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An endowment is the creation of a legal relationship, known as a charitable purpose trust, in which funds are held by the Board of Governors of the university as trustee and not in its own right.

Endowments are restricted based on terms agreed to and approved by the donor or government agency and the University. An endowment has two components; a capital (fund 5) portion and an expendable (fund 4) portion. The capital portion of the endowment is held in perpetuity to generate income and cannot be spent. The capital is invested in accordance with University policy.

The university is entrusted with the responsibility to ensure that funds are used in accordance with the terms set out in the donor agreements or terms of reference. In order to provide accountability and reporting to our donors, government agencies and auditors, spending is done directly from the expendable portion of the endowment and cannot be transferred to another project or fund unless specified in the agreement.

New endowment projects can be established after review in Financial Services of the completed Endowment and Restricted Fund application form.

Endowment and Restricted Fund Application Form

How Endowments Work

All investment activity is managed by the Investment Committee which is a subcommittee of the Board of Governor’s Property & Finance Committee.  Investment Committee members are volunteers chosen for their knowledge and expertise in investment and financial management.  The Committee manages the investments according to policies established by the Board of Governors and selects and monitors investment management firms that are responsible for the daily investment activities of the Operating and Endowment Fund.

MAPP 2.26 – Statement of Investment Objectives, Policies and Governance

The purpose of this policy is the document the investment beliefs, principles and policies of the University for the Operating and Endowment Fund.  The objective of the policy as it relates to endowments is to maintain the purchasing power of the fund over the long term to provide an investment return that will meet (after fees) the University’s Investment Payout Policy (MAPP 2.11).

This policy also outlines the University’s asset mix which is reviewed annually by the Investment Committee to maintain, over the long term, the best balance between investment returns within an acceptable level of risk.

MAPP 2.11 – Investment Payout Policy

This policy establishes the payout rates and timing of payouts of endowed, non-endowed funds and term endowments.  The policy is designed to ensure that current and future generations share equally in the benefits of the endowments.

Section 2.2 – Actual investment returns less investment managers’ fees, investment consultant’s fees, and custodial fees will be allocated proportionally to the capital of each endowed fund at April 30 each year.

This section states that the investment returns earned during the fiscal year, less all management fees, will be added proportionally to the capital of each endowment annually on April 30^th.  The balance forward or opening balance of an endowment at May 1st, will receive 12 months of investment returns.  Donations received during the year will begin earning investment returns the month after they are received.  For example, a donation received in December will earn investment returns from January to the end of the fiscal year in April.

Section 2.3 – Endowed funds will be permitted to spend an amount equal to 4.0% of the average value of the total endowment over the most recent five year period.  In the case of new endowments, the average will be calculated based upon the number of years the endowment has been at °ÄÃÅÁùºÏ²Ê¿ª½±Ô¤²â.

This section speaks to how the funds available for spending are calculated in May of each year.   The purpose of this calculation is to provide a consistent and predictable allocation for spending for faculties, departments and students by smoothing out the fluctuations in investment returns.  For example, this assists faculties and departments in their budgeting process so they know what funding they have for a Chair’s salaries and benefits.  In addition, the consistent allocation for spending eliminates the need to change the value and number of student awards annually when there are swings in investment returns.

The following example demonstrates how the policy works with a $50,000 endowed donation received in Year 1 to support a $2,000 student award.  While investment returns over 6 years have fluctuated between a low of -18.2% and a high of 18.8% and the capital balance has ranged from $40,451 to $53,750, the allocation for spending remains within the $2,000 range to provide consistent support for the students.  This example also demonstrates how the allocation for spending is calculated in Year 6 to show how the 5 year averaging works.  The endowed balances from Years 1 – 5 are averaged to provide a value of $48,119.  This amount is then multiplied by 4% to provide a value of $1,925 for the allocation for spending in Year 6.  In May of Year 6, $1,925 is transferred from the Capital Balance to the Expendable Balance for spending.  Excess returns from prior years allow for a $2,000 to be awarded in that year.

Section 2.4 – In any particular year, should accumulated investment returns of any individual endowment be insufficient to fund the amount made available for spending, endowment capital will be used, with the expectation that such amounts will be recovered from future investment returns.

 This section provides direction on how the allocation for spending will be funded if cumulative investment are returns are less than the calculated allocation for spending.  If this is the case, a portion of the original donation is used to fund the allocation for spending.  The expectation is that over time, the endowment will earn sufficient investment returns to restore the donation beyond its original value.

