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
Bank, Cash and Funds Management Accounts
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
Management
Real Estate Policies
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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.
Named account holders on file with the Foundation are the only individuals authorized to request supplemental distributions from Foundation accounts. Withdrawals of distribution amounts are available:
- after the minimum endowment level has been achieved through gifts and permanently reinvested amounts, and
- after having reached the minimum endowment level for four (4) full calendar quarters, and
- 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.
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Distribution Policy
Background
The Texas Uniform Management of Institutional Funds Act (UMIFA - a portion 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, including 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 any amounts in the accumulated reserve for market fluctuation for a given account. Account holders should not make long-term commitments based solely on anticipated endowment account distributions.
The Board utilizes two separate distribution policies.
“Pre-2003 Funds” - Annual Procedure
Annually, the Board reviews performance figures for its investments and determines an "Annually Established Distribution Percentage" rate. This rate is used in calculating the target annual distribution amount for endowed accounts for the Foundation. Some older accounts have individual distribution guidelines specified in their Memorandum of Understanding, which take precedence over this policy.
The Directors will base their selection of this "Annually Established Distribution Percentage" on a number of criteria including, but not limited to, investment performance, inflation, cost of living, UNT program costs, and the Board's long-term investment and distributions strategy. Upon determining the "Annually Established Distribution Percentage" rate, the Directors shall instruct staff to utilize income (interest, dividends, appreciation, plus depreciation) and/or reserves for each individual fund to produce a distribution for each account for the coming period, when possible.
The following definitions are used for “Pre-2003 Funds”:
- Total return is defined as the sum of total interest and dividends earned, plus all realized and unrealized gains and losses, less all investment expenses and management fees.
- Income is defined as the sum of interest and dividends earned, plus all realized and unrealized gains and losses.
- Spendable income is defined as the amount of money that is produced by calculations using the Board’s target annual distribution rate, and is generated from the Total return, and/or the reserves for each individual fund, when available.
The target annual distribution amount for each endowment fund will be between 3 and 6 percent (3% - 6%) 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, the target annual distribution rate shall be 4 percent (4.0%) of this calculated average market value of each individual fund.
Distribution of spendable income to a UNT spending account shall be made quarterly, as soon as practicable, usually after the last calendar day of February, May, August and November. This distribution amount shall be recalculated each quarter based on the 12 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.
No distribution of any “Pre-2003 Funds” permanent endowment shall ever reduce the fair market value of the individual endowment fund to a level below the historic cost of the fund (the original and all subsequent gifts to the fund and any amounts specified in the fund’s Memorandum of Understanding that direct income to be added to principal), unless specified in the Memorandum of Understanding.
If, at any point of distribution, the total return shall be less than the target distribution amount, the actual distribution shall be limited to any available positive total return amount, not to exceed the target annual distribution rate.
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Receipt of Gifts and First-Year-Endowed Distribution Formula “Pre-2003 Funds”
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 are transferred to the investment pool on the 1st working day of the second following month.
“Pre-2003 Funds” endowment funds shall be excluded from the target distribution until the endowment has been established (i.e.: funds in the investment pool shall have reached the Minimum for Endowment as established by the university through gifts and any permanently reinvested amounts) for four full calendar quarters (the first full calendar quarter begins by 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 Memorandums of Understanding used in all “Pre-2003 Funds” Memorandums of Understanding shall include the following:
“At least annually, subject to the availability of income and reserves for this fund, the Foundation will make a distribution 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. Distributions for this endowed fund will normally be created by its current income and reserves. Once the Foundation has distributed money in the manner described, then the Foundation shall have no further responsibility as to such funds or their application.”
“Post-2002 Funds” - Annual Procedure
The Board of Directors recognizes the desire for higher rates of spendable income by the account holders at the university for these newer endowment funds. The following spending policy reflects an objective to distribute as much total return as is consistent with overall investment objectives defined herein while protecting the real value of the endowment principal.
The following definitions are used for “Post-2002 Funds”:
- Total return is defined as the sum of total interest and dividends earned, plus all realized and unrealized gains and losses, less all investment expenses and management fees.
- Income is defined as the sum of interest and dividends earned, plus all realized and unrealized gains and losses.
- Net current yield is defined as the sum of total interest and dividends earned less all investment expenses and management fees.
- Spendable income is defined as the amount of money that is produced by calculations using the Board’s target annual distribution rate, and is generated from the Total return, and the Net current yield, and/or the reserves for each individual fund, when available.
The target annual distribution amount for each endowment fund will be between 3 and 6 percent (3% - 6%) 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, the target annual distribution rate shall be 4 percent (4.0%) of the average market value of each individual fund.
Distribution of spendable income to a UNT spending account shall be made quarterly, as soon as practicable, usually after the last calendar day of February, May, August and November. This distribution amount shall be recalculated each quarter based on the 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.
If, at any point of distribution, the fair market value of the individual endowment fund of any “Post-2002 Funds” endowment is below the corpus of the fund (historic cost), the distribution shall be limited to net current yield.
If, at any point of distribution, the total return shall be less than the target distribution amount, the actual distribution shall be limited to the net current yield, plus any available positive total return amount, not to exceed the target distribution rate.
Receipt of Gifts and First-Year-Endowed Distribution Formula “Post-2002 Funds”
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 are transferred to the investment pool on the 1st working day of the second following month.
“Post-2002 Funds” endowment funds shall be excluded from the target distribution until the endowment has been established (i.e.: 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 by 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 from January 1, 2003 forward shall include the following:
“At least annually, subject to the availability of income and reserves for this fund, the Foundation will make a distribution 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. Distributions for this endowed fund will normally be created by its current income and reserves, and when this fund’s market value is below its historic cost, by the net current yield (interest and dividends less management fees) from this fund. Once the Foundation has distrib¬uted money in the manner described, then the Foundation shall have no further respon¬sibility as to such funds or their application.”
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Fees charged to Endowed Accounts
The Foundation charges 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 only source of revenue available to the Foundation for these functions.
The Management Fees charged against all accounts held by the Foundation 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 assistance; and approved Board of Directors expenses.
These are the only fees charged against accounts managed by the UNT Foundation.
- No portion of any donation to the fund will ever be used to pay the management fees
- 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
- Management fees are based upon the following account market values:
| Fee Rate |
From Market Value |
To Market Value |
|---|
| 1.50% | $0 | $750,000 |
| 0.80% | $750,000 | $1,500,000 |
| 0.70% | $1,500,000 | Higher |
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