategic priorities

1) donor approached13 Grinnell College about making a gift in13 the range of $250000ndash$500000for13 the College to use to13 purchase and13 maintain13 residential property to be13 utilized as afaith-shy‐based13 center At that time such13 a project was not a priority and13 the Collegecommunicated that the needs13 of the student body13 were already13 being met The College didnot pursue the gift

2) donor approached13 Grinnell College about the possibility of making a $1 million gift from afamily foundation to support13 experiential student13 learning in a specific area of13 psychology This area13 was not strength for the department13 and the department13 did not13 have plans to13 grow The College did13 not pursue the gift

3) donor approached13 Grinnell College near the end13 of a tax year with13 an13 interest in13 giftingland for the Collegersquos access and use The College explored the possibility but the donorrsquosproposed13 restrictions were deemed13 too13 onerous The College did13 not pursue the gift

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 18

Response to13 Question 11($ in thousands)

How much and what percentage of your college or universityrsquos endowment is invested in realproperty (not including13 REITs or other publicly-shy‐traded securities)

Fiscal Year 2013 2014 2015Endowment $1553629 $1829521 $1787775

(1)Real Estate Investments $59801 $52387 $51694 38 29 29

(1)Includes investments categorized as ldquootherrdquo13 in addition to ldquoreal estaterdquo13 on the audited financialstatements

Please list and describe your college or universityrsquos real estate holdings including real estate heldby the13 college13 or university the13 endowment and13 all related13 entities

Fiscal YearCampus Property 2013 2014 2015Land and Improvements $11771 $12533 $13406Buildings and13 Improvements $326408 $327774 $328591Construction13 in13 Process $267 $35 $390Total (Gross) $338446 $340342 $342387Accumulated13 Depreciation $108170 $116760 $125270Total (Net) $230276 $223582 $217117

Fiscal YearNon-shy‐Campus Property (1) 2013 2014 2015Limited Partnership Interests $59767 $52353 $51660Non-shy‐Campus Community Property $34 $34 $34Oil Mineral Rights (2) $3 $3 $3

(3)Other Real Estate $754 $754 $54Total Non-shy‐Campus Property $60558 $53144 $51751

(1)Includes investments categorized as ldquootherrdquo in addition to ldquoreal13 estaterdquo on the audited financial13 statements(2)Including property owned via a related entity(3)Comprised13 of property owned13 via a related13 entityNote Related entities include a C corporation 100 percent-shy‐owned13 by the College and13 annuity fundsfor13 which the College is trustee

If the college or university has made any Payments in Lieu of Taxes13 please13 provide13 the13 date13 and13 amount of the13 payment

The College has not made any Payments in Lieu of Taxes The College pays property taxes on anyproperty that is not mission-shy‐central and pays13 unrelated business13 income tax when appropriate

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 19

Response to13 Question 12

Does your college or university grant naming rights to donors based on certain donation levels Ifso please describe the naming rights13 program including how much and what percentage of anynaming rights donations your college or university has used for tuition13 assistance

Grinnell College has adopted the Fund Creation and Endowment Threshold Guidelines whicharticulate13 the13 levels at which donors can name13 variety of funds (such as student scholarshipsprofessorships and13 chairs and13 programmatic funds) Donors can permanently endow namedscholarship for a minimum of $50000 Donors13 can create an expendable scholarship meaning notendowed with the13 goal of fully spending13 annual gifts each year for $500013 per year Donors cancreate scholarships that are13 unrestricted and available13 to all students or can create13 restrictedscholarships Restrictions13 on scholarships13 vary Some donors13 restrict scholarship to those whodemonstrate financial need while others focus o academic performance major of study or thegeographic origin of the13 student

Gifts Received ($ in thousands)

Fiscal Year 2013 2014 2015 2016Named funds restricted for scholarships $986 $1591 $7511 $1237Named funds restricted for other use $843 $6603 $1928 $930Total named funds $1829 $8194 $9439 $2167

of gifts received for named funds restrictedfor13 scholarships 5391 1942

Projected

ScholarshipsOther Expenses ($ in thousands)

Fiscal Year 2013 2014

7957

2015

5708

2016Named funds restricted for13 scholarships $402313 $409613 $440813 $535713 Named funds restricted for other use $1108213 $1151513 $1245113 $1326113 Total named funds

$1510513 $1561113 $1685913 $1861813 of spending from named funds used for

scholarships 2663 2624 2615 2877

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 20

Response to13 Question 13

What conflict of interest policies does your college or university have in place to address financial13 interest in endowment investments (including potential13 conflicts of interest among and betweengoverning13 boards trustees executives internal employees tasked13 with overseeing13 the13 endowment and13 external asset managers of endowment assets)

The Collegersquos Conflict of Interest Policy was adopted on May 7 2011 and applies to each member ofthe Board of13 Trustees and each officer13 of13 the College during such personrsquos service to the College13 inthe case of13 a trustee the Conflict13 of13 Interest13 Policy applies for13 a period of13 five years following thedate of the trusteersquos completion13 of service to13 the College Under the policy a conflict of interest isdefined13 as a transaction13 in13 which13 (1) the trustee or officer (or member of hisher13 immediate family)13 is a party13 (2) the trustee or officer (or member of hisher immediate family) has a material13 economic interest or (3) the13 trustee13 or officer (or member of hisher immediate13 family) is in controlor has the power to13 control management policies of an13 entity that is a party to13 the transaction ANDeither the13 College13 is also party to or otherwise13 involved in the13 transaction or the13 involvement ofthe trustee or13 officer13 can reasonably be expected to give rise to an appearance of13 impropriety

The Conflict of Interest Policy provides for various safe harbor transactions relating toinvestments The purchase sale or holding of securities which13 are publicly traded13 by any trustee orofficer shall not constitute a conflict of interest transaction solely because the College also owns13 securities13 of the same class13 or other securities13 of the same issuer in its13 investment portfolio Alsoan investment by any trustee13 or officer in limited partnerships trusts or similar non-shy‐marketablevehicles in which the College also is an investor shall13 not constitute a conflict of interest transactionprovided13 that (1) the trusteeofficer makes hisher own13 evaluation13 of the investment merits (2) thetrusteeofficer13 does not13 utilize College resources or13 seek13 assistance from College employees inmaking the investment (3) the trusteeofficer does not ldquotrade offrdquo hisher relationship with theCollege for an13 investment allocation (4) the investment of the trusteeofficer does not lead13 to13 amaterial reduction in13 the Collegersquos investment (ldquocrowding outrdquo) and13 (5) the trusteeofficer disclosesin writing to the chief investment officer all13 material13 facts concerning the investment prior toparticipating in13 the transaction