Restricted projects have spending available for immediate use based on the terms agreed to and approved by the donor or governing agency and the University. Similar to endowments, the university has a fiduciary responsibility to ensure funds are spent in accordance with donor agreements or terms of reference. Therefore, unless specified in an agreement, funds are to be spent within the restricted project and cannot be transferred to another project or fund.

New restricted projects can be established after review in Financial Services of the completed Endowment and Restricted Fund application form.

Endowment and Restricted Fund Application Form

In addition to viewing project balances in GL Inquiry in the General Ledger, you can also view project information in the following reports.

• • Endowment Report - lists the expendable and endowed financial information for a specific range of projects and/or departments
  • Expendable Report - lists the expendable portion of endowed and restricted funds for a specific range of projects and/or departments

The reports can provide 3 levels of information based on the user’s needs.

1. 1. 1. Project Summary-  lists all projects balance forward, current year revenue, expenses and encumbrances and the ending month balance
      2. Project Detail - lists by account, all projects previous month balance, current month activity, outstanding encumbrances and the ending month balance
      3. Journal Transaction Detail - lists by account, all projects current month journal entry activities

Reports can be run from the users desktop as required.

How to Print the Expendable and Endowed Reports

If you have any questions regarding the content of the statements, please contact the Financial Officer or Accounting Analyst, Endowment and Restricted Funds.

Continuing Education projects include University non-credit courses, community services programs, conferences, workshops, seminars, fundraising events, day camps and other similar initiatives. These events contribute to the University's role within the community and are financed primarily by sponsorships, participant fee revenue and grants awarded by governments, external agencies, foundations and corporations.

New Continuing Education projects can be established after review in Financial Services of the completed Continuing Education Application Form. Also included with the form are the guidelines for this type of project.

Continuing Education Application Form

HST

Registration fees for conferences, workshops, seminars and ticket sales for events are subject to 13% HST. Brochures, registration forms, and websites referencing registration must include the University's HST number (10816 2587 RT0001). As per the Canada Revenue Agency, projects that charge HST on registration and ticket sales will receive a 100% HST rebate on related expenses.

Depositing of Cheques

Departments are responsible for depositing conference registration fees or ticket sales through the Central Cashier using the deposit memo form below. Deposits must be split between the project revenue account and the corporate HST account (UW82 105400). Please keep back-up of your HST calculation as they are subject to audit.

Any donations or sponsorships received must be sent to Advancement Services for deposit to ensure that the appropriate charitable or business receipts are provided. Cheques sent to Advancement Services must be accompanied by a Faculty Remittal Form.

Overhead

Continuing Education events have an incremental cost to the University. In order to make a contribution to these incremental costs, overhead is charged to projects at the end of each month based on the monthly transactions. Overhead is not charged on internal transfers or on donations that have been issued a charitable tax receipt through Advancement Services.

Budgets

Annual budgets are required for Continuing Education projects and must be submitted by May 31st of each year using the Continuing Education Application Form.

Medical tithes are part of the Clinical Academic Contract between the Schulich School of Medicine and Dentistry, its affiliated hospitals and the appointee. Medical tithes are funds that have been receipted and deposited to a University Restricted project to be used exclusively for expenditures on medical scientific research and/or academic development at the Schulich School of Medicine and Dentistry.

Depositing of Medical Tithes

There are 2 options:

• • Electronic Funds Transfer (EFT) through the Finance Department at the Schulich School of Medicine and Dentistry
  • Cheque (sent to the Accounting Analyst in Endowment and Restricted Funds)

The following information must accompany the deposit:

• • Total amount of deposit
  • Department
  • Tithe account
  • Listing of Tithe amounts by physician

Please note that the list of physicians must match the receipts required (i.e. deposits relating to physician groups must state the amount relating to each physician). The business receipt will reflect the date the funds are deposited in the UWO bank account.

Receipting of Medical Tithes

Financial Services creates business receipts that are distributed to physicians through the Administrative Assistant in each clinical department based on the physicians preferred twelve month period (calendar year or corporation year). The Financial Management Committee of each clinical department is responsible for providing a letter to accompany the business receipt that indicates what portion of the medical tithe was spent on research activities.

