Foundation Finance Definitions
An endowment is a permanently invested fund. While “income” (see Spending Distribution, below) from the fund may be spent, the principal (gift) of the fund must remain intact. Donors may restrict the purposes for which endowment “income” can be spent.
Invested funds include funds in the University’s primary pool, which is externally managed trusts.
A quasi-endowment, also known as “funds functioning as endowment” or “designated endowment,” is an invested fund that is treated as an endowment for investment purposes, but is not legally restricted as such. The principal of a quasi-endowment fund may be liquidated.
The spending distribution represents the dollar amount of funds made available for expenditure from each unit of the endowment for a given fiscal year, as governed by the spending rule. This is a payout of “income” from the endowed fund. This distribution is placed in a UNCG current fund for spending. The spend must be for the intended purpose.
The spending rate is a statistical measure calculated by dividing the total fiscal year spending distribution per unit by the market value per unit in effect at the beginning of that fiscal year. The Trustees have set a policy the current spending rate at 4.0%.
Scholarship “spending distributions” related to the endowed funds are funds expended solely by the Financial Aid office.