Clemson University Foundation Review of Restricted Funds 1

Objectives Enhance your ability to effectively administer restricted gifts by providing you with : A basic understanding of the different types of gifts Clemson receives An explanation of endowed funds An explanation of non-endowed/operating projects An explanation of your responsibilities for your department’s restricted funds An overview of the tools available to your department 2

Types of Gifts Endowment gifts – An endowment is a fund established with a gift or gifts from one or more donors to CU or CUF to be invested in order to generate annual financial support for a purpose agreed to by Clemson and the donor(s). The actual gift, which is known as the corpus is NOT spent, but rather a portion of the investment returns is spent as determined by a spending policy. – The CU/CUF endowment consists of approximately 1700 individual funds with various purposes and restrictions. Expendable gifts – Gifts given for immediate use 3

Endowments CUF Funds:CorpusAppreciationSpending Permanent Endowment Term Endowment Quasi- Endowment Permanent Endowment – created by a donor to exist forever. Term Endowment – created by a donor to exist for a specific period of time or until the occurrence of a specified event. Quasi-Endowment – established by the Board to function as an endowment. 4 CU Funds:CorpusAppreciationSpending Permanent Endowment /22 Term Endowment /22 Quasi- Endowment /22 CUBS Fund Numbers

5 CUF/CU Endowment Growth *Represents non cash, trusts held by others, and CUREF assets to benefit endowment

Endowment Basics Fund Agreements – A contract between the donor and the University that outlines the purpose(s) for which gifts/funds are to be expended. A Fund Agreement is required to set up a project/fund to receive all endowment gifts and non-endowment gifts for student support funds, which include scholarships, fellowships, grant-in-aids, awards, and other forms of student financial aid. – To view a completed Fund Agreement via the Circle of Gratitude website, go to: 6

Endowment Basics 7 Endowment Minimums – Scholarships & Fellowships

Endowment Basics Investment – The Investment Committee of the Clemson University Foundation provides direction and recommendations to the Board of Directors for the investment of the financial assets of the Foundation, and those other assets for which the Foundation has fiduciary responsibility. The primary purpose of the Investment Committee is to manage the investment and disbursement of assets of the Foundation and those managed by the Foundation, while maintaining prudent fiduciary standards. – Dr. John Alexander serves as Chief Investment Officer – ns.pdf ns.pdf 8

FY17 Endowment Spending Policy for CUF and CU Endowments Total FY17 Endowment Payout: $19.13 million; 9% increase over FY16 Key Components of the approved policy: Payout rate of 4% (unchanged) applied to an endowment’s average market value for FY15, FY14, FY13  Market value > 108% of historic gift value as of 6/30/15 Reduced payout rate 2%, if applicable  Market value < 108% of historic gift value as of 6/30/15; AND  Endowment has generated a prior payout 9

FY17 Payout – By Donor Purpose 10

Spending Policy Example FY13FY14FY15 Corpus $100,000 Appreciation 16,388 33,898 31,9613 Yr Avg * Payout Rate Market Value $ 116,388$133,898$131,961$127,415 * 4% FY13FY14FY15FY16FY17 Payout Balance Forward $25 $1,382$43$1,018 $2,792 Payout Allowed 3,757 2,061 4,475 4,774 5,097 Actual Spending -2,400 -3,400-3,500-3,000 Spending Balance $1,382$43 $1,018 $2,792 11

Expendable/Operating Gifts Expendable gifts – Gifts given for immediate use – No express instruction to hold gift permanently CUBS Fund Numbers – Fund 55 – CUF – Fund 23 – CU – Fund 21 – CU Scholarships 12

13 Setting up a new CUF operating account, endowment or annual fund

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Gift Assessments Endowments are assessed an Administrative Mgmt Fee. The administrative management fee is utilized in securing, raising, investing and administering endowment funds in accordance with policies and procedures of CUF in effect at the time. – The fee for the current fiscal year is 1.25%. Effective FY15 fee is assessed on the three year average market value of the endowment. Gifts to expendable/operating funds are assessed a 5% reinvestment fee at the time of the gift. The reinvestment fee is to help support Clemson’s efforts to increase overall private giving. – Gifts to annual scholarships, grants-in-aid, student awards and fellowships are excluded from the reinvestment fee. 15

Departmental/School Responsibilities Expend funds – in most cases, not intended to be a “savings account”. Expend funds within disbursement guidelines and for the purpose intended by the donor. Familiar with restrictions of funds within your department. Assist in donor stewardship – completing Circle of Gratitude 16

Resources/Tools CUBS Queries – Current_Balances – Endowment_Detail – Endow_QuickTotals – Stmt_of_Change 17

Interactive Gift Report The report lists all contributions received by the Foundation during the time frame specified by the user. Revenues (purchases) are excluded as well as monies received by the Foundation which are not considered contributions (such as pledges). Found at A confidentiality statement and user account are required before access is granted – Access to the report is granted for users in a variety of ways: By college: user can see all funds designated to specific college(s) By department: user can see all funds designated to specific department(s)

Example of Interactive Gift Report

Resources/Tools Circle of Gratitude –

Contacts Your Business Officer – Erin Thomas Development – Donita Wagner Donor Services – Janice Cantinieri Gift Receiving – Director of Gift Management: April Purvis ‒Gift Receiving Listserv: GIFT_MANAGEMENT- GIFT_MANAGEMENT- 21 Gift Receiving Directory See chart, or feel free to contact anyone in Gift Receiving and they will direct you as necessary to the proper person