GENERAL INFORMATION

The Mission of the UNT Foundation
Structure of the Foundation
Staffing the Foundation
Board of Directors Volunteer Position Description
Conflict-Of-Interest Policy
Directors and Officers Liability
Communicating with the Board
Nondiscrimination/Equal Opportunity/Affirmative Action/Sexual Harassment Policy Statement
Whistleblower Policy
Public Information

ACCOUNT MANAGEMENT

Definitions throughout this Manual
Establishing a New Account
Types of Accounts
Account Holders
Deposits (Contributions) to Accounts
Procedure for Acknowledging and Receipting Gifts

INVESTMENT MANAGEMENT

Endowment Account - Investment Vehicles
Operating Account - Investment Vehicles
Investment Policy
Appendix A
Appendix B
Appendix C

OBTAINING FUNDS FROM ACCOUNT

Withdrawals of Amounts from Endowment Accounts
Distribution Policy
Fees Charged to Endowed Accounts

SPECIAL INFORMATION

Funding Requests from Foundation Unrestricted Assets
Executor Functions
Trustee Functions

GIFT PLANNING AND ACCEPTANCE POLICIES

Overview
Liquidation of Gifts
Appraisal
Tangible Personal Property
Life Insurance
Guidelines for Gifts of Life Insurance
Gifts of Cash
Securities
Individual Wills
Charitable Gift Annuities
Charitable Remainder Trusts
Real Estate Policies

^ Top

 

OBTAINING FUNDS FROM ACCOUNTS

Withdrawals of Amounts from Endowment Accounts

Distributions from select endowment accounts (scholarships, fellowships, and some lectureships, professorships and chairs) are automatically made quarterly after the last calendar day of February, May, August, and November. Account Holders may direct that no automatic distributions occur, and that all distributions shall be initiated by the Account Holder’s use of individual Disbursement Authorization forms.

Named Account Holders and their Account Proxies on file with the Foundation are the only individuals authorized to request distributions from Foundation accounts. Withdrawals of distribution amounts are available

1. after the minimum endowment level has been achieved through gifts and permanently reinvested amounts, and
2. after having reached the minimum endowment level for four (4) full calendar quarters, and
3. in accord with the Memorandum of Understanding for the account.

Permanent Endowment accounts are designed to produce distribution amounts for use in such long-term, limited activity activities as Scholarships, Fellowships, Lectureships, Professorships and Chairs.

Quasi-endowments and operating accounts are designed for more irregular distributions, including complete or near-complete liquidation. The number of distributions from these accounts should be limited to no more than one (1) distribution per month. Distribution Requests must be received by the 20th of the month to be processed that month.

Account Holders requesting supplemental distributions should utilize the Disbursement Authorization form supplied by the Foundation. The blank form may be reproduced by the account holder as needed. An original signature of the account holder is required on this form for each individual request; email submissions of this form are not accepted.

Supplemental requests for distributions from the same account of amounts less than $10,000 in any single month will usually be processed and available within ten (10) working days from receipt of the request at the Foundation office. Extraordinary requests, or numerous requests from multiple account holders, may further reduce the minimal cash reserves, requiring this processing period to be extended.

Requests for distributions from the same account of $10,000 or more, in any single month, may be processed and available within ten (10) working days following the next first (1st) of the month after receipt of the request at the Foundation office.

Staff will make every effort to comply with account holder requests for supplemental distributions, and these time limits will apply as the standard operating guidelines.

^ Top

Distribution Policy

Background

The Texas Uniform Prudent Management of Institutional Funds Act (UPMIFA - a section of the Texas Property Code) contains language that describes the parameters within which charitable organizations such as the University of North Texas Foundation, Inc. may manage endowment funds under their care. This includes the manner in which the proceeds from invested funds may be distributed to fund beneficiaries. Based on this governing authority, the Board of Directors of the University of North Texas Foundation, Inc. utilizes the following procedures to distribute funds to the account holders of the various endowment funds under its management.