How do you vet board membersrsquo potential conflicts13 of interest

The Conflict of Interest Policy also requires that each current member of the Board of Trustees andeach officer of the13 College13 file13 statement in July with the13 treasurer13 certifying that13 heshe has readand is familiar with the13 terms of the13 Conflict of Interest Policy and also requires that13 suchtrusteeofficer13 (1)13 disclose any possible conflicts of13 interest13 which may have arisen or13 occurred inthe fiscal year13 of the College ending June 30 or which13 may be expected13 to13 arise or occur during thefiscal year13 beginning July 1 or13 (2)13 knows of13 no such possible conflict13 of13 interest

What are your policies if a conflict arises with a member of the board of trustees

In the event of a conflict of interest under the policy prior to entering into the transaction thetrusteeofficer13 is required to fully disclose in writing to the Executive Committee of13 the Board of13 Trustees all material facts concerning the transaction and the13 extent and nature13 of hisher interestin the transaction and promptly respond to any requests for clarification or additional13 information

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 21

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22

The table below which uses information13 from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for financial aid support for $16893 $17934 $18965 $20014studentsEndowment spending used for other purposes $37507 $37866 $40278 $44504Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used13 for financial aid 31 32 32 31

Projected

How much for other forms of student financial aid Please specify the types13 of non-shy‐tuitionfinancial aid provided

The College provides many forms of assistance to students beyond financial aid including prizesfellowships internships and student employment

Financial aid and other student support are13 shown below

Fiscal Year 2013 2014 2015 2016Financial aid support to students $40349 $45126 $47090 $47324Other student support to students $2742 $2688 $2763 $2855Total financial aid and other student support $43091 $47814 $49853 $50179Financial aid and other student support funded by $18123 $19122 $20207 $21388endowmentfinancial aid and other student support funded by 42 40 41 43endowment

Projected

The market value of the endowment restricted to use for13 financial aid and other13 student13 support13 is

Fiscal Year 2013 2014 2015Market value of endowment restricted to financial aid andother student supportTotal endowment market value

$126508

$1553629

$149611

$1829521

$152513

$1787775of endowment restricted to financial aid and other

student support 8 8 9

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 16

Endowment spending restricted to use for financial aid and other student support is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid and other student support $4620 $4736 $5163 $5701Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid and 8 8 9 9other student support

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid and other13 student13 support Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aid and other student support for13 students

The table below which uses information from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid and other support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for13 financial aid and $18123 $19122 $20207 $21388other student supportEndowment spending used for other purposes $36277 $36678 $39036 $43130Total endowment spending $54400 $55800 $59249 $64518of total endowment13 spending used for financial 33 34 34 33aid and other student support

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 17

Response to13 Question 10

Does your college or university have policies regarding whether it is allowed to accept fundsrestricted to a specific purpose

Grinnell College has adopted a Gift Acceptance Policy The Policy was endorsed13 by the Board13 ofTrustees Advancement Committee an Audit an Assessment Committee The policy is designed toassure13 that all gifts to or for the13 use13 of Grinnell College13 are13 structured to benefit Grinnell College13 while ensuring fidelity to donor intent Because some gift situations may be complex or13 more costlythan beneficial or13 restricted in a manner13 not13 keeping with Grinnell Collegersquos goal of13 philanthropythat13 advances the Collegersquos mission13 the policy has been13 developed13 to13 outline the procedures forassessing and accepting gifts to Grinnell College for the Collegersquos benefit

Has your college or university ever declined a donation because it was restricted to a certainpurpose If so please13 describe13 those13 specific scenarios in which your school rejected13 donation

Grinnell College has three examples of gifts declined because the donor-shy‐imposed restrictions did13 notalign with Grinnellrsquos mission and board-shy‐approved strategic priorities

1) donor approached13 Grinnell College about making a gift in13 the range of $250000ndash$500000for13 the College to use to13 purchase and13 maintain13 residential property to be13 utilized as afaith-shy‐based13 center At that time such13 a project was not a priority and13 the Collegecommunicated that the needs13 of the student body13 were already13 being met The College didnot pursue the gift

2) donor approached13 Grinnell College about the possibility of making a $1 million gift from afamily foundation to support13 experiential student13 learning in a specific area of13 psychology This area13 was not strength for the department13 and the department13 did not13 have plans to13 grow The College did13 not pursue the gift

3) donor approached13 Grinnell College near the end13 of a tax year with13 an13 interest in13 giftingland for the Collegersquos access and use The College explored the possibility but the donorrsquosproposed13 restrictions were deemed13 too13 onerous The College did13 not pursue the gift

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 18

Response to13 Question 11($ in thousands)

How much and what percentage of your college or universityrsquos endowment is invested in realproperty (not including13 REITs or other publicly-shy‐traded securities)

Fiscal Year 2013 2014 2015Endowment $1553629 $1829521 $1787775

(1)Real Estate Investments $59801 $52387 $51694 38 29 29

(1)Includes investments categorized as ldquootherrdquo13 in addition to ldquoreal estaterdquo13 on the audited financialstatements

Please list and describe your college or universityrsquos real estate holdings including real estate heldby the13 college13 or university the13 endowment and13 all related13 entities

Fiscal YearCampus Property 2013 2014 2015Land and Improvements $11771 $12533 $13406Buildings and13 Improvements $326408 $327774 $328591Construction13 in13 Process $267 $35 $390Total (Gross) $338446 $340342 $342387Accumulated13 Depreciation $108170 $116760 $125270Total (Net) $230276 $223582 $217117

Fiscal YearNon-shy‐Campus Property (1) 2013 2014 2015Limited Partnership Interests $59767 $52353 $51660Non-shy‐Campus Community Property $34 $34 $34Oil Mineral Rights (2) $3 $3 $3

(3)Other Real Estate $754 $754 $54Total Non-shy‐Campus Property $60558 $53144 $51751

(1)Includes investments categorized as ldquootherrdquo in addition to ldquoreal13 estaterdquo on the audited financial13 statements(2)Including property owned via a related entity(3)Comprised13 of property owned13 via a related13 entityNote Related entities include a C corporation 100 percent-shy‐owned13 by the College and13 annuity fundsfor13 which the College is trustee

If the college or university has made any Payments in Lieu of Taxes13 please13 provide13 the13 date13 and13 amount of the13 payment

