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Policy on Reinvestment of Endowment Income 

Background

From time to time, the University may make an internal decision to designate certain otherwise unrestricted funds or reserves as quasi-endowment.  These quasi-endowments will function in substantially the same manner as an endowment except that the University establishes the terms of the quasi-endowment and they will allow for expenditure of principal as well as income.  Therefore quasi-endowments are not permanent funds, but they are considered long-term investments.

Determining What Funds Should Be Reinvested

When a department wishes to reinvest some or all of the available balance in their endowed account back into the principal of the endowment, the following points should be considered:

  • Determine the amount to be reinvested carefully.  Once money has been reinvested, it will remain in the endowment principal for a minimum of 10 years.  Therefore, reinvestment should be an infrequent request used only to increase the endowment principal in order to meet a future goal or use of the fund. 
  • If the balance of available funds is larger than the need for the use of funds, this should be brought to the attention of the cabinet member who oversees your area.  It is possible that donor wishes for the use of the fund are too restrictive and, with the approval of the cabinet member and the Vice President for University Relations, the donor could be approached to request a change in the restriction.

Procedures for Requesting a Reinvestment of Endowment Income

  • Produce a written request that includes the reason for the request for re-investment, the responsible person on the account, the amount to reinvest, and a brief description of the current restrictions on the use of the fund.
  • If the area falls under Academic Affairs, submit the request to the Academic Dean.  The Dean will then review the proposal with the Vice President for Academic Affairs.  If the request is deemed appropriate, it should then be forwarded to the Treasurer for final approval.  If approved, the request will then be submitted to the Manager of Restricted Funds for action. 
  • If the area falls outside Academic Affairs, the proposal should be submitted to the Treasurer for approval.  If approved, the request will then be submitted to the Manager of Restricted Funds for action.

(revised: 10/29/13)