Wright State University
Policy number: 3702
Subject: Quasi-Endowment Fund
Date issued: April 1998
Authority: Wright State University Board of Trustee Resolution 98-26 (December
5, 1997); Vice President for University Advancement
3702.1 General Policy
To help support Wright State University's continuing
efforts to achieve its mission, external donors may provide gifts to the university.
The donor may impose no restrictions on the gift whereby the gift may be used
for any university purpose (an unrestricted gift), or the donor may restrict
the gift to be used only for a specific department, activity, or project (a
restricted gift). One method of giving is to establish an "endowment," which
is a gift whereby the donor stipulates, as a condition of the gift, that the
principal be maintained for a specified period of time or until an event occurs
or that the principal be maintained in perpetuity. The funds are invested for
the purpose of producing present and future income which may either be expended
currently or added to the principal. The Wright State University Foundation,
Inc., has the responsibility to receive gifts and maintain accountability for
them.
3702.2 Quasi-Endowment Funds
- Explanation
Wright State University may make internal decisions to allocate and designate
funds as quasi-endowment funds, in order to achieve the institution's initiatives
and to serve the needs of its students. A quasi-endowment functions in the
same manner as an endowment except that a quasi-endowment is created by
the university rather than by an external donor. Therefore, it is the discretion
of the Board of Trustees to expend the principal of a quasi-endowment or
to continue the existence of a quasi-endowment.
- Maintenance
Quasi-endowments are to be maintained within the university and are to
be maintained separately from Wright State University Foundation accounts
which are funded by external gifts only. The following procedures govern
establishment, maintenance, and termination of a quasi-endowment fund.
- Creation of a quasi-endowment fund may be recommended by a university
unit to the provost or appropriate vice president. The provost or appropriate
vice president will then submit the recommendation to the President's
Cabinet for approval. Once approved by the President's Cabinet, the recommendation
for a quasi-endowment fund will be submitted to the Finance and Audit
Committee of the Board of Trustees and ultimately to the full Board for
approval.
- The submitting unit must include as part of a recommendation a description
of the quasi-endowment, including the purpose of the fund, how it relates
to the university's mission, and an identification of the source of funds
for establishing the quasi-endowment. The funds for establishing the quasi-endowment
are to be cash balances and not base budgets. The minimum amount necessary
to establish a fund is $50,000.
- The quasi-endowment will be accounted for in the university's endowment
fund and accordingly be subject to the disbursement policies and investment
guidelines in place for those funds. In addition, no endowment principal
may be expended without approval by the Board of Trustees.
- Upon approval, the Office of Financial Services will create an account
number in the endowment fund for the quasi-endowment. In order to expend
annual earnings, the responsible unit must identify the operating account
number. Any questions regarding an appropriate account from which to expend
funds should be directed to the Office of Financial Services.
- Establishment of a quasi-endowment will be considered permanent. Therefore,
a request to terminate or discontinue a quasi-endowment and a subsequent
transfer of funds to general university funds is subject to the same approval
process described in paragraph 1) above, including approval by the Board
of Trustees.