The College has not made any Payments in Lieu of Taxes The College pays property taxes on anyproperty that is not mission-shy‐central and pays13 unrelated business13 income tax when appropriate

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 19

Response to13 Question 12

Does your college or university grant naming rights to donors based on certain donation levels Ifso please describe the naming rights13 program including how much and what percentage of anynaming rights donations your college or university has used for tuition13 assistance

Grinnell College has adopted the Fund Creation and Endowment Threshold Guidelines whicharticulate13 the13 levels at which donors can name13 variety of funds (such as student scholarshipsprofessorships and13 chairs and13 programmatic funds) Donors can permanently endow namedscholarship for a minimum of $50000 Donors13 can create an expendable scholarship meaning notendowed with the13 goal of fully spending13 annual gifts each year for $500013 per year Donors cancreate scholarships that are13 unrestricted and available13 to all students or can create13 restrictedscholarships Restrictions13 on scholarships13 vary Some donors13 restrict scholarship to those whodemonstrate financial need while others focus o academic performance major of study or thegeographic origin of the13 student

Gifts Received ($ in thousands)

Fiscal Year 2013 2014 2015 2016Named funds restricted for scholarships $986 $1591 $7511 $1237Named funds restricted for other use $843 $6603 $1928 $930Total named funds $1829 $8194 $9439 $2167

of gifts received for named funds restrictedfor13 scholarships 5391 1942

Projected

ScholarshipsOther Expenses ($ in thousands)

Fiscal Year 2013 2014

7957

2015

5708

2016Named funds restricted for13 scholarships $402313 $409613 $440813 $535713 Named funds restricted for other use $1108213 $1151513 $1245113 $1326113 Total named funds

$1510513 $1561113 $1685913 $1861813 of spending from named funds used for

scholarships 2663 2624 2615 2877

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 20

Response to13 Question 13

What conflict of interest policies does your college or university have in place to address financial13 interest in endowment investments (including potential13 conflicts of interest among and betweengoverning13 boards trustees executives internal employees tasked13 with overseeing13 the13 endowment and13 external asset managers of endowment assets)

The Collegersquos Conflict of Interest Policy was adopted on May 7 2011 and applies to each member ofthe Board of13 Trustees and each officer13 of13 the College during such personrsquos service to the College13 inthe case of13 a trustee the Conflict13 of13 Interest13 Policy applies for13 a period of13 five years following thedate of the trusteersquos completion13 of service to13 the College Under the policy a conflict of interest isdefined13 as a transaction13 in13 which13 (1) the trustee or officer (or member of hisher13 immediate family)13 is a party13 (2) the trustee or officer (or member of hisher immediate family) has a material13 economic interest or (3) the13 trustee13 or officer (or member of hisher immediate13 family) is in controlor has the power to13 control management policies of an13 entity that is a party to13 the transaction ANDeither the13 College13 is also party to or otherwise13 involved in the13 transaction or the13 involvement ofthe trustee or13 officer13 can reasonably be expected to give rise to an appearance of13 impropriety

The Conflict of Interest Policy provides for various safe harbor transactions relating toinvestments The purchase sale or holding of securities which13 are publicly traded13 by any trustee orofficer shall not constitute a conflict of interest transaction solely because the College also owns13 securities13 of the same class13 or other securities13 of the same issuer in its13 investment portfolio Alsoan investment by any trustee13 or officer in limited partnerships trusts or similar non-shy‐marketablevehicles in which the College also is an investor shall13 not constitute a conflict of interest transactionprovided13 that (1) the trusteeofficer makes hisher own13 evaluation13 of the investment merits (2) thetrusteeofficer13 does not13 utilize College resources or13 seek13 assistance from College employees inmaking the investment (3) the trusteeofficer does not ldquotrade offrdquo hisher relationship with theCollege for an13 investment allocation (4) the investment of the trusteeofficer does not lead13 to13 amaterial reduction in13 the Collegersquos investment (ldquocrowding outrdquo) and13 (5) the trusteeofficer disclosesin writing to the chief investment officer all13 material13 facts concerning the investment prior toparticipating in13 the transaction

How do you vet board membersrsquo potential conflicts13 of interest

The Conflict of Interest Policy also requires that each current member of the Board of Trustees andeach officer of the13 College13 file13 statement in July with the13 treasurer13 certifying that13 heshe has readand is familiar with the13 terms of the13 Conflict of Interest Policy and also requires that13 suchtrusteeofficer13 (1)13 disclose any possible conflicts of13 interest13 which may have arisen or13 occurred inthe fiscal year13 of the College ending June 30 or which13 may be expected13 to13 arise or occur during thefiscal year13 beginning July 1 or13 (2)13 knows of13 no such possible conflict13 of13 interest

What are your policies if a conflict arises with a member of the board of trustees

In the event of a conflict of interest under the policy prior to entering into the transaction thetrusteeofficer13 is required to fully disclose in writing to the Executive Committee of13 the Board of13 Trustees all material facts concerning the transaction and the13 extent and nature13 of hisher interestin the transaction and promptly respond to any requests for clarification or additional13 information

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 21

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22

Endowment spending restricted to use for financial aid and other student support is

Fiscal Year 2013 2014 2015 2016Spending restricted to financial aid and other student support $4620 $4736 $5163 $5701Total endowment spending $54400 $55800 $59243 $64518of total endowment spending used for financial aid and 8 8 9 9other student support

Projected

As is shown13 above while only a small percentage of the endowment is specifically restricted13 forfinancial aid and other13 student13 support Grinnell elects to use a significant13 portion of13 its quasi-shy‐endowment to fund financial aid and other student support for13 students

The table below which uses information from Schedule D of the IRS Form 990 shows13 the totalendowment funding13 allocated to financial aid and other support for students

Fiscal Year 2013 2014 2015 2016Endowment spending used for13 financial aid and $18123 $19122 $20207 $21388other student supportEndowment spending used for other purposes $36277 $36678 $39036 $43130Total endowment spending $54400 $55800 $59249 $64518of total endowment13 spending used for financial 33 34 34 33aid and other student support

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 17

Response to13 Question 10

Does your college or university have policies regarding whether it is allowed to accept fundsrestricted to a specific purpose

Grinnell College has adopted a Gift Acceptance Policy The Policy was endorsed13 by the Board13 ofTrustees Advancement Committee an Audit an Assessment Committee The policy is designed toassure13 that all gifts to or for the13 use13 of Grinnell College13 are13 structured to benefit Grinnell College13 while ensuring fidelity to donor intent Because some gift situations may be complex or13 more costlythan beneficial or13 restricted in a manner13 not13 keeping with Grinnell Collegersquos goal of13 philanthropythat13 advances the Collegersquos mission13 the policy has been13 developed13 to13 outline the procedures forassessing and accepting gifts to Grinnell College for the Collegersquos benefit