It is the philosophy of the Board that stable and slowly growing cash distributions should be made available to account holders for the purposes originally described by the donors of the funds. Distributions of this nature should be made available perpetually. These distributions should be insulated from severe fluctuations in annual investment returns as much as possible. Distribution amounts are dependent on investment returns, and Standards of Prudence, defined below, for each individual account. Account holders should not make long-term commitments based solely on anticipated future endowment account distributions.

Subject to the intent of a donor expressed in a Memorandum of Understanding, the Foundation, in managing and investing an endowment fund, shall consider the charitable purposes of the university and the purposes of the endowment fund. In addition to complying with the duty of loyalty imposed by law, each Member of the Board of Directors responsible for managing and investing the Foundation’s fund shall manage and invest the fund in good faith and with the care an ordinarily prudent person in a like position would exercise under similar circumstances. In managing and investing the Foundation’s fund, the Foundation may incur only costs that are appropriate and reasonable in relation to the assets, the purposes of the Foundation, and the skills available to the Foundation; and shall make a reasonable effort to verify facts relevant to the management and investment of the fund.

The Foundation may pool two or more institutional funds for purposes of management and investment. Except as otherwise provided by a Memorandum of Understanding, the following will apply:

1. In managing and investing the Foundation’s fund, the following factors, if relevant, must be considered:
   • general economic conditions;
   • the possible effect of inflation or deflation;
   • the expected tax consequences, if any, of investment decisions or strategies;
   • the role that each investment or course of action plays within the overall investment portfolio of the fund;
   • the expected total return from the investments;
   • other resources of the Foundation;
   • the needs of the Foundation and the fund to make distributions and to preserve capital; and
   • an asset's special relationship or special value, if any, to the charitable purposes of the Foundation.
2. Management and investment decisions about an individual asset must be made not in isolation but rather in the context of the Foundation’s portfolio of investments as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the fund and to the Foundation.
3. Except as otherwise provided by law, the Foundation may invest in any kind of property or type of investment consistent with its fiduciary responsibility.
4. The Foundation shall diversify the investments of an endowed fund unless the Foundation reasonably determines that, because of special circumstances, the purposes of the fund are better served without diversification.
5. Within a reasonable time after receiving property, the Foundation shall make and carry out decisions concerning the retention or disposition of the property or to rebalance a portfolio, in order to bring the endowment fund into compliance with the purposes, terms, and distribution requirements of the Foundation as necessary to meet other circumstances of the Foundation and the requirements of UPMIFA.
6. A person that has special skills or expertise, or is selected in reliance upon the person's representation that the person has special skills or expertise, has a duty to use those skills or that expertise in managing and investing the Foundation’s funds.

Annual Procedure

Annually, the Board reviews performance figures for its investment pools and determines an "Annually Established Distribution Percentage" rate. This rate is used in calculating the target annual distribution amount for endowed accounts. The Directors will base their selection of this "Annually Established Distribution Percentage" on a number of criteria including, but not limited to:

1. the duration and preservation of the endowment fund;
2. the purposes of the Foundation and the endowment fund;
3. general economic conditions;
4. the possible effect of inflation or deflation;
5. the expected total return from the investments;
6. other resources of the Foundation; and
7. the investment policy of the Foundation.

Upon determining the "Annually Established Distribution Percentage" rate, the Directors shall instruct staff to produce a distribution for each account for the coming period, when prudent. In no event shall the Foundation make a distribution unless it has determined that such distribution is prudent for the uses, benefits, purposes, and duration for which the endowment fund is established. Further, in making a determination to make a distribution or accumulate assets, the Foundation shall act in good faith and with the care that an ordinarily prudent person in a like position would exercise under similar circumstances.

The target annual distribution amount for each endowment fund will be between 3 and 5 percent (3% - 5%) of the average market value calculated for each individual endowment fund for the preceding 12 calendar quarters or less if the endowment has been established for fewer than 12 calendar quarters. Unless otherwise determined by the Board of Directors, and subject to the Board approved Standards of Prudence, the target annual distribution rate shall be 4 percent (4.0%) of the average market value of each individual fund.

