1. FUND 320 Chartstrings Building Endowment Chartstrings

2. Why So Many Chartstrings? Principal tracked separately from spending. Spending budget set by policy. New gifts can be added to principal at any time. Changes to endowment uses, purposes, agreements, etc. require written authorization from each and every donor.

3. Gift SPENDING True Buys units Term Spending Income Reinvestment BUDGET - EXPENSES = BALANCE Consolidated Endowment Basics Book Value consists of the original corpus (gifts) and reinvested income; represents the money used to buy units (or shares) of the consolidated endowment and is used to determine when an endowed fund reaches term and becomes a true endowment. Market Value is the current value of the consolidated endowment. Each fund has units (or shares) of the consolidated endowment and the unit value is calculated each month. Units are purchased at MV. Gifts are added to the consolidated endowment. Investments are made. Performance of investments increases market value of the consolidated endowment. Policy determines income distributed for spending. 4.5% rate of spending is based on a rolling 13 quarter average of the consolidated endowment market value (not the current endowment market value). This spending policy provides a smoothing effect to the highs and lows of endowment market values. Once a year, a management fee is assessed against the consolidated endowment, based on a 4-quarter average of the market value. The 0.5% management fee does not reduce the 4.5% spending rate. Year-end balances are made available for spending the following year. The Board of Trustees has fiduciary responsibility. If a term endowment, then spending income is reinvested.

4. 5,7624,2220000 Spending 1.8246 1.50701.09510.70810.3445Units 110,276 89,12365,04742,24420,616Book Value 020,000 Gifts Year 6Year 5Year 4Year 3Year 2Year 1 $100,000 Pledge payable over 5 years Term until $100,000 Growth & Spending 70,17668,02165,91263,47758,28151,524Unit Value 13Q Ave 01,1534,076 2,803 1,628616 Reinvestment 74,78372,47070,23068,05865,94863,814Unit Value Current 136,449132,229105,83474,52846,69621,982Market Value 5,7625,3754,0762,8031,628616Income Buy units based on current market value. Income reinvested while a term endowment. Becomes true endowment when book value reaches term. 4.5% spending based on 13-qtr average (not market value).

5. Gift SPENDING True Buys units Term Spending Income Reinvestment BUDGET - EXPENSES = BALANCE Consolidated Endowment Chartstring - Fund 352 400 320 Term Endowment True Endowment Endowment Spending

6. 0484352Term Endowment 0484400True Endowment 0000320 Endowment Spending 3xxxxx Donors & Restrictions 03975205012You PRPPURPROAIDPROJPCBUFNCSRCFDDPTOBASICS Source _________ Describes the donors and any restrictions. See fund documents to view restrictions, including purposes and investments. Building the Chartstring

7. One code per chart- string; used centrally 12520503203001232010397 99.9% of time, these are “0000” or blanks. 125205032030012320103970000 Optional; use for tracking expenses. 125205032030012320103970000 Completing the Spending Chartstring ODPTFDSRCFNCPCBUPROJAIDPROPURPRP Fund - Spending _________ Departments usually spend from endowments and that’s why you use Fund 320 so much.

8. All endowments have governing documents including such things as: who established the fund who can give to the fund restrictions on spending restrictions on investing contingency plans To receive a copy of endowment documents, please contact: Development and Alumni Relations or Financial Reporting and Accounting Services To establish new endowments, please contact: Development and Alumni Relations

9. alumni.uvm.edu/business