Has your college or university ever declined a donation because it was restricted to a certainpurpose If so please13 describe13 those13 specific scenarios in which your school rejected13 donation

Grinnell College has three examples of gifts declined because the donor-shy‐imposed restrictions did13 notalign with Grinnellrsquos mission and board-shy‐approved strategic priorities

1) donor approached13 Grinnell College about making a gift in13 the range of $250000ndash$500000for13 the College to use to13 purchase and13 maintain13 residential property to be13 utilized as afaith-shy‐based13 center At that time such13 a project was not a priority and13 the Collegecommunicated that the needs13 of the student body13 were already13 being met The College didnot pursue the gift

2) donor approached13 Grinnell College about the possibility of making a $1 million gift from afamily foundation to support13 experiential student13 learning in a specific area of13 psychology This area13 was not strength for the department13 and the department13 did not13 have plans to13 grow The College did13 not pursue the gift

3) donor approached13 Grinnell College near the end13 of a tax year with13 an13 interest in13 giftingland for the Collegersquos access and use The College explored the possibility but the donorrsquosproposed13 restrictions were deemed13 too13 onerous The College did13 not pursue the gift

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 18

Response to13 Question 11($ in thousands)

How much and what percentage of your college or universityrsquos endowment is invested in realproperty (not including13 REITs or other publicly-shy‐traded securities)

Fiscal Year 2013 2014 2015Endowment $1553629 $1829521 $1787775

(1)Real Estate Investments $59801 $52387 $51694 38 29 29

(1)Includes investments categorized as ldquootherrdquo13 in addition to ldquoreal estaterdquo13 on the audited financialstatements

Please list and describe your college or universityrsquos real estate holdings including real estate heldby the13 college13 or university the13 endowment and13 all related13 entities

Fiscal YearCampus Property 2013 2014 2015Land and Improvements $11771 $12533 $13406Buildings and13 Improvements $326408 $327774 $328591Construction13 in13 Process $267 $35 $390Total (Gross) $338446 $340342 $342387Accumulated13 Depreciation $108170 $116760 $125270Total (Net) $230276 $223582 $217117

Fiscal YearNon-shy‐Campus Property (1) 2013 2014 2015Limited Partnership Interests $59767 $52353 $51660Non-shy‐Campus Community Property $34 $34 $34Oil Mineral Rights (2) $3 $3 $3

(3)Other Real Estate $754 $754 $54Total Non-shy‐Campus Property $60558 $53144 $51751

(1)Includes investments categorized as ldquootherrdquo in addition to ldquoreal13 estaterdquo on the audited financial13 statements(2)Including property owned via a related entity(3)Comprised13 of property owned13 via a related13 entityNote Related entities include a C corporation 100 percent-shy‐owned13 by the College and13 annuity fundsfor13 which the College is trustee

If the college or university has made any Payments in Lieu of Taxes13 please13 provide13 the13 date13 and13 amount of the13 payment

The College has not made any Payments in Lieu of Taxes The College pays property taxes on anyproperty that is not mission-shy‐central and pays13 unrelated business13 income tax when appropriate

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 19

Response to13 Question 12

Does your college or university grant naming rights to donors based on certain donation levels Ifso please describe the naming rights13 program including how much and what percentage of anynaming rights donations your college or university has used for tuition13 assistance

Grinnell College has adopted the Fund Creation and Endowment Threshold Guidelines whicharticulate13 the13 levels at which donors can name13 variety of funds (such as student scholarshipsprofessorships and13 chairs and13 programmatic funds) Donors can permanently endow namedscholarship for a minimum of $50000 Donors13 can create an expendable scholarship meaning notendowed with the13 goal of fully spending13 annual gifts each year for $500013 per year Donors cancreate scholarships that are13 unrestricted and available13 to all students or can create13 restrictedscholarships Restrictions13 on scholarships13 vary Some donors13 restrict scholarship to those whodemonstrate financial need while others focus o academic performance major of study or thegeographic origin of the13 student

Gifts Received ($ in thousands)

Fiscal Year 2013 2014 2015 2016Named funds restricted for scholarships $986 $1591 $7511 $1237Named funds restricted for other use $843 $6603 $1928 $930Total named funds $1829 $8194 $9439 $2167

of gifts received for named funds restrictedfor13 scholarships 5391 1942

Projected

ScholarshipsOther Expenses ($ in thousands)

Fiscal Year 2013 2014

7957

2015

5708

2016Named funds restricted for13 scholarships $402313 $409613 $440813 $535713 Named funds restricted for other use $1108213 $1151513 $1245113 $1326113 Total named funds

$1510513 $1561113 $1685913 $1861813 of spending from named funds used for

scholarships 2663 2624 2615 2877

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 20

Response to13 Question 13

What conflict of interest policies does your college or university have in place to address financial13 interest in endowment investments (including potential13 conflicts of interest among and betweengoverning13 boards trustees executives internal employees tasked13 with overseeing13 the13 endowment and13 external asset managers of endowment assets)

The Collegersquos Conflict of Interest Policy was adopted on May 7 2011 and applies to each member ofthe Board of13 Trustees and each officer13 of13 the College during such personrsquos service to the College13 inthe case of13 a trustee the Conflict13 of13 Interest13 Policy applies for13 a period of13 five years following thedate of the trusteersquos completion13 of service to13 the College Under the policy a conflict of interest isdefined13 as a transaction13 in13 which13 (1) the trustee or officer (or member of hisher13 immediate family)13 is a party13 (2) the trustee or officer (or member of hisher immediate family) has a material13 economic interest or (3) the13 trustee13 or officer (or member of hisher immediate13 family) is in controlor has the power to13 control management policies of an13 entity that is a party to13 the transaction ANDeither the13 College13 is also party to or otherwise13 involved in the13 transaction or the13 involvement ofthe trustee or13 officer13 can reasonably be expected to give rise to an appearance of13 impropriety

