Gift Fees in Practice: A Candid Conversation on What Really Works-Investment Policy with Gift Fee Language

Investment Policy with Gift Fee Language

Pdf Summary

The document is the Foundation for SoLAcc’s Investment Policy, which sets rules for managing endowed and non-endowed funds. It establishes minimum funding levels to create endowments: $10,000 for a scholarship and $60,000 for a professorship, with up to five years allowed to meet the goal. Donors must keep contributing during that period.<br /><br />The Finance and Audit Committee is responsible for overseeing investments, though it may delegate certain tasks to investment managers or staff. The policy requires compliance with UPMIFA and aims to generate income for operations, programs, and scholarships while preserving and growing principal over time.<br /><br />The policy allows investments in public debt and equity securities, REITs, hedge funds, private equity, and private debt, but imposes limits. No more than 74% of endowed assets may be in equity, at least 26% must be in fixed income, foreign exposure is capped at 50% within public equity and debt, and publicly traded debt must average at least “A” credit quality. Alternative investments are limited to 25% total, with sub-limits for REITs, hedge funds, and private equity/private debt.<br /><br />If a new endowment deposit exceeds 50% of the current balance, dollar-cost averaging must be used over six months. Spending is allowed only when the endowment’s market value exceeds original corpus by at least the amount to be spent; otherwise, no spending is permitted.<br /><br />The Foundation charges an annual internal management fee of 1.0% on existing endowments, reviewed yearly, with new endowments exempt for their first year. Non-endowed current funds are managed more flexibly, with money market funds preferred. The policy also requires regular reporting, periodic RFPs for investment services, and allows future amendments by the Finance and Audit Committee.

Keywords

investment policy

endowed funds

non-endowed funds

Finance and Audit Committee

UPMIFA compliance

endowment spending rules

asset allocation limits

alternative investments

dollar-cost averaging

management fee