Investment Policy for University-Held Endowments – 309.9

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University of Arkansas at Little Rock
Policy Name: Investment Policy for University-Held Endowments
Policy Number: 309.9
Effective Date: October 14, 2016

Policy:

Purpose

The purpose of this policy is to provide guidelines for administering, establishing, investing, and managing endowments held at the University of Arkansas at Little Rock.

Administering Endowments

An endowment is a fund where the principal (corpus) is held for investment and the payout on the principal is available for spending as directed by the donor. There are only two authorized repositories for endowment gifts: The University of Arkansas at Little Rock (the “university”) and The University of Arkansas Foundation, INc. (the “UA Foundation”).

For those endowment gifts made directly to the university and held in university accounts, campus management is responsible for administering and investing these funds under the supervision of an advisory committee consisting of the vice president for finance, vice chancellor for finance and administration, and other senior administrators from the university. Campus management has delegated the responsibility of investing university-held endowments to the UA Foundation.

Establishing Endowments

Unless created by a bequest or devise through a donor’s will or trust, a signed endowment gift agreement is required to establish an endowment account. The gift agreement ensures (a) the university clearly understands the purpose of the gift, how the payout is to be used, and any other unique terms and conditions of the gift and (b) the donor clearly understands the policies by which their gift will be managed.

Complete information on establishing endowments is available from the University of Arkansas at Little Rock Alumni and Development Office. Minimum funding levels for the various endowment types are as follows:

Position Minimum Funding Level
Endowed Chair $1,000,000
Endowed Professorship $500,000
Endowed Scholarship $25,000
Endowed Award $10,000
Investing Endowments

Endowment gifts to the university are invested in the Total Return Pool sponsored by the UA Foundation. Additional information on the investment policies and asset allocation guidelines of the UA Foundation may be obtained at info@uafound.org or 479.575.5581.

Spending Endowments/Payout Rate

Endowment income will be distributed annually in accordance with the payout rate established by the UA Foundation. The calculation of the distribution is the payout rate multiplied by the three-year average of market values as of June 30 of the fiscal year. The Office of Financial Services can be contacted at 501.569.3318 for the current payout rate.

Management Fee

All endowment funds will be assessed an annual management fee, unless waived by senior management, based on the market value of the assets held in the endowment. The calculation of the management fee is the management fee rate multiplied by the three-year average of market values as of June 30 of the prior fiscal year. The Office of Financial Services can be contacted at 501.569.3318 for the current management fee rate.

 


Source: Initial Policy
Revised:
Approved By: Chancellor Andrew Rogerson, October 14, 2016
Custodian: Office of Finance and Administration