The Conflict of Interest Policy provides for various safe harbor transactions relating toinvestments The purchase sale or holding of securities which13 are publicly traded13 by any trustee orofficer shall not constitute a conflict of interest transaction solely because the College also owns13 securities13 of the same class13 or other securities13 of the same issuer in its13 investment portfolio Alsoan investment by any trustee13 or officer in limited partnerships trusts or similar non-shy‐marketablevehicles in which the College also is an investor shall13 not constitute a conflict of interest transactionprovided13 that (1) the trusteeofficer makes hisher own13 evaluation13 of the investment merits (2) thetrusteeofficer13 does not13 utilize College resources or13 seek13 assistance from College employees inmaking the investment (3) the trusteeofficer does not ldquotrade offrdquo hisher relationship with theCollege for an13 investment allocation (4) the investment of the trusteeofficer does not lead13 to13 amaterial reduction in13 the Collegersquos investment (ldquocrowding outrdquo) and13 (5) the trusteeofficer disclosesin writing to the chief investment officer all13 material13 facts concerning the investment prior toparticipating in13 the transaction

How do you vet board membersrsquo potential conflicts13 of interest

The Conflict of Interest Policy also requires that each current member of the Board of Trustees andeach officer of the13 College13 file13 statement in July with the13 treasurer13 certifying that13 heshe has readand is familiar with the13 terms of the13 Conflict of Interest Policy and also requires that13 suchtrusteeofficer13 (1)13 disclose any possible conflicts of13 interest13 which may have arisen or13 occurred inthe fiscal year13 of the College ending June 30 or which13 may be expected13 to13 arise or occur during thefiscal year13 beginning July 1 or13 (2)13 knows of13 no such possible conflict13 of13 interest

What are your policies if a conflict arises with a member of the board of trustees

In the event of a conflict of interest under the policy prior to entering into the transaction thetrusteeofficer13 is required to fully disclose in writing to the Executive Committee of13 the Board of13 Trustees all material facts concerning the transaction and the13 extent and nature13 of hisher interestin the transaction and promptly respond to any requests for clarification or additional13 information

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 21

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22

Response to13 Question 10

Does your college or university have policies regarding whether it is allowed to accept fundsrestricted to a specific purpose

Grinnell College has adopted a Gift Acceptance Policy The Policy was endorsed13 by the Board13 ofTrustees Advancement Committee an Audit an Assessment Committee The policy is designed toassure13 that all gifts to or for the13 use13 of Grinnell College13 are13 structured to benefit Grinnell College13 while ensuring fidelity to donor intent Because some gift situations may be complex or13 more costlythan beneficial or13 restricted in a manner13 not13 keeping with Grinnell Collegersquos goal of13 philanthropythat13 advances the Collegersquos mission13 the policy has been13 developed13 to13 outline the procedures forassessing and accepting gifts to Grinnell College for the Collegersquos benefit

Has your college or university ever declined a donation because it was restricted to a certainpurpose If so please13 describe13 those13 specific scenarios in which your school rejected13 donation

Grinnell College has three examples of gifts declined because the donor-shy‐imposed restrictions did13 notalign with Grinnellrsquos mission and board-shy‐approved strategic priorities

1) donor approached13 Grinnell College about making a gift in13 the range of $250000ndash$500000for13 the College to use to13 purchase and13 maintain13 residential property to be13 utilized as afaith-shy‐based13 center At that time such13 a project was not a priority and13 the Collegecommunicated that the needs13 of the student body13 were already13 being met The College didnot pursue the gift

2) donor approached13 Grinnell College about the possibility of making a $1 million gift from afamily foundation to support13 experiential student13 learning in a specific area of13 psychology This area13 was not strength for the department13 and the department13 did not13 have plans to13 grow The College did13 not pursue the gift

3) donor approached13 Grinnell College near the end13 of a tax year with13 an13 interest in13 giftingland for the Collegersquos access and use The College explored the possibility but the donorrsquosproposed13 restrictions were deemed13 too13 onerous The College did13 not pursue the gift

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 18

Response to13 Question 11($ in thousands)

How much and what percentage of your college or universityrsquos endowment is invested in realproperty (not including13 REITs or other publicly-shy‐traded securities)

Fiscal Year 2013 2014 2015Endowment $1553629 $1829521 $1787775

(1)Real Estate Investments $59801 $52387 $51694 38 29 29

(1)Includes investments categorized as ldquootherrdquo13 in addition to ldquoreal estaterdquo13 on the audited financialstatements

Please list and describe your college or universityrsquos real estate holdings including real estate heldby the13 college13 or university the13 endowment and13 all related13 entities

Fiscal YearCampus Property 2013 2014 2015Land and Improvements $11771 $12533 $13406Buildings and13 Improvements $326408 $327774 $328591Construction13 in13 Process $267 $35 $390Total (Gross) $338446 $340342 $342387Accumulated13 Depreciation $108170 $116760 $125270Total (Net) $230276 $223582 $217117

Fiscal YearNon-shy‐Campus Property (1) 2013 2014 2015Limited Partnership Interests $59767 $52353 $51660Non-shy‐Campus Community Property $34 $34 $34Oil Mineral Rights (2) $3 $3 $3

(3)Other Real Estate $754 $754 $54Total Non-shy‐Campus Property $60558 $53144 $51751

(1)Includes investments categorized as ldquootherrdquo in addition to ldquoreal13 estaterdquo on the audited financial13 statements(2)Including property owned via a related entity(3)Comprised13 of property owned13 via a related13 entityNote Related entities include a C corporation 100 percent-shy‐owned13 by the College and13 annuity fundsfor13 which the College is trustee

If the college or university has made any Payments in Lieu of Taxes13 please13 provide13 the13 date13 and13 amount of the13 payment

The College has not made any Payments in Lieu of Taxes The College pays property taxes on anyproperty that is not mission-shy‐central and pays13 unrelated business13 income tax when appropriate

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 19

Response to13 Question 12

Does your college or university grant naming rights to donors based on certain donation levels Ifso please describe the naming rights13 program including how much and what percentage of anynaming rights donations your college or university has used for tuition13 assistance

Grinnell College has adopted the Fund Creation and Endowment Threshold Guidelines whicharticulate13 the13 levels at which donors can name13 variety of funds (such as student scholarshipsprofessorships and13 chairs and13 programmatic funds) Donors can permanently endow namedscholarship for a minimum of $50000 Donors13 can create an expendable scholarship meaning notendowed with the13 goal of fully spending13 annual gifts each year for $500013 per year Donors cancreate scholarships that are13 unrestricted and available13 to all students or can create13 restrictedscholarships Restrictions13 on scholarships13 vary Some donors13 restrict scholarship to those whodemonstrate financial need while others focus o academic performance major of study or thegeographic origin of the13 student

Gifts Received ($ in thousands)

