UTDBP3034
University Endowment Policy

Policy Statement

Purpose and Scope

Endowments are a critical element in The University of Texas at Dallas' (UTD) ability to maintain quality in its academic and research efforts.

The University recognizes that each endowment is unique and that exceptions may, from time to time, be appropriate. The policies in this section are designed to permit maximum flexibility in securing additional endowments.

All endowments will be established in accordance with Series 60000: Development of the University of Texas System (UTS) Regent's Rules and Regulations, and the UTD Gift Acceptance Procedures. UTD seeks and receives private sector contributions for the purpose of establishing endowments to fulfill the mission and goals of the institution. Endowments are designated for the following purposes:

1. Faculty positions (chairs and professorships),
2. Scholarships and fellowships,
3. Miscellaneous - Programs, etc

Management Policy for Endowment Distributions

The principal of the endowment provides a permanent legacy in support of UTD's mission and goals and may not be expended, unless otherwise specified by the donor. Distributions from endowment funds represent an important and growing source of funding for UTD. The following guidelines are intended to ensure the effective management of endowment distributions in compliance with the donor's designations and will enable accurate reporting to donors on how the funds are expended.

1. The endowment administrator, designated by the President or the President's designee, is responsible for the management of endowment distributions of each of the endowments under his/her purview. The endowment administrator is responsible for ensuring that endowment distributions are used:
   1. for the purpose(s) intended by the donor(s) and according to the official document(s) associated with the establishment of the endowment(s) by the UTS Board of Regents or its designee(s);
   2. in accordance with applicable policies approved by the UTS Board of Regents and UTD.
2. Endowment distributions will be budgeted and used to carry out UTD's mission of instruction, research and service in compliance with the official endowment documents and UTD policies. Expenditure budgets will not be overspent, and expenditures will conform to UTD's annual operating budget.
3. The Endowment Compliance Office will be responsible for providing the endowment administrator with a copy of the Endowment Detail Report which delineates the donor's purpose and the terms of the endowment agreement for each established endowment under his/her purview.
4. The endowment administrator will approve all expenditures from the endowment distribution funds withn their oversight.
5. Transfers of resources from the endowment distribution funds to UTD operating funds may be made only when the restrictions for the operating fund are consistent with the terms of the endowment agreement.
6. Endowment distributions may not be used to establish or create, in whole or in part, another endowment, except in accordance with UTS Gift Acceptance Procedures (UTS 138).
7. Endowment distributions should be expended on an annual basis and should not be accumulated. Endowment balances will be reviewed semi-annually.
   1. When the endowment has no expenditures for the prior twelve months, the endowment administrator is required to complete an action plan explaining the absence of activity and providing a plan for future spending. Action Plans will be reviewed and approved by the appropriate Dean or Vice President and the President (or the President's designee). Completed Action Plans are submitted to the Endowment Compliance Office.
   2. When cash accumulations exceed two years of annual distributions without an approved spending/savings plan on file, the following actions will be taken.
      1. One-half (50%) of the endowment's accumulated distributions in excess of 2 years annual distributions will be reinvested in the endowment/quasi-endowment principal to increase future distributions.
      2. Evaluations will be conducted in period 1 and period 7 and reinvestment transfers will be made in period 2 and period 8.
      3. Endowment administrators and unit leaders will be notified of the pending reinvestment transfers.
      4. Automatic reinvestment transfers to the endowment/quasi-endowment principal will be submitted by the Endowment Compliance Office to the Vice President for Budget and Finance for approval.