Through prudent management, it has been the objective of our Trust Funds to provide a steady flow of income for the University to maintain and enhance our academic, research and scholarly activities. Our funds are managed by external money managers under policies established by the Board of Governors. The integrity of the capital of each trust fund is maintained by spending only a portion of the investment income. Currently, the University’s policy is to disburse 4.0% of the average market value of the funds and capitalize the remaining investment income to ensure continued growth and to protect the purchasing power of the original capital.
The guiding principles and objectives of the University’s investment policies in relation to trust funds are:
- preservation and growth of capital through judicious investment management and a responsible income distribution policy
- commitment to our donors that their directions on the use of the expendable investment income from their funds will be honoured
- communication to our donors on the performance and impact of their endowed funds
The University receives donations and places the gift in a category as outlined in the Charitable Giving Policy, section 3. The categories are: Undesignated gifts, Broadly Designated gifts and Specifically Designated gifts.
When the expenditure of designated donations from private sources is determined by written terms and conditions and/or legal requirements, that have been agreed upon by the donor and the University, these donations are placed in trust fund projects.
The possible components of a trust fund are defined below. A trust fund may be expendable only, or have all three components.
- Non-expendable funds: Defines the status of all or part of donated funds, as designated by the donor at the time of the gift, that may not be expended. Earns annual investment return based on investment pool returns.
- Expendable funds: The accumulation of unspent income and funds designated for expenditure.
- Preservation of capital: Non-expendable and applies to General Perpetual trust funds only. It absorbs the increases and decreases between actual investment income earned and the amount of expenditure (spending allocation) permitted each year from fund.
Information Box Group
Externally restricted, endowed trust funds where the donation or bequest is non-expendable and from which only income earned may be expended. Principal invested in the Long Term Pool. May also have expendable donations.
Externally restricted, unendowed trust funds from which both the donations and income earned will be expended. Principal invested in the Short Term Pool.
Externally restricted, unendowed trust fund from which both the donations and income earned will be expended. Principal invested in the Long Term Pool. This type of trust is suitable for original capital balances greater than $100,000.
Externally restricted, unendowed short-term trust funds, which normally, are to be spent in the current year for the purpose expressed in the terms. No investment income is credited and no administration fees are charged to specific trusts.