Endowment Management

Michele Whitaker

Hi, I would appreciate if anyone could share how they have set up their endowment accounts, and how they manage the spendable amount and unitization.

We currently have each endowment set up as a project, and are tracking changes in a unitization spreadsheet, and updating the projects accordingly. Is there a feature or module where we we can track our entire investment pool, and FE does those calculations for us? We do have the allocation module, but I am still learning about it.

Also, currently we do not have a separate project for the “spendable” amount, such as the award amount for a professorship. How are you all tracking the “spendable” balance- in the same project, or in a separate one? (When I say “spendable” amount, for me that means a specific amount our board has said we can spend in the next year from an endowment fund, not just everything over corpus.)

I appreciate any advice you can give regarding managing endowments in FE! Thanks!

Patricia Nowak

@Michele Whitaker We have two projects set up for each endowment. The endowment project like you have and then a second project that we call the expendable. Our project numbering system is XXXX-XXXXXX the first four digits indicate if the project is the endowment or the expendable and the two related projects share the same 6 digits after the dash. We use FE NXT to record our endowment pool accounting, but we do not use unitization, we operate on a percentage basis. Our policy is that each endowment pays out 1% at the end of each quarter to their expendable for a total of 4% per year. All other accounting for investment related transactions flows into the endowment.

Laura Lehnen

@Michele Whitaker we use one project number, but different funds for the corpus and the expendable. For example, 06 is our endowment corpus and 04 is the spendable portion. Our spend allocation is done annually, around end of October, for the following fiscal year ending June 30. Our Board votes on a certain percentage to pass to the spendable portion, which is then moved to the 04 fund. This keeps our project numbers together, but we can still differentiate between the two by searching for the correct fund. We also do a quarterly JE to allocate gains/losses for the investments to each project. We are currently using a spreadsheet to manage this part, but we would love to find a way to manage it through FE.

Angela Tuttle

@Michele Whitaker We have two projects one for the endowment and one for the spendable. We also use two different bank account “fund” numbers. We also use a spreadsheet for unitization.