Fiscal Year 2013 2014 2015 2016Named funds restricted for scholarships $986 $1591 $7511 $1237Named funds restricted for other use $843 $6603 $1928 $930Total named funds $1829 $8194 $9439 $2167

of gifts received for named funds restrictedfor13 scholarships 5391 1942

Projected

ScholarshipsOther Expenses ($ in thousands)

Fiscal Year 2013 2014

7957

2015

5708

2016Named funds restricted for13 scholarships $402313 $409613 $440813 $535713 Named funds restricted for other use $1108213 $1151513 $1245113 $1326113 Total named funds

$1510513 $1561113 $1685913 $1861813 of spending from named funds used for

scholarships 2663 2624 2615 2877

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 20

Response to13 Question 13

What conflict of interest policies does your college or university have in place to address financial13 interest in endowment investments (including potential13 conflicts of interest among and betweengoverning13 boards trustees executives internal employees tasked13 with overseeing13 the13 endowment and13 external asset managers of endowment assets)

The Collegersquos Conflict of Interest Policy was adopted on May 7 2011 and applies to each member ofthe Board of13 Trustees and each officer13 of13 the College during such personrsquos service to the College13 inthe case of13 a trustee the Conflict13 of13 Interest13 Policy applies for13 a period of13 five years following thedate of the trusteersquos completion13 of service to13 the College Under the policy a conflict of interest isdefined13 as a transaction13 in13 which13 (1) the trustee or officer (or member of hisher13 immediate family)13 is a party13 (2) the trustee or officer (or member of hisher immediate family) has a material13 economic interest or (3) the13 trustee13 or officer (or member of hisher immediate13 family) is in controlor has the power to13 control management policies of an13 entity that is a party to13 the transaction ANDeither the13 College13 is also party to or otherwise13 involved in the13 transaction or the13 involvement ofthe trustee or13 officer13 can reasonably be expected to give rise to an appearance of13 impropriety

The Conflict of Interest Policy provides for various safe harbor transactions relating toinvestments The purchase sale or holding of securities which13 are publicly traded13 by any trustee orofficer shall not constitute a conflict of interest transaction solely because the College also owns13 securities13 of the same class13 or other securities13 of the same issuer in its13 investment portfolio Alsoan investment by any trustee13 or officer in limited partnerships trusts or similar non-shy‐marketablevehicles in which the College also is an investor shall13 not constitute a conflict of interest transactionprovided13 that (1) the trusteeofficer makes hisher own13 evaluation13 of the investment merits (2) thetrusteeofficer13 does not13 utilize College resources or13 seek13 assistance from College employees inmaking the investment (3) the trusteeofficer does not ldquotrade offrdquo hisher relationship with theCollege for an13 investment allocation (4) the investment of the trusteeofficer does not lead13 to13 amaterial reduction in13 the Collegersquos investment (ldquocrowding outrdquo) and13 (5) the trusteeofficer disclosesin writing to the chief investment officer all13 material13 facts concerning the investment prior toparticipating in13 the transaction

How do you vet board membersrsquo potential conflicts13 of interest

The Conflict of Interest Policy also requires that each current member of the Board of Trustees andeach officer of the13 College13 file13 statement in July with the13 treasurer13 certifying that13 heshe has readand is familiar with the13 terms of the13 Conflict of Interest Policy and also requires that13 suchtrusteeofficer13 (1)13 disclose any possible conflicts of13 interest13 which may have arisen or13 occurred inthe fiscal year13 of the College ending June 30 or which13 may be expected13 to13 arise or occur during thefiscal year13 beginning July 1 or13 (2)13 knows of13 no such possible conflict13 of13 interest

What are your policies if a conflict arises with a member of the board of trustees

In the event of a conflict of interest under the policy prior to entering into the transaction thetrusteeofficer13 is required to fully disclose in writing to the Executive Committee of13 the Board of13 Trustees all material facts concerning the transaction and the13 extent and nature13 of hisher interestin the transaction and promptly respond to any requests for clarification or additional13 information

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 21

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22

Response to13 Question 11($ in thousands)

How much and what percentage of your college or universityrsquos endowment is invested in realproperty (not including13 REITs or other publicly-shy‐traded securities)

Fiscal Year 2013 2014 2015Endowment $1553629 $1829521 $1787775

(1)Real Estate Investments $59801 $52387 $51694 38 29 29

(1)Includes investments categorized as ldquootherrdquo13 in addition to ldquoreal estaterdquo13 on the audited financialstatements

Please list and describe your college or universityrsquos real estate holdings including real estate heldby the13 college13 or university the13 endowment and13 all related13 entities

Fiscal YearCampus Property 2013 2014 2015Land and Improvements $11771 $12533 $13406Buildings and13 Improvements $326408 $327774 $328591Construction13 in13 Process $267 $35 $390Total (Gross) $338446 $340342 $342387Accumulated13 Depreciation $108170 $116760 $125270Total (Net) $230276 $223582 $217117

Fiscal YearNon-shy‐Campus Property (1) 2013 2014 2015Limited Partnership Interests $59767 $52353 $51660Non-shy‐Campus Community Property $34 $34 $34Oil Mineral Rights (2) $3 $3 $3

(3)Other Real Estate $754 $754 $54Total Non-shy‐Campus Property $60558 $53144 $51751

(1)Includes investments categorized as ldquootherrdquo in addition to ldquoreal13 estaterdquo on the audited financial13 statements(2)Including property owned via a related entity(3)Comprised13 of property owned13 via a related13 entityNote Related entities include a C corporation 100 percent-shy‐owned13 by the College and13 annuity fundsfor13 which the College is trustee

If the college or university has made any Payments in Lieu of Taxes13 please13 provide13 the13 date13 and13 amount of the13 payment

The College has not made any Payments in Lieu of Taxes The College pays property taxes on anyproperty that is not mission-shy‐central and pays13 unrelated business13 income tax when appropriate

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 19

Response to13 Question 12

Does your college or university grant naming rights to donors based on certain donation levels Ifso please describe the naming rights13 program including how much and what percentage of anynaming rights donations your college or university has used for tuition13 assistance

Grinnell College has adopted the Fund Creation and Endowment Threshold Guidelines whicharticulate13 the13 levels at which donors can name13 variety of funds (such as student scholarshipsprofessorships and13 chairs and13 programmatic funds) Donors can permanently endow namedscholarship for a minimum of $50000 Donors13 can create an expendable scholarship meaning notendowed with the13 goal of fully spending13 annual gifts each year for $500013 per year Donors cancreate scholarships that are13 unrestricted and available13 to all students or can create13 restrictedscholarships Restrictions13 on scholarships13 vary Some donors13 restrict scholarship to those whodemonstrate financial need while others focus o academic performance major of study or thegeographic origin of the13 student

