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Unspent Endowment Funds

  • 1.  Unspent Endowment Funds

    Posted 17 days ago

    Good afternoon,

    I just started at a new organization and we are in the process of reviewing unspent endowment funds with our Finance department. We currently do not have a policy in place for these and was hoping someone could share some best practices around this. I've read some institutions allowing unspent funds to remain for a 3 year time period and then being transferred to the principal account for reinvestment. However if this is not written into the original endowment agreement, are we able to do so or do we need written approval from the donor? Many of these unspent funds have not been reviewed in quite some time and I am sure exceed a 3 year period. We definitely need to put new policies in place and update agreement language so could use some best practices as a starting point.

    Thank you! 



    ------------------------------
    Monica Banea
    Associate Director of Data Management
    The Jackson Laboratory
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  • 2.  RE: Unspent Endowment Funds

    Posted 17 days ago
    If nothing is stipulated in the endowment agreement, you cannot do anything with these funds without donor agreement.  If the donor is not around you can work with the heirs.  One way or another you will want to amend the agreement to accommodate your and the donor desire for what to do with the unspent funds.

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987






  • 3.  RE: Unspent Endowment Funds

    Posted 17 days ago

    What John said! You cannot make funds permanently restricted that are not permanently restricted by donor. Also by making the endowment bigger, you are augmenting the issue that the department isn't spending the income for some reason. You need to research the reason and find a way for dept to spend it as the donor wished. My thoughts.

     

     

    Aaron Forrest CPA

    Senior Director Gift and Donor Services

    University of Rochester Office of Advancement

    585.275.2799 | aaron.forrest@rochester.edu