Are all private gifts for the benefit of ASU processed by the foundation?
The ASU Foundation for a New American University (“Foundation”) was established to support private fundraising to benefit ASU. University policy directs that private gifts are made to the Foundation. The Foundation also handles gifts made to the University by depositing gifts made to ASU into ASU bank accounts.
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What is an endowment?
An endowment is a fund that is established with a donor investor direction to provide program support in perpetuity.
The program support is provided by spending a portion of the total return of the fund’s investment, the realized and unrealized gains, interest, and dividends. The remainder of the return is reinvested. By reinvesting a portion of the return, the invested capital grows, providing future annual support that increases with inflation.
If a donor cannot make an outright gift at this time, are there other ways to support ASU?
One way is through a planned gift. Planned gifts are a critical component of fundraising because they are tailored to the financial, tax and estate planning needs of the donor. The options include bequests through a will or living trust, charitable remainder unitrusts, charitable remainder annuity trusts, charitable gift annuities, deferred payment charitable gift annuities, charitable lead trusts, and remainder interest in a personal residence or farm.
What is done with an investor’s gift when it is received?
The gift is credited to an account governed by the restrictions and for the purpose the donor investor designated.
For endowment accounts, the funds of that gift are then commingled with other funds in the Foundation Endowment Pool (a diversified investment pool managed for the benefit of the ASU programs designated by donor investors) for investment management purposes so that each fund benefits from investment in a larger pool.
How does the ASU Foundation ensure that donor intentions are honored now and for generations to come?
When an endowment gift is made, the donor’s purpose of the gift is documented in an account created to hold the transaction history of the gift. Expenditures from the account are monitored for alignment with the donor-designated purpose.
Who oversees the investment of the Foundation Endowment Pool?
The Investment Committee oversees the investments and is comprised of seven members of the Board of Directors of the Foundation. The Chair of the Investment Committee is Harry Papp. The other voting members of the Committee are Anne Mariucci, Scott Wald, Bob Johnson, Morgan Olsen, Wayne Doran and Steve Evans. A number of advisory members also participate in the Investment Committee meetings including the CFO and the AVP of Treasury Operations for the Foundation, the Deputy Treasurer for the University, and three faculty members from the ASU finance academic area.
A professional investment advisor, Cambridge Associates LLC, advises the Investment Committee and the Foundation staff on the management of the endowment. Cambridge is the leading consultant in the field of endowment management.
How is the Foundation Endowment Invested?
Since the purpose of the endowment is to provide benefits in perpetuity, the endowment is invested with a long-term perspective. The goal is to earn sufficient total return over time so that two investment goals are met: to provide annual program support in the current year and to provide for reinvestments, over time, at a level so that future annual support keeps pace with inflation.
The Investment Committee follows a standard investment management process. This process includes decisions about the asset allocation for the portfolio, the development of the investment policy, the selection of investment managers, custodians, consultants, and other service providers, the monitoring of managers and service providers, the monitoring of the costs of managing the portfolio, and periodic rebalancing. Foundation staff reviews the process and portfolio performance monthly. The Investment Committee receives reports monthly and meets on a quarterly basis.
The investment pool is highly diversified, currently with over 55 investment managers. Prior to selection, an investment manager is subjected to a due diligence process. After selection, the investment manager is monitored and the Investment Committee is informed of changes in management, style and performance.
What is the Endowment Spending Policy?
The Spending Policy is determined by the Investment Committee.
The Spending Policy utilizes the Constant Growth methodology and increases the prior year payout by the long term inflation rate (currently 3%), subject to a cap and floor. Additionally, new gifts received during the calendar year receive 3.75% of the gift value. The payout provides support to the University in accordance with the donor intent. The annual spending payout is available on the first day of each fiscal year. (July 1st)
An institutional advancement fee is assessed at 2% of the endowment’s market value. The fee is calculated yearly based on the 12 quarter average market value of the fund and is assessed on July 1st. The institutional advancement fee supports some of the costs of managing the Foundation endowment, including legal, administrative, financial and reporting obligations. The fee also helps support advocacy and fundraising activities for the benefit of ASU.
What type of report is sent to investor donors on funds they have established?
At least annually, the Foundation sends out an Endowment Report on each Endowment Fund to the investor donor that contributed to the Fund. Anytime there are questions, investors are encouraged to contact the Foundation.