Summary
This document provides guidance for the standard procedures when requesting Callable, Endowed – Temp (a.k.a. Quasi) funds, and/or Endowed – Perm. It also describes when to use a ‘Check Request’ vs. when to submit a ‘Fund Closure’ form.
Key Takeaways
- The type of fund you are requesting monies from (callable, endowed etc.) affects which type of request you would use to fully draw down its available balance.
- If your intent is to close a callable fund, please submit a Fund Closure Request form. If your intent is to request a portion of the balance of a callable fund, fill out a check request.
Definitions:
Callable Funds
A callable fund typically supports university priorities for a finite period of time and in a flexible manner. Generally, gifts in the callable pool — which is made of callable funds — are spent in their entirety within three years or fewer.
Permanent Endowment Funds
Gifts designated by a donor to be invested into perpetuity. Endowment funds are placed within a unitized pool to be invested with a long-term strategy intended to grow the endowment balance and produce a stream of income to support ongoing university programs.
Temporary (a.k.a. Quasi) Endowment Funds
A temporary endowment, or a fund functioning as an endowment, is a fund that is invested to provide income for a long but unspecified period, and the governing authority can expend the principal of the fund at any time.
Spendable Cash (SC)
The cash balance available for immediate spending according to the donor’s wishes as outlined in the fund description. Spendable cash is gifted by donors who wish to provide a gift for immediate spending. Spendable cash is not invested in the endowment portfolio but may earn interest according to established policy.
Spendable Endowment Income (SEI)
The cash balance available for immediate spending, generated on a quarterly basis by the spending plan which requires that a percentage of an endowed fund be regularly made available to fund programs. Spendable endowment income should be spent according to the donor’s wishes as outlined in the fund description. Spendable endowment income is not invested in the endowment portfolio and does not earn interest.
Callable Funds
Requesting the disbursement of a portion of the balance of a callable fund: A check request, approved by the Dean/Divisional Business Fiscal Office or approving authority may be submitted requesting any portion of the balance in 1000 – Spendable Cash. See screenshot below.
Requesting the disbursement of the full balance of a callable fund: If the intent is to close the fund, please submit a Fund Closure Request form. The Finance team will use the Fund Closure form to initiate the disbursement consisting of 100% of the balance in 1000 – Spendable Cash and close the fund.
Temporarily Restricted Endowment (a.k.a. Quasi) Funds
Requesting the disbursement of a portion of the balance of an Endowment – Temp fund: A check request can be submitted requesting 100% of the balance in 1005 – Spendable Endowment Income (SEI) and 100% of the balance in 1000 – Spendable Cash (when applicable). Additionally, up to 80% of the endowment market value can be requested with a check request, without any other action needed, as long as the endowment market value does not go below the minimum amount to create an endowment, which is $25,000. See screenshot below.
Note: Please provide a screenshot of the fund balances when you submit your check request for approval so that the full balance of the fund is visible, not only the balances in 1000 and 1005, for the individual approving the request. This will provide the information needed to determine if the request fits within these guidelines outlined in this document.
Requesting the disbursement of the full balance of an Endowment – Temp fund: If the intent is to close the fund, please submit the Fund Closure Request form. It is important to keep in mind that while this type of fund is not permanently restricted, it is part of the endowment pool. Therefore, the full amount of the fund will not be disbursed until the fund is liquidated. Liquidation of the fund will occur during the quarter close procedures following a review by the WFAA Finance team.
The Finance team will use the Fund Closure form to initiate the first disbursement consisting of 100% of the balance in 1005 – Spendable Endowment Income (SEI), 100% of the balance in 1000 – Spendable Cash (when applicable), and 80% of the endowment market value. After the fund is liquidated and the quarter is closed, the balance will automatically be disbursed to the same 233 as the first payment unless otherwise instructed.
Endowed – Perm Funds
Requesting the disbursement of a portion of the balance of an Endowment – Perm fund: Endowment Perm funds are intended to live in perpetuity. A check request can be submitted requesting 100% of the balance in 1005 – Spendable Endowment Income (SEI) and 100% of the balance in 1000 – Spendable Cash (when applicable). Endowment appreciation may only be used with permission from the donor as determined in the fund agreement.
