Trustee Financial Training

1

Agenda:

1.Overview of the Foundation2.Define and discuss University-controlled

Activities3.Track a University-controlled Activity transaction4.Define and discuss Foundation-controlled

Activities5.Impact on Financial Statements6.Questions

Trustee Financial Training

2

1. Overview of the Foundation

3

Overview

The purpose and mission of the Foundation are, acting on its own or through affiliates, to support and assist the University of Oregon in its activities by management and administration of Foundation assets representing privately donated funds, by leading advocacy for the University, and by developing, financing, constructing, acquiring and operating facilities for or on behalf of the University.

4

CONTRIBUTIONS

UNIVERSITY

INVESTMENT

DONOR

Overview

OPERATIONS BUDGET

5

FOUNDATION

DISTRIBUTIONS

2. Define and discuss University-controlled

Activities

6

CONTRIBUTIONS

UNIVERSITY

INVESTMENT

DONOR

Overview

OPERATIONS BUDGET

7

FOUNDATION

DISTRIBUTIONS

University-controlled Activities

The Foundation receives CONTRIBUTIONS from private gifts and INVESTS those funds for the University of Oregon.

DISTRIBUTIONS are made available for University spending, according to the donor’s purpose for the gift: to fund student scholarships, faculty support, academic programs, or capital projects.

8

CONTRIBUTIONSDONOR

CONTRIBUTIONS may be received in the form of:• Cash• Stock• Property

CONTRIBUTIONS

University-controlled Activities

9

INVESTMENTS are managed based on the purpose or nature of the asset:• The General Investment Program (GIP) includes endowment distributions and gifts

that are available for current spending. • The Willamette Investment Pool (WIP) primarily includes endowed assets intended

to exist in perpetuity.• Deferred assets (trusts and gift annuities) available at maturity.• Legacy and Intermediate funds available for current spending, managed

individually to match cash flow needs.

INVESTMENT

University-controlled Activities

10

The Board has authorized DISTRIBUTIONS (monies available for spending) from endowment assets at a rate that maintains, in perpetuity, the investment earning power of the endowment. Currently, this rate approximates 4% of the endowment’s market value on December 31.

UNIVERSITYDISTRIBUTIONS

University-controlled Activities

11

3. Track a University-controlled Activity

transaction

12

CONTRIBUTIONSINVESTMENT

DISTRIBUTIONS

University-controlled Activity Transaction: Endowment

13

CONTRIBUTION made to an endowment• $25,000 check (minimum to

establish)

Initial investment• $25,000 into WIP

WIP earnings• initial earnings pay gift fee• earnings then accrue to

endowment market value

DISTRIBUTION calculated• based on market value • made available for spending

quarterly

Available for spending• University makes a request for

funds based on endowment purpose and value of accrued distributions

CONTRIBUTIONSINVESTMENT

DISTRIBUTIONS

University-controlled Activity Transaction: Restricted Current

14

CONTRIBUTION made to a restricted current fund• $1,000 check (minimum to

establish)

Initial investment• $1,000 into GIP

GIP earnings• earnings are revenue to the

Foundation Available for spending• University makes a request for

funds based on purpose and total value of fund

4. Define and discuss Foundation-controlled

Activities

15

CONTRIBUTIONS

UNIVERSITY

INVESTMENT

DONOR

Overview

OPERATIONS BUDGET

16

FOUNDATION

DISTRIBUTIONS

Foundation-controlled Activities

The Foundation BUDGET is supported by investment income from and management fees on assets under management.

Additionally, the Foundation receives Unrestricted CONTRIBUTIONS of private gifts and INVESTS those funds for Foundation-controlled Activities.

17

CONTRIBUTIONS

Revenue sources:• all earnings from GIP

• administrative fees on all endowments and trusts based on market value

• distributions from Foundation unrestricted endowments

Budget includes: • revenues from

CONTRIBUTION and INVESTMENT sources

• expenses, primarily payroll, as approved by the Trustees

Unrestricted CONTRIBUTIONS

INVESTMENTOPERATIONS

BUDGET

Foundation-controlled Activities

18

Revenue sources:• unrestricted Foundation

endowment gifts

• unrestricted Foundation current use gifts

• gifts of property

• distributions from trusts where Foundation is beneficiary

Foundation-controlled Activities

19

Operations Budget 2009-2010(amounts are stated in thousands of dollars)

2009-10RevenuesUnrestricted Foundation gifts $ 500Trust distributions 166GIP earnings 544Administrative fees 3,662Endowment distributions 142

TOTAL Revenues $ 5,014

ExpensesPayroll $ 3,617Other 1,379

TOTAL Expenses $ 4,996

5. Impact on Financial Statements

20

21

INVESTMENTS representing both University-controlled and Foundation-controlled assets are presented (i) on the Statement of Position by type of investment and (ii) in Footnote 4 by management strategy.

INVESTMENT

Financial Statements

22

Footnote 4 • GIP• WIP• Trust and gift annuities• Other investments

Statement of Position • Marketable securities• Limited partnerships• Land and buildings• Money market and CDs

Financial Statements

23

Financial Statements

24

for current-use (University)

earnings

from endowments

for current-use (Foundation)

earnings

from endowments (Foundation)

Financial Statements

25

to an endowment (Foundation or University)

UR PRTR

for current-use (University)

earnings

from endowments (University)

CONTRIBUTIONS CONTRIBUTIONSCONTRIBUTIONS

INVESTMENT

DISTRIBUTIONS

SPENDING

INVESTMENT

DISTRIBUTIONS

CONTRIBUTIONS are revenues on the Statement of Activities and include:

CONTRIBUTIONS

Financial Statements

26

University-controlled and Foundation-controlled Activities• Outright gifts (endowed and currently spendable)• Pledges• Deferred gifts

Financial Statements

27

INVESTMENTS generate revenues on the Statement of Activities and include:

INVESTMENT

Financial Statements

28

University-controlled Activities• Investment income from WIP and

individual investments• Changes in values of deferred gifts

Foundation-controlled Activities• Investment income from GIP• Assessments on endowment and

trusts

Financial Statements

29

DISTRIBUTIONS are presented as expenses on the Statement of Activities by purpose:

DISTRIBUTIONS

Financial Statements

30

University-controlled Activities• Academic program support• Facilities and equipment• Student aid• University administrative support

31

Foundation expenses are presented on the Statement of Activities by purpose:

Financial Statements

32

Foundation-controlled Activities• University allocations• Budgeted payroll and other

operating expenses

OPERATIONS BUDGET

Financial Statements

33

 

6. Questions?

34