Medical Tithe Transfers

The purpose of the Medical Tithes is to support research and academic development and therefore, transfers are allowed only to Research or Operating accounts. All requests for the transfers of funds are completed in Financial Services upon submission of the Medical Tithe transfer form. A detailed expense description of the transfer is required. All back-up relating to the transfer must be kept in the clinical department for audit purposes.

A significant number of Endowment & Restricted funds support student awards. The University’s policy that includes definitions of award types is

The establishment and management of Endowed & Restricted student awards involves collaboration between Financial Services, Alumni Relations and Development, Advancement Services, the Office of the Registrar, the School of Graduate and Postdoctoral Studies as well as faculties and departments.

Award Process Diagram

Deadlines for Award Funding

All funding must be received before an award can be given out.  

Undergraduate Awards (follow the academic year of September – August)

Fall Awards
Donor funding is to be received by August 31st
Faculties and donors should assume that fall awards receiving funding after August 31st will be given out in the next academic year.

Spring Awards
Donor funding is to be received by December 31st.  
Faculties and donors should assume that spring awards receiving funding after December 31st will be given out in the next academic year. 

Graduate Awards (follow the fiscal year of May – April)

Ontario Graduate Scholarships (OGS) and Queen Elizabeth II Graduate Scholarships in Science and Technology (QEIISST)
Donor funding is to be received by December 31st. 
Faculties and donors should assume that OGS and QEIISST receiving funding after December 31st, will be given out in the next fiscal year. 

All Other Grad Awards
Faculties independently award student aid throughout the year as long as there is sufficient funding in place.  There are no specific deadlines relating to non OGS/QEIISST student awards

Undergraduate Award Search -

Graduate Award Search -

Many faculties and departments incorporate a donation into the ancillary fees that are collected with tuition fees. The amount of the donation varies and is based on the need or initiatives of each faculty. Students have the ability to opt out of the donation until September 30th.

Tax Receipts

As °ÄÃÅÁùºÏ²Ê¿ª½±Ô¤²â is a registered charity, Canada Revenue Agency (CRA) permits °ÄÃÅÁùºÏ²Ê¿ª½±Ô¤²â to issue charitable receipts for donations that support post-secondary education and research. Students who do not opt out of the donation will receive a charitable tax receipt that will be available to them electronically in Student Center.

Use of Donation

A charitable donation is given voluntarily with no benefit in return to the donor. The donation therefore becomes the property of the University and must be utilized in accordance with the University’s CRA registered mandate to support post-secondary education and research.

Approval of Spending

Each faculty will oversee their own process for the submission of proposals to be funded through Student Fee Donations. The students and respective Students Councils have the ability to recommend projects to be funded. Final approval for spending is the responsibility of the Dean or senior administrative officer with financial responsibility with the faculty or department.

Management of Donations and Spending

All donations and associated spending must be managed within the University’s general ledger in order to comply with CRA regulations. Funds cannot be transferred to a student group/union/organization to be managed. Approved expenses for internal services and purchases (i.e. Bookstore, Facilities Management) are paid by journal entry. All approved expenses from external vendors are paid through Mustang Market or by PCard where appropriate. Travel expense claims and travel advances may also be utilized in accordance with MAPP 2.16 Travel and Expense Reimbursement.

Where spending has been approved to support an event organized by the University’s Student Council (USC), the faculty/department will request an invoice from the USC to be processed through Mustang Market.

The University of °ÄÃÅÁùºÏ²Ê¿ª½±Ô¤²â Ontario Foundation Inc. (the Foundation) was incorporated in the State of New York in 1966 for the purpose of providing non-alumni with a charitable tax receipt, recognized by the Internal Revenue Service (IRS), for donations to The University of °ÄÃÅÁùºÏ²Ê¿ª½±Ô¤²â Ontario. The Foundation is recognized as tax-exempt public charity under section 501(c)(3) of the Internal Revenue Code.

The Foundation directors consist of the President, Chair of the Board of Governors, Vice-Chair of the Board of Governors and the VP External of The University of °ÄÃÅÁùºÏ²Ê¿ª½±Ô¤²â Ontario.

IRS Employee Identification Number (EIN): 13-6620923

The University of °ÄÃÅÁùºÏ²Ê¿ª½±Ô¤²â Ontario
Charitable Business Number
# 10816 2587 RR0001

The University of °ÄÃÅÁùºÏ²Ê¿ª½±Ô¤²â Ontario Foundation Inc.
Employee Identification Number (EIN)
13-6620923

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Operating & Endowment Fund Investing

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