Distribution of spendable amounts to a University spending account may be made quarterly, as soon as practicable, usually after the last calendar day of February, May, August and November. The distribution amount shall be recalculated each quarter based on the trailing 12 calendar quarter rolling average market value of each individual fund. If the fund has less than 12 calendar quarters to average, the average of the available quarters will be used.

Standards of Prudence

The Board of Directors has adopted the following distribution adjustments in response to the “prudence” requirements of UPMIFA to be applied to each individual fund:

• As long as Market Value is at least 80% of cumulative gifts, distribute 1% of the twelve-quarter average market value.
• When Market Value is below 80% but at least 75% of cumulative gifts, distribute 0.75% of twelve-quarter average market value.
• When Market Value is below 75% but at least 70% of cumulative gifts, distribute 0.50% of twelve-quarter average market value.
• When Market Value is below 70% but at least 60% of cumulative gifts, distribute 0.25% of twelve-quarter average market value.
• When Market Value is below 60% suspend all distributions.

This policy adjustment shall take effect with the distribution calculation based upon the March 31, 2009 calculation date.

Receipt of Gifts and First-Year-Endowed Distribution Formula

The Foundation accepts gifts for endowed funds through the 20th (or earlier last working date) of each month for transfer to its investment pool on the 1st working day of the following month. Gifts received after the 20th of the month (or last working day before the 20th of the month) are transferred to the investment pool on the 1st working day of the second following month.

Endowment funds shall be excluded from the target distribution calculation process until the endowment has been established (IE: funds in the investment pool shall have reached the Minimum for Endowment as established by the university through gifts and permanently reinvested amounts) for four full calendar quarters (the first full calendar quarter begins on the first day of that calendar quarter when the endowment has been fully funded to at least the minimum required level).

Memorandum of Understanding Language

The language pertaining to distributions that shall be used in all new Memorandums of Understanding shall include the following:

“Distributions shall commence after the end of the fourth full calendar quarter after the minimum gift level established by the University for this type of fund has been received. Then, at least annually, if it is determined to be prudent under applicable Texas statutes, the Foundation will make distributions for this award to the University based on the Distribution Policy established by the Board of Directors of the Foundation, as it may be revised from time to time, and the instructions, understandings and commitments contained herein. Once the Foundation has distributed money in the prudent manner described above, then the Foundation shall have no further responsibility as to such funds or their application.”

^ Top

Fees charged to Endowed Accounts

The Foundation charges management fees against endowment accounts to cover the costs of administration of the Foundation, and to assist the stable distribution of funds from permanent endowments to the University. This is the major source of revenue available to the Foundation for these functions.

The Management Fees charged against all endowed Foundation accounts are used to pay all of the expenses required to operate the Foundation. These expenses include: all investment, custodial and consulting fees; annual audits; administrative expenses; salaries and benefits; materials and supplies; legal services; data processing; and approved Board of Directors expenses.

These are the only fees charged against endowed Foundation accounts.

• No portion of any donation to the fund will ever be used to pay the management fees
• No fees are charged until a fund is added to the Foundation investment pool
• All management fees are charged and collected on a monthly basis
• All management fees are charged and collected based upon the invested market value of each individual account at the close of the month net of investment manager expenses
• The minimum management fee charged and collected from any individual account shall be $3/month
• These fees are in line with similar fees charged by peer institutions

Management fees are based upon the following account market values:

Combined Fee Rate	From Market Value	To Market Value
1.50%	$1	$750,000
0.80%	$750,001	$1,500,000
0.70%	$1,500,001	10,000,000

Fixed Fee Rate *	From Market Value	To Market Value
0.60%	$10,000,001	$20,000,000
(Negotiated)	$20,000,001

* These are the only fees assessed to these larger accounts

^ Top