Gifts Received ($ in thousands)

Fiscal Year 2013 2014 2015 2016Named funds restricted for scholarships $986 $1591 $7511 $1237Named funds restricted for other use $843 $6603 $1928 $930Total named funds $1829 $8194 $9439 $2167

of gifts received for named funds restrictedfor13 scholarships 5391 1942

Projected

ScholarshipsOther Expenses ($ in thousands)

Fiscal Year 2013 2014

7957

2015

5708

2016Named funds restricted for13 scholarships $402313 $409613 $440813 $535713 Named funds restricted for other use $1108213 $1151513 $1245113 $1326113 Total named funds

$1510513 $1561113 $1685913 $1861813 of spending from named funds used for

scholarships 2663 2624 2615 2877

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 20

Response to13 Question 13

What conflict of interest policies does your college or university have in place to address financial13 interest in endowment investments (including potential13 conflicts of interest among and betweengoverning13 boards trustees executives internal employees tasked13 with overseeing13 the13 endowment and13 external asset managers of endowment assets)

The Collegersquos Conflict of Interest Policy was adopted on May 7 2011 and applies to each member ofthe Board of13 Trustees and each officer13 of13 the College during such personrsquos service to the College13 inthe case of13 a trustee the Conflict13 of13 Interest13 Policy applies for13 a period of13 five years following thedate of the trusteersquos completion13 of service to13 the College Under the policy a conflict of interest isdefined13 as a transaction13 in13 which13 (1) the trustee or officer (or member of hisher13 immediate family)13 is a party13 (2) the trustee or officer (or member of hisher immediate family) has a material13 economic interest or (3) the13 trustee13 or officer (or member of hisher immediate13 family) is in controlor has the power to13 control management policies of an13 entity that is a party to13 the transaction ANDeither the13 College13 is also party to or otherwise13 involved in the13 transaction or the13 involvement ofthe trustee or13 officer13 can reasonably be expected to give rise to an appearance of13 impropriety

The Conflict of Interest Policy provides for various safe harbor transactions relating toinvestments The purchase sale or holding of securities which13 are publicly traded13 by any trustee orofficer shall not constitute a conflict of interest transaction solely because the College also owns13 securities13 of the same class13 or other securities13 of the same issuer in its13 investment portfolio Alsoan investment by any trustee13 or officer in limited partnerships trusts or similar non-shy‐marketablevehicles in which the College also is an investor shall13 not constitute a conflict of interest transactionprovided13 that (1) the trusteeofficer makes hisher own13 evaluation13 of the investment merits (2) thetrusteeofficer13 does not13 utilize College resources or13 seek13 assistance from College employees inmaking the investment (3) the trusteeofficer does not ldquotrade offrdquo hisher relationship with theCollege for an13 investment allocation (4) the investment of the trusteeofficer does not lead13 to13 amaterial reduction in13 the Collegersquos investment (ldquocrowding outrdquo) and13 (5) the trusteeofficer disclosesin writing to the chief investment officer all13 material13 facts concerning the investment prior toparticipating in13 the transaction

How do you vet board membersrsquo potential conflicts13 of interest

The Conflict of Interest Policy also requires that each current member of the Board of Trustees andeach officer of the13 College13 file13 statement in July with the13 treasurer13 certifying that13 heshe has readand is familiar with the13 terms of the13 Conflict of Interest Policy and also requires that13 suchtrusteeofficer13 (1)13 disclose any possible conflicts of13 interest13 which may have arisen or13 occurred inthe fiscal year13 of the College ending June 30 or which13 may be expected13 to13 arise or occur during thefiscal year13 beginning July 1 or13 (2)13 knows of13 no such possible conflict13 of13 interest

What are your policies if a conflict arises with a member of the board of trustees

In the event of a conflict of interest under the policy prior to entering into the transaction thetrusteeofficer13 is required to fully disclose in writing to the Executive Committee of13 the Board of13 Trustees all material facts concerning the transaction and the13 extent and nature13 of hisher interestin the transaction and promptly respond to any requests for clarification or additional13 information

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 21

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22

Response to13 Question 12

Does your college or university grant naming rights to donors based on certain donation levels Ifso please describe the naming rights13 program including how much and what percentage of anynaming rights donations your college or university has used for tuition13 assistance

Grinnell College has adopted the Fund Creation and Endowment Threshold Guidelines whicharticulate13 the13 levels at which donors can name13 variety of funds (such as student scholarshipsprofessorships and13 chairs and13 programmatic funds) Donors can permanently endow namedscholarship for a minimum of $50000 Donors13 can create an expendable scholarship meaning notendowed with the13 goal of fully spending13 annual gifts each year for $500013 per year Donors cancreate scholarships that are13 unrestricted and available13 to all students or can create13 restrictedscholarships Restrictions13 on scholarships13 vary Some donors13 restrict scholarship to those whodemonstrate financial need while others focus o academic performance major of study or thegeographic origin of the13 student

Gifts Received ($ in thousands)

Fiscal Year 2013 2014 2015 2016Named funds restricted for scholarships $986 $1591 $7511 $1237Named funds restricted for other use $843 $6603 $1928 $930Total named funds $1829 $8194 $9439 $2167

of gifts received for named funds restrictedfor13 scholarships 5391 1942

Projected

ScholarshipsOther Expenses ($ in thousands)

Fiscal Year 2013 2014

7957

2015

5708

2016Named funds restricted for13 scholarships $402313 $409613 $440813 $535713 Named funds restricted for other use $1108213 $1151513 $1245113 $1326113 Total named funds

$1510513 $1561113 $1685913 $1861813 of spending from named funds used for

scholarships 2663 2624 2615 2877

Projected

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 20

Response to13 Question 13

What conflict of interest policies does your college or university have in place to address financial13 interest in endowment investments (including potential13 conflicts of interest among and betweengoverning13 boards trustees executives internal employees tasked13 with overseeing13 the13 endowment and13 external asset managers of endowment assets)

