ADVANCEMENT POLICIES & PROCEDURES

11.a. USU Cash Handling Policy 530

11.b. Advancement Cash Handling Policy

11.c. Extension/4-H Donation Handling

11.d. Regional Campus Deposit Instructions

11.e. Gift Receipting Cycle

11.f. Insubstantial Benefit Limits (Safe Harbor Rules)

11.g. Gift Transmittal Form

 

11.h. Depositing Non-Charitable Donations

Noncharitable donations are non-tax deductible (e.g., donations from a government agency, paying for a specific student's tuition, where the donor benefits from donating, donations to sororities or fraternities, or donations that do not support the mission of the University. Units are encouraged to thank donors for non-charitable donations, however, because the funds are non-charitable the donation does not get deposited through the Office of Advancement Services. Non-charitable donations may be tracked as an attribute in Millennium so that they can be included when pulling reports that reflect how the constituent has supported the University.

11.i. Endowment Overview

The Utah State University Endowment Fund consists of endowed gifts which provide perpetual financial support for scholarships, fellowships, faculty chairs and professorships, and other important University programs and services. An endowed gift is intended to provide the University with a permanent source of funding by investing the principal amount of the gift and making available a portion of the income it generates. The amount of endowment "income" available for spending is determined by the USU Board of Trustees and is governed by Utah law.

The Endowment may also include donor contributions and surplus funds that are designated by the University as "quasi-endowments." Quasi-endowments are treated like endowed funds, except that no laws prohibit any portion of a quasi-endowment from being spent in accordance with its designated purpose. However, University policies and procedures govern the minimum time frame a quasi-endowment must be established before the principal is eligible to be spent.

Nearly all endowment and some quasi-endowment funds are collectively invested as a large, singular pool of funds, called the Endowment Pool (the "Pool"). Although the Pool is invested as a singular fund, the individual endowment and quasi-endowment funds comprising it are separately tracked by assigning each fund shares of ownership in the Pool, similar to how an individual's investment in a mutual fund is tracked.

The investment objectives for the University endowment funds are long-term in nature. The Endowment Pool is a balanced portfolio of funds designed to produce long-term growth with reduced volatility. The strategy for endowment management includes investing in a broad range of financial instruments. It is the desire of the University to continue to grow the size of the endowment over time and to produce a stable and predictable payout stream.

11.j. USU Investment Policy 571

11.k. Endowment Performance

Fiscal Year

Year

Rate of Return

Endowment Value

1997

1997

13.09

$44.90

1998

1998

12.78

$54.60

1999

1999

5.19

$66.70

2000

2000

(3.88)

$76.90

2001

2001

(6.38)

$85.50

2002

2002

(7.18)

$81.90

2003

2003

0.65

$81.90

2004

2004

18.38

$91.50

2005

2005

7.65

$97.10

2006

2006

6.78

$110.30

2007

2007

15.77

$130.60

2008

2008

(3.20)

$145.60

2009

2009

(13.70)

$151.20

2010

2010

10.60

$172.40

2011

2011

17.40

$209.10

2012

2012

2.25

$209.20

2013

2013

12.40

$242.06

2014

2014

13.90

$283.10

2015

2015

2.90

$315.10

2016

2016

1.50

$326.00

2017

2017

12.50

$360.20

2018

2018

7.60

$322.04

2019

2019

6.10

$341.80

11.l. Endowment Administrative Fee and Use Of

Utah State University assesses up to a 1.5% fee on the true endowments invested in the endowment pool. This fee, that has been approved by University leadership, USU Foundation Board and USU Board of Trustees, is used to support University Advancement, investment administration, and other president-approved purposes. The fee is assessed on the 12-quarter moving average of the portfolio fair market unit value for the three preceding fiscal years, with a budget lead time of one year. No new endowments whether funded with new money or existing monies will have the endowment fee waived. Any exception to this will be reviewed by the Gift Acceptance Committee for recommendation to the University President for action.

Endowment administrative fee calculations are made as follows:

  1. If there is a transfer to the spendable, then a fee will be charged.
  2. If there is no transfer to the spendable due to a restriction on the endowment (endowment has to get to a certain dollar value, can't spend until someone retires, no spending until a certain fiscal year), then no fee will be charged UNLESS the corpus of the endowment is over $25,000.
  3. For the first fiscal year an endowment buys into the endowment pool the fee will be calculated as follows:
    • All units purchase on October 1, 20xx will be charged 75% of the fee (calculated on a per unit basis).
    • All units purchase on January 1, 20xx will be charged 50% of the fee (calculated on a per unit basis).
    • All units purchase on April 1, 20xx will be charged 25% of the fee (calculated on a per unit basis).
    • All units purchase on June 30, 20xx will not be charged a fee - These endowments will pay the full fee the next fiscal year.
  4. For endowments that specifically say to spend all the earnings each fiscal year, there will be no fee charged in years when there is less than the 4% earnings.
  5. The fee will be charged only if there are funds in appreciation. The University will spend appreciation down to zero, but won't go negative to pay the spending rule or fee.

11.m. Endowment Spending Policy

The University's spending policy is to distribute, annually, 4% of the three-year average fair market value of the endowment. These funds are taken from the earnings. In years when the investment does not earn 4%, the transfer for spending can come from appreciation. In addition to the 4% that is transferred for spending, the university currently retains 1.5% of the value of the endowment to support University Advancement, investment administration, and other president-approved purposes.

The spending policy benefits both the donor and the University by protecting the core growth of the endowment. This protects the distributable income. Therefore, the University ensures that donors' funds are not losing income for awards made according to donors' wishes.

11.n. CMIP Investment

Cash Management Investment Pool, consists of available cash in excess of estimated daily operating requirements from all University and agency funds. The pool is not operated on a unit (marked value) method. The rate of return is similar to a money market.
https://www.usu.edu/policies/517/Cash_Management_Investment_Pool_Guidelines.cfm

11.o. CASE Reporting & Management Guidelines

The University follows the CASE Reporting Standards and Guidelines for Educational Fundraising by the Council for Advancement and Support of Education (CASE) for reporting annual fundraising and campaigns. The latest edition of the guidelines is the 4th edition.

11.p. FASB

Financial Accounting Standards Board (FASB) that establishes financial accounting and reporting standards for public and private companies and not-for-profit organizations that follow Generally Accepted Accounting Principles (GAAP).

11.q. Donor Bill of Rights

The Donor Bill of Rights, found at https://www.case.org/resources/donor-bill-rights, was created by the Association of Fundraising Professionals (AFP), the Association of Healthcare Philanthropy (AHP), the Council for Advancement and Support of Education (CASE), and the Giving Institute: Leading Consultants to Non-Profits. It has been endorsed by numerous organizations including Utah State University.

11.r. Requesting Banner Index

Requesting new banner indexes for a unit/department will go through the unit Financial Officer using Service Now. When requesting an index for a charitable donation, you must ensure that the fund type is one that can hold a donation.
The new endowment must have a completed gift agreement in place before a new index can be requested. Donations will be deposited in the Advancement holding index until a new index can be created.

11.s. Solicitation Codes

Units can request a solicitation code through the Office of Advancement Services that can be tied to their specific solicitation. When donations are processed in the database, the gift is then tagged with the same solicitation code to ensure accurate reporting on solicitation efforts.

11.t. Moving Donations to a Different Account

Millennium is the system of record for donations. Any donation that needs to be moved to a different account than what the funds were initially deposited to must work with the Office of Advancement Services to move the funds. This is to ensure that the funds are being used for the purpose the donor instructed and to keep Banner in sync with Millennium.