Trustee Financial Training 1

Agenda: 1.Overview of the Foundation 2.Define and discuss University-controlled Activities 3.Track a University-controlled Activity transaction 4.Define and discuss Foundation-controlled Activities 5.Impact on Financial Statements 6.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

CONTRIBUTIONS DONOR 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

CONTRIBUTIONS INVESTMENT 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

CONTRIBUTIONS INVESTMENT 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 INVESTMENT OPERATIONS 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 (amounts are stated in thousands of dollars) Revenues Unrestricted Foundation gifts$ 500 Trust distributions166 GIP earnings544 Administrative fees3,662 Endowment distributions142 TOTAL Revenues$ 5,014 Expenses Payroll$ 3,617 Other1,379 TOTAL Expenses$ 4,996

5. Impact on Financial Statements 20

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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) URPR TR for current-use (University) earnings from endowments (University) CONTRIBUTIONS 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

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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