The Collegersquos Conflict of Interest Policy was adopted on May 7 2011 and applies to each member ofthe Board of13 Trustees and each officer13 of13 the College during such personrsquos service to the College13 inthe case of13 a trustee the Conflict13 of13 Interest13 Policy applies for13 a period of13 five years following thedate of the trusteersquos completion13 of service to13 the College Under the policy a conflict of interest isdefined13 as a transaction13 in13 which13 (1) the trustee or officer (or member of hisher13 immediate family)13 is a party13 (2) the trustee or officer (or member of hisher immediate family) has a material13 economic interest or (3) the13 trustee13 or officer (or member of hisher immediate13 family) is in controlor has the power to13 control management policies of an13 entity that is a party to13 the transaction ANDeither the13 College13 is also party to or otherwise13 involved in the13 transaction or the13 involvement ofthe trustee or13 officer13 can reasonably be expected to give rise to an appearance of13 impropriety

The Conflict of Interest Policy provides for various safe harbor transactions relating toinvestments The purchase sale or holding of securities which13 are publicly traded13 by any trustee orofficer shall not constitute a conflict of interest transaction solely because the College also owns13 securities13 of the same class13 or other securities13 of the same issuer in its13 investment portfolio Alsoan investment by any trustee13 or officer in limited partnerships trusts or similar non-shy‐marketablevehicles in which the College also is an investor shall13 not constitute a conflict of interest transactionprovided13 that (1) the trusteeofficer makes hisher own13 evaluation13 of the investment merits (2) thetrusteeofficer13 does not13 utilize College resources or13 seek13 assistance from College employees inmaking the investment (3) the trusteeofficer does not ldquotrade offrdquo hisher relationship with theCollege for an13 investment allocation (4) the investment of the trusteeofficer does not lead13 to13 amaterial reduction in13 the Collegersquos investment (ldquocrowding outrdquo) and13 (5) the trusteeofficer disclosesin writing to the chief investment officer all13 material13 facts concerning the investment prior toparticipating in13 the transaction

How do you vet board membersrsquo potential conflicts13 of interest

The Conflict of Interest Policy also requires that each current member of the Board of Trustees andeach officer of the13 College13 file13 statement in July with the13 treasurer13 certifying that13 heshe has readand is familiar with the13 terms of the13 Conflict of Interest Policy and also requires that13 suchtrusteeofficer13 (1)13 disclose any possible conflicts of13 interest13 which may have arisen or13 occurred inthe fiscal year13 of the College ending June 30 or which13 may be expected13 to13 arise or occur during thefiscal year13 beginning July 1 or13 (2)13 knows of13 no such possible conflict13 of13 interest

What are your policies if a conflict arises with a member of the board of trustees

In the event of a conflict of interest under the policy prior to entering into the transaction thetrusteeofficer13 is required to fully disclose in writing to the Executive Committee of13 the Board of13 Trustees all material facts concerning the transaction and the13 extent and nature13 of hisher interestin the transaction and promptly respond to any requests for clarification or additional13 information

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 21

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22

Response to13 Question 13

What conflict of interest policies does your college or university have in place to address financial13 interest in endowment investments (including potential13 conflicts of interest among and betweengoverning13 boards trustees executives internal employees tasked13 with overseeing13 the13 endowment and13 external asset managers of endowment assets)

The Collegersquos Conflict of Interest Policy was adopted on May 7 2011 and applies to each member ofthe Board of13 Trustees and each officer13 of13 the College during such personrsquos service to the College13 inthe case of13 a trustee the Conflict13 of13 Interest13 Policy applies for13 a period of13 five years following thedate of the trusteersquos completion13 of service to13 the College Under the policy a conflict of interest isdefined13 as a transaction13 in13 which13 (1) the trustee or officer (or member of hisher13 immediate family)13 is a party13 (2) the trustee or officer (or member of hisher immediate family) has a material13 economic interest or (3) the13 trustee13 or officer (or member of hisher immediate13 family) is in controlor has the power to13 control management policies of an13 entity that is a party to13 the transaction ANDeither the13 College13 is also party to or otherwise13 involved in the13 transaction or the13 involvement ofthe trustee or13 officer13 can reasonably be expected to give rise to an appearance of13 impropriety

The Conflict of Interest Policy provides for various safe harbor transactions relating toinvestments The purchase sale or holding of securities which13 are publicly traded13 by any trustee orofficer shall not constitute a conflict of interest transaction solely because the College also owns13 securities13 of the same class13 or other securities13 of the same issuer in its13 investment portfolio Alsoan investment by any trustee13 or officer in limited partnerships trusts or similar non-shy‐marketablevehicles in which the College also is an investor shall13 not constitute a conflict of interest transactionprovided13 that (1) the trusteeofficer makes hisher own13 evaluation13 of the investment merits (2) thetrusteeofficer13 does not13 utilize College resources or13 seek13 assistance from College employees inmaking the investment (3) the trusteeofficer does not ldquotrade offrdquo hisher relationship with theCollege for an13 investment allocation (4) the investment of the trusteeofficer does not lead13 to13 amaterial reduction in13 the Collegersquos investment (ldquocrowding outrdquo) and13 (5) the trusteeofficer disclosesin writing to the chief investment officer all13 material13 facts concerning the investment prior toparticipating in13 the transaction

How do you vet board membersrsquo potential conflicts13 of interest

The Conflict of Interest Policy also requires that each current member of the Board of Trustees andeach officer of the13 College13 file13 statement in July with the13 treasurer13 certifying that13 heshe has readand is familiar with the13 terms of the13 Conflict of Interest Policy and also requires that13 suchtrusteeofficer13 (1)13 disclose any possible conflicts of13 interest13 which may have arisen or13 occurred inthe fiscal year13 of the College ending June 30 or which13 may be expected13 to13 arise or occur during thefiscal year13 beginning July 1 or13 (2)13 knows of13 no such possible conflict13 of13 interest

What are your policies if a conflict arises with a member of the board of trustees

In the event of a conflict of interest under the policy prior to entering into the transaction thetrusteeofficer13 is required to fully disclose in writing to the Executive Committee of13 the Board of13 Trustees all material facts concerning the transaction and the13 extent and nature13 of hisher interestin the transaction and promptly respond to any requests for clarification or additional13 information

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 21

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22

from the Executive Committee trusteeofficer may not engage in13 a conflict of interest transaction13 unless the transaction is approved by an affirmative vote of13 at13 least13 two-shy‐thirds of the ExecutiveCommittee

The College maintains similar Conflict of Interest Policy for (non-shy‐officer) employees of theCollege This policy requires that any employee with an actual or potential conflict of interestcomplete a disclosure statement which is13 reviewed by13 a committee with representation from theoffice of human13 resources the treasurerrsquos office and the deanrsquos office The committee thendetermines an13 appropriate course of13 action

Response to Sen Hatch Reps Brady and RoskamGrinnell College

Page 22